February 9, 2012

AP, Others Likely Misreported Chinese Chevy Volt ‘We Get the Tech or You Can’t Produce’ Shakedown Last Year

GovernmentMotors0609Sometimes you read the most interesting things in those supposedly boring trade publications.

One such item of interest comes from an article in Manufacturing News (HT to an emailer) written by Richard A. McCormack which is primarily about the Mainland China’s designs on the worldwide auto parts industry, including the U.S. Some of the larger American unions are demanding that the administration and Congress take action on what they see as unfair trade practices. One sentence is indicative of a more pervasive problem, and it directly contradicts what the establishment press has been telling Americans for months. It’s of particular concern to all Americans because the U.S. government still owns over 25% of General Motors, and reads as follows: “China has told GM that it will not be able to sell its Volt electric vehicle in China unless GM transfers technology to China and produces the vehicle there.”

What?

That’s not what the Associated Press told readers back in September (bold which directly contradicts McCormack’s contention is mine):

GM to Build Electric Cars in China, Protect Chevy Volt Technology

General Motors Co. agreed Tuesday to deepen cooperation with its flagship Chinese partner on development of electric vehicle knowhow amid pressure from Beijing to hand over proprietary technology.

Investments and other details of the plan were not provided, and it was unclear if the agreement was the result of a renewed push by China to acquire advanced technology its own automakers still lack.

U.S. lawmakers have complained that China is shaking down GM to get the technology that drives the Chevrolet Volt electric car. GM plans to start selling the Volt in China by the end of the year, but its prospects are iffy because it doesn’t qualify for a Chinese government subsidy that amounts to $19,000 per car. The government offers the subsidy only to electric cars made in China.

Lawmakers contend such requirements are unfair and may violate world trade rules.

But GM spokesman Jay Cooney in Detroit said the company has not been pressured by the Chinese government to share the Volt technology and has no plans to share it. He said GM is working with the Chinese government in an effort to get the subsidy for the Volt because it helps reach a government goal of getting more electric vehicles on the road.

It’s bad enough when U.S. private firms give away their family jewels just to be able to do business in China or to have Chinese firms make their products (By the way, I question whether this is an absolute precondition of doing business there when Apple, one of the most close-to-the-vest companies on earth, has significant subcontracted manufacturing operations there.)

But — setting aside concerns about the Volt’s financial viability and safety, or even whether it’s technology is that noteworthy — it’s much worse that a U.S. government-controlled entity, which GM still is (no other shareholder has a larger stake), might perhaps end up giving away the technology of a company on which it just blew billions of dollars of taxpayer funds on a bailout less than three years ago.

From a media standpoint, if McCormack at Manufacturing News is right (and it’s hard to see why we should instinctively doubt him), how did the AP get it so wrong four months ago? Please don’t tell me that the Chinese have toughened their stance in the intervening four months. Demanding American technology on the cheap is standard operating procedure and the starting point for negotiations and doesn’t change unless there’s pushback. McCormack’s report is properly seen as showing that no pushback has ever occurred.

Was the AP fooled? Or is the wire service going to say what its reporters wrote in September was true because the real negotiating is being conducted between the Chinese and U.S. governments, while GM’s corporate management has no knowledge or involvement? If so, that’s pretty pathetic and deceptive reporting.

Other outlets which appear to also have missed the story or to have allowed themselves to be deceived can be found near the bottom of the web page at this link.

Cross-posted at NewsBusters.org.

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