GM is big in producing cars in China.
GM, of course, is a household name in the US.
It's not known, I think, by hardly anybody I run into that GM sells more cars in China
than they do in the US and the rest of the world.
They sell four million vehicles a year inside China.
The total for the rest of the world is three million vehicles.
And the profitability in China is really high, profitability in the US is getting squeezed
quite a bit, partly because the newcomers coming in like Toyota, and Honda and the Germans.
And so in a sense what's happening when the government gets in the middle of these things
and tries to change where things are made, it can have unintended consequences.
It may be great for the country, but bad for some companies
If I'm hearing you correctly, though, it almost sounds as if I want to buy American made,
I have a better shot of doing that if I buy a Toyota or a Mercedes.
Yeah, there's no question.
I know the numbers.
I mean, I'm really familiar with this industry.
Well, started with Henry Ford-- I mean, really close with the detail of this industry here,
and in Europe and in Asia.
And if you want to measure, in terms of labor content or materials of the car and you want--
and you say-- and if somebody says, I want to buy a real American made vehicle.
I said, the highest you're going to get is around 90% US made, Toyota Camry.
And the next will be Honda Accord, it will be maybe 85%, 88% measured either way labor
or materials.
So GM, Ford and Chrysler can't do that on the average.
They can do it with trucks, but that's it.
I mean, I think GM long-term is in really serious trouble.
Expand on that.
Why?
Well, it's four million cars a year in China.
But the Chinese, if they get pretty upset with the US, they're going to want to be independent
of the US.
And GM will end up being a Chinese company.
Say that again.
If the Chinese really want-- if they feel they can't trust the US, that the relationship
is going to always trouble, then they want to create a distance between themselves and
the US-- ba-- some kind of moat.
And if so, then they'll swallow up GM.
They'll simply find a way to.
It maybe let it get in trouble and rescue it by nationalizing it or something.
But GM US, without China, is trouble.
I mean, it's already in trouble.
And if you go up against Toyota, and Honda and the big three German makers in the next
few years it's-- that's-- I-- by the way, in autos itself worldwide is in a multi-year
downward adjustment because the nature of buying is changing all over the world.
People I-- don't-- a lot of people don't need to buy a car anymore.
They got Uber and Lyft.
And in the US we have other reasons why the auto market is going to shrink.
I mean, we've gotten overloaded with cars that were leased because they were cheaper
to operate, but returned, so now we've got a big buildup of excess supply.
It's a matter of time that we're going to see several years of diminished annual volume,
and that's going to be mainly taken by these German and Japanese producers.
That's why Ford is now going to shift to trucks, but the real target is autonomous freight
trucks.
That's-- the new CEO of Ford, that's the division he came out of.
That's-- he-- that's his vision of the future.
GM doesn't have a vision.
I think they're vulnerable.