I haven't forgot about the New World Order post Charlie P and whoever is interested in chatting about that. Thought I'd post this as just a hint of what is coming about. This article, if you don't have time to read it all, basically says that GM, like others are selling out to the Chinese more and more every year. I'll explain later when I have more time, why this is a bad thing. Coincidentally, I heard on the news this morning that 6 million American jobs are expected to be lost in the next five years. This is one of the reasons why, but it's all part of a master plan. I'll explain later.
AUTOMAKERS AND TRADE:
Flood of auto parts to come from China; Surge in imports by GM, others
is seen as a threat to jobs in U.S.
Jeffrey Mccracken
12 February 2004
Detroit Free Press
During the next few years, auto imports from China -- for parts like
radios, CD players or DVDs -- are expected to explode. So, too, is the
number of workers employed in China by Detroit's automakers and
suppliers.
Looking at Detroit's three automakers and largest parts suppliers, it's
clear that the politically sensitive drive by U.S. corporations to
import more goods from China will only grow.
The biggest push appears to be from General Motors Corp., which plans to
increase 20-fold the number of auto parts it buys from China and uses in
the United States, Europe, Mexico and elsewhere. In 2003, GM bought
about $200 million in Chinese auto parts for use in the rest of the
world. Its top purchasing executive expects that to grow to $4 billion
by 2009.
Currently, GM brings more auto parts into China than it exports, but
that will change rapidly during the next few years.
GM, the world's largest automaker, will more than double the number of
parts it buys in China for cars it makes there, going from $2.8 billion
for Chinese parts for China to $6 billion annually.
"The Chinese marketplace of suppliers is growing," Bo Andersson, GM vice
president of worldwide purchasing, said in an interview last month. "Our
largest electronics supplier is in China. Our focus is on being ready
for China, but we will also export more in the future."
A move to import more from China helps the bottom line for GM and other
corporations, because of China's lower wages, lower energy costs, sparse
environmental regulations and the currency advantages of making a
product in China and shipping it to the United States. GM and other U.S.
automakers face intense price competition from foreign automakers that
make cars and trucks in the United States and abroad, usually paying
lower wages and providing fewer benefits.
Nonetheless, the combination of a $104-billion U.S. manufacturing trade
imbalance with China, the loss of 2.6 million U.S. manufacturing jobs
since 2001 and a coming presidential election make any talk of goods
exported from China to the United States a touchy subject.
"This kind of thing is catastrophic. It's very disheartening when big
manufacturers in this country decide to buy more parts from China
because it just kills all of us mom-and-pop manufacturers who can't pick
up and move there," said Gerald Flannery, president of the Michigan
Tooling Association. He owns a Detroit gauge-maker with 30 workers.
Flannery was in Washington, D.C., on Wednesday with other manufacturers
berating House members about China and the loss of manufacturing jobs.
Flannery met with Michigan Republicans Candice Miller, Mike Rogers and
Thaddeus McCotter.
"China is becoming a huge election-year issue. It's erupting at the
grassroots level among manufacturers. When a company like GM buys
billions from China, as far as I'm concerned, they're deciding to put
billions in their economy and not ours," Flannery said.
Concern about the move of U.S. jobs overseas was a topic all day in the
Capitol. Federal Reserve Chairman Alan Greenspan testified that he
expects job growth, while Democrats decried a White House report that
outsourcing of jobs to lower-wage workers in other countries could help
the U.S. economy.
The issue of jobs and work going overseas is so sensitive that every
night, CNN runs a feature called "Exporting America" that looks at U.S.
companies "sending jobs overseas or choosing to employ cheap overseas
labor."
A recent Automotive News article first detailed GM's push to purchase
more parts from China. The topic has sparked criticism and concern
within GM and from small U.S. auto-parts suppliers.
Smaller manufacturers "are absolutely terrified" by China, said Frank
Vargo, vice president of international economic affairs at the National
Association of Manufacturers.
"They are import-competing firms, and they're terrified their
manufacturing customers will move to China or buy more parts from
China," said Vargo.
"China is all we hear about from small manufacturers. If jobs are a big
issue at the election, trade with China may resonate as a big issue,"
said Vargo, whose group, based in Washington, represents 14,000
companies.
Auto sales within China are exploding, jumping 30 percent through the
first nine months of 2003, and China has passed Germany as the
third-largest auto-sales market, behind the United States and ***an.
GM's auto sales in China jumped 46.4 percent in 2003.
China, with nearly 1.3 billion people, is expected to emerge as the
world's largest market for consumer goods in coming years.
What other automakers do As part of its strategy to keep down auto
prices, GM is asking suppliers for "global pricing," which GM suppliers
called code for buying parts from China. GM is one of the world's
largest buyers of parts and materials, spending $83 billion in 2003,
including $61 billion in North America.
"I expect our suppliers to buy where they can buy best, whether that is
northern Michigan, South Carolina or somewhere else," said GM's
Andersson. "We have asked our tier-one suppliers to look at the global
marketplace for parts. I expect that from them."
Ford Motor Co., meanwhile, has doubled its purchases from what it calls
"low-cost countries" like China, India and South Korea. The number grew
from less than $500 million a year to about $1 billion in 2003, said
spokesman Paul Wood.
Ford spends about $70 billion a year on parts and materials, including
$50 billion from domestic sources.
DaimlerChrysler Corp. did not have specifics on its plans to buy more
auto parts from China, but said the amount will grow.
"We do expect that our purchases in China will grow on a level similar
to other worldwide auto manufacturers," said Chrysler spokesman Mike
Aberlich.
Jobs go overseas, too Much of the growth of an auto-parts industry in
China is coming from U.S.-based suppliers such as Delphi Corp. The Troy
maker of products ranging from steering systems to electrical parts is
the world's largest auto supplier.
In 1993, it had about nine employees in China. Today, it has about
7,000. It's the largest foreign auto supplier in China. Delphi's revenue
from China grew 50 percent to about $650 million in 2003.
The amount Delphi brought from China to the United States, Europe and
elsewhere grew from about $65 million in 2002 to about $95 million in
2003.
As Delphi's China arm grows, its U.S. employee base is shrinking. In
October, it announced plans to cut 500 U.S. salaried jobs and 3,000
hourly jobs.
Southfield-based Lear Corp., one of the largest makers of auto interior
parts such as seats, is also growing in China, though it says much of
that growth is to meet increased demand in China.
Lear had 1,950 employees in China at the end of 2003, up from about
1,220 employees in 2002.
Other large suppliers such as Visteon Corp. are also expanding into
China, both to make parts for Chinese vehicles and to export to the rest
of the world.
"It's just part of doing business for billion-dollar suppliers," said
Neil DeKoker, president of the Original Equipment Suppliers Association,
which represents 350 suppliers. "They have to be there or else they give
up business to competitors. But there is a fallout with small
manufacturers when the automakers buy parts from China. The small
suppliers have difficulty moving to southern Alabama, let alone China,"
he said.
A problem for Mexico Ironically, any expansion of auto parts exported
from China to the United States and the rest of the world also threatens
the last country to worry many American manufacturers -- Mexico.
"China is a huge, looming threat to Mexican auto jobs. Parts can be made
in China and shipped to Mexico pretty easily, and the cost savings . . .
are just enormous," said Rebecca Lindland, senior market analyst at
Global Insight, an economic-research firm.
"Of course, China is also a real threat to auto jobs here in the United
States. I mean, how can companies compete with 50-cent wages?" she
asked.
Contact JEFFREY McCRACKEN at 313-222-8763 or
mccracken@freepress.com.
Selling out: This is a small part of moving toward a NWO
