|GM China President and Managing Director Kevin Wales - Image: GM China|
In acknowledgement of that wisdom, our global team of journalist/analysts -some of them among the best within academia, NGOs and government- did indeed weigh the following words, and the GM activities that induced them, then wondered why we didn't hit the "send" button within minutes of reviewing a recently published interview conducted with GM China's Kevin Wales.
What Kevin Wales euphemistically calls China's process of "Innovation through commercialization" to accelerate technology prove-out and utilization, is simply considered, by every other industrialized society, as theft, industrial espionage, illegal acquisition of intellectual property, patent right infringement, unfair trade practice by government subsidization... In other words, economic war on a massive scale, coupled with an endgame strategy epitomizing zero sum.
Grammatically, we rank "Innovation through commercialization" right along with "ethnic cleansing" in sheer euphemistic audacity.
Mr. Wales and other GM executives have played -willingly or unwittingly- into the most reprehensible example of (perhaps) illegal transfer of wealth, technology, production process and economic stability at the DNA level in the history of the world. And of greater concern, a concomitant compromise of US national security through provision of sensitive technologies -like the neodymium magnets pioneered by former GM subsidiary Magnequench which was itself inexplicably purchased by the Chinese in the same time frame GM resumed sales in that county- with weapons applicability to China's military. No, Mel Brooks (History of The World, Part I) is not laughing, nor is Ford amused amidst recent reports of an F-150 "commercialization" by a Chinese car firm. And yes, you should be worried: The Once Great Britain learned the hard way as it woke up to the fact that world renowned brands spawned within its borders were now owned by offshore others, while reducing its manufacturing base capacity to pre-industrial levels.
Echoes of a Cold War Mindset
The idea that those leading GM at the moment have been -and still are- so willing to give away a US company built on the sweat and blood of fathers, grandfathers, great grandfathers and myriad other family and friends whose contributions created an industrial powerhouse long the envy of the planet (and a heretofore non-existent, successful, middle class) to a communist, dictatorial regime whose skirts are still awash in the blood of millions of its own people eliminated in the Mao ordered purges between 1949 and 1967, is at once disturbing and incomprehensible. It behooves us to ask ourselves how this type of corporate behavior would have been viewed at the height of the Cold War, and what the consequences might have been. And, need we add that GM is still partially owned by the US government?
The Spectre of A Corporation Responsible Only to Itself Amidst Inconsistent Trade Policy
One has to wonder to what extent GM sought guidance in the last 30 years relative to the level of risk they were willing to expose themselves to a a result of significant expansion in China (ask the Tibetans why Buick is one of the most coveted brands in that country for over six decades). We refuse to believe that any credible risk assessment -given the historical and provable excesses of China's communist party- would have strongly recommended GM investing in this country no matter how rich and enduring its heritage as the oldest continuing civilization on this earth.
"I suspect that GM may have been told what so many other corporations seeking to tap the potential riches of an emerging market 1 billion plus people strong were advised: No more exposure to potential losses in real estate, technology and people than they could effectively absorb", said one China analyst. "In short, I doubt that it was terribly encouraging for the simple reason there was more at risk than just GM's bottom line." (see Super-Globalism)
If the old GM hierarchy proceeded with an observable modicum of caution in line with the conclusions of a presumed risk analysis conducted, the current leadership, with extremely limited automotive industry management skillsets, has abandoned anything resembling caution despite warnings from learned, knowledgeable, extraordinarily well connected sources both governmental and private. Indeed, one ignores the findings of the United States China Economic and Security Review Commission and the US Department of Defense only at their own peril.
Obviously, we cannot lay the current and lamentable state of affairs squarely at the feet of corporate executives, for the simple reason that legally they can do no more than the trade policies of this government permit. And unfortunately, such policies past and present, the last 25 years in particular, have not proven themselves as champions of US industrial base preservation.
|Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft During Signing Ceremony For a new vehicle production plant in Yizheng, Jiangsu Province - Image: VW Group China|
VW (大众汽车(中国)) Has Substantial Reason to Protest "GM Number One in The World Again" Status
In spite of those pundits, "analysts" and other industry "observers" who have derided Volkswagen's current stance, the company is right to protest the "GM is Number One in The World Again" mantle conferred by those who have not bothered to do their homework in terms of determining how, and from where, those claimed sales and production numbers were formulated and derived.
It has been determined by several credible sources that such "official" PRC data is infamously unreliable, inaccurate and specifically designed to perpetuate a falsehood, indeed a facade -the Chinese "ghost cities" as a supreme example- of a quasi-reality.
We state here and now, based on inferential data collected by the USCC, that if the production and sales numbers assigned to the Chinese market were scrutinized in line with traditional data compilation methodologies, China's "Number 1 in Auto Sales and Manufacturing" title would disappear overnight. Yes, it may very well attain that status in the future, but not now nor in 2010.
As a sidebar commentary, we feel it important to state categorically that GM will permit Zhejiang Youngman Lotus to purchase -over the "objections" of Swedish receivers - SAAB for the simple reason there was no true objection in the first place. In fact, it was part of an GM internal strategy to create the appearance of strength and independence for GM -even a hint of altruism- as they publicly stated the "concerns" they had from a market competitiveness, proprietary information and technology standpoint of Youngman acquiring the remnants of this Swedish icon.
Youngman, a novice on the international auto industrial scene, has been assured its overtures have not nor will be dismissed - if they are patient. A patience, mind you that allowed China's auto industry to add the venerable MG nameplate to its repertoire of acquired Western brands. In this regard, we truly hope that GM renders the above assessment a falsehood.
"外国人" (Foreigners) Held in Derision
According to our sources, PLA (yes, People's Liberation Army; every major corporation in China is under their control) handlers of Western executives, are in all likelihood, privately laughing derisively at their level of naivete`, measurable only in a quantum universe. (see "Crisis on Asimov: A Vision of 2085")
To be sure, the recently announced higher tariffs, taxes and the intended limiting of foreign imports by China is just the beginning, followed by state ordered property confiscations utilizing a method that Warren Buffett's BYD is only all too familiar. It would be wise to remember also that both GM and Ford ceased operations in China following the Mao led Communist victory over Generalissimo Chiang Kai-Shek in 1949. And, more important to this discussion, the current government of China is ideologically the mirror of that established by Mao Zhe-Dong. Conversely, any firm doing or planning to do, business in this country should keep that fact in mind.
But GM needn't worry, for now at least: They have been successfully absorbed by the PRC collective with DNA markers indistinguishable from the absorbing entity. Nevertheless, according to our sources, the relationship is no longer symbiotic and the "host", GM, is of limited value in the same way that Boeing and Airbus are. The latter in light of China's rolling out a pre-production prototype of their first indigenously produced C919 airliner last year, incorporating Airbus A320, Boeing 737, 777 and 787 Dreamliner technology and process.
Once again, the Chinese, no matter their chosen course of governance, have proven themselves masters of the endgame and true progeny of Sun Tzu.
GM's transition to China... is now complete. - Myron D. Stokes and the ER Global team
Related and Recommended Reading:
USCC Report To Congress 2011 http://www.uscc.gov/annual_report/2011/annual_report_full_11.pdf
Crisis On Asimov: A Vision of 2085 http://www.slideshare.net/GHHLLC/future-of-the-auto-industry-crisis-on-asimov-a-vision-of-2085-dr-sheila-ronis-e-motion-reportscom-myron-stokes-publisher-presentation
Super-Globalism: Strategies For Maintaining A Robust Industrial Base... http://www.slideshare.net/GHHLLC/superglobalism-strategies-for-maintaining-a-robust-industrial-base-through-technological-policy-and-process-improvement-presentation
Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2011 http://www.defense.gov/pubs/pdfs/2011_cmpr_final.pdf
Project on National Security Reform - Vision Working Group Report and Scenarios http://pnsr.org/data/files/project_on_national_security_reform_vwg.pdf
Mighty MG: Direct From China (NZ Herald) http://www.nzherald.co.nz/motoring/news/article.cfm?c_id=9&objectid=10783083
China's Youngman bids for bankrupt carmaker Saab http://www.reuters.com/article/2012/02/03/saab-idUSL5E8D32MF20120203
2010 Automotive Industry Analysis: 2008 Congressional Hearings http://www.slideshare.net/GHHLLC2/2008-automotive-industry-analysis-congressional-hearings-martha-hindes-emotion-reportscom
Restoration of GM http://www.slideshare.net/GHHLLC/gm-analysis-e-motion-reportscom-restoration-of-general-motors-viability-a-european-solution-of-einsteinian-simplicity-presentation