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Discussion Starter · #1 ·
http://www.autoblog.com/2007/04/23/gms-korean-outfit-to-get-3-2-billion-investment/

GM's Korean outfit to get $3.2 billion investment

Posted Apr 23rd 2007 3:33PM by Frank Filipponio
Filed under: Plants/Manufacturing, GM, Earnings/Financials
We knew that the new GM global small car platform was important to the embattled carmaker, but now we know just how valuable GM thinks it is. The new Gamma is apparently worth quite a bit to the future of GM -- $3.2 billion to be exact. That's how much GM has pledged to invest in GM Daewoo Auto & Technology Co. over the next two years. The money will primarily go towards "product and powertrain," according to GM CFO Fritz Henderson. He made the announcement at a press conference last week in Seoul. Not only does it show the importance of the Gamma platform, but it also shows the increased importance of GM's Korean development operations.

Besides the Gamma, GM Daewoo will also take on new R&D responsibilities, with a new center planned for the next two to three years. Diesel engines and a new six-speed transmission are also coming from this Korean facility. The Gamma cars, themselves, should start production in late 2009, with a range of gas and diesel engines displacing 1.2 to 1.8 liters. The vast majority of these products should be sold outside of Korea.
GM won't export out of China or dump $3.2 billions in product R&D until they are allowed a 100% ownership. In the meanwhile, foreigners will pass on China to go where the government does allow 100% foreign ownership and a massive pool of local engineering talent is available, namely India.
 

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50% joint venture is forced marrage, it is unfair and immoral, like any forced marrage. Market-for-technology is blackmail in a pretty name.

Chines does not need technology, Chines just need a fair and just system, free competition. all the strangest Chines car makers are the ones like Chery, Geely, are the ones almost been killed by the govermant.
 

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Real_I_Hate_China said:
GM won't export out of China or dump $3.2 billions in product R&D until they are allowed a 100% ownership. In the meanwhile, foreigners will pass on China to go where the government does allow 100% foreign ownership
Real_I_Hate_China said:
and a massive pool of local engineering talent is available, namely India.
And it means only 1 thing, Indian auto industry will die in its infancy. It's like putting a 3 month old in a ring against Mayweather.

It would be 100% impossible for INdia to pop out any new auto companies and existing few will eventually either be taken over or go distinct.


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If the 50% rule was not applied, the american influence would exploit workers in a crushing manner. China is right restricting ownership and its prosperity is evidence of this.
 

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Discussion Starter · #6 ·
bassfisher said:
If the 50% rule was not applied, the american influence would exploit workers in a crushing manner.
Workers are treated better at foreign joint ventures than at Chinese owned auto companies.

China is right restricting ownership and its prosperity is evidence of this.
China has become the world class exporter in industries that allow 100% foreign ownership(In fact, the US Department of Commerce blame Japanese and Korean firms exporting out of China as the cause of the current massive trade deficit with China), but Chinese auto export industry is going nowhere thanks to the 50% ownership rule, which deters foreign auto firms from investing into China to set up an export base.

The fact that GM would rather export from Korea(100% ownership) with 20X higher salary than from China(50% ownership and the requirement to aid and train a future competitor) shows how damaging the 50% rule is to the growth of Chinese auto export industry.

As long as the 50% ownership cap rule remains, all Chinese market foreign brand cars will continue to be engineered outside of China.
 

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Real_I_Hate_China said:
As long as the 50% ownership cap rule remains, all Chinese market foreign brand cars will continue to be engineered outside of China.
really ? :D :lol: :p

The Buick Riviera concept was created in conjunction with the Pan Asia Technical Automotive Center (PATAC) in China, which is a design and engineering joint venture between General Motors and Shanghai Automotive Industry Corporation (SAIC), one of the largest Chinese automakers.
*ttp:// www(dot)forbesautos(dot)com/news/autoshows/2007/shanghai/buick-riviera-concept(dot)html
pictures

h*tp://i12.tinypic.com/4cwteso.jpg

h*tp://i13.tinypic.com/4if5pv9.jpg

h*tp://i14.tinypic.com/2rra3wh.jpg
 

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Real_I_Hate_China said:
Workers are treated better at foreign joint ventures than at Chinese owned auto companies.


China has become the world class exporter in industries that allow 100% foreign ownership(In fact, the US Department of Commerce blame Japanese and Korean firms exporting out of China as the cause of the current massive trade deficit with China), but Chinese auto export industry is going nowhere thanks to the 50% ownership rule, which deters foreign auto firms from investing into China to set up an export base.

The fact that GM would rather export from Korea(100% ownership) with 20X higher salary than from China(50% ownership and the requirement to aid and train a future competitor) shows how damaging the 50% rule is to the growth of Chinese auto export industry.

As long as the 50% ownership cap rule remains, all Chinese market foreign brand cars will continue to be engineered outside of China.
Not all foreign companies operating in China treat workers well. Remember Nike a while back?

The "world class exporter in industries that are 100% foreign owned" will forever remain foreign owned, with ALL PROFITS going into foreign hands. How's that good for China?????????? (US dept of comm should look in the mirror - the majority of imports from China are from US owned operations in China.)

The 50% rule helps launch China's own indigenous companies and grow them quickly, while keeping some levels of competition. It's a good rule - though should be adjusted accordingly going forward.
 

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Discussion Starter · #9 ·
BringIt said:
Not all foreign companies operating in China treat workers well. Remember Nike a while back?
Nike doesn't own those factories. They just buy from Chinese owned shops.

The "world class exporter in industries that are 100% foreign owned" will forever remain foreign owned, with ALL PROFITS going into foreign hands.
But parts procurement, wages, and taxes stay in China. In all, foreign investment of export-oriented plants always produce a positive benefit on the host country.

The 50% rule helps launch China's own indigenous companies and grow them quickly, while keeping some levels of competition. It's a good rule - though should be adjusted accordingly going forward.
I already discussed how the downsides outweigh benefits.

The Buick Riviera concept was created in conjunction with the Pan Asia Technical Automotive Center (PATAC) in China, which is a design and engineering joint venture between General Motors and Shanghai Automotive Industry Corporation (SAIC), one of the largest Chinese automakers.
But it is not created in China. The same goes for Buick LaCrosse. It will be styled in China, but engineered in the US. Foreign firms will maintain reskinning studios to comply with Chinese government's demand for local R&D(to fool the communists to think they are trying), but they won't actually develop chassis and engine in China due to the fear of technology leak.

It is China's loss, really.
 

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Real_I_Hate_China said:
Nike doesn't own those factories. They just buy from Chinese owned shops.
The shops are set up by nike as dummy corps to deflect the obvious negative impact that publicity would and did bring.

But parts procurement, wages, and taxes stay in China. In all, foreign investment of export-oriented plants always produce a positive benefit on the host country.
Tell that to the scads of canadian auto workers about to suffer loss of income and benefits due to the mismanagement at the CEO levels. Tell that to the shareholders that incurred captal losses due to stock prices. Don't tell that to the CEO's bilking the final millions in pay and benefits from failing corperations.

I already discussed how the downsides outweigh benefits.
North american auto manufacturers grew fat on tax breaks and R & D investments by the taxpayers. Remember Georgie Bushface extending tax benefits on SUV sales exceeding $60K while gas prices were surging out of control? To a former oil executive i guess that is an upside. To a declining empire it just may be a downside?


But it is not created in China. The same goes for Buick LaCrosse. It will be styled in China, but engineered in the US. Foreign firms will maintain reskinning studios to comply with Chinese government's demand for local R&D(to fool the communists to think they are trying), but they won't actually develop chassis and engine in China due to the fear of technology leak.
They may not devel it there, but the chinese engineers are masters of reverse engineering. The fact of every single item we currently consume being manu'd there stands as evidence.
It is China's loss, really.
Poor china. If it contines to take losses at its current rate it is likely to buy the universe by 2010. Excuse me, signing up for mandarin lessons like the rest of the smart money is doing.
 

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RHIC's arguments are hilarious.

Look no further than today's auto powers to see that a protected auto industry ultimately benefit the home country.

Japan, S Korea, France, etc.

Now look at countries that didn't protect their auto industry:

Mexico, UK, and now, US.

Foreign car makers rule their car industries.

China is not stupid enough to follow their path.

The 50% rule speeds investment and technology transfer, while protecting home industries at the same time. Very smart.

I propose changing that to 45% foreign own and 55% domestic, in all important industries. (Since China has an over-investment problem, an over-heating economy, and a huge export imbalance, doing this ought to cool things down a bit, and help grow the domestic car industry. Once the domestic cars makers are big and strong, slowly move to allow 100% foreign ownership to allow full-fledged competition.)
 

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Discussion Starter · #12 ·
BringIt said:
The 50% rule speeds investment and technology transfer, while protecting home industries at the same time. Very smart.
Also it makes sure China will never become a major auto exporter of Germany/Japan/Korea's scale.
 

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BringIt said:
Not all foreign companies operating in China treat workers well. Remember Nike a while back?

The "world class exporter in industries that are 100% foreign owned" will forever remain foreign owned, with ALL PROFITS going into foreign hands. How's that good for China?????????? (US dept of comm should look in the mirror - the majority of imports from China are from US owned operations in China.)

The 50% rule helps launch China's own indigenous companies and grow them quickly, while keeping some levels of competition. It's a good rule - though should be adjusted accordingly going forward.
completely disagree.
VW made much more money from its 50% Chinese joint venture then all the rest of it independent business(chinese market account for 80% profit at one year)

The 50% rule help lunch a bunch of "permit renting" companies. these companies simply rent a permit to sell car in China to foreign companies. today, none of them are series car maker. these company will collapse whenever the 50% rule is lifted.

Given a option, majority of worker will chose to work for a foreign company than a domestic one. that is a fact.

forced technology transfer in these 50% joint ventures is theft. it is immoral in any culture, ideology and society.
 

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Real_I_Hate_China said:
Also it makes sure China will never become a major auto exporter of Germany/Japan/Korea's scale.
Again, DON'T PUT KOREANS ON THE SAME LEVEL AS JAPANESE OR GERMANS!!! IT SICKENS ME!

Korean stands for cheap and crappy. Don't ever put your korean crap in line with Camery and Jetta.


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Discussion Starter · #15 ·
KING_OF_HILL said:
Again, DON'T PUT KOREANS ON THE SAME LEVEL AS JAPANESE OR GERMANS!!! IT SICKENS ME!
2006 Auto Exports

Japan : 6 million vehicles
Germany : 3.9 miillion vehicles
Korea : 2.7 million vehicles

As you can see, Japan, Germany, and Korea are three top auto expoters of the world. Chinese annual auto export is 1/8.5th of Korea's, mostly in cheap cars to 3rd worlds.

Korean stands for cheap and crappy.
Then Chinese should stop ripping off Korean cars. Korean cars remain the most frequently pirated cars in China.
 

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Real_I_Hate_China said:
Also it makes sure China will never become a major auto exporter of Germany/Japan/Korea's scale.
You are contradicting yourself, big time.

Germany/Japan/S Korea fiercely protected their home market and never allowed foreign ownership until their market is matured, and all of their auto exports are by their own car companies. Now you are saying China should allow 100% foreign ownership in order to become a major auto exporter??? It makes no sense whatsoever. :nono:
 

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cover said:
completely disagree.
VW made much more money from its 50% Chinese joint venture then all the rest of it independent business(chinese market account for 80% profit at one year)

The 50% rule help lunch a bunch of "permit renting" companies. these companies simply rent a permit to sell car in China to foreign companies. today, none of them are series car maker. these company will collapse whenever the 50% rule is lifted.

Given a option, majority of worker will chose to work for a foreign company than a domestic one. that is a fact.

forced technology transfer in these 50% joint ventures is theft. it is immoral in any culture, ideology and society.
VW, GM, and all foreign car makers make big time money in China - and they only own 50% of the business - imagine they own 100%!!! Their profits in China dwarfs their profits elsewhere because they lose money in other markets (esp. VW, GM).

Yes, most Chinese workers would rather work for a foreign company because of generally better treatment and pay (these days). But there were some bad apples and that's all I'm saying.

Joing venture is theft? The alternative is simple: Leave the Chinese market. Well? What do you say? That is the price of entry, any car company don't like it, leave. No one is stopping them.

By the way, foreigners has been raping and pillaging China for 200+ years, robbing and stealing countless treasures and destroying whatever they can't take away, all the while set China back by like a hundred years; I wouldn't be so quick to call China immoral. :nono:
 

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Discussion Starter · #18 ·
BringIt said:
Germany/Japan/Korea fiercely protected their home market and never allowed foreign ownership until their market is matured
Never heard of Opel and Daewoo(GM owned 50% of it from be beginning)?

Now you are saying China should allow 100% foreign ownership in order to become a major auto exporter??? It makes no sense whatsoever. :nono:
If China wants to be a self-owned exporter, then it has to wait 20 years before Chinese engineered cars are competitive enough to go to developed markets.

If China allows 100% foreign ownership, then it might be cut down to 3~5 years.

VW, GM, and all foreign car makers make big time money in China - and they only own 50% of the business - imagine they own 100%!!!
Sure, the foreigers would set up R&D center and export millions of vehicles outside of China using Chinese sourced parts and Chinese labor.

Joing venture is theft? The alternative is simple: Leave the Chinese market. Well? What do you say? That is the price of entry, any car company don't like it, leave. No one is stopping them.
To make it fair the US and EU should levy 30% tariff on Chinese cars.

By the way, foreigners has been raping and pillaging China for 200+ years, robbing and stealing countless treasures and destroying whatever they can't take away, all the while set China back by like a hundred years
It was Chinese lack of patriotism that caused Chinese fall back. Hence Chinese were patriotic, then they would have surely driven out Manchues well before 1911. But since Manchues weren't Chinese, they didn't really care what happened to China and the rest is history. But average Chinese don't care who rules them as long as they are free to make money, be it British, Japanese, Manchues, Communists, etc.

I wouldn't be so quick to call China immoral.
Chinese ethical standard is totally different from ours.
 

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Nice try.

Opel and Daewoo are babies compare to other German and S Korean car giants. The likes of MBZ and Hyundai laughs at their presence. (And how come GM can't just go into Germany and S Korea as GM and dominate their markets from the start???)

What? Allow 100% foreign ownerships speed up exportation of Chinese cars? Sure, under foreign brands, NOT Chinese's own brands, and all profits go to these foreign brands while Chinese's own brands will never stand a chance to get off the ground.

30% tax on Chinese cars? US and EU have yet to do that to Japanese and S Korean cars, why would they do that to Chinese cars? :nono:

Manchues (and Mongols) conquered China and became "Chinese" - and they wanted to - it's even better!!! For no reason whatsoever, the Chinese empire expanded and spread! With each "conquering", China became bigger and bigger - hey, does S Korea wanna conquer China??? :lol:

Yep, Chinese ethical standard is definitely different from "yours". If "yours" is Korean, then you would steal IP's from your fellow Koreans and sell to foreigners, and also steal endlessly from the Japanese. If "yours" is American, then you would trump up lies and go beat up small countries all around the world and cause hundreds of thousands of deaths with no repercussions. If "yours" is... oh I can go on and on... ;)
 

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Discussion Starter · #20 ·
Opel and Daewoo are babies compare to other German and S Korean car giants.
I showed a counter example to your claims that German and Korean government didn't allow foreign ownership.

The likes of MBZ and Hyundai laughs at their presence. (And how come GM can't just go into Germany and S Korea as GM and dominate their markets from the start???)
Germany : Rival german auto companies had world-class engineering.
Korea : Hyundai dumped tens of billions of dollars into Hyundai Motors from the beginning. Hyundai dumped so much money into Hyundai Motors that it overwhelmed its rivals and became a full fledged auto operation very quickly.(Kia was an independent operation with cash shortage and partners Daewoo and GM couldn't dump as much money into Daewoo Motors) There was only one company that could outspend Hyundai, and that was Samsung's Samsung Motors, but this operation started in the mid 90s and was hit by the Asian financial crisis and was ordered by the government to sell Samsung Motors to Renault and focus on Samsung Electronics. The result was that Samsung Electronics became the most profitable CE company in the world thanks to some $20 billion in planned investments diverted from Samsung Motors.

So this is the biggest difference between Chinese auto operations and Korean auto operations. Korean auto operations had immense amount of investment amounting to tens of billions of dollars from the very beginning, whereas Chinese auto operations lack such financial resources to become real auto companies quickly. Even SAIC doesn't have this kind of financial resources.

What? Allow 100% foreign ownerships speed up exportation of Chinese cars? Sure, under foreign brands, NOT Chinese's own brands
What difference does it make?

and all profits go to these foreign brands while Chinese's own brands will never stand a chance to get off the ground.
You got to make a choice, can't have both.

30% tax on Chinese cars? US and EU have yet to do that to Japanese and S Korean cars, why would they do that to Chinese cars?
Japan : 0% Tariff on imported cars.
Korea : 0% Tariff on US imported cars next year and 8% Tariff on Euro imported cars, which is less than What EU levies on Korean imported cars(10%). Even this is expected to go away when the EU-Korea FTA is concluded in a couple of years.

Since Chinese levy 30% tariff on imported cars, the developed markets should too levy 30% tariff on Chinese cars to be fair.

Manchues (and Mongols) conquered China and became "Chinese"
Ask any historian if Genghis Kahn was Chinese and he will laugh at you.
Of course Manchues and Mongols were foreign overlords ruling over China.

hey, does S Korea wanna conquer China???
No, just southern Manchuria which belonged to Korea until 1910.

Yep, Chinese ethical standard is definitely different from "yours".
My ethical standard says I must not spit on the streets and intervene when I see a woman getting beat up in a bus. When I hear news of Chinese women getting beaten up to death in a bus and no other passenger in the bus intervened, I shake my head and say to myself "OMG, what kind of people are the Chinese?"
 
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