In the aftermath of the Global Financial Crisis, the Federal government bailed out $Ford(F)$ $General Motors(GM)$ and Chrysler (among others) and effectively took stakes in these automakers. GM and Chrysler became partly government-owned entities, while Ford accepted a $6 billion loan.
Still, they thrived in China, allowing the auto giants to grow their sales there 3 to 8-fold in the coming years, helping boost their valuation and give the Federal government an exit. In my recollection, China did not raise objections to it. This was likely influenced by the fact that US automakers operated in China via joint ventures with local partners.
However, US automakers except for Tesla failed to catch up with the pace of innovation in China's auto industry. As China rapidly shifted away from ICE vehicles to electrified mobility, US automakers saw their prospects dim year after year. Throw in the trade war launched against China and the impact on US-branded vehicle sales is palpable despite operating in the world's largest car market.
Instead of putting up barriers and vilifying Chinese firms, perhaps we could entice Chinese automakers and EV battery firms to set up shop in the US via joint venture agreements that require (a) the sharing of technology, (b) employment of Americans at managerial levels, and (c) the retention of at least 60% of profits to be reinvested domestically.
Image
Image
Image
https://x.com/BrianTycangco/status/1830090437006442647
Comments