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(Bloomberg)   GM so badly off, it's closing plants and laying off workers. Just kidding, they're only doing that in North America. GM announces it's opening it's eighth plant in China, or, "Thanks for the bailout, suckers"   (bloomberg.com) divider line 93
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1950 clicks; posted to Business » on 22 Dec 2008 at 9:51 AM (5 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2008-12-22 09:32:49 AM
Maybe... I don't know... people are buying cars in China while demand is decreasing in the US?
 
2008-12-22 09:35:31 AM
They just opened one in Russia, too.
 
2008-12-22 09:44:15 AM
RodneyToady: Maybe... I don't know... people are buying cars in China while demand is decreasing in the US will work for pennies a day in unsafe conditions?

FTFY.
 
2008-12-22 09:54:37 AM
But the Unions have nothing to do with GM's problems.
 
2008-12-22 09:57:12 AM
China is a growing market, Submittard. Now that you're an official debtor of GM, you might not want to biatch so loudly when they expand where they think they can make money.farkin douche. Try to think a little further ahead than the end of your nose.
 
2008-12-22 09:57:47 AM
^^CREDITOR^^^.

/my bad
 
2008-12-22 09:58:05 AM
GM is selling more cars there, so they're doing the smart thing business wise.
 
2008-12-22 09:59:36 AM
RodneyToady: people are buying cars in China while demand is decreasing in the US?

Why don't the Detroit guys juat drive their cars to China? It can't be further than California, can it?
 
2008-12-22 09:59:37 AM
You curtail your manufacturing and costs in a contracting market, and spend, grow and invest in growing markets.

The US, currently, is a contracting market for vehicles. Asia is a growing market.

Or, GO WHERE THE MONEY IS
 
2008-12-22 10:00:36 AM
We used to have a trade policy that actually encouraged companies to employ Americans. Good thing those days are over,. We'll be a third world country in no time.
 
2008-12-22 10:01:46 AM
GM doing well in China makes a lot of sense. The Chinese are rather fixated on most American/Western things. Mix in the historical conflict between China, Japan, and Korea and you some lingering cultural bias not to buy Japanese/Korean goods.

Plus.. China is a growth market. Why not build plants where the growth is? Isn't that part of restructuring? Shipping completed cars is expensive.

When I was in China a few years ago Volkswagon was the top seller and Buick was "the" nameplate, from a highend/luxury viewpoint to have.
 
2008-12-22 10:02:58 AM
thalidomide new and improved: You curtail your manufacturing and costs in a contracting market, and spend, grow and invest in growing markets.

This still sounds like they're looking for short-term gain rather than long-term growth.
 
2008-12-22 10:04:24 AM
waiting4godot: When I was in China a few years ago Volkswagon was the top seller and Buick was "the" nameplate, from a highend/luxury viewpoint to have.

Does China really have that large of an elderly population?
 
2008-12-22 10:08:07 AM
Great, China is a growth market. I do believe, however, that the bailout was designed so that the Big 3 could maintain and economize operations within the US, as to keep Americans employed.

In an economic crisis, giving money to a company so that it can still lay off workers doesnt do anything for America. It helps China, and it helps GM. But if GM is limiting it's American workforce than that money doesn't return to the US economy.
 
2008-12-22 10:09:54 AM
So wait. GM complains they are losing money and foreign car makers have plants in the US hiring American workers, but harming American auto companies. They also claim those same foreign plants in the US are influencing the Senate people in those states not to bail out the big 3.

Now they are getting bailed in the US, laying off people and closing plants and building a plant in China to provide jobs for who? Now granted, building here then shipping over doesnt always make the best business sense, but come on. Does anyone else see any issues with this?
 
2008-12-22 10:10:35 AM
The Icelander: This still sounds like they're looking for short-term gain rather than long-term growth.

And what could possibly go wrong with that strategy?
 
2008-12-22 10:14:35 AM
Nemo's Brother: But the Unions have nothing to do with GM's problems.

Absolutely correct!

Toyota announces not being unionized makes no difference in this economy
 
2008-12-22 10:19:12 AM
Isn't Ford about to do the same in Brazil as well...
or at least, start funneling more capital and resources there?
 
2008-12-22 10:25:47 AM
RodneyToady: Maybe... I don't know... people are buying cars in China while demand is decreasing in the US?

If only there were some sort of vast trade imbalance that would send empty container ships back to China, that would make exporting cars there pretty cheap.
 
2008-12-22 10:32:00 AM
So, when will GM's Chinese cars start lapping up on US shores?
 
2008-12-22 10:32:03 AM
RodneyToady 2008-12-22 09:32:49 AM Maybe... I don't know... people are buying cars in China while demand is decreasing in the US?
====================

Demand is INSANELY high in China and it's cheaper in China because they're paid subhuman wages.

As a human-rights move, it's a bad choice. As a business movie, it's pretty damn good.
 
2008-12-22 10:32:04 AM
The Icelander: This still sounds like they're looking for short-term gain rather than long-term growth.


"GM's China-made vehicle sales rose 8.1 percent in the first 10 months to 861,458. Its U.S. sales fell 20 percent to 2.56 million. China's industrywide auto sales jumped 11 percent to 7.83 million in the period, compared with a 15 percent drop in the U.S. "

How is what they're doing a short-term gain? How many potential car buyers are there in the US? What's GM's market share? And how about China?

China's demand is only going to grow over the moderate-to-long term. In the US, at best it'll stay steady. And most growth in the US for one manufacturer will probably come at the expense of another. In China, one manufacturer might not be able to meet all demand.
 
2008-12-22 10:32:57 AM
GM is competitive in emerging markets for the same reason transplants are competitive in the US market...no legacy costs.

GM is currently a health care company with a side business making cars.
 
2008-12-22 10:33:04 AM
I think the fact that GM vehicles are in high demand shows just how bad Chinese cars really are.
 
2008-12-22 10:36:47 AM
The Icelander: I think the fact that GM vehicles are in high demand shows just how bad Chinese cars really are.

To be fair, the Chinese cant even get milk and eggs without fears of it killing you. GM cars just dont work well. So GM will look pretty good over there.
 
2008-12-22 10:37:46 AM
Hey!!! they can make profits in China and Russia, and at the same time, take Tax Money and lay off workers in the U.S. I'm buying GM Stock NOW!!! LOL
 
2008-12-22 10:38:23 AM
thirdful 2008-12-22 10:09:54 AM So wait. GM complains they are losing money and foreign car makers have plants in the US hiring American workers, but harming American auto companies. They also claim those same foreign plants in the US are influencing the Senate people in those states not to bail out the big 3
===================

I know it's so very very hard, but let's follow the logic before your brain turns into that of Rush Limbaugh's.

Step 1: Find a market with great demand (China)
Step 2: Find a merket with cheap labor (China)
Step 3: Make large profit from Steps 1 and 2. (Building a plant in China)
Step 4: Use those extra profits to keep the U.S. plants open.

Ding!
 
2008-12-22 10:42:51 AM
RodneyToady: How is what they're doing a short-term gain? How many potential car buyers are there in the US? What's GM's market share? And how about China?

Considering that every thread about US car manufacturers devolves into arguments about patriotism or manliness. Those are apparently the only two things that GM, Ford and Chrysler have over other car manufacturers.

And now they're opening up plants in China and closing plants in the US, so they're effectively taking the "Buy American" argument off of the table, as if globalization hadn't already done that.

Now, the people in charge of GM's Chinese division might be smarter than the ones at the head of the company, and this might be one of them. But if you're doing most of your manufacturing in China, how are you still a US car company? They're effectively getting paid by the government to send jobs overseas. And that, like their decision to skirt CAFE standards and make shiatty small cars and behemoth SUVs, is probably going to bite them in the ass.
 
2008-12-22 10:46:05 AM
thirdful: To be fair, the Chinese cant even get milk and eggs without fears of it killing you. GM cars just dont work well. So GM will look pretty good over there.

"Buy the new GM Otaku! It won't blow up randomly!"

jake3988: Step 1: Find a market with great demand (China)
Step 2: Find a merket with cheap labor (China)
Step 3: Make large profit from Steps 1 and 2. (Building a plant in China)
Step 4: Use those extra profits to keep the U.S. plants open. Close the plants in the U.S. because they're not profitable and ship cars in from China.


FTFY.

No serious business is going to keep unprofitable plants open.
 
2008-12-22 10:47:01 AM
jake3988:
I know it's so very very hard, but let's follow the logic before your brain turns into that of Rush Limbaugh's.

Step 1: Find a market with great demand (China)
Step 2: Find a merket with cheap labor (China)
Step 3: Make large profit from Steps 1 and 2. (Building a plant in China)
Step 4: Use those extra profits to keep the U.S. plants open.

Ding!
====================
You really think GM is going to reinvest in a US plant with those profits? A plant that is losing money because they cant build cars Americans want? To pay more American wages, when they could just import from their Chinese plant? Seriously?
 
2008-12-22 10:48:13 AM
Everyone of you who was in favor of this Bush,Obama, McCain sponsored bailout, screwed our country. It's ridiculous.
 
2008-12-22 10:50:06 AM
Nemo's Brother: Everyone of you who was in favor of this Bush,Obama, McCain sponsored bailout, screwed our country. It's ridiculous.

So that's what, three people in all of Farkdom?
 
2008-12-22 10:53:33 AM
Ace Rimmer: Nemo's Brother: But the Unions have nothing to do with GM's problems.

Absolutely correct!

Toyota announces not being unionized makes no difference in this economy


That proves nothing. Toyota may not be profitable for the first time ever. Hell. GM wouldn't be groveling in DC if they only had one bad decade, let alone year. Compare the cost per car between the two companies. You can find a copy here (new window) since you probably have a filter on anything not endorsed by the unions.

Basically, once you count health care, benefits, union crap and legacy costs, GM pays $75 an hour to employees. Toyota pays about $40 an hour. Do the math.
 
2008-12-22 10:55:14 AM
The Icelander: Nemo's Brother: Everyone of you who was in favor of this Bush,Obama, McCain sponsored bailout, screwed our country. It's ridiculous.

So that's what, three people in all of Farkdom?


A lot of TFers are revisionists. Many favored the bailout before it happened. Look at the threads about Pelosi driving away Republicans from voting the first time around and you will find hundreds of people online in favor of it. Only now that it has already proven to be a disaster, are people realizing that they were always against it.
 
2008-12-22 10:59:05 AM
What good is having an American automaker if they don't provide jobs to Americans?
 
2008-12-22 10:59:14 AM
People in China are just happy to have cars, they're not worried about quality yet.

that and the near total lack of environmental restrictions probably helps GM's bottom line over there.
 
2008-12-22 11:04:37 AM
jake3988: Demand is INSANELY high in China and it's cheaper in China because they're paid subhuman wages.

The wages are better than they'd get as subsistence farmers. And the work is easier too. Regardless of whether or not it offends our sensibilities, the sweatshop is a vital step when transitioning from an agrarian to an industrial economy. Concern over sweatshop wages is less a human rights issue (because without those wages, they'd be doing the back breaking labor of subsistence farming just to survive), and more a protectionism issue- if we either boycott sweatshop goods are pressure developing economies to strangle themselves by forcing higher wages, American companies win.
 
2008-12-22 11:05:00 AM
Nemo's Brother: Basically, once you count health care, benefits, union crap and legacy costs, GM pays $75 an hour to employees. Toyota pays about $40 an hour. Do the math.

Toyota also has the advantage of socialized health care in their country. Would you like that here?
 
2008-12-22 11:06:56 AM
Nemo's Brother: You can find a copy here (new window) since you probably have a filter on anything not endorsed by the unions.

From your article:
Reason #1. Demand Shift and Uncertain Energy Policy
Reason #2. The Financial Meltdown
Reason #4. Sub-Par Quality and Lackluster Cars
Reason #5. Global Slowdown

Are you honestly blaming the UAW for those?

Reason #3. Legacy Costs

Ok, that seems to be where the union bashing comes in. Yes, U.S. automakers have to factor in $2000 extra into their cars now to cover the promises they made to their workers 20 some years ago. From the very article you posted...

That particular disadvantage, says Cole, will be "gone by the end of next year," when a new labor agreement goes into effect.

So the UAW themselves have already agreed to fix this particular problem.
 
2008-12-22 11:08:22 AM
Probably better for GM in the long run.

We can now send China crappy cars to go along with cigarettes.

//Maybe the smoking joke was in bad taste.
 
2008-12-22 11:08:56 AM
Oh goody - we get to subsidize union contracts for the unprofitable US operations!

Change!
 
2008-12-22 11:14:19 AM
The Icelander: waiting4godot: When I was in China a few years ago Volkswagon was the top seller and Buick was "the" nameplate, from a highend/luxury viewpoint to have.

Does China really have that large of an elderly population?


I don't know...do you think Mercedes Benz is a global luxury brand? hehe.
 
2008-12-22 11:15:46 AM
Nemo's Brother: Everyone of you who was in favor of this Bush,Obama, McCain sponsored bailout, screwed our country. It's ridiculous.


and the other options were...
 
2008-12-22 11:17:47 AM
Ok, so let me understand this, GM is dying and in need of a bailout. Now not GM plants just operating in the US, but GM as a whole right? And now you guys are defending there business strategy?

...opened its eighth vehicle plant in China and said it had no plans for adding further capacity amid slowing demand in Asia's biggest auto market.

Auto sales in China have declined in three of the past four months because of the global economic slowdown.


Profit? In a declining market?

And how do they react to a decling market?

We are ``building capacity for the long term and we are very comfortable with what we are doing.''

They're 'very comfortable' with what they're doing? Arent't these the same guys that have been destroying thier own company for the past few decades?

But hey, no worries...

GM expects to boost China sales about 9 percent next year as it adds new models

Boost sales? Based on what? Oh and adding new models, according to posts on Fark, has worked out so well for them so far.

And how do they plan on doing this?

...helped by China's $584 billion economic stimulus plan.

Now maybe I'm missing something, but how can you guys suddenly start defending GM's business plans?
 
2008-12-22 11:18:07 AM
i'm starting to think that submitter's are using apostrophe's wrong on purpose.
 
2008-12-22 11:18:16 AM
thalidomide new and improved China is a growing market, Submittard. Now that you're an official (creditor) of GM, you might not want to biatch so loudly when they expand where they think they can make money.farkin douche. Try to think a little further ahead than the end of your nose.

Aw. Someone thinks that GM is going to pay this money back. How cute.

Seriously - this bailout is supposed to help American firms, American people and the American economy.

When a company closes up shop in America to build in China, to sell to the Chinise, how is this helping anything American.

Maybe it is a good business move for GM. Giveing them American dollars to do it with is a very bad move for the American taxpayer.
 
2008-12-22 11:20:09 AM
Colonel_Debugger: Nemo's Brother: Everyone of you who was in favor of this Bush,Obama, McCain sponsored bailout, screwed our country. It's ridiculous.


and the other options were...


RAP NLOU
 
2008-12-22 11:23:43 AM
asian car companies are more american than american car companies. look it up. someone tell the south too since they dont have internets access.
 
2008-12-22 11:38:57 AM
this is exactly how Toyota and Honda are being successful - they've built plants in the markets where they sell cars too. GM is still primarily American owned, and any profits will come back here.

I don't see the issue.
 
2008-12-22 11:42:16 AM
jake3988:

I know it's so very very hard, but let's follow the logic before your brain turns into that of Rush Limbaugh's.

Step 1: Find a market with great demand (China)
Step 2: Find a merket with cheap labor (China)
Step 3: Make large profit from Steps 1 and 2. (Building a plant in China)
Step 4: Use those extra profits to keep the U.S. plants open.

Ding!


If you really believe in Step 4, I have a series of New York City bridges I'd like to sell you.
 
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