Posts Tagged ‘Confronting the Dragon’

Wow, Today’s Los Angeles Times Op-Ed Column Attacks Coda Automotive, Which “Assembles” Electric Cars in the Bay Area

Tuesday, December 13th, 2011

Today’s Opinion bit in today’s LA Times is all about “China’s Wolf in Green Clothing,” all about Coda Automotive, that Los Angeles company what’s “assembling” Chinese car parts in Benicia, CA.

Coda: Code for a Trojan horse - Much of the electric car, pitched as an ‘all American’ green vehicle, is made in China.

“A Los Angeles firm has quietly assembled a Trojan horse electric car designed to carry the Chinese military-industrial complex deep into America’s auto market. Detroit should be afraid, very afraid. And anyone in the U.S. unemployment line — along with American taxpayers, who are subsidizing this sham — should be outraged.”

Whoa, dude! All right, quietly? No, Coda Automotive crows as loud as it can all the time.  Trojan horse? You mean POS Trojan horse that nobody’s going to buy so I don’t know that the CODA Sedan is going to go “deep” anywhere. Detroit doesn’t need to care at all. Coda Automotive has pretty much zero effect on American employment, but, yes, we are subsidizing it and that’s not good.

“The car is branded Coda and debuted at the L.A. Auto Show. While Coda Automotive salespeople were eager to portray it as “All American” — we got one of them bragging about it on camera — its entire chassis and battery system and most of the metal (apparently 65% of the car) come from China’s factory floors, which are not known for their high labor standards.

Salespeople say stupid things all the time so, I don’t know. (But I’ll add that the phrase “All-American” was used by Coda in marketing a year or two back.) Anyway, yes, the “glider” (the car except itself except for the drivetrain) and the main battery pack are made in China only to be shipped to the Bay Area for “final assembly” near the Port of Oakland. But the prime mover, the motor, is sourced in America, so you do the math. Oh, you did the math, but I don’t think you have all the data from Coda just yet. Let’s agree that this is a Chinese car or a mostly Chinese car.

“From a jobs perspective, the Coda’s arrival means this: American electric carmakers such as California-based Fisker Automotive and Tesla Motors, along with the GM Volt and Ford’s Focus Electric, will compete on home soil with a company benefiting from all of the unfair trade practices China has used to bury so many other American industries — from toys, textiles and machine tools to electronic assemblers and, most recently, solar panels. These practices range from currency manipulation to reported illegal export subsidies, counterfeiting, pollution and widespread worker abuses.

Fisker Automotive is working on making its first hybrid cars and those GM Volts are, similarly, hybrids. Coda’s main competition would be the Nissan Leaf (made in Japan but they’re working on getting a U.S. factory going, FYI). “Compete on home soil?” Really? Shouldn’t you use motherland or fatherland or homeland instead? So you want the toy industry to relocate to the U.S.? That would take a lot of work, wouldn’t it?

“Taxpayers should be outraged because the Coda is eligible for the combined federal and state tax rebates on electric vehicles of $10,000 a vehicle, while China blatantly blocked the Volt from its Chinese green subsidy unless GM manufactured it in Shanghai and turned over design secrets.”

I don’t know, maybe. The feds are focused on getting electric cars on the road, for better or worse. You could make a similar case against subsidizing the Nissan Leaf.

“These economic considerations notwithstanding, a closer look at Coda’s supply chain reveals a darker truth. The “new” Coda is actually an updated variation on the 6-year-old Saibao from China’s state-owned Hafei Motor Co. Hafei is a division of Changan Automobile Group, which in turn is controlled by China Weaponry Equipment Group. This state-owned enterprise supplies China’s aggressively expanding military, and its parent, China South Industries Group, owns half of arms dealer Norinco, which reportedly tried to smuggle guns to Libya during the last days of the Kadafi regime.

Well, now you’re on the trolley. I’ll add that the 2005 Saibao III from Haifei was made from Mitsubishi “Carisma” (that’s what they called the car – they wanted a big trunk at the expense of a small back seat) tooling shipped over to China. The reason why the Coda looks like a mid-90′s Honda Civic is that it was designed all the way back in 1994 by a joint Mitsubishi / Volvo effort called NedCar. It didn’t work out so that’s why this vehicle wasn’t developed properly over the years. And actually, the Saibao III wasn’t even good enough for the Chinese market six years ago as a $12,000 gas-engined car.

Oh, here it is, from 2007:

(The thinking at the time was that it would be hard to sell a Chinese car in America, IIRC. Anyway, this Javlon morphed into Coda.)

So, I don’t know, you want the Chinese arms industry only making arms?

Norinco’s other bloody trade has included transferring missile technology to Iran, attempting to sell AK-47s to U.S. street gangs and selling nearly $70 million in arms to Zimbabwe’s Mugabe regime. So, before considering a Coda as a means of going green, remember all the red blood shed by Coda’s real backers.

I guess that’s a fair question. But I suppose you could ask it to the people lined up buying Christmas toys as well…

And speaking of backers, it is disquieting and disgusting that the Chinese government has been able to put so many prominent American faces on such a job-killing venture. Coda CEO Phil Murtaugh is the former head of GM’s China division, and the company has raised more than $300 million from banks such as Morgan Stanley and well-connected private investors that include former Clinton White House Chief of Staff Mack McLarty and former Goldman Sachs CEO Henry Paulson.

Disgusting? They’re bidnesspeople trying to make money, as many of these these same people were trying to make money with WebVan before it went belly-up a decade ago.

Paulson’s role in saddling up the Coda Trojan horse is particularly galling. As Treasury secretary under President George W. Bush, he repeatedly refused to brand China a currency manipulator; this inaction contributed to the loss of tens of thousands of American factories and millions of American jobs. According to Nobel economist Paul Krugman, China’s currency manipulation alone costs America up to 1.5% of its GDP every year, and Economic Policy Institute economist Robert Scott suggests this kills as many as 3 million U.S. jobs. Now, Paulson stands to personally profit from China’s currency manipulation and other unfair trade practices as an investor in a venture that would worsen the U.S. trade deficit and swell U.S. unemployment lines.

“Kill, killing, kills, blood…” – boy you guys really know how to op-ed.

“Finally, another Coda enterprise adds insult to injury: a planned Ohio battery factory to be built with more than half a billion in U.S. taxpayer stimulus bucks, including an Energy Department loan and incentives from the state of Ohio and the city of Columbus. Great, except that a Chinese-dominated joint venture with Tianjin Lishen Battery will really own it. That’s an enormously expensive way to create “up to” 1,000 jobs, with potential millions in profits shipped back to China.”

Well that’s a good point, the battery factory is a stupid way to employ a small number of people in Ohio. (But I’m sure Ohioans like the idea, and it is a swing state, after all.) Sounds as if you all don’t like international trade in the first place, but you’re assuming that there are profits to be had from that factory.

“When more than 20 million Americans can’t find a decent job and millions more don’t earn a decent wage, the last thing we need is China invading the U.S. auto market and getting U.S. subsidies under the false pretenses of helping Americans “go green and buy American.” Greg Autry and Peter Navarro are the authors of “Death By China: Confronting the Dragon — A Global Call to Action.” They teach at UC Irvine‘s Paul Merage School of Business and blog on the Huffington Post.”

Wow, you’re selling a book? “Death By China: Confronting the Dragon,” hehAnyway, let’s agree that Coda shouldn’t be subsidized. And actually selling that Sedan to regular people, well, that’s going to be a tough row to hoe even after the $5000 reduction in MSRP (all the way down to “just” $41,000!) in a world that has access to the much better and less expensive Nissan Leaf. They’ll get some fleet sales though.

All right, thanks for the op-ed, I guess.