Chinese to Buy Volvo

hawk20

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Chinese to Buy Volvo.

http://www.just-auto.com/article.aspx?id=100597

Summary: China's Geely Automotive Holdings wants to buy a majority stake in Volvo Cars together with an unidentified Swedish investor while allowing Ford to keep a stake in its Swedish affiliate, the Dagens Industri newspaper reported.
Date: 6 August 2009
 

jberks

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I know protectionism is a bad thing but knowing the Chinese, this would be another nail in the coffin of western production and quality.
They aren't interested in Volvo, only their technology. (Note all the new B'ham built Rovers running around these days) Once they've bled them dry, they'll destroy them so they can use slave labour in China to build them cheaper.

Unfortunaly EU/US executives view their Chinese counterparts as on the same page as them. I know from experience that in any batch of chinese skilled people there is at least one government spy. At management level I imagine they all are. I know because fortunately as clever as they think they are, in my game they're still amateurs, so we caught ours, but then we expected it and were looking for him. (I missed him myself as I couldn't believe a real one would be so hopelessly inept at it - good cover really!)

These morons go out to dinner, get drunk and sign anything.
 

mattsurf

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Do not underestimate the chinese - I work for a telecoms equipment manufacturer, now most of the kit is made in China. The Chinese started with low cost high volume manufacturing, which they did really well, progressively they are moving into low volume high end manufacturing, which they also do really well. Now they have started to get into design and engineering, undoubtedly over the next 10 years many electronic engineering jobs will be outsourced to China.

I cannot criticise China's desire to become a world economic power (well it is one already). Their strategy is brilliant, and they do a great job, and quality is excellent. In the past there were serious issues with industrial espionage, however this is becoming much less of a problem as the Chinese realise that they must act more ethically in order to attract western companies. The problem is that in the west we bury our heads in the sand, it is OK to loose "low value" manufacturing to China as we control the Intelectual property and the "value add" design work - let me tell you that China also wants the "Value Add" as well and unless we do something about it the west will be left as a service only economy and will eventually collapse.

The only glimmer on the horizon is that labour costs in China are increasing allarmingly - to such a level that Chinese companies are now outsourcing the "low value" manufacturing to other lower costs regions
 

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Do not underestimate the chinese - I work for a telecoms equipment manufacturer, now most of the kit is made in China. The Chinese started with low cost high volume manufacturing, which they did really well, progressively they are moving into low volume high end manufacturing, which they also do really well. Now they have started to get into design and engineering, undoubtedly over the next 10 years many electronic engineering jobs will be outsourced to China.

I cannot criticise China's desire to become a world economic power (well it is one already). Their strategy is brilliant, and they do a great job, and quality is excellent. In the past there were serious issues with industrial espionage, however this is becoming much less of a problem as the Chinese realise that they must act more ethically in order to attract western companies. The problem is that in the west we bury our heads in the sand, it is OK to loose "low value" manufacturing to China as we control the Intelectual property and the "value add" design work - let me tell you that China also wants the "Value Add" as well and unless we do something about it the west will be left as a service only economy and will eventually collapse.

The only glimmer on the horizon is that labour costs in China are increasing allarmingly - to such a level that Chinese companies are now outsourcing the "low value" manufacturing to other lower costs regions

So true,,I saw it all with the electronics that I handle,,it went all around the small islands off China and Japan, and most now comes from eastern Europe
 

Alex M Grieve

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Do not underestimate the Chinese - I work for a telecoms equipment manufacturer, now most of the kit is made in China.
The only glimmer on the horizon is that labour costs in China are increasing alarmingly - to such a level that Chinese companies are now outsourcing the "low value" manufacturing to other lower costs regions

Well said Matt - we are currently fools in a fools paradise and we all delight in buying goods made in a "low labour cost" environment.

Low labour costs are achieved by all the things we used to see in Europe (especially the UK) before and during the industrial revolution - child labour, sweat shops, 12 hour, seven day working, no employee benefits or rights, no concessions to environmental management or health and safety.

Since we wakened up to this the average life expectancy for a manager has gone up from 32 years (1830 year of the first Factories Act) to 80.


With respect to China (and their sub contractors) it is playing out as follows:
  • manufacturing moves to "low cost labour economies" (HMRC, BT, Banks and others are also sending "service industries" there)
  • Western manufacturing ceases to exist
  • the far Eastern "sleeping giant" wakens up to the points I have made
  • as Matt says, Chinese labour costs are increasing alarmingly
  • the cost of manufactured goods will rise to mimic our own
  • but we will by then have lost our manufacturing industry.
The consequences are fairly predictable from there. Gordon may not in fact have saved the planet. We will all be trying to buy the new expensive Far Eastern produce with money from pensions we no longer have. Gordon will be trying to run the country with the tax revenues from the same pensions.

Spotted the flaw?
 
OP
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hawk20

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Seems to me incredibly short-sighted of Ford to sell Volvo and Jaguar. they transformed Jaguar in many ways -especially improving production methods and overall design. Just as it becomes successful they've sold it to India. Sad.

Now Volvo -surely one of the great European makes by any standards. Will be sad to see it go.
 

Alex M Grieve

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Seems to me incredibly short-sighted of Ford to sell Volvo and Jaguar. they transformed Jaguar in many ways -especially improving production methods and overall design. Just as it becomes successful they've sold it to India. Sad.

Now Volvo -surely one of the great European makes by any standards. Will be sad to see it go.

At one point a couple of years ago, the Volvo division of Ford was the only one in profit!

Within the car manufacturing industry, Jaguar have the unhappy reputation of being "about to launch the car that will get us into profit next year". Sadly, next year is always a year away.
 

mattsurf

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Outsourcing to China has been the main reason for our low inflation economy over the past few years (ie we source products for less, sell them cheaper, hence low inflation), however, inflationary pressure will build massively in the next few years as a result.... We will run out of things to move to low cost regions (or else we will all be unemployed) hence the pyramid begins to collapse (you need to carry on sourcing more and more cheaper products to support the inflation pyramid - it is a giant ponzy scheme). On top of this labour costs in China are rising, on top of this, the long term cost of material and fuel is increasing. Maybe it is just me, however, I see fiancial crisis phase 2 in the not too distant future - although I hope that I am wrong.
 


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