Was The American Auto Parts Industry "Given" To China?
And every nation but one signed on. A hundred and fifty-five nations agreed to a kind of form of blackmail, which is that you want to sell cars to the U.S., you want to sell, you know, orange juice to the U.S., you’re going to have to go along with deregulating your banking system, accepting our derivatives junk, our junk bonds and our junk derivatives, and opening up your sectors to Goldman Sachs and JPMorgan, so that Morgan, Citibank, and others are allowed to operate internationally. The effects, of course, have been disastrous.
It’s a stunning allegation, but it’s one that increasingly appears to be backed by solid evidence: the United States “exported” bad banking practice in exchange for importing everything from bananas to Bentleys. But there’s more.
By the way, even when we look at the destruction of Detroit, China signed the agreement, agreed, okay, we’ll open up our banking sector to derivatives and your toxic junk, but we want your auto parts industry in return. So we basically handed over the auto-parts industry to China. That was their deal. Two million manufacturing jobs shifted to China from the U.S., and auto-parts was a big part of it, which led to the–. One of the reasons why the city of Detroit went bankrupt despite the auto bailout is that auto parts did leave for China. So, you see, there’s direct repercussions of this type of secret connivance between our officials and banks. It’s a very dangerous business. And for Summers to have been in the middle of organizing this and coordinating this and not revealing this–they’re allowed to have these meetings, but they can’t do it in secret–it raises questions about whether this guy should be the central banker of the United States.
This is the sort of allegation which offers a very simple answer to a very complicated question, and perhaps for that reason it should taken with anything from a grain to a lick of salt. This isn’t a centrally planned economy and the government can’t just “shift” two million jobs. Still, it’s worth discussing, particularly as the not-quite-totally-open Chinese auto market continues to require a couple pounds of flesh with each imported American product.
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Did anyone see the 60 ins report last night about US workers now have new competition: robots are replacing thousands of workers, that is why unemployment remains high despite a better economy, BTW my mechanic would use rebuilt, CV axles and rack and pinion units but now he gets them from China, almost the same price, with a better warranty, cause he said the locally rebuilt units were poorly re-manufactured.
@Big Al--The major productivity gains in the US are mainly due to robotics. If you get a chance google the CBS 60 Minutes segment on robots. It is amazing what robots can do from filling orders in a warehouse with a preciseness of a Swiss watch to the repetitive tasks on assembly lines 24/7 with the only downtime for routine maintenance and repairs. The gains in quality on fit and finish on cars and trucks is mainly due to robotics. In the 60 Minutes segment for $22k a robot can be purchased that does the same amount of work as 2 assembly line workers and if you include $3 an hour wages in China the robot still comes out a head cost wise even in a US plant. Many of the lower skilled jobs that can be automated will eventually leave China and be replaced by robots in North America. The cost savings are even before you add the shipping cost from China and the time it takes to ship goods from China. Much easier to change production to meet increases and decreases in demand if products are produced locally. That would be just as true for foreign owned plants in the US as well as domestically owned manufacturing.