GM and GE Get In Bed With China

Guess what corporations are getting into bed with the Chinese? General Motors (GM) and General Electric (GE)! Yes, you read that correctly. GM, recipient of $50 billion of taxpayer money, and GE, whose CEO is Jeffery Immelt, good friend of President Barack Obama. GE and GM agreed on a pilot installation of electric vehicle (EV) charging stations in Shanghai, the latest step in GM’s plan to develop infrastructure in China to support sales of its Chevy Volt. GE agreed to buy the extended range EVs for use at its corporate headquarters in Shanghai.

General Motors

GM received a subsidy of $50 billion in 2009 because it was “too big to fail.” In 2010, GM “claimed” that it paid back the government bailout loan in full, with interest, years ahead of schedule. While that statement is true, what GM CEO Ed Whitacre was referencing was the $6.9 billion money received amount, not the $43 billion stock equity position taxpayers were forced to take with the bail-out. But that is the subject of another post.

Under pressure from the Chinese government GM has agreed to provide access to its proprietary electric vehicle technology to its Chinese partner, Shanghai Automotive Industrial Corp. (SAIC). Beijing has pledged that it will do whatever it takes to help the Chinese car industry take the lead in EVs. GM contends the move will help it maintain a lead in the rapid electrification of the industry. A serious concern is that GM may lose control of intellectual property (IP). Protection of IP rights has become a critical concern, with Chinese businesses routinely ignoring trademarks and copyrights on everything from pop music and movies to pharmaceuticals and automotive design.

GM is partnering with China in a 50-50 joint venture with China’s state-run auto industry. And GE will join GM in a related partnership in China. Why, you ask, is GM doing this? As it turns out, GM will receive a $19,300 subsidy per EV from the Chinese government. To get it GM must share its EV technology with the Chinese, as well as produce the EVs in China. The GM China Advanced Technical Center, in Shanghai, is adjacent to GM’s headquarters, and is in a 50-50 partnership with Chinese state-run SAIC to develop and implement the electric technology, probably in the Shanghai GM Chevy Sail, introduced late last year. GM, we also learn, is “selling” Volts to GE for use in China.

GM vice president Stephen J. Girsky told the New York Times, “This is not a political decision today. It’s a business decision.”

General Electric

GE will install a number of charging stations at a government-assigned international EV demonstration zone in Shanghai’s Jiading District and at the GM Headquarters office in the city. GE will build and install
EV charging stations which could be in higher demand if drivers buy EVs. The company estimates the expanding market could bring it up to $500 million in revenue over the next three years. The charging station installations replicate the infrastructure build-up efforts in the U.S. it developed from grants from the Department of Energy. Also, GE Energy announced in August, 2011, a partnership with Hertz Corp. for advancing EVs and charging stations in China.

Ford?

Ford’s CEO, Alan Mulally said that Ford Motor Co. may make electric cars with its partner in China as the auto industry moves toward producing more fuel-efficient vehicles. “As we move to more electrification, you’re going to see more hybrids, plug-in hybrids and all-electric cars,” said Mulally.

The Japanese?

Both Nissan and Toyota have no plans to manufacture existing models (Nissan Leaf and Toyota Prius) in China. Nissan, in China, is jointly developing an electric car with its Chinese partner, Dongfeng Motor. But it has decided not to build its new electric Nissan Leaf in China. Toyota said that it will build and sell in China the current generation of the Prius gasoline-electric hybrid, even though the Prius is not eligible for most Chinese government subsidies because it is not a plug-in vehicle. But Toyota has said that it has no plans to build or sell the plug-in version of the new Prius in China. It would be eligible for Chinese subsidies – but only if Toyota transferred core technologies.

So… the next round of whining you will hear from Democrats and the Obama administration will be about how U.S. EV manufacturers in this country can’t compete because of China’s massive subsidies to their EV industries. And the environmentalists and government subsidy company investors will cry for more U.S. government “investment,” or their Solyndra-like companies will fail and their green jobs will be gone and/or not be permanent.

Are GM and GE putting short term profits ahead of patriotism? When (not if) the Chinese take advantage of our technology and use it to build better war machines, we taxpayers will have to again bail out GM, as well as GE.

But that’s just my opinion.