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.
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/bu...tner=TOPIXNEWS
See, the workers in this country have to put up with this outsourcing bull , yet when something GOOD for the average joe, like Canadian prescription drugs shows up, the companies have a fit over having to compete with cheap overseas prices, and bribe the politicans into blocking them.
a business' job is make profits... as a shareholder these are good things... do you not invest in anything?
Could it be the same reason company executives get million dollar bonuses for sending memos back and forth?
Clan - You don't understand. You seem to think of said "business" as some sort of American en y. They're not. They don't give two rats asses for America other than how they can buy and manipulate politicians to increase their margins.
When they move jobs, they move the game. The labor capital is no longer in this country, it's somewhere else, being spent by East Indians or Chinese in their country. That is a BAD thing, and will ultimately cause the collapse from within of the US much more surely than some mythical values that no one can define, yet prove to be the best distraction at election time for our new breed carpetbaggers. The corporate world wants free economics ONLY on the labor side, and not on the products, because they THEY would have to compete with the rest of the world. That's ed up.
Actually its a good thing, unless you are a fan of $5/hour. America is a relatively capital abundant country, and your use of the internet is one of the benefits from it.The labor capital is no longer in this country, it's somewhere else... That is a BAD thing,
Not for long, scott. It's not $5 per hour jobs they're shipping out, it's professional jobs, IT and engineering jobs, accounting jobs. That capital rich environment is on it's way out the door already.
On a related note, I will shortly be moving to Germany to work at an auto plant. Beats driving oil tanker trucks in Iraq or crab fishing off Alaska in the SS Minnow.
what part of "i'm a shareholder of xyz company and the value of their stock(my holding) rises as profits rise" do i not understand.. i could care less where the jobs are as long as my investments rise...
those jobs are leaving too!
Paper profits - they're magically delicious.
Good. You can visit your grandchildren working as domestic help in Bangalore or Beijing. Make sure that your grandson knows how to shine shoes.i could care less where the jobs are as long as my investments rise...
they aren't paper when you sell...
I have to really disagree with this. While America is a capital abundant country, that capital lies where exactly? It sure doesn't lie amoung the majority of American people.
Job relocation isn't a problem in itself, it's simply the realization that the American workforce isn't as valuable as it has made itself out to be. And while Americans love to believe they stand for certain manufacturing standards both in labor practices and environmental protection, their willingness to spend money on goods not produced under those conditions says otherwise.
I simply do not understand how we can sign free trade agreements that allow for the importation of goods produced in conditions that we would not allow in the United States. While it does not violate any laws, it certainly does seem to contradict the intent of the laws we have in place here.
On the surface jobs being exported look great because a company will be able to produce goods at a cheaper cost and thereby increase their profits. But the problem comes into play when the practice grows to the point that the jobs leaving are not being replaced by equal jobs. Then, you end up dropping the average salary, and the American workers who also happen to be the American spenders have less money to spend.
While opening up the markets can be good for companies in the short run, if done laisser faire it can hurt an economy.
Show me the median income in the US versus other countries.I have to really disagree with this. While America is a capital abundant country, that capital lies where exactly? It sure doesn't lie amoung the majority of American people.
The real problem is when Americans feel they deserve $30/hour to put rivets on a pair of blue jeans.But the problem comes into play when the practice grows to the point that the jobs leaving are not being replaced by equal jobs.
Americans can sit around a boo-hoo about job exportation and how foreigners are stealing their jobs, but the bottom line is they have priced themselves out of the market. You wouldn't pay $150 bucks for a haircut at Supercuts, and corporations aren't going to overpay for labor.
The bottom line is that the job exportation ballyhoo is a myth more than anything else... we are 3 years away from the start of net losses in the supply of labor. Unemployment, while relatively high compared to a few years ago, is not historically out of line.
A real problem I have with a lot of democrats right now is the convienence with which they choose sides on issues like these. White collar jobs are finding there way into developing countries and they complain... but when people in these countries are starving, they are the first to jump on the "send aid" bandwagon. To me this is almost as annoying as listening to a jackass like Tom Delay pick sides of the Shiavo fence to suit his own needs.
A fundemental shift in the way we think of businesses need to change. Businesses do not exist to make America a swell place, they exist to create wealth for shareholders. The shift to the global economy has begun, and sucessful businesses will utilize global opportunities. Those who lose their jobs because they were unable to change with the times have no one to blame but themselves... either roll with the tide or drown in the wake.
ex certainly got one thing right though, and that is the hypocracy that comes into play when international trade doesn't immediately benefit US interests. He mentioned cheaper Canadian drugs as an example. Personally, I don't think this is a good example because there are a lot of variables in play that get overlooked when people get into a discussion about drug importation (namley, government created compe ive advantage - these loopholes are not the economics of compe ion*)- but the main point is a good one. To me, the best example is Bush's steel and textile tariffs of a few years ago. This was nothing more than pandering and subsidizing an industry which fails to remain compe ive.
America, and the rest of the world in general, needs to get on the free trade bandwagon or be left in the darkages of suboptimal GDP and underemployment.
*Some elaboration on the Canadian drug importation case... the low cost of the products that allow them to be resold at relatively lower prices are a function of health-care structures, patents, and a lot of different things that are beyond the control of drug companies. You can draw a loose comparison to bootlegged videos and music in China... (granted, these are illegal where Canadian drugs are not, they are just a different country's product). You would not want to allow Chinese imports of bootlegs to come in and compete with licensed products (or at least you shouldn't, if you have a brain), and you don't want to allow drugs to come in at lower cost due to artificially created compe ive advantages.
I want to reply to this, but I want to do so later or tomorrow because I'm too damn braindead to do it right now.
fantastic posts.
As a business owner, until we brought in legal working mexican nationals, our problem, was hiring people off the street, cleanign them up and drug testing them.
starting pay was 300 a week, free room, washer and dryer.
All they had to do, was come to work, shave every day, and stay off the booz and drugs.
It was a daily hassel, and the night of pay day the saying around the company was "I wonder who will quit today"
I have to say, ever since we brought in the Mexican nationals, that our production has gone up, its alot nice to work around cause these guys are pleasant likeable guys, and we dont worry about guys quitting, or worry about them on drugs or being drunk.
The guys you hire off the street do the job so they can go on their next binge, the nationals come to WORK.
I know this prob has zippity do da to do with said above topic, but we are importing workers, and Im sure someone will tell me how horrible we are for doing it.
BTW, I know this isn't a "homeless thread"
but I gotta say the funniest thing Ive ever heard to fix the homeless problem was in a Sam Kinnison stand up act.
Funniest Ive ever heard.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
