The new GM looks abroad

Note the 3rd and last paragraphs. Definitely not the company of the Dinah Shore commercial-
http://www.youtube.com/watch?v=KGZvQoPxhNs
. Dead
as a doornail.
The new GM looks abroad http://money.cnn.com/2010/08/25/autos/gm_overseas_expansion.fortune/index.htm
FORTUNE -- What will likely be the defining characteristic of the new General Motors has gone largely unnoticed in the analysis of its initial public offering prospectus filed earlier this month: the degree to which it is no longer a North American-centric company.
Already 72% of the company's vehicle sales already are generated outside the U.S. and that number is certain to grow larger in future years.
As GM moves more of its business overseas, it will have major consequences for the management of the company and its culture, the direction of its product development, and the allocation of capital.
With opportunity comes risk, of course, and operating in a large number of different regions and countries exposes GM to political and economic risks, as well as foreign regulatory requirements that are subject to change. Among those cited in the prospectus: economic tensions between governments, political instability, natural calamities, war, and terrorism.
Overseas growth could also lead to clashes with joint-venture partners, strains on corporate culture, and raise knotty issues about branding. A recent brouhaha over the use of Chevrolet's traditional U.S. nickname, Chevy, in overseas markets may give only a hint of what is to come.
GM's current international tilt is the result of a strong offshore push begun in the mid-90s under then-CEO Jack Smith. While Smith's strategy of buying stakes in overseas manufacturers like Suzuki and Saab failed, he understood the importance of the rest of the world from his experience running GM Europe, and it has paid off in GM's strong position in developing markets.
Nearly 40% of GM's unit sales now come from countries with emerging economies, notably the BRIC countries of Brazil, Russia, India, and China, which not so incidentally are also experiencing the industry's highest volume growth.
GM claims the number-one market-share position in China, where it began operations in 1997, and the number-three spot in Brazil. Across the BRIC countries as a whole, it finds itself the market share leader with 12.7%. 0:00 /2:16GM IPO's unanswered questions
Selling globally can be a marketing nightmare. In addition to its familiar brands like Germany's Opel and Australia's Holden, GM disclosed it will be selling cars under such unfamiliar names as Daewoo, FAW, Jiefang, and Wuling.
Customers may find it confusing too, as GM rolls out the Chevy brand around the world on vehicles that are about as American as the Eiffel Tower. In Europe, for instance, the vehicles sold as Chevrolets are made in South Korea by GM Daewoo.
In its prospectus, GM makes much of the fact that it plans to launch 19 new models in North America by 2012. But that pales in comparison to activities elsewhere around the world. GM's international operation, which excludes Europe, plans to launch as many as 77 new vehicles through 2012 in places like South Korea, South Africa, and the ASEAN region.
Besides enabling GM to leverage its global platforms and spread the costs of new technology, operating in countries with developing economies offers enormous potential savings.
According to the prospectus, 17% of GM's vehicles are manufactured in medium-cost nations like South Korea and Brazil, where wages and benefits run between $15 and $30 an hour. And remarkably, 43% of its vehicles are manufactured in low-cost locations such as China, Mexico, Eastern Europe, India, and Russia where all-in labor costs less than $15 an hour. That's about one-quarter of what UAW members in the U.S. get.
GM is directing much of its resources to China, where its Buick brand is well established and where it is expanding the number of nameplates sold under the Chevrolet brand. Because of China's rules regarding foreign corporations, GM operates through three joint ventures with Chinese companies: one for passenger cars, one for mini-commercial vehicles, and one for light commercial vehicles and medium vans.
The three joint ventures sold 1.2 million vehicles in the first six months of 2010 and produced equity income of $734 million. By comparison, GM North America accounted for just 1.4 million vehicles.
One potential irritant is the growing ambition of GM's passenger car partner, Shanghai Automotive Industry Corporation (SAIC), which may find itself competing with GM in the near future. In addition to producing Buicks, Chevys, and Cadillacs, SAIC also makes vehicles under its own name for sale in China. As GM's IPO prospectus dryly notes, "At present, vehicles that SAIC produces primarily serve markets that are different from markets served by our joint ventures," with the emphasis on "at present."
Besides China, GM is putting a big push on South America. It is creating a new regional organization, GM South America, headquartered in Sao Paulo, Brazil, which will begin business later this year with 29,000 employees. The new organization will have product design and engineering capabilities that will allow it to continue creating local cars and trucks.
As North America, as well as Europe, fade in importance to the health of the corporation, GM's direction going forward is clear. Not too long from now, GM's headquarters in downtown Detroit may seem like a corporate backwater compared to more exciting developments in Shanghai, Sao Paolo, and elsewhere.
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As many other multinational companies have discovered then the wages and other costs in the US have become a liability and they have moved jobs abroad.
This has happened gradually over the years so it is nothing new.
Unfortunately for the people in the US this gradual move will stop being gradual and will come in leaps and jumps when the whole construction comes crumbling down.
The $ will lose its value and come back to make life miserable for a lot of people.
The printing presses, wars and corruption using $ all over the world is making the whole structure coming falling down.
Interestingly the end of the cold war 1990 is a key to when this really started to happen.
The US may have won the cold war but is losing its footing in the aftermath.
There are a lot of other companies who have done a similar runner with jobs to foreign countries with lower wages.
The unemployment is rising and nowadays it is mostly high paying jobs that are moving abroad.
The whole financial system is rocking.
The banks are full of bad loans.
The housing market is crumbling and it makes construction business grind to a halt.
The price of everything people need is rising.
The problem is the amount of $ and also the overproduction of durable goods.
GM has voted with their feet and ran away to foreign soils and so have many other multinationals done.
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Bjorn wrote:

How true, how true.
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GM like most other manufactures that operate around the world, makes products in those countries primarily for the markets within those counties.
GM has been making cars in Europe for the European market since before WWII
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Well, what they make abroad, let them sell abroad. If we didnt allow these products to be imported to the USA, that might stimulate the American jobs.
We dont need another trillion dollar money bath and stimulus package. We need good government......something we have not seen in years.
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Soon only GM products you can buy will be sold in Wallmart and made in china delivered from mexico.
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Do you believe GM will become a Japanese corporation and follow their business model?
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Soon only GM products you can buy will be sold in Wallmart and made in china delivered from mexico.
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On 8/26/2010 7:27 AM, Mike wrote:

Nope. I don't.
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Really? Then why did you post what you did?

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Because Japanese companies usually make money. GM usually looses money. A Japanese company wouldn't buy GM... Why would they?
Ok, perhaps there might be some value in GM China, but GM US and Europe? These are boat anchors at best.
On 8/26/2010 12:49 PM, Mike wrote:

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Once again our friend Canuck57 is telling us the sky is falling LOL

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On 8/26/2010 6:46 AM, Bjorn wrote:

I am not sure if you are joking, but I predict you are right. It is only a mater of time before we go to Walmart for the electric vehicle MSRP $10k or a Tata Nano for $3,000.
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Get real we will never see any new car sold in the US for $3,000 or even $15,000. Federal regulations killed the low cost car forever, years ago.
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That is a cop out, Tata Nano passed Euro safety which in many regards is considered superior to US safety guidelines. Has the 50 mpg right now too.
The real reason is political lobby groups getting DC to rig the regulations. Canada does this too. A GM Regal made in Oshawa in Canada isn't legal in Canada. You need to have the daytime running lights a little brighter. $200 tops of the modification, but GM charges 20-30% more for Canadian vehicles. Stupid regulations but true. US does it too to imports.
That is why Toyota, Honda, BMW and others make most of their vehicles in the US. Stupid really when they can be made cheaper and better in Japan, Korea or China.
Kia sales in Canada and US are taking off as people are realizing good car need not be priced crazy. Kia makes a lot of money off of each one too. But then they don't have to deal with US management, politics or union dysfunctionality.
Yep, government in Canada and the US keeps prices high.
On 8/26/2010 12:48 PM, Mike wrote:

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You certainly are entitled to your opinion, no mater how convoluted it may be LOL
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You are confused, the American auto manufactures import few of their brands. Most of what they build outside of the US is sold outside of the US.
The Japanese are by far the largest importers of the vehicles they sell in the US. In the case of Toyota it imports more than 50% of the vehicles that it sells in the US.
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As usual, you are WRONG. Japanes do not import 50% of their vehicles they sell.
On 8/26/2010 7:02 AM, Mike wrote:

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Check the US Commerce Department site and you will find the proof that Toyota imports around 52% of the vehicles that it sells in the US, dummy.
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Bet you can't cite that? The reason is simple, more BC from Mike who will not put his own money down for a GM.
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Toyota does NOT import 50% of its vehicles. But the above does show the winners, Kia, mostly imported too.
I still think Walmart should bring in the Tata Nano.
On 8/26/2010 12:51 PM, Mike wrote:

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Obviously you did not search the US Commerce Department site if that is what you still chose to believe. What you sited are the sales figures not the point of origin and all of the midget cars and Luxury models are made in Japan, dummy
Please name the Toyota Motor Company vehicles that you think are made in the US. You can even include those that are only assembled in the US of mostly imported parts and materials like the Camry.
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