GM goes green in the Chinese auto industry

GM plans to build an advanced corporate research center and new China and Asian-Pacific headquarters in the Pudong section of Shanghai.

10/30/2007


General Motors has invested in its future and the future of green technology in China.


GM plans to build an advanced corporate research center and new China and Asian-Pacific headquarters in the Pudong section of Shanghai. A joint venture partnership and a 1,300-employee research center shared with the Shanghai Automotive Industry Corp. preceded GM’s decision to invest in a $250 million in a corporate campus and research center.

The project will work in conjunction with China’s government and academic institutions to find ways the country can reduce its reliance on fossil fuels. The development of gasoline-hybrid cars, electric vehicle technology, energy efficiency in the auto parts manufacturing process and alternative fuels such as ethanol highlights the initiatives of the research center. A second initiative proposed by GM in conjunction with its joint-venture partner is the $5 million grant to the China Automotive Energy Resource Center, in association with Tsinghua University and SAIC.

GM’s joint venture sales in China grew from 20,000 in 1999 to more than 1 million this year, which makes China the second-largest market behind the United States. The 25% increase in auto sales over the last year, along with the expanding middle class of China - a recent addition to the car buyer’s market - contribute to the negative effects on the environment. The growing market of car users and the Chinese government’s National Development and Reform Commission on the local-content rules for alternative-fuel vehicles will result in more restrictions for the manufacturers. In order to qualify for expected subsidies, the rules state that China must manufacture the major components in an effort to increase local manufacturing and production.

The outsourcing of vehicle development personnel and technology in China is a major concern for GM engineers in Detroit and Australia. The use of non-unionized Chinese engineers, who receive less than half the salary of an American and Australian engineer, means the potential loss of opportunities for an already diminishing job market for engineers.

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