That's Capitalism! China might buy GM and Chrysler
Posted November 21st, 2008 by sentinel
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Under the sway of the global financial crisis, the U.S. auto giants General Motors and Chrysler LLC are tottering on the brink of collapse. Japan’s Toyota Motor was previously rumored to buy them out, but now Chinese carmakers SAIC and Dongfeng are also said to have plans to acquire the two U.S. auto companies, reported the 21st Century Business Herald today.
On November 15, a senior official of China’s Ministry of Industry and Information Technology — the state regulator of China’s auto industry — told reporters that the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.
An industry analyst noted that the global financial crisis has forced Chinese manufacturers to retool and upgrade themselves in order to meet and survive the challenge. Many enterprises dependent on low-value-added manufacturing will be driven out of the new wave of competition by technically innovative and financially sound rivals. It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.
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We taught the Chinese very well....
What would you do with 2 Trillion dollars of worthless U.S. Bonds???
Correct...Buy Hard Assets!!! Examples: gold, precious metals, companies, commodities, real estate, etc.. And that is what they are doing now before the dollar goes bust, although buying this stuff will only hasten the dollars collapse.
The issue that made me lose faith in Ron Paul.
For the record, this is copied & pasted from my Digg account. All comments and suggestions encouraged:
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I'm questioning Ron Paul's vision of patriotism, and I voted for him! I'm from Detroit, but Dr. Paul's vision of patriotism is for me to take one for the team and fail. No solutions, only failure in the name of so called "free markets". How convent to switch to free markets after southern states including his own gave $Billions in tax incentives to encourage foreign owned manufacturers to set up shop. This is not a free market. At least let us ease into a free market economy. The necessary poison is just too great to drink all at once. If we drink the poison slow enough we will adapt rather than completely die. Since 2006, the state of Michigan's government sector employs MORE people than our manufacturing sector. One state just can't compete with the subsidies offered by 15 other states to foreign owned automakers.
Michigan still pays more in Federal income taxes than it receives back. Could we at least have our 15% overpayment back? Frankly, I think we could use it right now. During World War 2, Detroit's Manufacturing sector was known as the Arsenal of Democracy. Our Manufacturing saved this country, and sadly, now we need our country to save us. Even Peter Schiff admits that we have an I-Pod economy based on consumption and not enough wealth creation via manufacturing. If we destroy manufacturing jobs, will they return to this country?
I work Wisconsin because despite what the Anti Detroit propagandists suggest, there's no work to be found back in Michigan. I'm not alone. In fact many of my coworkers are also from Michigan....And the wave of Michigan refugees has barely begun. Watch your ass, because we're coming for your jobs next. In the good old days (2 years ago) I could work in Ohio because back then there were still jobs there. It was quite sad to drive from my Michigan home every Sunday night to my apartment in Ohio because even at 11 PM deep in Ohio, there were other Michigan license plates heading in the same direction - away from home.
Last summer I worked on a contract gig in the Phoenix, Arizona area.
I was shocked. Roughly 30 of the 60 people in my department worked 2000 miles away in Detroit at one time or another. And we were just the Engineers! I can't fathom what will happen if assembly line workers start leaving in droves. The city of Detroit once had more than 2 million people. Now it has roughly 800,000. Things are so bad that even the criminals are leaving. No Joke.
If I lived in a earthquake zone, or a tornado zone, I'd be able to buy insurance to offset my risk. Unfortunately, my only form of recession insurance is to short sell the stock market. If the market collapses, I'll be sitting pretty. If the market recovers, I'll actually lose money, but hopefully I'll still be able to find a job to make up for my losses.
Am I really living the American Dream or am I just not taking enough Prozac? This life isn't freedom. This is deflationary wage slavery.
I live 30 minutes in any
I live 30 minutes in any direction from the HQ of all three of the big three. I am a Software Developer and in Michigan most of the development jobs are tied to the big three some how. Being self employed adds to the mix since if I can't get work I can't go to the unemployment line. All that being said I still think we need to let them fail... It will not be easy but it will help the state grow in the long run.
Now why can't Michigan offer
Now why can't Michigan offer the same 'tax incentives' as other states? And the same right to work laws? Or better yet, no work and tax related laws whatsoever? It's not Texas' fault Michigan lawmakers can't provide a decent environment to operate a business in. Any more than it's South Korea's fault that more companies want to set up shop there than in the North. At least the North Koreans's have the excuse they can't vote the statist trash out of office. In Michigan, election after election goes by without anyone booting the commies out. I can guarantee you, if Michigan enacted policies modeled on Ron Paul's economic views, car makers would open factories there as well.
The federal income tax is nasty, period, and completely inexcusable. No government of a civilized country has any business snooping into how much money it's citizens make.
Michigan gets hit disproportionately hard because the heavily unionized labor force make good fixed wages, which are the easiest ones to go after. Those who make less, have little to steal, while those who make substantially more, belong to a class of people connected enough to have molded tax law deductions in their favor. As always, it's the honest, hard working, no frills guys who get fleeced, while the destitutes and the sleazebags take in the spoils.
Until Michiganers wake up and start voting for candidates promising to end the income tax, I have a hard time feeling sorry for them, though.
They got used to buying
They got used to buying trash like IBM personal computer :D
Does this mean
that the US will adjust it's labor practice laws to allow the Chinese management to shoot less-productive slave workers in the head, and send their organs to be sold on the lucrative transplant market too?
Will "Fetus soup" be served in the factory cafeteria?
Inquiring minds want to know!
this is misleading
The article clearly states that Chinese companies do NOT plan to buy the companies, but their assets. This is a world of difference.
Also, I don't see why people think this is some Chinese conspiracy. Everything that has happened occurred because of us...or at least our government. China didn't force GM into bankruptcy. China didn't force our government to borrow its money. China didn't make guarantees to the UAW union.
If you think China is trying to buy GM's assets at lower than market prices, buy them yourself for higher prices. GM isn't going to prefer to sell their assets for less money. Oh wait, there goes your stupid conspiracy theory.
somehow...
...i knew this would happen.
lets see....u.s. sells crappy financials to foreigners, u.s. goes belly up, foreigner doesn't lend anymore or purchase at market price, u.s. faces bankcruptcy, foreigner buys up assets - even swaps them for bad loans....hmmm.
now we can all go to a chinese company and get a loan for a car! so, you and me lose twice and china wins twice. PERFECT.
looks like the NWO wins. great, now my steering wheel will give me lead poisoning....
Good Riddance
I should probably be saddened by the news, but I'm honestly not. GM and Chrysler haven't made a good business decision in decades and they deserve everything that is coming to them.
What DOES worry me is that this is just posturing by the car companies to get a nice, fat bailout from the government.
1) Start rumors that a prominent American company will be bought by China.
2) Scare/guilt trip Congress into passing the bailout ("it would be unpatriotic to just let our rivals waltz in and take over our companies!")
3) Profit!
Why stop with the auto makers?
China could just buy the whole U.S. Like when we bought Alaska. We could be their little eastern territory. Then we could stamp "made in China" on things made in Detroit.
We could be like step brothers with Taiwan. We would tell the big bad China that we are independant, but the whole world would know that we are just their bitch.
America HAD its time....
We had it...and had it for a good, long while. Then, complacency reared its ugly head and we lost it. We are fast becoming a 3rd world nation. The next super-powers of the world will be, most-likely, India and China. We have become (by design) a nation of idiots. George Carlin was right on in his stage rage...."...dumbed-down. They want us just smart enough to run the machines and do the paperwork..."
I guess, on the bright side of this, perhaps GM and Chrysler will FINALLY build a good car. Look at Honda in Marysville, OH: American workers assembling some of the finest little cars. The plant voted to NOT go union. ..and the UAW went berserk! Now that Obama-lama-ding-dong is in power, perhaps unionization will be forced on us all.
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BC
'No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and Virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders.'
-- Samuel Adams (letter to James Warren, 4 November 1775)
while i'm generally against bailouts
i don't know if i like the idea of letting china have anything to do with gm. that could technically be a national security issue. who builds hummers? i'd rather see gm get a bailout than wall street.
GM is trying to dump Hummer.
They think that it is worth 4 billion though. But a friend of mine pointed out that if the big three go down or only two, that there will be millions of jobs lost. These car companies are supported by a whole crapload of other industries that had nothing to do with their stupid attitude of what people want in a cross-over or suv. But, where would it stop as in bail outs. I would like to know though how we went from 350k unemployed last month to 4 million?
i guess i was a little too vague
i didn't mean hummer quite that literally, i was just pointing out that traditionally our auto manufacturing has supplied our military in times of need. in the event of a total economic collapse and the global jockeying for position i just don't know if it would be wise to let our auto makers go. what if we actually faced a situation where we need to defend ourselves?
America HAD its time
If you honestly think Japan will maintain their pay scales at their plants here in the US once the unions have gone, you are SADLY deluded. I'm not defending the unions, but human nature is the same here and across the Pacific.
If they don't maintain these
If they don't maintain these payscales, then some workers will quit and others will take their place. The cost for manufacturing a car will go down, and the price will have to come down, too, because overall wages will be lower, so people will need to pay less for a car. This will also free up labor to work in other industries that need the labor more, like perhaps agriculture. And as those wages go down, then our illegal immigration problem goes down. In the big picture, there is not a downside to letting artificially inflated wages fall to their free-market level. I don't have a problem with unions either, but companies need to have the right to say no to unions. If not, then we are not a free country.
Hey...
What's more American than apple pie, mom and made in China? What are ya? Communist?
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"An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it. Truth stands, even if there be no public support. It is self sustained." -Mahatma Gandhi
If I were China
I'd buy the big two and call the new company GemFord. I'd spend a tiny fraction of the billions in US dollars China now holds before their value goes into a tailspin. What else are they going to do with them? Buy gold? I'd be doing that too, but acquiring Ford and GM would be pretty impressive for them. After booting our all the union contracts, they could easily re-tool with their technology and reduced labor cost to produce a world class product. Like it or not, the US carmakers got fat a lazy and have lost their edge. Let China bail them out...for good. I trust them more than Paulson and Bernanke and Pelosi and Frank and Boooosh. (or Obama
GM's financial anchor
as I understand it, is that it pays more in pensions than it does in salaries. It's a carryover from the pre-401K days when you could expect your company to stand by you until death do you part. The new kids on the block don't have the same burden.
I'm from Detroit originally, and until a few years ago when I went back to visit I could drive down a crowded instate highway for an hour and see nothing but American cars. I also noticed that they tended to be the ugliest damn cars on the road with horrendous styling - a sign that Detroit was out of touch with modern consumers buying sexier foreign models. I think the domestic auto makers are producing much better cars these days. It probably took them too long to update their product line, but the collapse of the auto industry is partially due to unforeseen circumstances beyond their control.
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Alcohol, Tobacco, and Firearms - should be a convenience store, not a government agency!
This is good news, however
This is good news, however painful to our national pride. The only path out of this economic disaster is for other nations to buy the USA. They are no longer buying our debt, so the only hope is that they buy our assets on the cheap. Otherwise we are left to print our way out of this mess and hyperinflate the dollar into oblivion.
Finally we are seeing the economy work as it is intended. I just wish more of the overbloated US industries would start to auction themselves off to foreigners. There's plenty of opportunity to advertise via "buy it now" on ebay.
We need to use this "Big Three" Automaker crisis...
as an opportunity for a real change in our transportation system.
www.et3.com
http://www.popularmechani...
Real solutions, not socialism
Oh great
then we will have to wonder how our cars are rigged to kill us.
Most of the products we buy are from China these days
anyway if you check the label, so why not our cars too? Go Slave Labor, get rid of the unions, woohoo....
Timing of stories
This story is being released the same time as this story, which has as part of its report:
Transfer of wealth and economic power from West to East...