Automakers Are Taking a Beating Over China
Stocks for automakers such as General Motors, Fiat Chrysler Automobiles and Ford took a pounding Tuesday after China devalued its currency in an effort to boost exports from the country, stemming the economic slowdown already underway.
In a statement released Tuesday, GM said it had enough of a local supply chain within China to offset its exposure to international currency fluctuations.
“We believe that our exposure is limited and manageable, and do not expect that the devaluation will have a material impact on the company’s financial performance,” the company wrote.
According to the New York Times, China’s currency swing of nearly 2 percent yesterday is historic for the country. Typically the Yuan would fluctuate hundredths of a percent against the dollar. The largest move up until yesterday was 0.16 percent.
Still, the 2 percent dip isn’t considered a big enough swing to warrant a huge reaction. By comparison, the Euro and Yen have fallen 18 and 22 percent against the dollar in the last year, and China’s economy is ranging out of double-digit growth — but still growing.
Nonetheless, automakers with heavy ties to China — notably GM and FCA — took a shot in the pocketbooks yesterday on expectations of what could be around the corner for China.
More by Aaron Cole
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Divert resources to India, then? Indonesia? Malaysia?
Who the hell isn't taking a beating from the state of China these days? If you don't think you are...think again.
But, but.... doesn't everyone realize that it is good that the earnings of an automaker depends less on making cars competently, than on begging and kowtowing to a bunch of politicians and bankster trash who can wantonly manipulate interest rates and print money???
China is so out of balance in many ways. Pollution, poor pay, inequality and corruption out the wazoo. They (everyone really) needs to be responsible in building and disposing of materials, pay better wages instead of it going to the riches, slow down corruption and limit the power of the rich to some degree. More production/efficiency/value needs to be better linked to higher pay! Guess we will be learning this the hard, IMO!