Clandestino
04-21-2005, 11:29 AM
Daimler Weighs Plant in China to Export Cars to U.S.
By KEITH BRADSHER
Published: April 21, 2005
HANGHAI, April 21 - DaimlerChrysler AG is in talks with one of its Chinese partners to build a plant in China in order to export subcompact cars to the United States, a top company executive said today at the Shanghai Auto Show.
Dr. Ruediger Grube, the DaimlerChrysler executive president and management board member in charge of corporate development and China operations, said that while no final decision had been made, he hoped that the details could be worked out in the second half of this year. It would almost certainly be the first mass-produced Chinese car widely sold in America.
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Mr. Grube's aides were surprised that he mentioned the negotiations and said afterward that they had no further information except to say the car would be a small sedan, not a coupe, and roughly the size of the Chevrolet Aveo.
"Low wages make China a very attractive place to build cars," Mr. Grube said. "China today has a big, big, big advantage as far as labor costs are concerned."
The United Automobile Workers union in Detroit has been warning for years that low wages in China would pose a threat to American jobs. But Mr. Grube said that Daimler hoped to avoid a political reaction in the United States and any damage to the Chrysler, Dodge and Jeep brands by selling a model not previously sold in America.
Yet with the Bush administration and many Midwestern members of Congress already concerned about China's rapidly rising trade surplus with the United States and refusal to allow its currency to appreciate, Daimler's disclosure today seems certain to provoke considerable discussion in Washington.
Wages and benefits cost DaimlerChrysler 38 euros an hour in Germany ($49.75), 28 euros an hour ($36.62) in the United States, 4.5 euros an hour ($6) in Brazil and only 1.5 an hour ($2) in China. Mr. Grube would not provide forecasts of the production schedule, but it would take at least two years to get a plant up and running.
Earlier this year, a Chinese company, Chery Automotive, announced plans to try to set up a distribution network in the United States in 2007, working with Malcolm Bricklin, an entrepreneur who tried to distribute the Yugo, a car from Yugoslavia.
But top executives from established American and European automakers have dismissed the likelihood of Chinese automakers selling significant numbers of cars in the United States on their own.
Jim Padilla, the president and chief operating officer of the Ford Motor Company, said here on Wednesday night that large-scale automotive exports were unlikely anytime soon except for parts.
Mr. Padilla warned that the decline of the American manufacturing base in the face of strong imports made it increasingly likely that those imports might face restrictions.
Mr. Grube declined to say which of its two Chinese partners - Beijing Automotive Industry Holding Company Ltd. and the Fujian Motor Industry Group - was involved in the talks. But Daimler is already building Jeeps for the Chinese market with Beijing Automotive and will start making Mercedes C- and E-Class sedans for the local market with Beijing Automotive in October or November at a plant now under construction outside of Beijing.
By contrast, Fujian Motor is Daimler's partner in making large vans and would appear a less-likely partner for small car production.
Chris Gubbey, the executive vice president of Shanghai G.M., said on Tuesday that auto parts in China remain 5 to 7 percent more expensive than in other countries. Parts makers in China must still import higher quality grades of steel, and lacked the scale needed for low-cost production. But this is rapidly changing and Mr. Grube said that he expected the cost of parts in China to fall sharply.
http://www.nytimes.com/2005/04/21/business/21cnd-chin.html?ex=1114747200&en=0bfd79ddcfdece2c&ei=5099&partner=TOPIXNEWS
By KEITH BRADSHER
Published: April 21, 2005
HANGHAI, April 21 - DaimlerChrysler AG is in talks with one of its Chinese partners to build a plant in China in order to export subcompact cars to the United States, a top company executive said today at the Shanghai Auto Show.
Dr. Ruediger Grube, the DaimlerChrysler executive president and management board member in charge of corporate development and China operations, said that while no final decision had been made, he hoped that the details could be worked out in the second half of this year. It would almost certainly be the first mass-produced Chinese car widely sold in America.
Advertisement
Mr. Grube's aides were surprised that he mentioned the negotiations and said afterward that they had no further information except to say the car would be a small sedan, not a coupe, and roughly the size of the Chevrolet Aveo.
"Low wages make China a very attractive place to build cars," Mr. Grube said. "China today has a big, big, big advantage as far as labor costs are concerned."
The United Automobile Workers union in Detroit has been warning for years that low wages in China would pose a threat to American jobs. But Mr. Grube said that Daimler hoped to avoid a political reaction in the United States and any damage to the Chrysler, Dodge and Jeep brands by selling a model not previously sold in America.
Yet with the Bush administration and many Midwestern members of Congress already concerned about China's rapidly rising trade surplus with the United States and refusal to allow its currency to appreciate, Daimler's disclosure today seems certain to provoke considerable discussion in Washington.
Wages and benefits cost DaimlerChrysler 38 euros an hour in Germany ($49.75), 28 euros an hour ($36.62) in the United States, 4.5 euros an hour ($6) in Brazil and only 1.5 an hour ($2) in China. Mr. Grube would not provide forecasts of the production schedule, but it would take at least two years to get a plant up and running.
Earlier this year, a Chinese company, Chery Automotive, announced plans to try to set up a distribution network in the United States in 2007, working with Malcolm Bricklin, an entrepreneur who tried to distribute the Yugo, a car from Yugoslavia.
But top executives from established American and European automakers have dismissed the likelihood of Chinese automakers selling significant numbers of cars in the United States on their own.
Jim Padilla, the president and chief operating officer of the Ford Motor Company, said here on Wednesday night that large-scale automotive exports were unlikely anytime soon except for parts.
Mr. Padilla warned that the decline of the American manufacturing base in the face of strong imports made it increasingly likely that those imports might face restrictions.
Mr. Grube declined to say which of its two Chinese partners - Beijing Automotive Industry Holding Company Ltd. and the Fujian Motor Industry Group - was involved in the talks. But Daimler is already building Jeeps for the Chinese market with Beijing Automotive and will start making Mercedes C- and E-Class sedans for the local market with Beijing Automotive in October or November at a plant now under construction outside of Beijing.
By contrast, Fujian Motor is Daimler's partner in making large vans and would appear a less-likely partner for small car production.
Chris Gubbey, the executive vice president of Shanghai G.M., said on Tuesday that auto parts in China remain 5 to 7 percent more expensive than in other countries. Parts makers in China must still import higher quality grades of steel, and lacked the scale needed for low-cost production. But this is rapidly changing and Mr. Grube said that he expected the cost of parts in China to fall sharply.
http://www.nytimes.com/2005/04/21/business/21cnd-chin.html?ex=1114747200&en=0bfd79ddcfdece2c&ei=5099&partner=TOPIXNEWS