Is GM Sealing Its Own Fate in China?

Frank Williams
by Frank Williams
is gm sealing its own fate in china

We've been saying for almost a year that U.S. and European automakers need to watch their backs when dealing with their government-owned Chinese joint venture partners. Now that GM is paying a quarter billion dollars to hand over all their hybrid research set up an environmental research center in the military dictatorship known as The People's Republic of China, the Gerson Lehrman Group is sounding the same alarm. Jack Lifton says GM's "business model based on a shortsighted belief in mainly short term solutions to long term problems" has "led them to their latest mistake with regard to the Chinese OEM automotive industry." After decades of building up the Chinese auto industry, they now "have to bring to China as a gift the latest technology required for cars made to be sold in the American and European markets" to sell their products in the Chinese market. If a Chinese company should offer to buy Ford or even Chrysler in the near future, "we should thank GM for so generously giving China a good part of the technology it will have needed to close the [market] gap." Ruh-roh.

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  • Eh_political Eh_political on Nov 08, 2007

    windswords, The US military has been issuing fairly blunt assessments about future capabilities going forward. I am sure you are aware of that. The difference between occupying Iraq, with all of the logistical headaches and major troop commitments, and a surgical strike using some of the most elite elements of the US military couldn't be more, um different. As far as comparing a single purpose weapons system to the incredibly versatile PC, I would have aimed a touch lower. First, its like comparing "apples" (sorry Woz) to um, lets say unicorns. In fact missile defense is the modern day Maginot line. It soaks up massive amounts of national treasure, and adversaries will find a way to work around it. So I agree, the technology is not mature, it is in fact immature. And useless. And costly. So, “the US ability to project power looks pretty weak going forward” and “If Pakistan dissolves into chaos, it will be neutered in a day”. I sincerely hope Pakistan muddles through.

  • KBW KBW on Nov 08, 2007

    Its funny, we had a mostly working ABM system in the 1970s called Safeguard. It was some pretty amazing stuff even by today's standards. Missiles which could reach Mach 10 in less than 5 seconds. And you though a 5 second 0-60 time was fast. Alas, Nixon canceled the program and now we have to start from scratch.

  • Ryan Knuckles Ryan Knuckles on Nov 08, 2007

    tentacles: Does China have a restriction on highly educated people leaving their country? I have heard this rumor a few times, and in conjunction with the huge influx of foreign people (a vast majority are Chinese) becoming professors at the college I just graduated from, it seems plausible.

  • BerettaGTZ BerettaGTZ on Nov 08, 2007
    tentacles : November 7th, 2007 at 8:28 pm wrote: I’m Chinese. I think the tone is a little alarmist Yes it is. No one need worry about China taking over the US. This is the country that built the Great Wall to keep out foreign (Mongol) invaders. The only imperialistic aspirations China has is to bring Taiwan back into the People's Republic. Global domination is not in the culture of the Chinese. As for GM, my take is that this is a lot of PR and not much teeth. After all, GM has been in China for over 10 years and has had lots of experience with intellectual property issues (remember the Chery incident) so give them some credit for not being so naive and foolish as to walk in with their latest technology and just hand it to them. It is a good PR move to increase GM's business in China. The country is an environmental disaster, and it will have far-reaching long-term consequences to their economic development and political stability. So GM appearing to take an interest in China's environmental problems is a good business strategy. In China it's all about appearances anyway.