Chrysler Cruises to China

DaimlerChrysler has announced that it will produce a new class of compact Chrysler cars in China for export to the United States. This is yet another move that emphasizes the current trend of manufacturing moving out of the US and into China. Chrysler has said that it will keep its factories in the US and that only this new compact will be produced in China. That of course is code for: we will keep the factories here until you get too used to the ultra cheep cars from China to object to the relocation of the US factories to China. If you don't believe me, just read the New York Times article about the entire automotive industry is seeing China as the savior that will reverse their current losses.

Who could blame the companies when you compare the costs of labor of producing anywhere else? To produce in Germany it costs $49.60 an hour, in Japan it costs $40.96, in the US it is $36.55, even in Brazil and South Africa it costs $5.87 and $5.48 respectively. While in China it is only $1.96 an hour, and this number includes all the benefits.

Who is to blame you ask? Well first, I blame the Unions for driving the costs to such a ridiculous total that it is impossible for companies to compete with China. Second, I blame the people that have allowed China to enter the WTO while the Chinese government still controls labor rates, benefits, and does not allow for fare competition. How can you have a free market system when one of the countries that participates in it cheats by intervening in its economy? That is the opposite of a free market system.

I really hope that we wake up before all our industries get brought over to China, and it will be too late to do anything. It is time that our government steps in and protects our industries from the Chinese onslaught. However, somehow I really doubt this will happen.