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Jeep, an Obama favorite, looks to shift production to China

October 25, 2012

Paul Bedard
Washington Secrets
The Washington Examiner


In another potential blow for the president's Ohio reelection campaign, Jeep, the rugged brand President Obama once said symbolized American freedom, is considering giving up on the United States and shifting production to China.

Such a move would crash the economy in towns like Toledo, Ohio, where Jeeps are made and supplied, and rob the community of the economic security they thought Obama's auto bailout assured them.

Obama is such a fan of Jeep that he included a picture of himself speaking at the Toledo plant in his newly released second term agenda binder. In his address to the plant in 2011, Obama said, "I just took a short tour of the plant and watched some of you putting the finishing touches on the Wrangler. Now, as somebody reminded, I need to call it the 'iconic' Wrangler. And that's appropriate because when you think about what Wrangler has always symbolized. It symbolized freedom, adventure, hitting the open road, never looking back."

Well it appears that the taxpayer bailed-out Chrysler is looking back and now considering cutting costs by shifting production of all Jeeps to China, which has a strong desire for Jeeps.

In a Bloomberg interview, Jeep's president said the automaker plans to restore Jeep production in China, suspended in 2009, and is considering making all Jeeps in China. "Fiat SpA, majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers' operations in the region," reported the business wire service.

Mike Manley, chief operating officer of Fiat and Chrysler in Asia and president of the Jeep brand, told Bloomberg, "We're reviewing the opportunities within existing capacity" as well as "should we be localizing the entire Jeep portfolio or some of the Jeep portfolio" to China.

Chrysler builds Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley said the firm is in talks with China's Guangzhou Automobile Group Co.

http://washingtonexaminer.com/jeep-an-ob...03#.UIl4z0bCz8B

He sold Chrysler (and thus, Jeep) to Fiat .... so why are we surprised that production is moving overseas?

Do you think they'd stay if we elect Romney?

I always get confused about this stuff though. There are laws that make it so that the car companies have to at least assemble in this country to sell in this country (from what I understand). That's why there's big car plants down south for Toyota and Honda.

To protector ourselves, you can only import so many new cars into this country. The rest have to have some sort of production in this country.

Does anybody understand these laws better then me?

Obama sold off Chrysler to Fiat, an Italian company. What loyalty do they have to the US at all?

Add in that we (the US taxpayers) also lost $1.2 billion on the Chrysler deal .... and it's just all th better.

Of course, that's a bargain compared to the $20 or so billion we stand to lose on the GM deal.

It's the concept that giving more breaks/money to the top level of publicly traded companies will create jobs is so completely erroneous. The bottom line is...the bottom line. How profitable can they be is really the goal. Giving a corporation a tax break does not mean more jobs. It means more profits. (However, having said that, the opposite is true. More taxes on corporations WILL cut jobs because they need to maintain profitability)

Jeep is looking for a way to make more profits from pressures from the shareholders. If they can save a penny, they will.

From Chrysler:

http://blog.chryslerllc.com/blog.do?id=1932&p=entry

Jeep in China
by Gualberto Ranieri

There are times when the reading of a newswire report generates storms originated by a biased or predisposed approach.

On Oct. 22, 2012, at 11:10 a.m. ET, the Bloomberg News report “Fiat Says Jeep® Output May Return to China as Demand Rises” stated “Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley (President and CEO of the Jeep brand) referred to adding Jeep production sites rather than shifting output from North America to China.”

Despite clear and accurate reporting, the take has given birth to a number of stories making readers believe that Chrysler plans to shift all Jeep production to China from North America, and therefore idle assembly lines and U.S. workforce. It is a leap that would be difficult even for professional circus acrobats.

Let’s set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China. It’s simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation. A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments.

Other sources:

http://www.washingtonpost.com/blogs/plum...7c314_blog.html

The Morning Plum: Romney’s false scare story in Ohio
By Greg Sargent

This created a stir last night on Twitter that has subsided. But it wouldn’t be surprising if the Obama campaign seizes on it in coming days to close out its argument in Ohio. From the Detroit News:

Republican presidential hopeful Mitt Romney told a rally in northern Ohio on Thursday night that Chrysler was considering moving production of its Jeep vehicles to China, apparently reacting to incorrect reports circulating online.

“I saw a story today that one of the great manufacturers in this state, Jeep — now owned by the Italians — is thinking of moving all production to China,” Romney said at a rally in Defiance, Ohio, home to a General Motors powertrain plant. “I will fight for every good job in America. I’m going to fight to make sure trade is fair, and if it’s fair America will win.”

Romney was apparently responding to reports Thursday on right-leaning blogs that misinterpreted a recent Bloomberg News story earlier this week that said Chrysler, owned by Italian automaker Fiat SpA, is thinking of building Jeeps in China for sale in the Chinese market.

Romney told Ohioans that a major manufacturer is on the verge of moving all its jobs to China — but it isn’t true. Chrysler is looking to build Jeeps in China for the Chinese market, not to move American jobs there. In fairness to Romney, the news story that gave rise to this tale seems to have been sloppily written. But all the relevant facts were in the original article. And in any case, there are no indications the Romney campaign bothered to check out its preferred story before working it into his stump speech.

http://wheels.blogs.nytimes.com/2012/10/26/wheelies-the-truthiness-edition/

• In response to reports that it would shift production of Jeep vehicles to China from North America, Chrysler published a blog post on Thursday denying the claim. “Let’s set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China,” Gualberto Ranieri, senior vice president of corporate communications for Chrysler, wrote. An erroneous interpretation of a recent report by Bloomberg, in which Chrysler executives discussed the possibility of producing the entire portfolio of Jeep vehicles in China, led to the false reports, Mr. Ranieri said.

The Detroit Free Press noted that the faulty interpretation was echoed by the Republican presidential candidate Mitt Romney on Thursday, during a campaign stop in Defiance, Ohio. (Chrysler)

http://www.northwestohio.com/sports/story.aspx?id=817826#.UIrQM_lRGSo

Reports of Chrysler's plans to build Jeeps in China sent a panic through Northwest Ohio over the future of Toledo's assembly plant.

A Bloomberg News article reports that Fiat SpA (F), majority owner of Chrysler Group LLC, is in talks with its Chinese partner about restoring production of the vehicle overseas. While the article stated Chrysler would add these production sites to its current operations, Gov. Mitt Romney referenced the report during his speech in Defiance on Thursday night, from which he concluded that Jeep production would shift out of the country completely.

"I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China. I will fight for every good job in America, I’m going to fight to make sure trade is fair, and if it’s fair, America will win." Romney said.

But Chrysler's vice president of communications, Gualberto Ranieri, issued a statement Thursday night, assuring Jeep had no plans to leave the country and that it would be a leap "difficult even for professional circus acrobats."

"It's simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation," he wrote.

UAW Region 2B director Ken Lortz called Romney's statements about Jeep production moving to China "offensive and wrong."

"The auto industry supports 1 in 8 jobs in Ohio. We Ohioans know the truth. We will continue to build our great products here in Toledo, in Ohio, and across this great nation because thanks to President Obama, America’s auto industry has come roaring back. We will never forget that you were so quick to let it slip away," Lortz said.

The success of Toledo's Jeep production after the U.S. auto bailout has been something touted by President Obama during this election cycle. After Romney's remarks at the Defiance rally, the president's campaign reiterated Chrysler's statement and added, "President Obama has fought on behalf of U.S. auto workers by challenging unfair Chinese tariffs on U.S. auto exports to China, including Jeeps, while Romney would have let the American auto industry and a million jobs go under."

The Romney campaign has not yet issued a response to the incorrect statements made about Jeep production during the Defiance rally.

http://www.detroitnews.com/article/20121...uction-to-China

Washington — Republican presidential hopeful Mitt Romney told a rally in northern Ohio on Thursday night that Chrysler was considering moving production of its Jeep vehicles to China, apparently reacting to incorrect reports circulating online.

"I saw a story today that one of the great manufacturers in this state Jeep — now owned by the Italians — is thinking of moving all production to China," Romney said at a rally in Defiance, Ohio, home to a General Motors powertrain plant. "I will fight for every good job in America. I'm going to fight to make sure trade is fair, and if it's fair America will win."

Romney was apparently responding to reports Thursday on right-leaning blogs that misinterpreted a recent Bloomberg News story earlier this week that said Chrysler, owned by Italian automaker Fiat SpA, is thinking of building Jeeps in China for sale in the Chinese market.

The Bloomberg story, though accurate, "has given birth to a number of stories making readers believe that Chrysler plans to shift all Jeep production to China from North America, and therefore idle assembly lines and U.S. work force. It is a leap that would be difficult even for professional circus acrobats," Chrysler spokesman Gualberto Ranieri said.

"Let's set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China. It's simply reviewing the opportunities to return Jeep output to China for the world's largest auto market. U.S. Jeep assembly lines will continue to stay in operation."

The Bloomberg story, however, sparked the confusion in the first paragraph of the story, saying Chrysler planned to return Jeep output to China "and may eventually make all of its models in that country."

But the reporter included Mike Manley, chief operating officer of Fiat and Chrysler in Asia, later in the story referring to adding Jeep production sites rather than shifting output from North America to China.

A Romney representative didn't immediately respond to a message seeking comment on his remarks.

The $85 billion bailout has emerged as a top issue in the final days of the presidential campaign with both camps trying to win Ohio, which is home to more than 75,000 auto sector jobs.

The President Barack Obama's campaign seized on the comments. Obama spokesman Danny Kanner tweeted: "Romney shamefully tried to scare voters tonight into thinking Jeep production moving to China. False."

Campaign spokesman Matt McGrath called Romney's comments "blatantly false."

"At an event in Defiance, Ohio tonight, Mitt Romney shamelessly tried to scare voters into thinking Jeep was moving to China and taking American jobs with it," he said. "That is blatantly false, and speaks to how Romney will say absolutely anything to win votes.

"The truth is that Chrysler is not moving its Jeep production from America to China. As Chrysler said today, 'Jeep has no intention of shifting production of its Jeep models out of North America to China.' And what's more: President Obama has fought on behalf of U.S. auto workers by challenging unfair Chinese tariffs on U.S. auto exports to China, including Jeeps, while Romney would have let the American auto industry and a million jobs go under."

Obama this week has been suggesting Americans would be driving Chinese-made vehicles if Romney's opposition to the bailout had prevailed.

"I don't know how a guy sits on a stage, talking to tens of millions of fellow Americans, and you are saying somehow that you were all for the auto industry when everybody remembers you weren't," Obama said in Cleveland on Thursday night.

"If Mitt Romney had been president when the auto industry was on the verge of collapse, we might not have an American auto industry today. We'd be buying cars from China, instead of selling cars to China."

But it's far from clear that Americans would be driving Chinese cars since today more than 50 percent of cars bought by Americans are Japanese, German or Korean — and there's no reason Americans might not have boosted purchase of those models.

Chinese automakers are not exporting any vehicles to the United States, but the United States is exporting a small fraction of total Chinese vehicle sales.

Romney denies that his opposition to the bailout would have resulted in the collapse of U.S. automakers. He argued for putting the companies into bankruptcy first before they received any government assistance. But many experts say GM and Chrysler might not have survived without immediate government assistance.

Obama has not in recent days acknowledged in speeches that his administration forced GM and Chrysler into bankruptcy in mid-2009.

OK, so point is that an American company is expanding its production to capitalize on Chinese new wealth and demand for American products, and Mitt Romney's team heard the news, made it bad without looking into it, and put a false scare into Ohioan auto workers for what should really be considered a potential success story. Got it.

Would the creation of plants in China lower the amount of Jeeps made in the USA?

Since EVERY Jeep SUV is made in the USA, would it take jobs away because all of the Jeeps we're making here and sending overseas wouldnt be made here anymore...and we'd be making less, only to support the US market?


That would be less good. What is gonna happen if that is the case?

I'd have to look at it, but from what I remember China imposes some hefty tariffs on cars imported from the U.S.

From a company standpoint, it would be much more financially viable to build the cars in China than pay the 15-25%.

That may have changed over time, but those were around where the tariffs were a year or so ago.

Romney telling a lie?? Who would have thunk it??
Next week he will deny saying it.

King

I don't believe that the US government has any stake left in Chrysler. I thought that they sold off 100% to Fiat.

It always struck me as strange that the government wanted to hang on to GM to the death, but couldn't wait to dump Chrysler.

And folks who live in Defiance should have known better the moment they heard this come from Romney's mouth.

If they get their local news from the usual NWOhio sources, they'd have been hearing about increased local production, old assembly lines reopening, expansion of existing facilities, and a report that new shifts would be hired in- to the tune of about 1K workers over the next year. How that constant stream of news jibes with what the Governor just said is anybody's guess.

http://www.autoblog.com/2012/06/29/chrysler-adding-jobs-at-toledo-jeep-plant-to-boost-wrangler-prod/

http://www.nytimes.com/2011/11/17/business/chrysler-to-add-1100-jobs-in-toledo.html?_r=0

http://www.toledoblade.com/Automotive/2011/08/11/Jeep-expansion-to-add-1-100-jobs.html

It could have been another case of "looking before leaping," but let's not kid ourselves about politics: If one can stretch the truth for a few days without getting called on it, it could be worth a few votes. A quick retraction is a small price to pay for a momentum-shifter in a tight swing state race.

Am I saying that the more sinister-sounding option is true? Of course not... not without proof. I don't 'spin in that direction.' But I will say this: either option displays a certain reckless approach to facts that should be of concern for anyone sitting the fence. (Equal concern and scrutiny should also be paid to the messages coming from 'Camp Blue,' as well.)

FACT-CHECK EVERYTHING... FROM MULTIPLE SOURCES.

Especially if you're stumping those 'facts' on camera, in front of a thousand people.

I have a hard time believing that China will confine its Jeep production to its own markets (the Chinese population) when they apparently view the entire world as "their" market. If China can sell the same product worldwide at a fraction of the U.S. price, it will have the same effect as simply moving the jobs overseas.

**********


Trade Case May Produce Few Results

New York Times
September 17, 2012
By KEITH BRADSHER

BEIJING — President Obama’s trade case against China on cars and auto parts will have little immediate impact on jobs and companies in the United States, but it is one of the few legal options available to the United States as China’s auto industry faces overcapacity problems and looks overseas to increase sales.

In filing the case on Monday with the World Trade Organization, Mr. Obama was making a political gesture to Midwestern states coping with the pressure that Chinese exports are placing on the American auto industry. But actual effects are likely to be delayed and limited.

World Trade Organization cases typically take a year and a half to resolve. And unlike antidumping and antisubsidy cases, which can result in steep tariffs on imports that stay in place for years, the trade organization cases often end with the losing country simply abandoning the offending policy.

There can be a requirement that companies repay previous subsidies, but that is often difficult to enforce and can require further years of legal wrangling.

The subsidies at issue are also small relative to the scale of Chinese exports, which may mean that China’s low wages, high investment rate and other advantages may have played a bigger role in the spectacular expansion of Chinese auto exports than government subsidies.

American trade officials respond that while China may have many strengths underlying its export prowess, they are doing what they can to address those policies that may violate international trade rules — particularly China’s emerging policy of setting up so-called export bases in which automakers receive incentives to make cars and car parts for overseas markets.

“The Obama administration will use every available avenue to stand up for American workers and businesses in the global trading system, and in taking this case to the W.T.O. against China we’re doing so in a way that tackles China’s entire export bases program in this sector,” said Carol Guthrie, the spokeswoman for the Office of the United States Trade Representative.

She added, “This administration has a consistent record of supporting American jobs through wins at the W.T.O., smart use of all our enforcement options and dialogue that gets results for American workers as well.”

The Chinese export bases policies are so numerous, and affect so many different kinds of products, that it would take dozens of separate antisubsidy cases to tackle all of them. That would require a far lengthier legal effort than a single trade organization case, which the United States has started by essentially filing a list of the names of the offending policies to China.

Under the process, the United States essentially demands that Chinese officials start discussing how, if at all, the many policies are consistent with China’s commitment as a World Trade Organization member not to subsidize exports.

Another advantage of such cases is that they require the United States only to prove that the Chinese policies violate organization rules. Antisubsidy cases at the Commerce Department also require proof that a domestic industry has suffered financial injury as a direct result of the foreign subsidies. That tends to be harder to prove when the industry’s health is improving, and auto sales are rising this year as Americans replace aging cars.

The Obama administration said the subsidies to exporters in China totaled at least $1 billion from 2009 through 2011. But Chinese customs data shows that the country exported $56 billion worth of automotive equipment during these years.

Obama administration officials say that something needs to be done about Chinese subsidies, and the automotive subsidy case is a start. As China has lost previous W.T.O. cases, subsidies have increasingly been hidden in local and provincial budgets, and it is these that Monday’s case pursued.

The filing lists more than 80 specific policies, often at the municipal level, that are part of China’s export bases program. W.T.O. rules explicitly ban countries from providing subsidies that are contingent on goods being exported.

Finding offending policies at the municipal and provincial level has long been a challenge for governments filing W.T.O. cases worldwide, because of language barriers and because many rules are not published. The Obama administration persuaded Congress early this year to authorize more money for trade enforcement staff, and it said on Monday that the export subsidy case was one result of this.

The global trading system has long been founded in part on the assumption that companies will act to defend operations in their home countries, and will file antidumping and antisubsidy cases against imports. But that logic has eroded in recent years in the case of China as practically every Western multinational corporation — as well as a growing number of small and medium-size companies — has moved factories and other operations to China and become reluctant to risk retaliation by filing trade cases.

When the Obama administration took office, it sought economic cooperation with China on many issues while bringing a series of trade cases on mostly industries that were either small or politically less prominent. The conspicuous exception was a decision in September 2009 to impose tariffs on tires imported from China, and even that decision was to some extent forced by complex legal deadlines in the United States.

The administration chose not to take a broad action on Chinese solar panels after it was asked to do so in a legal filing by the United Steelworkers in September 2010. That left imports essentially unrestricted as a series of solar panel manufacturers in the United States then went bankrupt or cut production and laid off workers in the following year.

What is left of the American solar panel manufacturing industry has only begun to stabilize after a German company with sizable operations in the United States and essentially none in China, SolarWorld, filed antidumping and antisubsidy cases late last year, resulting in the imposition in the spring of combined tariffs totaling more than 33 percent.

A W.T.O. case does have one big advantage over antidumping and antisubsidy cases: the filing can take aim at policies that are distorting trade all over the world, helping American companies export to other countries. By contrast, antidumping and antisubsidy cases protect only a country’s home market.

Chinese automakers have been rapidly expanding their shares of markets in emerging markets in South America, for example, traditionally an area of strength for Detroit manufacturers. The W.T.O. case is aimed at all Chinese automotive subsidies regardless of whether the exports are going to the United States.

The value of such complaints to W.T.O. dispute resolution, instead of domestic trade remedies like antidumping, “is that if the subsidies are withdrawn, it can improve the competitive position of U.S. exporters in other markets,” said Carolyn B. Gleason, a partner and longtime trade lawyer in the Washington office of McDermott Will & Emery.

http://www.nytimes.com/2012/09/18/busine...ed=all&_r=0

Interesting point, Dave, and I'm glad you brought it up.

Not long ago, there was a big debate on here about the 'free market', and how if we let it operate without the government getting in the way, we'd be much better off. I argued at the time that we never at any point in our history had anything close to a free market economy (no successful example exists in history, really), and people accused me of pigeonholing or nitpicking, but what I said was and is true.

Here, we're seeing a call for the government to intervene in the market in a protectionist role (which it has since the country's inception).

For us to intervene here is the exact opposite of a free market. In a true free market, China is the new king, and we go down the tubes fast. In a true free market, the Japanese crush us in the 1980's in almost every major industry. In a true free market, we probably never have an industrial revolution to begin with.

Remember these types of things next time someone touts the 'free market'.

I don't think that anyone called for a total free market, without any oversight at all.

Typical of you.

Question: You say I've been at this for years. Do you realize many others on here think the same as I do? Or do you not have a clue?

You stand for nothing. You attack or belittle everything. Anymore, I find it amusing. It's fine, but please don't pretend you are anything but a negative nellie on everything. Once in a great while, you offer some insight. You remind me of a college prof. that honestly feels his/her way is the ONLY way, and if people don't agree - you belittle them.

Everyone has their cross to bear I guess. But you are amusing. Thanks for that.

That's hilarious phil. Why? because I've never labeled you a bearded, wine drinking, turtle neck wearing prof. EVER. Dude, you're making me laugh. Not even in THIS thread have I labeled you that.

What's reality like in your life? I'll bet it's really special. Someday I'd like to visit your never never land.

You ARE gifted though. Me calling you a bearded, turtle neck wearing, wine drinking professor? I will back down if you can show me those words and/or phrases. Thanks in advance.

And me and melt downs? Perhaps you know more? Enlighten me. I shall find it comical. Again, thanks in advance.

(oh, I have no problem saying I'm wrong if I am. And, you know that bud. Prove me wrong here, and I'll admit it. Unlike you.)

See, I'm a stand up guy.

Phil, I have never once, in my life, called you a wine drinking, turtle neck wearing professor. And your reply was "on the old boards you did". Bud, that would be 7 years ago or so.

And you call ME sensitive? Had I even said that stuff, it would've been 7 years ago. Talk about holding a grudge......geez.

But, I did NOT say what you accused me of saying. And sadly, your only defense is "well, on the old board".......please man, that's pathetic. If you can't back up your accusations, just admit it. I think much more highly of a person that can say "I was wrong", than a person that hides from admitting it. And yes, I have admitted on here when I've been wrong. That, sir, is called class. That, sir, is called being responsible.

Oh, as for the asian food day on dec. 7th? I think you are dreaming, and making up things about me wanting to continue the dialogue in person with you.

Perhaps I'm wrong, and if so, I'd like to see the posts I made about, precisely about: me wanting to continue the dialogue IN PERSON with you.

I have a sneaky suspicion you'll say that was on the old board as well, because I don't think it ever happened.

Dang, you're pretty good at making accusations you can't back up.

I did, and do still think, that having japanese food on dec. 7th is a slap in the face of the the veterans. If I remember correctly, that was at the school in d.c. where most presidents kid's have attended. (at least the Obama kids, and W's kids - Sidwell Friends school?)

As for me being sensitive...........please. On here? LOL. In life? More sensitive than you could imagine - sensitive enough that when our church called because someone in the community couldn't afford groceries - we gave our church $100 to help them for that week, with the added caveat of "if they need more, call".

Sir, you have me seriously wrong. And you look foolish trying to paint me as anything other than what I am.

Still waiting for proof of me calling you a wine drinking, turtle neck wearing professor.

Still waiting for for proof that I wanted to talk to you in person about the asian food day. Carry on. I'm done with you and your lying.

I sincerely hope you find hope in this life. Being negative about EVERYTHING is no way to live life.

Aren't you the guy that claimed he was a writer for some t.v. shows? Aren't you the guy that claimed he knew so many celebrities?

One other thing - I'm not a hot head internet tough guy. That's neat that you throw that term around, though. It means you know some ways to defend yourself when faced with facts that don't match up to what you say..........

Again - carry on. Hope you have yourself a very great sat. night.