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According to Keith Bradsher, General Motors announced Monday, October 29th, that it would build an advanced research center in Shanghai to develop hybrid technology and other car designs. General Motors all ready has a 1,300-employee based research center in Shanghai with its main Chinese business partner, the Shanghai Automotive Industry Corporation. This company announced that it could help General Motors keep greater control over advanced vehicle engineering, new technologies, and future car development through the joint venture. This has been the latest research investment in China by a foreign automaker since Honda, Ford, and Volkswagen.
This latest report confirms that the American auto industry is still in big trouble economically. With the rise in gas prices and cheap labor costs in foreign countries such as Japan and China, American auto companies are struggling to stay alive. They know that the only way keep their businesses running is to ship job opportunities into foreign countries so they don’t have to pay worker’s benefits and high salaries. With these changes, General Motors will be able to match low cost productions by the foreign companies. This investment will have a huge impact on the workers and unions in General Motors. Future and existing research jobs may come to an end with the recent deployment of the new research in Shanghai.
For the past years, we have been reading and hearing about the constant downsizing of auto companies and the shipping of American jobs to foreign countries. From a business prospective, this is a smart move. Times are hard for the American auto companies and they need to make the right moves in order to avoid bankruptcy. There are ways around shipping American jobs to foreigners. American companies could lower pay rates and benefits in order to stop this. People will complain and be unhappy about these changes, but they need to realize that it’s better to take a pay cut than lose...