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GM Rebuffs China Criticism

Detroit maker investing $16 billion in U.S.

by on May.07, 2013

General Motors is investing $16 billion into its U.S. business, including plant improvements.

Stung by jibes from the Wall Street Journal’s editorial page, General Motors Co. is planning to invest about $16 billion on U.S. factories and facilities through 2016, more than it will spend in China, the company said.

Last month, GM Chief Executive Dan Akerson said on the eve of the Shanghai Auto Show that planned to invest $11 billion investment for its joint ventures in China. That was an increase from a 2011 outline to spend $7 billion through 2015.

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The Journal last week ran a commentary on its op-ed page titled, “Welcome to General Tso’s Motors,” saying China “is disproportionately benefiting” from the 2009 U.S.-backed bankruptcy reorganization of Detroit-based GM. The Journal’s editorial page previously has criticized the bailout. GM responded to the criticism in a letter to the newspaper.

General Motors Tonawanda Powertrain employee Tim Battaglia installs a timing chain assembly on an Ecotec I-4 engine.

“The $11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit and is far less than the approximately $16 billion in capital GM will invest in the U.S. over that time,” Selim Bingol, GM vice president of public policy, said in a letter published in the Wall Street Journal.

Through its joint ventures, GM sold 2.84 million vehicles in China, its biggest market, last year and wants to boost that to 5 million by 2015. As part of its continuing investment in the Chinese market, GM expects to increase its capacity in China by 20% this year.

GM “was in China long before the economic meltdown of 2008-2009, and not one dollar of U.S. taxpayer rescue money was spent on our operations there,” Bingol said in the letter. “Our Chinese joint ventures are self-funding, meaning we require funds spent there to be generated there.”

Previously, GM said it invested $8.5 billion in the U.S. since emerging from bankruptcy, including efforts to prepare for production for more fuel-efficient engines and vehicles.

GM has 43 manufacturing facilities, including 12 vehicle assembly plants, in the U.S., according to GM’s website. With its China investment, GM is increasing its number of assembly plants to 17 assembly plants, Bob Socia, the automaker’s China president, said last month. The total number of facilities in China will be 30 in 2016, GM said.

Vehicle sales by General Motors and its joint ventures in China increased 15.3% on an annual basis last month to an April record 261,870 units.

Shanghai GM and SAIC-GM-Wuling, as well as their Buick, Chevrolet, Wuling and Baojun brands, all reached all-time highs for April sales. Cadillac also set an all-time monthly sales record. GM’s sales for the first four months of 2013 were a record 1,078,243 units, an increase of 10.9% on an annual basis. Shanghai GM’s domestic sales in April were up 29.2% year-over-year to 121,559 units, SAIC-GM-Wuling’s sales in China were up 5.9% to 134,815 units and FAW-GM’s sales in the domestic market were down 0.3% to 5,124 units, GM officials said.

Buick sales in the domestic market totaled 66,923 units in April, which was an increase of 23.9% on an annual basis. The original Excelle family had sales of 25,336 units, an increase of 9.3%, while sales of the Excelle XT and GT increased 53.7 percent to 18,413 units.

Chevrolet sales in China rose 21.7 percent from the previous April to 50,559 units. Sales of the Cruze, the brand’s most popular model, were up 8.6% to 17,277 units. It was followed by the Sail, which sold 15,409 units, and the Malibu, which sold 8,786 units.

(GM invests $332 million development of powertrains. Click Here to read more.)

Cadillac sales in April were up 99.1% from last April to 4,077 units. It benefited from strong demand of 2,195 units for the SRX luxury utility vehicle and 1,802 units for the new XTS luxury sedan.

(Click Here to read about GM’s commitment to climate change.)

Shanghai GM was named “Best Car Manufacturer” at the Auto Shanghai 2013 Grand Awards. Its Ecotec 2.0-liter engine was named one of the “10 Best Engines” at the show.

Shanghai GM showcased 45 vehicles under its Buick, Chevrolet and Cadillac brands, with the theme of “Innovation Driving the Future.” The all-new Buick Riviera concept vehicle had its world premiere, while the Chevrolet Cruze hatchback and Cadillac Escalade ESV made their China debut.

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4 Responses to “GM Rebuffs China Criticism”

  1. dwight mannsburden says:

    Niedermayer (General Tso’s Motors, which is just SO amusing) is TTAC, just about the most anti-GM, anti-domestic website around. GM should have just told him he’s an idiot and to stuff it.

  2. Jorge M. says:

    GM can spin it any way they want but the bottom line is that they used U.S. tax payer LOAN money to expand in China while tax payers were defrauded out of millions of dollars GM never paid back on the LOAN. The LOAN was intended to save U.S. jobs, not create Chinese jobs. It’s a disgrace that GM would even think about using U.S. LOAN funds to expand in China.

    • Michael Strong says:

      Unless you’re privy to some paperwork, I believe the message was clear: Chinese money was used to bulk up the Chinese business. The question is do you believe that? In your case Jorge, I’m guessing you do not.

  3. Ragtop Man says:

    Isn’t China big on local content and assembly?

    My understanding is that opening factories to give people fresh off the farms a paying job (fancy, that) was the quid pro quo of setting up shop on the mainland.

    No surprise at all the straphanger media (NYT, WSJ) on the island got it wrong; it’s more newsworthy when they actually get something right.