Monday, October 29, 2007

GM in China -- cozy commitment in communist country

People's Republic of China embraces Michigan's number one son, GM.

GM has announced it will set up a $250 million alternative-fuel research center in Shanghai to produce commercially viable alternatives to gasoline engines. According to the AP, GM also will contribute $5 million to create an automotive energy research center in Beijing with elite Tsinghua University and Shanghai Automotive Industries Corp., one of GM's local partners.

Could this work have been done in Michigan? Aren't we into developing public/private partnerships? Don't we have the academic, research and development infrastructure to handle such a project? Hasn't the state made alternative energy and advanced automotive manufacturing top economic development priorities? Isn't state government dumping millions and millions of dollars into these priorities? What the heck is going on in the Tri-tech Corridor?

The AP reports that "The new research center will work on alternative fuels, alternative propulsion systems such as fuel cells and technology to improve energy efficiency, Wagoner said. He said it will focus on the booming Chinese market but its technology also will exported to other markets."

"Wagoner said GM picked China for the research center because of its fast-growing vehicle market, large pool of talented researchers and the communist government's push to develop alternative energy sources."

There you have it. We are not competing with Mississippi; we are competing with China. And they won the deal. Wagoner was wooed by favorable business conditions created by the communist leadership in China. (So was Walmart.) Governor Granholm and our state legislature just can't keep up with Ju Jintao and his Party. China has made alternative energy a national priority. While our state economy may be the size of Sweden's, we simply cannot compete with the one-party People's Republic of China, 1,321,851,888 comrades strong. We are only 10 million and we hardly share a unity of purpose.

What else does China have that we don't? An ascendant middle class with lots of disposable income. Even if only 20 percent of the Chinese population are middle class, that is 264,370,377 people, nearly the population of the United States.

In spite of questionable labor practices, China has scads of consumers with wads of cash.

Wagoner's first reason for picking China? Its fast growing vehicle market. This move is about selling cars, not cleaning up the planet. Doing research to create cleaner fuels in China is a means to an end -- selling more cars.

It's about selling lots of cars in a very populous country and staying globally profitable.