Idle hands in China workshops: foreign carmakers struggle with zombie plants

WSJ via EFE ^ | Christmas Day, December 25, 2018 | unattributed

[SunkenCiv]

A downturn in China's car market has wrong-footed some of the world's biggest automakers, saddling them with factories they no longer need and that are costly to retool, according to a report from the Dow Jones Newswires supplied to EFE on Tuesday. Ford Motor, Peugeot and Hyundai Motor especially mistimed recent expansions, opening new plants just as the seemingly unstoppable growth of China's auto market went into reverse.

[SunkenCiv]

Workers operate on the assembly line of Geely Automobile Holdings LTD in Ningbo, China, Sept. 12, 2009. EPA-EFE FILE/QILAI SHEN

[ConservativeMind]

What a shame. /s

[SunkenCiv]

If General Motors ends up putting a bunch of capacity on the block (and we have large rubblefields in these parts, right where parts plants used to be) Tesla won't be the only bidder -- the EU is force-feeding electric cars to its occupied territories. While this probably should work out as a business opportunity -- loads of recent-model left hand drive used German cars, sold into the US market -- its not unlikely that European manufacturers will expand production in the US, and buying abandoned capacity may not be a bad way to do it.

In before the Tesla- and China-bashing starts. :^)

[SunkenCiv]

Ford closed at $7.85 a share, and pays a .60 (.15/quarter) dividend (yield of 7.6%). Of course, it's been a buy since it was just under $10, and that hasn't worked out yet. How many cranky FReepers are willing to say that Ford has less real value than Tesla, irrespective of the difference in market cap?

[mylife]

Next thing you know they will call the Lordstown Oh folks back to work

[familyop]

Thanks for the Ford info. I recently read that Chinese consumer spending was down on some things.

[familyop]

I don’t know if that’s true about consumer spending there, by the way, but China is ramping up domestic competition against foreign-owned (e.g., U.S.) factories on some items.

[SunkenCiv]

They are backing down, bit by bit. Funny, isn't it, that the continual drumbeat about how China was going to destroy the US dollar by dumping US gubmint debt, as if that would A) work, or B) make financial sense, has vanished from FR threads? Well, not that I've read *all* of them...

• China cuts tariffs on 700 more items Just in Time for Christmas
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[SunkenCiv]

The Chevy Cruze would still be Beto in a head-to-head.

[SunkenCiv]

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[Pontiac]

China is ramping up domestic competition against foreign-owned (e.g., U.S.) factories on some items.

China’s leaders must think that they have stolen enough western technology to take the risk.

[Caipirabob]

China has been building crap housing for years and their citizens have been investing heavily in their realty market. In China, friends don't let friends buy Chinese products. However after decades of falsified, staged GDP the results are catching up with them. Not going to be a soft landing.

And the homes are just falling apart.

Watch this and have your kids watch as well:

Are NEW Chinese buildings really FALLING DOWN?

[caltaxed]

"Ford closed at $7.85 a share, and pays a .60 (.15/quarter) dividend (yield of 7.6%)"

F150 sales may increase due to blowback against GM US plant closures.

[SunkenCiv]

The libs I know (including members of my own family), who have been happy with Ford sedans, got their knickers in a twist about Ford's plans to shift toward truck production, and swear off ever buying another Ford. IOW, they're nuts. So much for solidarity with their union brothers, eh?

[SunkenCiv]

• Huawei's Retaliation: Massive Apple Boycott Sweeps China Amid U.S. Disputes

[PapaBear3625]

I don’t know if that’s true about consumer spending there, by the way, but China is ramping up domestic competition against foreign-owned (e.g., U.S.) factories on some items.

That's the Chinese pattern:

1) Make the American company open a factory in China.

2) Steal all the know-how and intellectual property.

3) Open up a competing factory using what they stole.

4) Undercut the Americans, since they got the development costs for free.

[PapaBear3625]

In China, friends don't let friends buy Chinese products. However after decades of falsified, staged GDP the results are catching up with them. Not going to be a soft landing.

Physicist I know has a really low opinion of the Chinese PhD students he had to supervise. They would routinely falsify research results to make themselves look good. That dishonese attitude, all through Chinese society...

[caltaxed]

The F150 redesign put Ford ahead of everyone and where they make the vast majority of their profits.

Lately though it looks like there are a lot more Dodge trucks on the road and they may be gaining market share on Ford.

[central_va]

Now is the time to close off the US auto market with HUGE tariffs. Hit ‘em now and hit hard. We need to break these gooks.

[SunkenCiv]

The head of Fiat/Chrysler (now deceased) made the move from sedans to trucks in their Chrysler lines (Fiat hasn't been able to make many inroads in the US market) last year, maybe that was even earlier.