AFTER RECEIVING BAILOUT, GM MAY MOVE VOLT PRODUCTION TO CHINA 

 

 

 

General Motors struck a deal today in Shanghai wherein the company has agreed to develop an electric vehicle (EV) platform with its longtime Chinese partner SAIC.

What else was included in this deal? GM has agreed to effectively move all future EV development to China. It could also mean that production of the vehicle itself will be moved overseas.

The deal comes as a result of the Chinese government insisting that foreign automakers give Chinese companies the EV technology they lack, according to an Associated Press report. Unsurprisingly, some U.S. lawmakers have raised their concerns about the deal and have characterized it as a “shake down” from the Chinese to get GM’s Volt secrets. GM has denied reports that it will hand over the intellectual property underlying the Volt.

GM Vice Chairman Steve Girsky, in a conference call from Shanghai, said that neither SAIC nor the Chinese government have demanded Volt technology but that any future EV developments would, of course, draw on GM’s Volt “experience and technology,” according to USA Today.

Under the deal, SAIC and GM will equally share the cost of developing a new all-electric vehicle, Girsky said.

As per the arrangement, GM plans to start exporting Michigan-made Volts to China by year’s end. However, it is highly unlikely that GM will sell many of the unsuccessful vehicles.

“The Chinese government is pushing electrics with a subsidy that amounts to about $19,000 per car — but only if the car is made in China. No imports allowed,” writes Chris Woodyard of USA Today. “There also are tariffs on cars imported to China, which lawmakers argue are unfair and may violate world trade rules.”

But, as mentioned in the above, what has some people truly upset is the fact that Girsky hinted that the Volt could eventually be built in China.

“If we localize, eventually it won’t have a tariff and it will get the subsidy. We have made no decision on if, when or where we build Volt in the future,” Girsky said.

USA Today further explains China’s quest for EV technology:

The push for more advanced technology reflects China’s frustrations with its continued weakness in automotive technology, analysts say. After 25 years of auto joint ventures that require local partners to hold at least a 50 percent stake, domestic automakers still lag behind global rivals in automotive engineering.

“China is not a technology leader in virtually any industry. The country has developed around low-cost production,” said Bill Russo of consultancy Synergistics. “This is the irony, that the largest and biggest growth market has relatively weak domestic manufacturers.”

It was because of the sudden growth in Chinese demand and faltering sales in the recession-stricken West that helped China surpass the U.S. as the largest car market in 2009. Just just year, sales of passenger vehicles, excluding large buses, jumped by a third to 13.7 million vehicles.

Two final thoughts:  First, considering that all GM’s EV development was financed with taxpayer dollars, it is perfectly reasonable that many people are upset with the car manufacturer. On the other hand, given what appears to be GM’s failure to develop a successful, affordable and stableEV, one might feel compelled to say of the Chinese, “They can have it.”

Second, given the fact that Federal government helped itself to millions and millions of taxpayer dollars in order to create “green jobs” that would help combat high unemployment, it would seem that moving research and development (and possibly manufacturing) jobs of a “green product” overseas is slightly, well, counterproductive.

(h/t Weasel Zippers)