Over the last few years whenever someone has mentioned General Motors and its plight I have always replied that GM has placed its future in China. As I understand it, all but one of the ten new factories GM has built over the last ten years have been built in China. China is now the largest auto market in the world and GM is the largest auto maker in China. The future of GM is bright, unlike the future of Flint, Michigan.

GM did not refocus its manufacturing base to China to replace American workers with Chinese workers. It simply placed its main efforts in what it saw as the best growth market for its products. In short, GM has to do what is best for GM, which may or may not be best for the USA.

My comments were confirmed by Ralph Nader in a TV interview today. He reiterated what I have been saying, i.e. that GM has moved its main efforts to China. He said GM will build 2 million vehicles in China in the coming year.

GM’s move is no different from any other auto maker. They all see their markets from an international perspective, not a national view. Japanese auto makers make their cars for the US market mainly in the USA, as do South Korean auto makers. Italian auto maker FIAT is now taking over Chrysler, as well as GM’s operations in Europe, to expand its sales in Europe and gain a new market in the USA. And TATA Motors of India has positioned itself as the cheapest car maker for all the developing world.

So why pour US tax dollars into GM? Well the administration wants to keep GM’s US factories in operation in order to save those jobs. This will benefit American workers and Flint, Michigan, but it will not make or break GM. No, GM has already repositioned itself as the leading auto maker in the top market. It’s future is assured.

Leo Cecchini
May 2009