I would be doing a disservice to Motley Fool readers if I didn’t at least look into GM’s side of the story. General Motors Company (NYSE:GM) vice president of public policy Selim Bingol insisted in a letter to the Journal that “[the] $11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit and is far less than the approximately $16 billion in capital GM will invest in the U.S. over that time.”
I think Bingol’s response was a fairly weak argument; it only dismissed that GM wasn’t directly taking cash from U.S. operations and investing it into China.
GM has 31 facilities in the U.S. including 12 assembly plants. To put it all in perspective General Motors Company (NYSE:GM)’s goal is to have at least 30 facilities in both the U.S. and China in 2016 – capitalizing on the world’s two largest and strongest auto markets.
As an investor I understand and recognize the need to invest in China heavily. I also think there’s much money to be spent in the U.S. to fix operations, support American jobs, and fix its tarnished image. The previous quote from Bob Socia about being able to export vehicles from China to the U.S. is not what I want to hear. I suppose that’s the price we may one day pay in a globalized economy – for better, or worse…
The article General “Tso’s” Motors Is Digging Itself a Deeper Hole originally appeared on Fool.com is written by Daniel Miller.
Motley Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.