Thursday, May 31, 2007
American Cars: Made in China

Chris Floyd points out that the humanitarian disaster in Somalia is even worse than that in Darfur, and that the Somalia disaster is caused by the kind of American intervention and ‘regime change’ that the Zionists are screaming for in Sudan. Of course, the Somalia regime change was yet another Israeli-inspired replacement of a government which was considered to be too Islamist. Floyd concludes by making the same big mistake that has become commonplace: alleging that the United States is in an energy war in East Africa with the Chinese. It is certainly true that the Zionist infiltrators in the American government we know as neocons have always hated China, and to the extent they still control American foreign policy they are doing whatever they can to cause conflict with China. However, as the American Establishment slowly retakes control of the American government, we will be seeing American foreign policy again reflect the real interests of the Establishment.

Since mathematicians started working on perfecting manufacturing as part of the American war effort in the 1940s, it has taken decades for the utopian dream of the capitalists – manufacturing anything, anywhere, including where labor costs are the lowest – to be realized. There have been many false attempts at dropping factories in the middle of nowhere, but no matter how many Western managers and techniques have been applied, they all ended in financial disaster. It was only in the 1980s that computer control mechanisms were perfected to the extent that capital was completely mobile. Since, both for legal and personal reasons, labor isn’t mobile, an immediate arbitrage situation appeared whereby capital could take even a larger slice of the pie from labor. Thus, the sudden renewed interest in ‘free trade’. China quickly became the obvious choice for manufacturing, with its combination of extremely low wages, totalitarian police state discipline, and welcoming government policies intending to use factories to modernize the country.

Just about everything that can be manufactured for the American market is now manufactured in China. There is no debate in the American Establishment: their wealth, and the financial health of the United States, is dependent on Chinese manufacturing. Since Chinese manufacturing is itself dependent on a reliable source of energy, there is no real conflict between the United States and China over oil (although there may be phony conflicts caused by the continuing malign influence of the Zionists in the American government). This fact has huge repercussion on American policy in the Middle East (more on this to come).

The one industry where manufacturing is still largely done in the United States is the automobile industry. The huge size of the industry, together with the iconic symbolism of the automobile in American life, meant that it was politically impossible to make the obvious move to manufacture automobiles in China. Now that the big three American automobile manufacturers are effectively insolvent, the time has come to make the move to China. Why was the incompetently managed, and serially insolvent, Chrysler attractive to Cerberus? Chrysler is the first American automobile manufacturer to set up manufacturing in China for the American market. Keith Naughton writes:

“Now the new owners at Chrysler promise to rethink what it means to be a car company. Cerberus Capital Management, the Wall Street private-equity firm named for the three-headed dog that guards the gates of Hell, has Motown rabid with speculation this week about the fallout from its $7.4 billion buyout of beleaguered Chrysler. A skilled and secretive turnaround outfit, Cerberus is expected to overhaul Chrysler in a way that could create a new model for Detroit, which badly needs a tuneup. Last year, GM, Ford and Chrysler combined to lose more than $16 billion, as the remnants of Henry Ford’s old model finally ran out of gas. Detroit insiders say they expect Cerberus to shake up the moribund American auto industry by asking this simple question: does a car company have to build all its own cars?

It could prove to be a transformative question. Rather than each Detroit automaker building every kind of car and truck – and losing their shirt on most of them – they could be design and brand houses that build only the things that make them money. After all, the thinking goes, customers only care about the product, the brand and the price. Why not focus on designing a car, marketing it and selling it, rather than manufacturing it?”

Cerberus will want to make Chrysler attractive so it can resell it in a few years at a big profit. There is no way to do that by continuing to manufacture in the United States. Despite some questions, the China deal is still on. Once the profits start rolling in, it is inevitable that all American automobile manufacturers will follow. The television industry disappeared in the United States with nary a whimper, and the automobile industry is sure to follow.