GM actually looked quite good for a while in China and had Volkswagen rattle in their jackboots in years’ past. Then, GM dropped the ball. Ford is a nobody in China. Ford’s feeble 240,879 units made in the first nine months don’t even rate a place amongst China’s top ten automakers. Officially, Ford doesn’t count at all in China, they hold only minority shares in two joint ventures. The WSJ wisely refrains from mentioning Chrysler. Chrysler was actually the first foreign carmaker in China. Kindof.
In 1983, then American Motors signed a deal with Beijing Automotive Works to replace its smoke belching Russian GAZ Jeeps with cheap Cherokees, a deal that makes some old-school Chinese still yearn for the Russian model. Chrysler let its first mover advantage fall fallow. “Its overall performance during the past two decades might politely be described as disappointing,” wrote Business Week, a year ago. Chrysler blames it on the Germans.Anyway, the Chinese car market is still growing.
Depending on who you ask or believe, growth is anywhere between 5 and 10 percent this year. Which sets China apart from waning Western Europe and especially from the atrophy formerly known as America. In GM’s Monday conference call, Mike DiGiovanni, GM’s chief sales analyst looked at the October figures, gulped, and said: “If you adjust for population growth, it’s the worst sales month in the post World War II era.” And then, in a rare case of clairvoyance, he muttered: “Clearly, we’re in a dire situation.” Message from China: “Sorry, can’t help ya! “
(Photo courtesy Otaku. Thank you!)
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The American auto industry is well worth saving, for many reasons. One reason is that for the past decade Detroit has made heavy investment and steady progress in improving its competitiveness, what it calls “altering the DNA” of American cars. US automakers spend $22 billion annually on plants, equipment, research and development. Breakthroughs are at hand in developing alternative fuel propulsion systems, and our national well-being and security depend upon seeing them through to completion.
If we allow U.S. automakers to go under out of anger, resignation, or ideology, it will only mean all the work and investment of the last decade will be ceded to our foreign competitors instead of being plowed back into the U.S. economy.
Another reason is the industry’s importance to the job market and the wider economy. Automobile manufacturing directly employs a quarter of a million workers and indirectly about one in ten U.S. jobs are related to some degree to the automotive sector, according to GM estimates. So the effects of a collapsed U.S. auto sector would not be limited to Detroit – they would be magnified as the ripples spread to related industries.
If we allow U.S. automakers to fail, millions of retirees depending on auto company pensions will be at risk and auto manufacturing jobs will disappear. The ripple effect won’t end there; millions of jobs in related sectors, such as U.S. manufacturers of steel, aluminum, iron, copper, plastics, rubber, electronics, and computer chips, will also feel the pain.
Worse yet, the promise of a meaningful future for American manufacturing would fade. As that promise dims, the role played by manufacturing jobs as a passport to the middle class would likewise disappear. Alexander Shlepakov
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