American Know-how, Made In China: GM Opens New Tech Center In Shanghai
Where are Debbie Stabenow and Carl Levin when we need them? The crusaders against China getting its hands on precious American intellectual properties must go bonkers when they hear this: In the olden days, the Chinese had to steal and rob know-how from America. No longer necessary: Americans outsource know-how creation to China. At the forefront: General Motors.
Today, GM opened the final phase (the video above was for the first phase, but is still pertinent) of the GM China Advanced Technical Center in Shanghai. According to a GM statement, the center “will support advances in technology, powertrains, electrification and vehicle design for GM on a local and global basis.”
The center will focus on “new energy,” which is, says Reuters, “a Chinese codeword for heavily electrified technology that powers all-electric battery cars and plug-in hybrid electric vehicles.”
The center wants to harvest the abundant and still relatively cheap engineering talent in China. As John Du, a director of the new center told Reuter s:
“There’s tremendous people capability in China with more science and engineering graduates than the U.S., Japan, and Germany combined. China now ranks first in the world in the number of PhD candidates, and these are talents we want to attract into the GM R&D and engineering workforce. Not just to develop product for China market.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Hey, this really is a smooth move! At last the top management and board at GM have recognized that China, and to some extent Asia, is the future. That's where the money is. That's where GM's salvation is. That's the path leading to righteousness for GM. True, GM cannot ever cut back its assembly operations in the US because of the bailouts, but GM can hold back on expanding its operations in the US because of the diminishing importance of the US auto market and the disincentive of high labor cost in the US. Whatever will be developed in Shanghai can always be assembled in the US, Canada and Mexico like GM has done with South Korean partnerships. I say this is a prudent business decision and will net GM a great deal of profit, worldwide. They've got to go where the money is, and the money is not in the US.
So, the US government borrows money from China to finance, among other things, the GM bailout, and GM creates jobs in China.
This is nothing new for Western companies. China has a huge pool of talents. Microsoft has been operating its research center in Beijing for years. GE also its own research center in Shanghai.
My sources (directly in this game), tell me that the "talents" of these lower-labor cost countries (like China) are their inclination to follow orders without questioning them. (Unlike the pesky, experienced and talented pool of U.S. engineers, who have somehow kept the U.S. companies alive despite the best efforts of the leaders.) Being dictatorial is efficient, unless you have the incompetent, ladder-climber executives telling them what to do, while also making them to use their convoluted, high-cost process to do it. U.S. executives think a degree equals talent; it does not.