GM’s investment in The People’s Republic of China presents two main dangers. First, it extends GM’s supply chain over an enormous distance. Second, it enmeshes The General in the economy of a non-democratic country. Frank Williams has already raised the alarm over the possibility of Chinese nationalization. We’ve also highlighted the chances of de facto nationalization; based on western automakers’ [mandatory] partners’ history of stealing Western designs and technology. In all this, we shouldn’t ignore the fact that GM’s money is propping up a communist dictatorship.
Make no mistake: GM’s Chinese operations depend on the country’s virtually endless supply of cheap labor, which depends entirely on government policy. In theory, all Chinese workers belong to the Communist party-controlled All China Federation of Trade Unions. Although there are locally-set minimum wages, international observers report factories ignore national guidelines– which are a fraction of US legal requirements. Strangely enough, the Chinese government shows little interest in policing wages, conditions or working hours.
China’s HuKou or “household registration” system is the real engine of the country’s “economic miracle.” When any one of China’s 350m poverty-stricken peasants migrates to an urban area for a factory job, they must pay deposits and “permit fees” to secure a job (normally obtained via loans from employers). If a migrant wants to return home, they forfeit the money, equal to many months’ wages, and must pay off any company related debts. Equally heinous, immigrant workers are not legal residents in their new urban locations; they’re denied education, housing, health care and social services. They are, in effect, indentured slaves.
According to Columbia University law professor Mark Barenberg, HuKou lowers China’s manufacturing wages by 47.4 percent to 85.6 percent. Barenberg says the policy reduces the price of Chinese exports by 11 to 44 percent. Not to put too fine a point on it, the success of GM’s Chinese exports— including tens of millions of dollars of car parts headed for The General’s US automotive factories each month— reflects the Chinese government’s deeply-entrenched repression of peasants’ personal freedom: apartheid by any other name.
GM’s defense: it ain’t me babe. The claim a GM Chinese automobile production factory is a clean, well-lighted place. GM’s workers enjoy a safe work environment, a regulated work week and higher than average wages (for whatever that’s worth). Even if we assume that the parts makers supplying GM’s Chinese assembly lines adhere to GM’s elevated [for China] wage and safety standards, all GM’s migrant factory workers are subject to the same despicable Hukou system.
And you simply can’t get around the fact that GM’s contribution to China’s economic success supports the continuation of a repressive regime– even if the damage to human rights is done somewhere “off stage.” Apologists argue that GM and other western automakers are part of China’s modernization; once capitalism gains a foothold, political freedom will follow. So… where is it? Why are so many analysts convinced that China’s workers are continuing their “race to the bottom” in international labor standards? And then there's the moral relativist's redout: if we don't do it, someone else will.
That statement puts us smack dab in the middle of a wider debate over corporate ethics. However laudable their behavior at the factory level, whatever the competitive climate, should multinational corporations do business in countries with repressive regimes? Hardball players amongst you will argue that GM’s primary responsibility is to its shareholders, not Chinese or even American workers. Perhaps so. But it is instructive to realize that GM has a bit of history in this regard, and it ain’t pretty.
In an article published in this month’s Jewish Journal, writer Edwin Black outlines GM’s involvement with Germany’s National Socialist Party. According to Black, “GM and Opel were eager, willing and indispensable cogs in the Third Reich's rearmament juggernaut.” Black chronicles a pre-war meeting between GM’s overseas chief James D. Mooney and the Fuhrer, where GM's enthusiasm for Hitler's economic, military and social agenda was abundantly clear. (Mooney later received The German Eagle with Cross.)
“The Wehrmacht, the German military, soon became Opel's No. 1 customer by far… Expanding its German workforce from 17,000 in 1934 to 27,000 in 1938 also made GM one of Germany's leading employers. Unquestionably, GM's Opel became an integral facet of Hitler's Reich.” Black also points out that Germany’s blitzkrieg depended on Opel’s "Blitz” truck and the tetraethyl gasoline formulation technology sold to the Nazis by a GM subsidiary.
Did Sloan know about Germany’s repression during this time? Black certainly makes a solid case for the assertion. Did Sloan care? “In a long April 1939 letter to an objecting stockholder, [Sloan wrote] that in the interests of making a profit, GM shouldn't risk alienating its German hosts by intruding in Nazi affairs. ‘In other words, to put the proposition rather bluntly,’ Sloan said in the letter, ‘such matters should not be considered the business of the management of General Motors.’” So what’s changed?
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If G.M. did’nt establish manufacturing in China they would really be missing a chance at an enormous market.Same said with the Eastern European countrys they deal with.Though the later maybe more progressive toward basic human rights,its still a gamble for all the Corporations investing heavily inside China as a social movement from the people could put them all back to square one.
Really intresting to read about G.M.’s buisness involvement with the Third Riech—- Wow–
But its also important to point out that G.M. also won numerous contracts to help supply the Soviets in the Land – lease deal.
Does this make it excusable as far as dealings with Nazi Germany?No way,but it does expose one thing.This Corporation could care less about governments and only about the dollar.The same philosophy used in the past is still in practice with China today.Funny how much in life and buissness is cylical.This is one facet G.M. can trully say the know the most of.
Nice write-up R.F. this one will really get the mind racing.
And Mike says it all. If gm doesn’t do it someone else will. And if the US didn’t export all of those jobs to china anyway, someone else in europe would beat us to the punch. It would be poetic justice if a newly envigorated communist regime nationalizes all industry and declares war on the US. But that is just business and risks are risks. Neither ex-communist russia or china are behaving like typical capatalistic countries, and with enough power they will strike out again. China can wreck this country with our debt to them and our lack of manufacturing base. Russia can withold oil to our European allies and wreck our economy indirectly by raising the price of oil to us and destroying the economy of europe. The cards are being dealt to our former enemies, we just have to sit back and wait for them to call.
Mr. Farago,
You bring up great points about the mistreatment of Chinese laborers. The issues you describe really should be addressed sooner than later by the U.S. and other governments before the Chinese government gains even more leverage (i.e. more economic clout)
What baffles me completely is why this article is under the GMDW heading. This makes no sense whatsoever.
What about VW’s investments? Ford’s? Toyota’s? Honda’s? etc.’s?
ThriftyTechie:
I thought long and hard about whether or not to include this post as a GM Death Watch.
I decided to do so because of the reasons outlined in the first paragraph (and detailed previously): GM’s Chinese investments are a significant risk to the company’s future.
I am welll aware that the moral issues raised by GM’s Chinese plants apply equally to DCX, VW, etc. But GM is a leader in this market, and I am NOT a fan of moral relativism.
Perhaps the wider point is that I believe companies SHOULD be ethical. You might suggest that there is a karmic cost to companies that support violations of human rights, but I couldn’t possibly comment.
If karma ruled the roost,G.M. Ford.Toyota and Mitsubishi would all be outta buissness by now.
Karma for Volkswagen—-I’m seeing Hitler roll down Pottsdamm Platz waving at the crowd.
Robert,I’m beginning to feel as though I’m in a 2nd rate Matrix conspiracy.The major Corporations play at each side of the table and the poor working man is subjected to cheesy plastic interiors and non-handling Shelbys.The Horror.
I might find it a compelling argument if it was possible to avoid cheap labour. Direct opposition to repressive regimes led to the Cold War. The attempt to essentially co-opt China with creeping capitalism might have a better long term path, but it may not.
The computer you posted this entry on was probably built in a very similar factory. It is not an issue of choice on the part of the consumer, sometimes there is no choice at all.
Of course, we could also blame the unions again for driving business away…
Ohh one more thing on Car company Karma
Mercedes—choice of luxury for all aspiring SS brass
Toyota ( though no design of their own ) 12 yr. old compact pick-ups/ prefered choice of Despots and renegade militias for mounting 30. caliber machine guns in the bed and roaming around nasty city streets.Just cant beat that Toyota quality and durability.
Fiat— for supplying the Italian army and helping them conquer of all things-Ethopia at the onset ofWW2.It could have been their theory to ride Mussollinis coat tails toward Roman expansion.
Allright I’m done babbling.
Bravo Bob, but…
Why then did you say Ford is “a loser” for promoting gay rights?
Ethics and business have never had a very friendly relationship. Supporting oppressive regimes is part of almost every major multinational’s cognitive dissonance. It is not hard to imagine a world in which America eventually ends up regretting China’s ascension to superpower status. The Chinese government is not interested in advancing the rights of their people, or spreading freedom throughout the world. Their only concern is power, money, and getting more of both. The idea that other company’s lack of ethical behavior in anyway excuses GM’s decision to get in bed with the Chinese government is just another example of relativistic morality justifying what is potentially bad policy.
The Chinese government continues to dispose of disagreeable citizens by murder, false imprisonment, and oppression. They exploit an uneducated workforce in order to function as a wellspring of cheap labor for the world’s multinationals. But none of that matters, because the ethical implications of business decisions have no bearing in “free” market ideology. It’s all BS, of course, but when has that ever stopped anyone in the industrial age?
Greed uber alles, always and forever. Good article Robert.
C'mon Jonny:
I didn't say Ford was a "loser" for "promoting gay rights." I said Ford should steer clear of US cultural/religious issues.
Without engaging in a debate about the legal protections afforded homosexuals in America, surely you can see there's a difference between sponsoring Gay pride marches and organizations promoting gay marriage and perpetuating a political system that inflicts abject misery (not to say a form of slavery) on millions of people without any substantive legal rights.
Still baffled.
I decided to do so because of the reasons outlined in the first paragraph (and detailed previously): GM’s Chinese investments are a significant risk to the company’s future.
And how is NOT investing in China less of a risk? If GM took the moral high ground and pulled out of China, you would have to end your ‘Deathwatch’ and start the ‘GM Eulogy’ series.
…GM is a leader in this market, and I am NOT a fan of moral relativism.
Point taken on the moral relativism. But GM is a leader in this market? What is this? 1965? We all know that Toyota is the leader now. Maybe not yet in sales, but they set the pace business-wise for the entire industry.
Don’t get me started on ethics… Who’s to blame for the human rights violations? The Chinese Government, the U.S. Government, the Chinese consumer, the American consumer, etc. etc. GM and Toyota hardly merit a shout out.
Interesting write up
Like others, I have issue with this criticism being aimed at GM and not the global auto industry as a whole. The investment in China over the last few years has been massive. Toyota, Ford, DCX, GM, and several others have significant interests there.
If GM did not follow suit, surely there would be a Death Watch article on GM’s stupidity for NOT being in China.
This goes beyond the global auto industry, this is all about the Global Middle Class.
Unless the American middle class starts to make themselves heard, GM et al will continue to use Chinese labor because consumers and beancounters (esp. beancounters) want cheaper products. Its a viscious cycle.
Actually, this could be a great talking point for the UAW. Instead of hiding behind trends that lead to their extinction, they could make this a moral issue.
I’d love to hear this debate broadcasted over the media much like less pressing matters like Gay marriage, freedom fries, etc.
Funny, Thrifty Techie and I posted the same sentiments at the exact same time.
Additionally, maybe the global auto manufacturers doing business in China may be there only because they had to. They couldn’t have imported cars into China from a neighboring country with ‘better’ political conditions as China would not reasonably allow it. If GM (or Toyota, et al) wanted a piece of China’s explosive growth and potential 1B unit marketplace, they had to do so IN China and partner with a Chinese automaker.
GM’s supply chain has been stretched over ‘an enormous distance’ for quite some time. They have interests in Poland and Russia for example. And isn’t Australia ‘an enormous distance’ from just about anywhere? They are now investing several hundred million in India. GM is a global company.
Thirftie Techie, Eric Miller:
Don't you guys have enough fun criticizing me for the things that I do say without jumping on me for things you think I'd say? If GM took a stand on China, I'd give them the credit they'd deserve.
In any case, are you seriously suggesting that GM couldn't stay in business if they stayed out of the Chinese market? And where's your indignation about all the American jobs lost to China?
While we're at it, I'd like to hear your thoughts about GM's extremely profitable investment in pre-war Nazi Germany. How great was that?
Sajeev:
I agree. The UAW's silence is deafening. As is the media's.
RF, you can never have too much fun
Great article. Thanks. I agree that inclusion as a DeathWatch is appropriate; the Chinese do not do business by rules meant to suit others. Why did GM rush to join an economy where piracy is a way of life?
Actually, this could be a great talking point for the UAW. Instead of hiding behind trends that lead to their extinction, they could make this a moral issue.
You’d think they’d be all over this like a python on a piglet wouldn’t you? But if you search for “China” on the UAW web site you find press releases and transcripts of statements that are 2 to 6 years old (or older). There’s nothing recent. After the initial chest thumping about GM and other builders ramping up in China, they’ve been unusually quiet on this topic. It makes me wonder what’s going on.
akatsuki:
December 3rd, 2006 at 10:39 am
I might find it a compelling argument if it was possible to avoid cheap labour. Direct opposition to repressive regimes led to the Cold War.
Akatsuki, I find fault wth your historical deduction. The Cold War started because the Soviets did not withdraw their troops from the liberated countries of Eastern Europe (the future Warsau Pact) and they did not disarm their own armies to any large degree like the west did (at their height in WW2 the Russian army had 400 divisions, the American army @ 90). Also the Soviets tried to blockade Berlin so they could take the portions of the city that by previous signed agreements were to be controlled by the Americans, British, and French, leading to the Berlin Airlift, arguably the first “battle” of the Cold War. Around this time the free movement of citizens from East to West Germany was halted. This was the time that Winston Churchill said in a speech that an “Iron Curtain” had descended on Eastern Europe.
Back to the subject at hand… RF you have to remember that many (too many) people thought that Hitler was an “OK” guy during the 30’s. He hadn’t invaded any countries yet, although he did annex some German speaking territories. He also broke the Versaille (sp?) treaty more than once by rearming and reconstituting the German armed forces. He then began persecuting the Jews, but hey, that’s an internal affair, and who are we to interfere? I don’t know if they had anything like our modern equivalent of weapons inspectors, but if they did I’m sure he lied to them and when he felt he could get away with it, he kicked them out (ala Saadam Hussein).
You can say that GM and other countries should have known better but there were so many on our side, including major politicians saying that it was ok, “peace in our time”, etc., that I can at least understand them willing to entertain the idea that if we ENGAGE him we could make him play nice by our rules. Even the New York Times wrote positive articles about Hitler.
There were very few who were willing to call a spade a spade back then. Winston Churchill was one, but he was like a voice crying in the wilderness.
Now fast forward to today. We have this guy in Iran, Mahmoud Ahmadinejad, trying to get nukes, saying that Israel should be wiped off the face of the map, the Holocaust never happened, and more, and yet there are those who say we can talk to this guy, trust this guy to play nice by our rules. Even Mike Wallace, who is Jewish, interviewed and had positive things to say about him (I haven’t checked, but I would bet that the NYT has also written favorable articles). He’s wrote an open letter to America talking about peace, human rights, and freedom, but there is video of him at various Middle Eastern confrences saying that Israel must be destroyed, Europe must be conquered by Islam, and America must be defeated.
Sometimes I feel like it’s 1938 again.
China’s political rulers are such an easy target, but why not look a little closer at what goes on at home? This Human Rights Watch report on the meatpacking industry (http://www.hrw.org/reports/2005/usa0105/) in the US describes conditions that sound far worse than those of GM’s china workers, but I’m sure few Americans think about that when stuffing a steak into their mouths.
American jobs being lost to China (or any other country) is largely a myth.
It is rare that a job that is done in location A is moved to location B simply because the labor is cheaper. Seriously.
There are some instances of this happening. They make the newspaper. Much like a murder makes the paper while millions of people that die of common diseases never get notice.
The real cause of manufacturing job losses are gains in efficiency. The irony is that at this point, more manufacturing jobs are lost each year in China than in the U.S…
I’m trying to figure out the supply chain issue. As long as GM isn’t sole sourcing an item from China then they could rapidly recover from any upheavals there.
It’s also unlikely that China will ever be a significant part of their business. To do so would be foolhardy until business and political safeguards are in place.
Robert, as I ask before and never got an answer (maybe you answered, but I lost it among all the posts), I might as well ask again: how many years (or days) have you ever lived in China?
Let me focus on one simple fact here: HuKou, the residential certificate.
Its main purpose is to control the farmers. Its main effect is a wealth disparity between the farmers(even though they may be working in a city, mostly construction) and city residents. In other words, city residents exploite farmers.
Most (I suppose “all”) of the GM workers in China have their city HuKou, since the jobs are considered very good.
Had there not been HuKou, the salary disparity between the two classes will shrink. That will make GM workers get paid less, since GM can then have the freedom to hire someone without a city HuKou. On the contrary, Nike workers may get paid more in that case.
Judging China is liking judging a GM car (or a Ford car, or whatever). It may be bad in one way. But you just don’t write a car review without a test drive. No, it does not make your car review any better if you got your info from someone else.
In my view this has nothing to do with the GM Death Watch series and it was an almost impossible stretch to include GM’s participation in China as one of it’s significant survival risks. The only other choice for GM is to not play in China at all. I’m fairly certain that if GM was sitting out China on moral grounds that doing so would be included in most commentaries about what is wrong with GM.
The issues raised are more than even industry wide. The west’s strategy since the Nixon/Kissenger era has been to attempt to infect China with capitalist and democrate ideas through a multi-decade program of engagement. Every US President since Nixon has continued on this course of action, Democrat and Republican alike. The China of today is not a perfect place, but it is on average a better place for it’s people than it was in the 1960s.
One price of the west’s policy visa-vis China has been intense pressure on the wages of low skilled factory workers in the west. In a way this can be viewed as a global redistribution of wealth in much the same way as wealth is redistributed by the tax codes in the US.
There remain grave risks inherent in what is going on, but given the realities outside of GM’s control it seems to me that they are quite literally doing the best they can visa-vis the global political and economic realities with respect to China. You can read any of my other posts to see that I am not an apologist for the 2.5, but in this instance I see the attack RF has made as completely missing the mark.
Perhaps you would do better with the supply chain argument if your targets were WalMart or Hewlett-Packard. The global auto parts supply business is more geographically diversified than that of almost any other manufactured product.
Great article, very thought-provoking but….
The “Great Unwashed Masses” in this country couldnt care less. Bring up all the WWII parallels you want…how many Jewish people in this country, relatives of the 6M exterminated in Germany, are happlily piloting their Mercedes, VWs, Audis and BMWs? How many of our fathers and grandfathers–people that helped this nation celebrate cictory over Japan are supremely content owning Avalons, Altimas, Camrys, and Accords
People bitch about Walmart killing unions and all the small businesses in their towns across this country, yet eagerly shop there and brag about the savings on the Chinese-made goods they just purchased, not to mention the convenience.
You think the auto compnaies dont see this?
When I took my automotive students on a tour of the local Chrysler plant , there were US flags everywhere, signs that read… “Hungry?–eat your import!”
Then I noted that many Mitsubishi engines were being installed, all of the assembly machinery was made by Niichi-Ra and Ryobi. When I asked our tour guide about this conflict of words and deeds, he acted like I just raped his mom and shot his dog.
These days, nationalism stops when monetary gains come into play.
But you all knew this, didnt you?
I think I’d rather deal with the communist Chinese than the UAW.
Fact is, though moral relativism stinks, there is no better business alternative to manufacturing (many things) in China right now. I don’t see in the article or posts above any alternative offered to that dilemma, and until there is, that is where the manufacturing base is going to go, like it or not.
I remember back in business school taking the wildly unpopular argument that “if utilized properly, there are high returns to slave labor.” I did it as tongue in cheek and as a devil’s advocate, but China has found a way to essentially make a go of that and the desire for GM to take a stand on that will do nothing but damage the General even more. Please, Robert and the rest of you, post a viable business alternative and not just a shallow politically popular diatribe. We all know what politicians do when asked to make good on their statements.
Stalin was in many ways far more evil than Hitler.
The Red Army rode to Berlin on Dodge trucks while the Wehrmacht retreated on their Opels.
The only point the Capitalist really cares about: Which ones were paid for? ;)
–chuck
Replying to WaaaaHoooo:
I remember back in business school taking the wildly unpopular argument that “if utilized properly, there are high returns to slave labor.”
And you know what? The “slave labor” thing actually gets improved. Chinese labors now earn more because of the foreign companies.
Back to the “ethics” thing. If I tell you there is a country, the president issues unconstitutional orders to spy on the citizens, the suspects are held indefinitely without a trial, and the soldiers rape and kill foreigners. Would you still want to do business with the country? Is that ethical?
Moral relativism does exist.
“Fact is, though moral relativism stinks, there is no better business alternative to manufacturing (many things) in China right now”
WaaaaHoooo, that statement says it all RIGHT THERE. For the companies involved, there is no need for an alternative.
As long as there is a demand, and that demand is satisfied by a product at a price point consumers are willing to pay(no matter WHERE it’s produced), from the company’s perspective there is no problem.
IMO, the “Global Economy” has led to an economy that is service-based as opposed to a manufacturing-based.
I think being in many nations is actually a way to reduce risk. And the same goes with having your American operations spread throughout many states. One law passed by politicians can wreck companies. Like the Michigan labor laws that put all of the power on the union side for negotiations.
After reading your comments, I’ve decided to remove this piece from the GM DW canon.
Thanks for your insights.
If ever theres a case for workers rights,protection you name it,it could possibly be found in Chinese factories.It has been cronicled & proven in the past that labor conditions and practices are arcane to standards employed in this country.
This is the perfect pretext to unionization.Its a possibility but one that a government such as China would say is dissadent behavior and crack-down on.
I have a hard time beliving the UAW is’nt active in at least some facet with regards to the 2.5’s involvment over-seas.
Some years down the road I really believe chinese factory workers will form some type of bargining power.I just hope that its done without the cost of human life.If they were to unionize,I think it would be treated like Tiannimen Iknow -misspelled )
The conditions are there its just a matter of someone stepping up to the plate.
Work will set you free:
http://images.google.com/imgres?imgurl=http://www.nazis.de/inidia/arbeit_macht_frei_terezin.jpg&imgrefurl=http://www.nazis.de/inidia/arbeit_macht_frei.htm&h=493&w=400&sz=23&hl=en&start=16&tbnid=rhMqzz9QM1qL1M:&tbnh=130&tbnw=105&prev=/images%3Fq%3Darbeit%2Bmacht%2Bfrei%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG
This all boils down to the question: What is freedom?
Is government thievery and extortion (taxation) freedom?
Is government monopolization of money (with their Central Banks) freedom?
http://www.mises.org/money.asp
Is the compulsory confiscation of labor services (forcing business to keep tax records and collect witholding taxes) freedom?
Let’s face it, people…the majority of you our there are just like me: A Rastus!
Get used to it. Morality aside, it’s better to know your life is only gauged by how much money you make others…than to proclaim ignorance.
Thats why, while I really have a strong distaste for unions, they at least counter one large force (corporations) with another. If for some reason you think little ole “you” as the Marlboro man, Mr. Freedom and Independent…you are slightly delusional.
Gas price fixing? Nahhh. Political intrigue? Nope, not a chance either. Mass Brainwashing on the largest scale?…of Course not…now go on, children, it’s Christmas Time!!!…you know what that means, don’t you?
Be a good little “consumer”, hear???
How many months of each and EVERY year of your life (your LIFE!) is spent slaving away for the state?
Hmmmm.
Taking up arms for the state? Murder, slaughter….slavery….
YES!! It’s a rightfully UGLY situation…and don’t think you are not a participant….you ARE!!
Come on. So the Nazis drove GM Opels. The Nazis also used IBM computers to coordinate the Holocaust. Bad things have happened, are happening, and will happen. Fine, moral relativism sucks. But it’s there. Watch “The Corporation” – it’s a fast 2.5 hour guide to corporate immorality. Can you blame them? Maybe. It’s legally free off of BitTorrent, even.
Also this idea of “virtually endless supply of cheap labour” is commonly batted about. Does everyone actually believe this? We are at point now where, in some sectors, there are labour shortages in China! Workers can now choose which factories they want to work at. From the Wall Street Journal:
“Toymakers have been working around growing labor shortages that are occurring as Chinese workers flee the lower-paying toy factories for better-paying high-tech factories.”
Now that’s there’s choice, how do you get workers? Better wages, better working conditions, better factories. I would say GM should be commended on setting a standard, no?
Is “China Paranoia” the next TTAC series?
WSJ article
The Corporation
IBM & the Holocaust
Nazis used IBM computers to coordinate the holocaust???
I’ve got no recollection of that ever happening,but I guess I’ll just take you’re word on that one.
The jury is out on the IBM Hollerith card readers controversy, but the conclusion depends upon your POV.
C-NET did a good rundown.
http://news.com.com/2009-1082-269157.html
Interesting stuff… but Mooney and Sloan are dead and not running GM worldwide anymore. And, as pointed up in many comments, RF would be critical of whatever GM did there anyhow.
Consider the fact that 1) this is not fresh news AND 2) RF posts it two days after the latest bit of good news about GM reinforces those of us who believe that he’ll either ignore any positive info about GM or somehow turn it into a negative.
From the DFP, December 1st, 2006;
“GM’s sales, increased 6.1% to 293,558. The Chevrolet Tahoe, GMC Yukon and Cadillac Escalade, all redesigned earlier this year, showed growth of 70% or more from November of last year.
Sales of the Chevy Silverado and GMC Sierra were up 18% and 31%, respectively. Redesigned versions of these trucks were starting to hit the market in November. The Saturn brand, thanks largely to an all-new Aura midsize sedan, was up 24%.
GM also reported encouraging news in its effort to reduce its reliance on fleet sales. Fleet sales, which include sales to rental-car companies, often prop up volumes but hurt profitability because they’re made at cut-rate prices and can damage the long-term value of a brand.
GM’s retail sales — those to individual auto buyers — were up 11%, and the company should meet a goal set in January to have retail sales for the year of 3 million vehicles, said Paul Ballew, executive director of global market and industry analysis.
“We’re hitting our marks in terms of the targets we set for the turnaround plan,” Ballew said.
GM’s sales were solid, analysts said. But they also cautioned that the comparison between this year and last year is somewhat misleading. After relying on big incentives through the summer, GM’s sales had fallen dramatically by last November, lowering the bar for what it needed to post this year to show an increase.
GM, though, does appear to have winners with a new set of trucks and a family of large crossovers hitting the market later this year and early next year, said Alex Rosten, an industry analyst for Edmunds-.com.
“They have an incredible amount of product in the pipeline that’s about to come out,” Rosten said.
The Nazis also used IBM computers to coordinate the Holocaust. ??
Could you elaborate on that one please?
There are approx. 1.4 billion Chinese and about 4000 lying, thieving, murdering maggots that refer to themselves as “The Government” (We only have 537). Not only is GM and all who conduct business in China bringing economic opportunity and material well-being to the Chinese people profoundly moral, they are heroic.
If you ever watched the Pixar movie “A Bugs Life”, the grasshoppers being “The Government” and the ants being the people… the grasshoppers, in time, are toast!!!!
On a personal note: To the kid that stood up to the tank in Tienamen square – I hope you are rich, happy, have a supermodel wife, many non-TWAT cars, and have everything you ever wanted and more ! You, my friend, are the man… A REAL man !
So what you’re saying is that GM has already gone bankrupt – morally.
Aaaah! The good old defence of being forced into being greedy!
“If I don’t do it someone else will!”
And even better in these comments: defending both GM and China. You can argue that China is not really a communist country anymore, but they sure are a dictatorship.
We’re also building our factories there, training their workers, giving them our technology and know-how. Then one day, they won’t need us. They’ll just either make their own cars, or make our cars under their brand name and we’ll find out there’s nothing we can do about it.
And btw, foreign investment is capped at 50% in any company in China. You can’t own or control any company. Car manufacturers are forced in partnering with existing chinese manufacturers (owned by your friendly chinese government). So there’s actually no need for nationalization, all those GM, BMW, VW factories are already property of our chinese friends.
And for the ethical issue, I guess that if we could outsource slavery far far away, and keep it there, so long as we don’t have to look at it, we can rationalize it in our mind.
……And I’m still waiting to see all those viable business alternatives to investing in China from all the naysayers…..
Holy cow! I thought I had logged on to a car review website. And BAM! we have reevaluated WWII, and weighed in on almost every world conflict and leader.
RF: I remember not too long ago you wrote another editorial comparing UAW members to something dispicable (that something escapes me now, dammit). After a small but vocal group chastised you, you withdrew the article. I guess you’ve decided to poke the bear again. However, being a victim of history channel saturation the article and following comments become a blur to me. You may be right. You may be wrong. Which way will the wind blow tomorrow. But, for what it’s worth, I would again recommend sticking with cars.
On a personal note: To the kid that stood up to the tank in Tienamen square – I hope you are rich, happy, have a supermodel wife, many non-TWAT cars, and have everything you ever wanted and more ! You, my friend, are the man… A REAL man !
Luther,You’re so right.He is-or was- a MAN amoung men.
Black, White… maybe Gray?
I don’t understand why it’s an all in or all out move for GM to be in China? Or rather, it’s all “right”, or all “wrong”. Can’t you manufacture in China and provide relatively decent working conditions?
I’m also a bit surprised that everyone feels that business and morality are separate – is there nobody reading and commenting that believes that at least sometimes, although hard in the short term, doing the right thing is better in the long term? I imagine that the moral high ground, although expensive, is also quite valuable… just look at the success of organic vegetables.
btw, I’m on the edge of my seat to hear the interpretation of Captain Kirk’s reported liquidation of his remaining block of GM shares in a private transaction on Friday. Next GM deathwatch tomorrow?
IBM did indeed supply a lot of automation and record keeping nouse to the Nazi regime. I’m not sure about the claim of ‘coordinating the holocaust’, but they made some mad money at the time courtesy of the rising Germans.
RF, this has got to be the real scraping of the bottom of the barrell in relation to the Deathwatch series (and your pulling it from that category is ludicrous – take responsibility for your words as they were written, please).
As mentioned earlier, if GM weren’t in China you and every other pundit would be all over them for lack off business nouse. If you’re going to have a crack at them, then tar all manufacturers with the same brush. This isn’t a GM thing, it’s a corporations in general thing.
And on the German thing, somewhere in my archives I have a picture of Ferdinand Porsche showing off a model of the new VW prototype, which we all came to know as the beetle. Looking on in admiration and wonder is one A. Hitler, who later honored him with a medal in 1937.
So where’s the VW article? And don’t you own a car that bears Mr Porsche’s name? If perchance you’ve written this on a genuine IBM PC then the trifecta of hipocrisy is quite complete.
Sub in ‘of’ for ‘off’ in paragraph 3.
And add the fact that VW are also huge players in China in paragraph 5.
Damn edit function won’t work…..
I’m also a bit surprised that everyone feels that business and morality are separate
I don’t believe business and morals should be separate, and indeed there are examples of business both being profitable and beneficial.
However I also believe that no-one should be surprised when businesses act questionably.
Serious question for Mr. Farago and all those who agree with the concept that GM should put its money where your mouths are with regard to China: Have you actively called your broker/financial advisor and said “I know I might take a hit on this, but I want to financially take a morally absolute stand when it comes to China. As I see it as an oppressive state hell bent on being the USA’s and free/democratic world’s next great enemy, I wish to immediately divest my portfolio of any and all companies doing business in China, with China, or from China.”
Be honest – since you want GM to do this: Have you?