China blackmails GM for Volt engineering secrets

People with money there seem not to care about gas mileage.

Despite subsidies the EV market in China is small. People with money buy guzzlers and people without money buy cheap cars or e-bikes.

I'm sure that GM can afford not to sell it there.

 

Everybody jokes about the poor quality of some Chinese-made goods. Sounds like a GM product would fit right into that market.

 

Just to chime back in - China has the reputation of manufacturing cheap stuff for the West, and while that is well deserved they no longer just make the cheap stuff - they tcome a long way and are now involved in the manufacture of some very high tech stuff.

Technology transfer is really not blackmail - and there is no ransom picture with this morning's newspaper. It is part of the business deal and companies are free to say no. However this is a great example of just how big a decision it can be - the market is absolutely huge. In this case GM can pass on the significant tax breaks to customers - the fact that it made the news I'd say is a good indication that they think they could sell a bunch of them in China - if not why even bother considering it?

GM cars in China are considered higher end - Buick is the main brand there - it is sort of like Budweiser beer - in the US it is considered run of the mill, but is more of a premium item overseas. If you are middle class there you would be thrilled to be driving a Buick.

The Chinese would not be looking at swiping the technology and using it in cars to be sold in the US (directly at least) as it would be pretty easy to go to court and have the sale blocked - same goes for Europe. They would be looking to use it cars sold in China and other developing countries. You can sell knock-off golf clubs on ebay but you can not do the same with a car.

I'd float a theory - GM has not been lighting things up here in the US with the Volt - could this be a Hail Mary to sell some cars now? I have said that I think that there is a great deal of value in the patents, but there are folks at GM who want and need results now. It is sort of like pro sports - building for the future does not help the coach and GM if they wind up getting fired so many teams need to go with a win now approach.

 

Penn Reels moved all their spinning reel manufacturing to China. US labor prices meant they couldn't compete on the spec (# ball bearings) front with their competitors. Prices didn't drop.

On the other side, I have noticed more made in US labels on plastic items that were once just Chinese made.

 

Rising labor costs in China mean that lower-volume, less labor-intensive items are likely to shift back to the USA (naturally to cheaper states):
BCG - Press Release - Made in the USA, Again: Manufacturing Is Expected to Return to America as China

However, come 2014 unless fuel costs rise significantly, it should be cheaper for the Chinese to ship to the Eastern United States:
[ame=http://en.wikipedia.org/wiki/Panama_Canal_expansion_project]Panama Canal expansion project - Wikipedia, the free encyclopedia[/ame]

But, there is something else to be concerned about. When labor costs rise in China, there will be other places that are cheaper. For example, there is significant Chinese investment in Kenya:
Business Daily: - Corporate News |Chinese manufacturers go local in battle for Kenya