GM Places Gun Against the Head of the Chinese-made Buick Envision
We previously reported that General Motors was seeking an exemption from U.S. tariffs that could affect the domestic wellbeing of the Buick Envision, the brand’s Chinese-made utility vehicle positioned between the Encore and Enclave. At the time, GM hadn’t weighed in on if it would pull the model from the United States if it didn’t get a pass into the country.
Since then, General Motors President Dan Ammanm has said the exception is the only way the automaker sees itself being able to continue selling the model in America. The automaker confirmed that the Envision’s domestic sales are insufficient to rationalize U.S. production but noted GM needed the model to have a complete lineup against brands like Audi, Lexus, and Mercedes-Benz.
According to Automotive News, GM’s filing claimed sales of the Envision in both markets would “lead to significant repatriation of funds” that would eventually result in cash for U.S. manufacturing and development of next-generation automotive technologies. But with fewer than 42,000 domestic deliveries last year, versus 210,000 in China, the company can’t rationalize building the model within the United States.
“While the volume of Envisions sold in the U.S. is small, it is strategically important and essential to the Buick brand,” GM said in its request. “A 25 percent tariff on the Envision may eliminate the vehicles from Buick’s U.S. offerings.”
Ammanm went a step further by saying the exception was basically the only way to keep the model in America. “That’s a vehicle that is a relatively low volume vehicle in the U.S. market,” he told reporters on Friday, following a presentation at the Billington Cybersecurity Summit in Detroit. “It’s a high-volume vehicle in China, so in order to have that vehicle available in the U.S. market, this is the only way that can work for us.”
The Envision, which former UAW President Dennis Williams called “the Invasion,” has been been a target for union advocates for years — ever since General Motors first began importing the vehicle from China in early 2016. It was the first light-duty vehicle from any domestic automaker to be produced in China and imported for U.S. consumers.
While it’s commonplace for domestic manufacturers to import vehicles from Europe, Mexico, and Canada. Increased tensions between China and lackluster reviews have helped the Envision standout as a “problem automobile” for some. Of course, the UAW isn’t thrilled anytime a domestic automaker ventures beyond U.S. borders for assembly.
“There’s another example how employers will go to low-paying nations and manipulate the process and start importing into the greatest market in the world, the United States of America,” Williams said of the Envision last year. “That’s unfair to the American taxpayer, and that’s unfair to the American people.”
However, if you look at the sales figures, Buick’s success in China is probably the only reason it still exists at all. The People’s Republic requires foreign entities to partner with an established Chinese firm before selling cars there and strict import tariffs make shipping vehicles in from foreign markets exceedingly difficult. Buick had little recourse if it wanted to chase volume in Asia.
Unfortunately, that decision is now hurting it here and General Motors is left trying to convince the U.S. government that the right decision is to let the Envision pass into America untaxed — even though China never extended the company the same courtesy.
“The profitability that we generate on that vehicle, selling it in the U.S. market, we obviously reinvest in the business here so we think it’s in everybody’s interest for that to continue,” Ammanm said.
[Image: General Motors]
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And thanks for being honest in your screen name. Only an employee of a U.S. automaker would ask such a stupid question. And you're welcome for bailing out your employer.
GM was bailed out during the late 2000s recession by us, the taxpayers of the United States. The cost to us was $11-$12 BILLION dollars at the time. The least GM could do is contract vehicle assembly in markets that are either domestic or allied with the United States. China is a communist country and is effectively a "friendly enemy" of the US. If GM wants to build vehicles in China for Chinese consumption, fine, that makes sense. But exporting them to the US is a slap in the face to every American that supported GM during GMs near bankruptcy.