China blackmails GM for Volt engineering secrets

Keep reading the rest of the article:
http://www.nytimes.com/2011/09/06/b...lt-at-china-but-chinese-want-its-secrets.html


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Does Volt's technology worth that much?
IMPOV, no.
Wake up, China...

GM has a long history of heavy handed opposition to fuel and pollution standards. Their treatment of EV1 customers is only one recent example of their intransigence. The charade of flex fuel meeting mileage standards is another.

It would seem that GM is getting a dose of their own style, this time on the receiving end.

Interesting point ... that China ought to steal other company's hybrid intelectual property rather than GM's.

Strangely though, I'd have to agree. Although China CAN build decent stuff - it seems like it's all to common for Chinese manufacturing to slap stuff together hap-hazardly. And with the Volt's complexity ... the all too common Chinese manufacturing philosophy (throw it together) could REALLY cause them problems ... as well as their buyers. Look at the BYD project. Their EV was supposed to already be on U.S. roads ... but is it?

[ame]http://en.wikipedia.org/wiki/BYD_e6[/ame]

See ... I'm just saying - if China can't get it right on the relatively simply EV level ... than how on earth will it profit them to strong arm GM for it's highly complex - Rube Goldberg technology. Heck ... I say let 'em have it! It'll set 'em back a decade!

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Those darn commies.

Some Day We Will Wake Up!! Like I Always Say If You Love China - You'll Love Walmart.

There is no reason for GM to play ball, no matter the value of that tech. Since GM is not making enough Volts, that tax credit would not mean much to GM.

What GM should do is throw a flaming bag of dog crap on China's front porch and ring the doorbell. That'll fix 'em.

The part I'm not understanding is that if they can't sell the Volt in their own back yard in any significant numbers, why in tarnation do they think they could sell even a handful of them over there? And then why bother?

Guys - I think that you are all missing the point. China and many other countries in the developing world have been very interested in technology transfer for years. Typically if you want to do business in these countries you need to partner up with a local firm. This is done on many levels - on up to the highest - for example when the US allowed Turkey to buy fighter jets part of the deal was that they would be assembled in Turkey. China is just the most aggressive country in this regard and they view it as a major part of their modernization. A while back I worked on a large project in Malaysia and got to see this first hand.

Just one point - the tax subsidies that are at issue are in China, not here in the US. So, you can see where the government has a point - GM wants the subsidies from the Chinese government so the government wants something in return - at least at first blush it is just quid pro quo. Also, lets think what sort of info this could be - it has to be more than just design specs - the Chinese are great at taking things apart and reverse engineering them.

The bigger issue though is that China is notorious when it comes to intellectual property - there is just no protection. I'd also go on to say (and I have said in the past) that the real value in the Volt is the technology. Unless the price of gas shoots up I just do not see the Volt as a big seller (same goes for the Leaf), but the future value of the tech in the car could be huge. I'd analogize this to the smart phone market - all of the big players are beginning to sue each other - Apple suing Samsung is just one case. A few weeks back Google agreed to buy Motorola Mobility for $12 billion - the general consensus is that they bought it for the patents - to let them protect Android. I believe that the same sort of patent/ip shakeout will happen with new car tech.

So, all that being said GM is really between a rock and a hard place. Given China's reputation they would be crazy to give in. I see the Volt as GM's Apple Lisa - their Macintosh (perhaps not as wildly successful, but successful all the same) is still in the future and they need to protect that.

Last point - in the past China was the low-cost option for manufacturing - not any more. Companies are already moving on to other places. Part of this is that China is running out of workers because of their one child policy, but also because they are moving upmarket. No longer is it the place for cheap junk - they are making more and more complex and high quality items - one great example of this is the iPhone. This is just going to accelerate and their quality in all sorts of items including their cars. They might be junk now, but give them 10 years and that will change - more so with every bit of advanced tech that they get from other countries.

It would likely be badged a Buick in China.

A Buick Volt. They could call it the Bolt.

Or Bampera.
To attract the Buddists, they could go with Ohm.

In Aug 2011, GM declared $2.4B profits and

"Net at GM International Operations, including Russia, China and Korea,
rose 14 percent to $573 million."Read More

And FWIW, the top selling car in China is the…

Some say that in 2011 it was the...
BUICK EXCELLE, sold exclusively in China. The Buick Excelle is based
on a design from GM's South Korean subsidiary, GM Daewoo Auto &
Technology.

Others say differently…
#1 was the BYD F3 with 263,900 units.

GM's share was:
#5 the Buick Excelle with 222,500 units, and
#8 the Cruze with 187,800 units
Read more

It appears that GM has a lot of market share and profits to protect.

Making difficult decisions, like should GM kowtow to the Chinese,
is why the suits in the board room get paid the very big bucks...
I wonder what the newly returned Mr. Lutz's position is.

Irrelevant factoid:

"According to the World Heath Organization (WHO), the Chinese kill
600 people A DAY in motor vehicle "accidents". Americans used to kill
50,000 a year which is only 140 a day. This has dropped to only 30,000
a year. Automobiles for the masses are relatively new in China and they
are working on driver safety."

Exactly. Japan was notorious for this behavior in the last half of the 20th century. It worked extremely well, so other countries are copying the mdoel. Requiring joint ventures and partnerships until they got the technology they needed. No one ever sold much there, but they got the products they needed to dominate industries. Televisions, cameras, etc. The false lure of a huge market is so tempting, most companies don't realize that long term they will be out of business because they gave away their only advantage.

These days, I believe every major company knows what they're getting into with China: lots of potential customers who would much rather buy a local knockoff for half the price if they get the chance.
There's a mitigating factor though - the rapidly growing middle/upper class segment in China sees things like American cars and American products as status symbols. Heck, they treat PBR like champagne because they haven't looked past the fact that it's American yet.

I don't think we're missing the point at all. China protects intellectual property very poorly if at all, is building a military machine designed primarily to counter that of the America's, and is actually a potential enemy who just happens to make all the cheap plastic crap—expensive plastic crap too, come to think of it—to which we're all addicted.

Technology transfer is the equivalent of copying someone else's homework.

The idea is NOT to sell Volts in China. The idea is for the Chinese to sell cheap copies of the Volt in the U.S.A. Why any American company would wish this—or why American citizens would, for that matter—is beyond me.

The lack of manufacturing ability is destroying this country. It's time we woke up to that fact.

The big issue is that China doesn't generally innovate anything - it's just not in their culture, from what I've read. They are great at taking an existing product, and figuring out a way to mass-produce it cheaply enough to make a profit at it, even if they have to strip the quality out of it. I remember when Research in Motion wanted to sell Blackberries in China, they were asked to turn over the technology for 'review' - which they did (if I remember right). The Chinese government turned right around to their own manufacturers, gave them the detailed information, and a copy was made to out-compete RIM in mainland China - basically costing RIM their shirts. GM would be utterly dumb to fall for it.

I am sure it's not a malice thing for most Chinese, it's just the way their culture operates - to conform, copy, and utilize; not to innovate, stand out, or individualize. Japan suffers from this problem a bit, as well - it's why electronics did well there, we might have invented XYZ widget, but the Japanese perfected it and miniaturized it, and the Chinese could pump out copies of the design like no one else on Earth. The problem is invention requires deviant thought, something highly discouraged in Chinese culture (it's a communist thing).

At least, if I remember my International Business classes correctly - the usual disclaimers are in effect: Your milage may vary, past performance is not a promise of future gains or losses, and don't run with scissors.

I'm sure they all know, but when you read press releases about such partnerships, it always seems like the short term lure of billions of customers makes them forget their choices will put them out of business long term.

You used to see a lot of rhetoric (but no action) from the US government about most favored trade status, tariffs, environmental concerns, human rights, etc, etc. Now, we don't even seem to spout rhetoric. Instead, the USA is sending our Vice President to China these days to assure them that their investments are safe. I wonder what assurances our companies are getting?

I don't think it's possible to determine intent with much accuracy. But we can decide if an action is detrimental to us, and act accordingly.