Jack Frost

Well, our corvette counterparts may be looking at just such a propect...soon:

GM wants it suppliers to build more parts in China to cut costs

http://money.cnn.com/2005/04/07/news/fortu....reut/index.htm


GM said to push suppliers to cut prices

WSJ: Automaker looks to reduce costs in U.S. car business by allocating resources to global markets.
April 7, 2005: 6:32 AM EDT

NEW YORK (Reuters) - General Motors Corp. is pushing its U.S. suppliers to offer lower prices, in line with levels charged by overseas suppliers, as it looks to cut costs in its loss-making North American car business, The Wall Street Journal reported Thursday.

Bo Andersson, GM's (Research) top purchasing executive, told a supplier group in a closed meeting Wednesday that GM will be allocating significant resources to global markets in the next few years, including China, South Korea and Europe, the Journal said, citing individuals who attended the meeting.

Some in attendance said they expect GM to push suppliers to build facilities in China, preferably near GM's joint-venture facilities in Shanghai, the Journal reported.

Andersson asked the group of about 380 people not to speak with the media about his comments, the paper said, and he declined to comment after the meeting.

lodom

This is just another example of a growing trend towards Globalization and off-shore manufacturing. Wages and benefits are probably the greatest single expense at most large companies, and when you can pay someone less than 1/20 of an American wage (just guessing at the number), it is hard for an American company to compete with companies that have lower costs. GM has huge liabilities with pension costs, high labor rates, not to mention declining profits and shrinking market share. I hate to see this happen, but it isn't suprising.

To answer the question....I'd still buy a Mustang if more of it was made offshore.

Altoid

I guess I'd have to think about it, but it's not happening just yet.

05WindveilGT

, that sum it up??

KUcurt

Does anyone ever think that possibly, in the future, we will become a Third World country? This globalization seems to be turning the tables on the U.S.

Jack Frost

But at what cost? Globalization/Free Trade is only viable between countries that have similar standards of living and cultural values...such as free trade between Canada and the US.

But there can be no free trade between the US and China.

How low are you willing to reduce your standard of living to compete with the Chinese???, who have abominable human rights, respect for the environment, and commonly live 12 peeps to a single bedroom apartment.

That's what the U.S., and much of the West is up against.

I for one think the price is too high.

Jack Frost

I don't think the US becoming a 3rd world country is in the cards...but make no mistake...there's a massive shift of wealth underway in the world, and it's out of the US and into China, and it's being perpetrated to a large extent by large corporations.

The Chinese are also screwing America big time by refusing to float their currency on the open market. They have artificially pegged their currency to the US dollar, to prevent it from rising and making their products more expensive in the US.

Wanna do something about it?. Well, stop shopping at Wal-Mart is a good start.

Webba

Well said Jack Frost. This subject rages me to no end as I am in the manufacturing business. These guys cut costs, keep most of the savings, complain about labor costs yet give out enormous bonuses to CEO's and use cheap labor including children and still have no problem sleeping at night. We run around the globe as the earth police warning about the spread of WMD and then we send work to these **** ant countries who make our products for dirt $ and crap quality. We as consumers and the US proliferate WMD more than anyone else by enabling these countries to learn how to manufacture and to evolve just as we did the past century. When everyone is working at Wallyworld and no one can afford big ticket items then these moron deciion makers will get it but then it will be too late.

KUcurt

But those moron decision makers, like Ken Lay, Bernie Ebbers, Jack Welch, etc., will be living in one of their many homes in places like Hawaii or Arruba, AND not giving a flying flip how the rest of the American populace is having to live. Of course, they never stop to think that the reason they can live in those wonderful mansions is because they profited off the backs of the common American worker - without giving very much back in return. Sorry for the political rant!

MrMorden

If quality stays the same and it keeps the cost down, I really don't care where it's built. market economics dictate that a company goes with the least expensive alternative, all other things being equal. You can't blame GM or any other company for making good financial decisions.

It stinks for American auto laborers, but the US has been moving toward a service-based economy for 30 years...it's not like anybody with half a brain could not have seen this coming and chosen a different career path...

Jack Frost

No hold on there...Jack doesn't deserve to be in the same sentence as Lay & Ebbers.

Welch always played by the rules, and did a darn good job.

Lay & Ebbers represent the worst of American commerce...they're worse than common thieves.

I've always held that the likes of Lay, Ebbers and the Tyco dude, Kozlowski (sp?) are more dangerous to America than Osama could ever hope to be, cuz those guys undermine faith in American business...they're the enemy within.

Jack Frost

That is a very narrow minded view..."it has not effect on me so I don't care" is what you're saying.

If you look at the bigger picture and into the future, everything in inextricably linked.

You talk about 'market economics'...well, market economics are only effective if there is a level playing field...which trade with China IS NOT.

And you said it yourself "all other things being equal"

If you read a few posts above, all things, indeed, ARE NOT EQUAL

bullittman

I know we don't have a political forum, but unfortunatley I believe we are on the way down. It will take a generation or two, AND we will not fall to "Third World" status but is inevitable IMHO.

KUcurt

I probably shouldn't have put Mr. Welch in there, but I am very stupified how all these CEOs are justified in getting the compensation that they've gotten. They couldn't have done all these "wonderful things" without help from lots of others...

Altoid

There is not a “roll eye” emote big enough for what you just said.

dustindu4

As long as the auto workers don't spill poo poo gai pan on the seats.

theelebowski

I don't think the US becoming a 3rd world country is in the cards...but make no mistake...there's a massive shift of wealth underway in the world, and it's out of the US and into China, and it's being perpetrated to a large extent by large corporations.

The Chinese are also screwing America big time by refusing to float their currency on the open market. They have artificially pegged their currency to the US dollar, to prevent it from rising and making their products more expensive in the US.

Wanna do something about it?. Well, stop shopping at Wal-Mart is a good start.
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jim of canada

Soon there will be nothing but the wealthy who will own everything and the poor living on the street with the females turing tricks to get money to feed the family. The Police will resume their orginal role of protecting the property of the land owners and crush any form of uprising. Full circle right back to fuedalism.

jbuch

The only solution is to toss the free trade at all costs dogma that has enthralled many of the politicians in both parties. We need to change the way our federal government is funded. I would raise much of our federal revenue via import tariffs and then sign bilateral trade agreements with countries that have similar standards of living and labor rules, environmental policies, etc... Some worry about causing a trade war. Bring it on. Nobody could actually win a trade war with the U.S.

fumaca

The picture gets worse when you start looking at what the Chinese are doing in other markets around the world. Their predatory economic practices are undermining the economies of many developing countries that formerly relied on low-end manufacturing (e.g., apparel) and no longer can compete with Chinese products at home or in the global markets.

They are also sticking it to us in our export markets in industries like telecom equipment where they are dumping mostly copied technology in developing countries to gain market share and push North American and European products out of the market. The picture is grim, I’m afraid.