Tuesday, June 17, 2008

Big 3 to increase exports to China

Deal OK'd ahead of trade talks lets GM, Ford, Chrysler ship $2.2B in parts, vehicles.

Sharon Terlep / The Detroit News

Detroit's Big Three automakers will ship $2.2 billion in vehicles and parts -- most made in the United States -- under agreements signed Monday between the companies and the Chinese government.

The deals, which mark some of the largest trade agreements to date between U.S. automakers and China, come ahead of two days of talks to resolve longstanding trade disputes between the nations.

General Motors Corp. will export $1 billion in U.S.-built vehicles and parts, mostly Cadillacs, to its Chinese partner, Shanghai General Motors, over the next two years. GM spokesman Greg Martin said the company was negotiating how many vehicles would be exported to China under the agreement.

Chrysler LLC plans to ship more than $400 million in Jeep brand SUVs, most of which are built in the United States, by 2009, said spokesman Dave Elshoff.

Ford Motor Co.'s deal calls for sending 30,000 U.S.- and Canadian-built vehicles to China as part of an $800 million agreement. Michigan-made transmissions are part of the pact.

"This historic export agreement with China is another step in our commitment to accelerate the development of new products that customers want and value and leverage Ford's global assets," Ford CEO Alan Mulally said in a statement.

The trade moves come as each of the Big Three angle for a larger share of China's fast-growing auto market, a mission that has increased in urgency as the companies lose ground in North America to foreign-based rivals.

Detroit's automakers have been sending vehicles to China for years, but not to this extent.

GM's China operations have imported about $4.2 billion worth of vehicles, components, equipment and machinery from North America over the past 11 years.

GM's most recent deal comes in addition to an agreement struck last year to export to China 5,000 Buick Enclaves, worth about $800 million, over four years.

All of the vehicles exported would be sold in China, Martin said.

Ford noted it first exported vehicles to China in 1913.

The Dearborn automaker called the agreement struck Monday one of the company's largest export agreements.

Under the pact, Ford will send 30,000 vehicles to China starting in 2009. The company this year will begin supplying transmission components and parts to its passenger car joint venture in China, Changan Ford Mazda Automobile Co. Ltd.

Top U.S. and Chinese officials are working this week to resolve investment disputes between the countries and to make way for international investments from both sides.

U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wang Qishan will discuss the imbalance in trade between China and the United States among other issues beginning today during talks at the Naval Academy in Annapolis, Md.

The U.S. trade deficit with China soared to a record $256.2 billion in 2007.

"It is clear that our strategy for robust engagement with China ... is more productive than protectionist policies or legislation," Paulson said on Monday.

U.S. Sens. Debbie Stabenow, D-Lansing, and Carl Levin, D-Detroit, along with a group of nine other senators, including Democratic presidential hopeful Barack Obama, sent a letter to Paulson urging him "to push the Chinese government to stop manipulating its currency."

The currency valuation has forced "American companies to declare bankruptcy or even go out of business, harming our workers, families, and middle class," the letter said. "This is about taking a stand for American businesses, American workers and American jobs."

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