Article

2005-06-21 China-Japan-Koreas

Could a Chinese auto manufacturer buy GM?

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Posted by Zhang Fei 2005-06-21 11:49|| || Front Page|| [5 views since 2007-05-07] Top

#1 Bottom line is that a Chinese acquirer could ship all of GM's plants over to China and ditch the unionized workers currently digging GM into a hole, while retaining a core of lavishly-paid line workers to train their Chinese counterparts.

Posted by Zhang Fei">Zhang Fei 2005-06-21 11:56|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2005-06-21 11:56|| Front Page Top

#2 Talk about the Union not looking out for the employee's best intrests, Zhang. I always thought it was in the employee's best intrest to have a company and a job to go to the next day.

Posted by mmurray821 2005-06-21 12:21|| 2005-06-21 12:21|| Front Page Top

#3 Well... what a fantastic idea! Toss in all the DoD contracts that GM has too! That way we could do the thumper on those nasty ChiComs a lot cheaper! We'll fool them!

Posted by Flavins Flineque6690 2005-06-21 13:24|| 2005-06-21 13:24|| Front Page Top

#4 FF6690: Well... what a fantastic idea! Toss in all the DoD contracts that GM has too! That way we could do the thumper on those nasty ChiComs a lot cheaper! We'll fool them!

Past foreign purchases of American companies have involved the divestment of sensitive American operations. A GM buyout would be no different. The fact is that GM has no monopoly on metal-bending skills or on industrial design. Its below-par quality and design are testament to its perennial also-ran status in the past several decades. The divestment of GM's defense-related operations would be a boon for the division and for DOD, neither of which would have to continue to deal with GM's hide-bound corporate and union culture.

Posted by Zhang Fei">Zhang Fei 2005-06-21 13:54|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2005-06-21 13:54|| Front Page Top

#5 Divestment would certainly follow, but as far as avoiding the bureaucratic mish-mash that GM has created for everyone to deal with and its sub-standard products, that would rise again as a phoenix. Selling out to the ChiComs isn't the answer for long-term benefit to the country. Short-term benefits to stockholders and those with hidden agendas would happen. Collectively, we are paying for our sins through shoddy managership rather than leadership, self-serving union leadership rather than employees managing it's affairs better, and returning to self-instilled pride and integrity inspite of dishonest business managers and owners. What a mess... but to sell out to the ChiComs is just another cop-out. I hope the traitors choke on their lo mein.

Posted by Fun Dung Poo 2005-06-21 14:09|| 2005-06-21 14:09|| Front Page Top

#6 I would think the Japanese would outbid them, and would probably keep (some of) the plants open.

Posted by liberalhawk 2005-06-21 14:11|| 2005-06-21 14:11|| Front Page Top

#7 FDP: Short-term benefits to stockholders and those with hidden agendas would happen.

The only benefits to stockholders are short term ones, unless you enjoy framing the stock certificates of defunct companies. In the long run, companies go bust, or are acquired - just check out the Dow roster from the turn of the 20th century.

FDP: Collectively, we are paying for our sins through shoddy managership rather than leadership, self-serving union leadership rather than employees managing it's affairs better, and returning to self-instilled pride and integrity inspite of dishonest business managers and owners.

Back in Coolidge's day, what was good for GM was good for the nation. We are now in a different era. GM acts as a drag on the nation's finances. Odds are that the government will have to step in to pay off GM's pension obligations. Since the government doesn't actually generate any income, that means we, the taxpayers, will be helping to pay off GM's pensioners. We don't need to enlarge the roster of GM's pensioners we need to pay off.

FDP: What a mess... but to sell out to the ChiComs is just another cop-out. I hope the traitors choke on their lo mein.

GM can be sold to the Chinese (or whatever acquirer comes calling) or it can be shut down. That's the choice that has faced other moribund companies, American or otherwise, in the past. As to the sellers being traitors, that's silly - how are stockholders obligated to use their money to subsidize the incompetence and greed of GM's management and unions? As of 2003, 326,000 people worked for GM. If each of these employees did a home equity loan for $60,000, they could raise $20B and buy out GM's current shareholders. Why don't they? Because leeching works only when it's done with other people's (stockholders') money - when you do it to yourself, it's called spending yourself into the poorhouse.

Posted by Zhang Fei">Zhang Fei 2005-06-21 14:56|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2005-06-21 14:56|| Front Page Top

#8 "Its below-par quality and design are testament to its perennial also-ran status in the past several decades."

Id say Toyota or Honda could deal with that. Both have made quality vehicles, and marketed them successfully, and Honda at least has done so with UAW employees. And both have a commitment to selling in the North American market, and might want the capacity.

But that wouldnt fit your agenda as well a Chi Com buy out, would it.

Chi "coms" fitting an anti-union agenda - it doth make the head explode, no?

Posted by liberalhawk 2005-06-21 15:07|| 2005-06-21 15:07|| Front Page Top

#9 LH: But that wouldnt fit your agenda as well a Chi Com buy out, would it. Chi "coms" fitting an anti-union agenda - it doth make the head explode, no?

The curious thing is that Communists are the ultimate union-busters. But the reality is that China will not tolerate independent unions for the same reason that they won't tolerate other non-governmental religious or social organizations - because they threaten the absolute power of the Chinese state.

Posted by Zhang Fei">Zhang Fei 2005-06-21 15:17|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2005-06-21 15:17|| Front Page Top

#10 Im with ZF on this one. This is close to selling the last buggy whip manufacturer to the suckers at a premium.

Posted by Shipman 2005-06-21 18:08|| 2005-06-21 18:08|| Front Page Top

#11 Japanese companies committed early to quality (largely due to Demming) and gained mind and market share. Detroit was late to the party (produced crap in the '70's and early '80's) but have improved dramatically since. China is competing (thus far successfully) on price. If a Chinese company were to buy GM and shut down the US factories, both price and quality would drop. They lose considerable market share on the high end and gain on the low end. Margins would drop and ultimately they'd lose a lot of money.

Posted by AJackson 2005-06-21 23:37|| 2005-06-21 23:37|| Front Page Top

#12 Didn't a japanese auto exec recently suggest that the death of GM would causing rising anti-japanese feeling in the US. If the Japanese bought GM to prevent the chicoms only an idiot couldn't spin that one as help from a dutyful ally that would save American jobs (even if many were lost at least American plants wouldn't be shut down).

I'm not sure the Japanese are in the position but it's intreging.

Posted by RJ Schwarz 2005-06-21 23:59|| 2005-06-21 23:59|| Front Page Top

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