GMs Chinese operations (as other non-Chinese companies) is only a 50/50 joint venture (in GMs case, with Shanghai aka SAIC, which also has a 50/50 JV with Volkswagen, and bought rights to the Rover designs before Rover imploded, also SAIC owns a portion of “GMDaewoo” and 49% of Ssangyong in South Korea). So, how “dedicated” is SAIC towards the GM JV? They are planning on building cars in COMPETITION with GM and VW for EXPORT soon.

The other “catch” is that if GM thinks the 50% owned JV in China is going to carry the rest of their worldwide automotive operations when North American operations is sinking, sinking, sinking – they had better go back to Econ 101. Ain’tgonnahappen dot com.

In case everyone’s forgotten, the People’s Republic of China is a communist state run by a few, and they can change anything on a whim. Like nationalize auto companies, or prevent profits from leaving from JVs, or raise interest rates (they just did that) to slow down the economy. Whatever.

The GM guys and the rest of the western JV part-owners had better figure out that they can’t simply control everything down at the Mason lodge any more. As in, the tiller isn’t in their hands. So, they can join the rest of us, who’ve never had a tiller in our hands, controlling billions of dollars and millions of lives.

Nearly all GM cars sold in China are made domestically.

The company has opened a second plant in Shanghai last year and added three new Chevrolet models in 2005, the Sail compact car, Epica intermediate sedan and Aveo hatchback. That pushed China sales for the brand past the 100,000 mark for the first time, establishing China as Chevrolet’s fourth-largest global market.

Just curious…

The middle class in this country is fast disappearing. Inflation is taking its toll. The official inflation rate is a lie. Manufacturing jobs are going away (and with it, the middle class).

Once upon a time, like in the late 1960’s, a teenager could mow lawns or work a minimum wage job for a year and buy a new Mustang or Camaro.

Now, a similar minimum wage job nets about $10,000, which might get you a new Chevrolet Cobalt in one of the “under duress” sales, certainly you couldn’t pay MSRP for a decent car, or anything equivalent to a Mustang or Camaro.

Likewise for the retired middle class who have been used to buying new Buicks and Mercury Marquis cars every 2 or 3 years, when faced with 70% increases in energy costs like electric bills, and gas at $3 a gallon, are unable to afford what they could before.

I’ve noticed a lot of these folks are gravatating to Kia Amanti cars, though. I bet they don’t trade every 2-3 years any more, with that Kia warrantee, either.

Hopefully, manufacturing jobs will start returning to this country as Toyota and other successful manufacturers continue to add production plants in this country.

It’s happening, but not at the same speed that GM and Ford are shedding manufacturing jobs (and let’s not forget that companies like Electrolux recently moved a lot of white goods – refrigerator and so on – production from Greenville, Michigan to Mexico even though the Greenville plant was turning them a profit).

http://www.businessweek.com/autos/content/aug2006/bw20060818_936204.htm

If UAW walks out on Delphi, it won’t only be GM who’s production stops. But it will probably be GM who’s production never restarts. Unless the GM bosses have requested their Chinese friends to start tooling up for parts to replace ALL of the Delphi components they buy, in huge quantities, that is.

Wow, that would be “encouraging” to GM buyers who are used to Wal-Mart (Chinese) toasters, microwaves, TVs and other items lasting oh, about 3 years or less.

As I mentioned before, if GM and the GM dealers lose money on selling these trucks for $12,999, how do you think they make out selling the same trucks (with a different grill) for $10,900?

Doesn’t take a brain surgeon to figure this stuff out.

Same ad showed a Pontiac Vibe for a bargain price of $13,900. This is virtually a Toyota Matrix with a few tweaks to the sheetmetal and different trim, grill and interior, yet sells for far under what Toyota can get. The resale value is less, too.

This tells me volumes about GMs long-term viability, or lack thereof.

I heard this same thing 25-30 years ago, in the midst of the Arab Oil Embargo, when everyone was bashing Detroit for building big cars. Dire predictions were made on how much time was left before Detroit was finished. 25 years ago they predicted the V8 was as dead as the dodo and everyone would eventually be driving Chevette sized cars. We all know how that one went.

And why is everyone bashing Detroit for making these types of vehicles? Every automaker is/has copied them. Obviously there’s demand for them. Yes, it makes far greater sense for the average person to drive a Civic or Corolla. Unfortunately, far more automobiles are bought for emotional reasons than practical ones.

Why would GM waste their energy on building small when all their money is made on big? Particularly when brand loyalty for their large vehicles is intense, unlike their smaller vehicles. And while their SUV sales have taken a small hit, their sales are still very strong.

I take the contrarian position and do not see the small car trend lasting. Gas prices will eventually come down – it may even collapse, like in 1986. The rise in oil prices is due more to futures speculators than anything else.

I agree with the posters about the unfair GM bashing. Yes they had some bad decisions, but where is this same badmouthing about some of the Koreans and European brands? They have consistently been at the bottom of the reliabilty surveys. VW has traditionally been dead last. Nissan, too, had major financial problems just a few years back and had to merge with Fiat. Why no talk about them?

I do believe that GM and Ford will eventually file for bankruptcy and merge with some other automaker. However, I can’t see their vehicles dissappearing. There are just too many loyal customers. Has anyone been to the Carolinas or Texas? In Texas, the Tahoe outsells both the Camry and Accord. Chevy by itself outnumbers all the foreign cars in parts of those areas.

By the way, GM’s stock has risen 50% in the last several months – one of the best performers of the S&P recently.

This environment, it seems to me, causes parts to be designed to be cheap, and built cheap with cheap materials. Could this explain GM’s dashboards? Their seats? Their vehicles?

I wonder if this is a trait of the Japanese manufacturers? I am sure that they are constantly cutting costs, but at any cost?

Is this cost cutting at all cost mentality not part of the reason for the desirability gap between the domestics and “imports”? Are there too many old fashioned car guys still at GM to adjust to the new economy and newly sophisticated consumer? Does this explain all the stripped, ugly, basic cars we see at GM dealers? I guess they think we need to pay for quality.

Wake up guys! Make all your cars attractive and with quality. Give us a good value, not a $10k option package necessary to get a car that you are not embarrassed to leave in your driveway at night.

Or we will buy from someone who will.

You might want to read some of the ads a bit more closely yourself. Those ‘incredibly hot’ brand new Cobalts are being advertised at $9999 – full price.

I’ve seen the Chevy trucks for $12,999 full price, out the door as well. Obviously that’s not a loaded, 4WD medium-duty. Frankly, that’s about all a light-duty domestic work truck should cost anyway. Problem is, GM doesn’t make a profit on that unit.

I have not interest in anything GM sells, though I grant the C6 is pretty darn good. I do have a (perhaps a skosh macabre) interest in watching GM get what it has so richly deserved since the late 60’s.

Everything that will happen to GM was pre-ordained in the early 70’s. The coming fall of GM will only be a surprise to those who believe/d the myths.

Please, enlighten us all. Tell us how a company that continues to lose money every quarter can continue to even keep the lights on, let alone develop what it has not had for 30+ years: product that is competitive.

Once they do their bankruptcy, GM might be able to reform into tiny niche player profitable company. But nobody who knows how to use a calculator can find a way for GM to even survive without, if they are incredibly lucky, writing off at least 75b. Since they are having a hard time borrowing even a few billion, seems unlikely that dinero is rattling around in petty cash.

Have you heard that saying about watching train wrecks? You know it’s going to happen, and that’s it’s going to be horrible, but you just can’t help it.

BTW, spinning doesn’t work here.

How long does anyone with a lick of sense think that this kind of thing can continue?

My local Chevrolet dealer has 400 trucks and only a handful of cars in stock. The radio ads are sounding absolutely hysterical. New Chevrolet Silverado pickups for $12,999.

Now. These pickups weigh in at about 2 metric tons, 4400 pounds. With the cost of copper, steel, palladium, platinum, aluminum, plastic (made of oil) and everything else skyrocketing faster than the “officlal” rate of inflation, I ask you.

Do you suppose that GM can “make any money” by selling Silverados from $12,999? Let’s be realistic here, and say, NO WAY.

That’s not even considering the UAW jobs bank where GM is paying guys to stand around and play cards.

Let’s look at an analogy of a bathtub with multiple leaks and a dripping tap.
The tub was full at one time, but the incoming pipes gradually filled with gunk and the incoming flow has essentially gone to a drip. But the drain is now busted and can’t be fixed, plus the bathtub has multiple leaks.

How long before the tub is empty? Not long.

The US division of Daewoo went bankrupt, and owners got left holding the bag. GM didn’t honor anything, of course, as they didn’t buy the US division. If history repeats itself, it’s going to be a horror show.

Maybe this is part of GM’s plan, ie, a bankruptcy filing, in addition to allowing them to skip out on their pension obligations, would also give them a way to reduce the number of brands at GM while raising cash at the same time.

But the new smaller GM would still have to compete successfully in the market place and selling brand(s) to another car maker only adds to the competition. The scenario you paint would have GM’s remaining brands like Buick competing with a chinese Chevy offering a similar product line at a significantly lower price point, even after the cost savings obtained thru bankruptcy.

But you can see the opportunities/options a bankruptcy filing might offer. I think it’s only a question of time/timing for the filing.

So now BMW is apparently selling SAIC (Shanghai auto) the rights to the Rover name, but SAIC weren’t able to buy up the MGRover factory or machinery (they were beat by Nanjing Auto, another Chinese company) however SAIC did purchase the design-rights to the Rover cars. Nanjing got the design rights to the MG cars.

Kind of like one company getting rights to the Chevrolet Equinox and another, the Pontiac Torrent, the badge-engineered Equinox clone with a different grill.

The big irony is that SAIC just watched “the master manipulator” GM itself, do the deed to Daewoo, and string along the creditors until the price was right (pennies on the dollar). In fact, both Suzuki and SAIC were “in on the deal” and also bought part of Daewoo for a song, along WITH General Motors. (Two’s company, three’s a crowd, guys).

So I’d say yeah, SAIC or some other big Chinese outfit may end up owning the Chevrolet BRAND.

SAIC owns 48% of Ssangyong of South Korea, owns Rover rights, has a license to build Daewoo based Chevrolets and US based Buicks in China and owns part of GMDaewoo. Like an octopus with most arms under water, the threat doesn’t seem big, right now…

So, could a post-GM Chevrolet line consist of all South Korean and Chinese vehicles? Potentially, yes. They’d only probably have to cover 8-10% of the US market initially because many buyers would be scared away by the bankruptcy of GM, to be honest. They could cherry-pick the best dealers (sorry for the Chinese car “Chery” pun, there).

Chevrolet dealers could sell: Aveo, Optra (sold in Canada right now as a Chevy, also made in China by SAIC as well as South Korea by Daewoo), Epica (a mid-sized Daewoo sold in Canada right now as a Chevy), Equinox (a Canadian Suzuki contract-built car, with Chinese V6s), Vibe (contract built in California by NUUMI – now sold as a Pontiac and based upon a Toyota Matrix), Kalos (a small SUV built by Ssangyong which could be fitted with their Mercedes derived 2.3 liter four), Rexton (a medium SUV built by Ssangyong with Mercedes-derived 3.2 liter inline six), and Chairman (a luxury sedan on the basis of a 15 year old Mercedes sedan with 3.2 liter inline six), and Allure (the Buick LaCrosse / aka Allure, now built or very soon to be built by SAIC in China with the China built 3.6 DOHC V6). Notice, no pickup trucks? No sucky GM minivans? Maybe SAIC would buy up the Mexican GM factory which could churn out some Chevrolet Silverado pickups using cheap labor. Surely they wouldn’t buy into American UAW factories.

None of the liabilities of GM would be bought-in either, if a Chinese company waited until Chapter 7 bankruptcy and bought up bits and pieces. Like maybe Opel and GM Europe, as well? GM Europe now sell GMDaewoo cars (not forgetting, part owned by SAIC right now) as CHEVROLETS.

The Chinese learn fast. GM showed them how to do it with the Daewoo deal.

Hey, GM? Ain’t come-uppance gonna be a b*tch? The sad part is, the management who are responsible will walk away with money, the workers, nothing. No pensions, no nothing.

Now if you think that will solve GM’s problems, you are living in a fool’s paradise. Cutting costs will only get you so far, you still have to make cars people want to buy. I would wager that the ONLY car GM makes that most piston heads would agree is a good car at a competitive price is the Vette. And therein lies the problem.

As for what would happen to GM, I have a prediction: it will be sold to a Chinese car maker. Why the Chinese? First, they have the money to buy GM. Second and most importantly, the Chinese are new to the US market and GM would give them an instaneous distribution network in the US.