GM is a good old American car company.  We should be patriotic and buy their stuff. Right?

GM is putting up a major research center in China, as another major transfer of our R&D elsewhere.  It continues that company's practice of driving Michigan auto suppliers out of business by replacing them with foreign suppliers, even if the local products are the same price.  There is something very strong about the outsourcing mentality that causes an illogical inertia.

That's not to say that our companies should not invest overseas.  But if they build overseas to re-import to the U.S. that is a problem.  The currency manipulation and value added tax problems facilitate this.

• GM could, if it wanted to, drive major sensible change to U.S. trade policy.
• GM could, if it wanted to, push many politicians to rein in the currency manipulation problem.
• GM could, if it wanted to, be a major force in driving an audit of trade policy to correct the U.S. economic course before signing new agreements.

But... it outsources.  God Bless America.

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Exactly
written by Michael Stumo , October 30, 2007

Right on target

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Colorado Springs Manufacturing Task Force
written by David C Anderson , October 30, 2007

Although GM could, and should, do what is recommended, note that GM is meeting Chinese government requirements to develop technology in a domestic Chinese setting in order to participate in that market. The New York Times article points out that the National Development and Reform Commission local-content rules are pointed as much as anything at Toyota, which assembles in China but ships intellectual property laden critical components in sealed boxes - from plants in Japan.

With the so-called richest, at least at present largest, world market, the US government could do much more to require reciprocal development attention. That would, however, conflict with the interests of the corporate world - in which US-based corporations are responsible for importing 2/3rds of product sourced in China.

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