GM to Invest in Thai Plants; New Chevy Colorado

[Ming]

GM to Invest in Thai Plants
By JAMES HOOKWAY and PHISANU PHROMCHANYA
online.wsj.com
August 13, 2008 6:05 a.m.

BANGKOK – General MotorsCorp. said it will invest $445 million to build a diesel-engine plant in Thailand and upgrade an existing assembly facility, reflecting the company's increased dependence on a growing Asian market to help offset its continuing problems in the U.S.

The plant, which will produce engines for small pick-up trucks, is slated to begin production in 2010 and will have an annual capacity of more than 100,000 units, GM said in a statement Wednesday. The facility will be GM's first diesel-engine plant in Southeast Asia and will produce four-cylinder diesel engines for use by Chevrolet in Thailand and other global markets, the
company said.

The assembly plant is being upgraded to produce a new, small-model pick-up truck, known as the Chevrolet Colorado.

GM Chairman and Chief Executive officer Rick Wagoner said in a news conference at the new site that "General Motors is intent on becoming an industry leader here in Thailand and across Asean," referring to the Association of Southeast Asian Nations, a market which comprises countries such as Indonesia, Malaysia, Vietnam and the Philippines, as well as Thailand.

Thailand's eastern seaboard – the country's most heavily industrialized region – is an important part of the global supply chain for several major auto manufacturers. Last year, Ford Motor Co. and partner Mazda Motor Corp. announced a $500 million investment in a compact car plant in the same area earmarked for GM's new plant. Ford also operates a pick-up truck plant there, which exports to more than 130 countries around the world.

Toyota Motor Corp., the world's biggest car maker, also treats Thailand as a major export hub and is using it as a base to develop more fuel-efficient cars.

GM's expansion in Thailand contrasts with the difficulties it faces in the U.S. Soaring gas prices and a slowing economy there have curbed car sales at a time when the Detroit's big three – Ford, GM and Chrysler LLC – are struggling to remain competitive with Asian rivals including Toyota, Honda Motor Co. and Nissan Motor Co.

The new Thai engine plant will initially employ 340 workers and is located next to GM's vehicle assembly plant in Rayong province, which opened in 2000 and employs about 2,900 workers. The assembly plant can produce 130,000 vehicles a year, making a range of GM products, including the AVEO compact, Optra midsize sedan, Optra Estate wagon, and the Captiva sport-utility vehicle.

SOURCE

[PontiacBixler]

Bring it out here and I think you will see a small explosion of these truck sales.

I think it's front end is rather fetching.

[Perian]

Originally Posted by PontiacBixler

Bring it out here and I think you will see a small explosion of these truck sales.

I'm sure they will if they can get rid of the import tariff (AKA "Chicken Tax*").



* The Chicken Tax was instituted back in 1963, and was aimed at European (read VW) truckmakers. The long and the short of it is that there was a trade war going back then between the USA and Europe. The Europeans tripled the tax of chickens being imported into Europe, and the US retaliated by putting a 25% tax on any truck imported into the USA. That's how it came about, and we've lived with it ever since.

So now there is an effort afoot by the Bush administration for a free-trade agreement with Thailand that would substantially reduce this tariff, if not eliminate it. The UAW and Detroit automakers are fighting this tooth-and-nail not to let this happen. They fear that if the Chicken Tax is reduced or repealed, the US will be flooded with cheap pickups made in Thailand.

Source: "The Stalwart"

[Chaz_23]

Why not Brazil instead of Thailand?

[smokyn454]

So by 2014 you will see a new Colorado.

Way to go GM, another 6 years of the current model that you won't update because an "all new" truck is just around the corner.

That is, of course, if GM is still in business in 2014

[Sgt Beavis]

It doesn't appear that the free trade agreement with Thailand is going to be completed before the end of the Bush Administration.

If McCain is elected, I think you'll see continued negotiations but if Obama is elected I think you'll see a more protectionist front.

Even if a McCain administration gets an FTA with Thailand, I kinda doubt the Democrats in the Senate will ratify it.


I've always wondered about these FTAs and the jobs they cost the US. Why don't they just insert a rule into an FTA that any manufacturing jobs that are moved from the US to an FTA partner are not considered to be part of that FTA and a tariff can be levied. But new factories that are not created by closing down US manufacturing are perfectly fine. In other words, growth is good but simply moving jobs around for cheaper labor isn't.

I'm mostly for free trade but I do think we're kicking ourselves in the nuts if we don't stop this flow of jobs. I'm just thinking that some common sense measures and a Fair Tax would help us alot in this situation.

[RamJet502]

It better not look like the Thai version which already looks way too similar to the Frontier.

[likearock00]

I'll hold my breath for this- just our luck it won't even be sold here. GM will let the Colorado go on like Ford's been doing with the Ranger.

[Ming]

Originally Posted by likearock00

GM will let the Colorado go on like Ford's been doing with the Ranger.

Some pretty pathetic incentives on the Rangers, too, last I checked, so Ford isn't going out of their way to sell their small trucks either, apparently. I thought Ford used to offer tempting deals on them...I must be thinking back to the S-10 days.

At least the fuel economy is where it should be on the Ranger at 21/26 for the 4-cyl. That city number really needs to be up there. It's not like all pickups are constantly cruising at highway speed.

The Colorado has more power, but has a curb weight of about 3350 (the Ranger is about 200 pounds lighter) and is rated at 18/24 mpg with its 4-cyl. Hardly the kind of numbers you want if you're looking for a gas sipper.

Unfortunately, given news in the past, I doubt we'll see those cool little 4-cyl. diesels from Brazil or Thailand in a Colorado here any time soon.

First GM has to prove that they are interested in selling small trucks in the USA, not just talking them down and offering insane rebates on full sizers that lure potential small truck buyers into the larger trucks.

[skylark68]

Originally Posted by Ming

Some pretty pathetic incentives on the Rangers, too, last I checked, so Ford isn't going out of their way to sell their small trucks either, apparently. I thought Ford used to offer tempting deals on them...I must be thinking back to the S-10 days.

They've got too many full size trucks languishing on dealer lots to try to push Ranger's/Colorado's...

[Ming]

Originally Posted by skylark68

They've got too many full size trucks languishing on dealer lots to try to push Ranger's/Colorado's...

True, but I don't expect GM and Ford to change even after the 2008's are long gone and that excuse dries up.

There will remain a heavy reliance and expectations placed on the future sales of full-sizers for the potential profits they deliver, even if staying hooked on them and not pushing their smaller alternatives is the "Devils Candy" in the long run.

GM at least can't seem to wrap it's head around focusing more on Colorado/Canyon sized trucks, even at $4.00 a gallon. They'd rather ride the Titanic down to the ocean floor (and hope for $2.50 gasoline) than give their small trucks a fighting chance with more R&D money and advertising.

Slap some XFE equipment and badges on the big trucks. That's their answer.

[cbennie2]

Originally Posted by Chaz_23

Why not Brazil instead of Thailand?

Probably because Thailand like the US, has a large percent of truck sales. Only difference is that in Thailand, it is an economic necessity a lot of them to have trucks since they are utilized for business especially family owned businesses. There were just as many cars as trucks on the roads in Bangkok when I was there, unlike Brazil, which had a far higher percent of cars.

[Pinnacle]

I cannot wait for this truck with a diesel engine in it, but, typical GM too late to market.

[TKR]

Originally Posted by smokyn454

So by 2014 you will see a new Colorado.

Way to go GM, another 6 years of the current model that you won't update because an "all new" truck is just around the corner.

That is, of course, if GM is still in business in 2014

The 'all new' Colorado is due in 2010. From memory it is being designed in Brazil with input from other GM markets (Australia etc). While I am sure it will be built in Brazil for the local market, I think additional production in Thailand makes sense for global markets. I suspect the US will also get local assembly (where is the current Colorado built?).

[chevydlrmn]

Originally Posted by TKR

The 'all new' Colorado is due in 2010. From memory it is being designed in Brazil with input from other GM markets (Australia etc). While I am sure it will be built in Brazil for the local market, I think additional production in Thailand makes sense for global markets. I suspect the US will also get local assembly (where is the current Colorado built?).

The current model is built in Shreveport, Louisiana. If there is in fact a plan for a new Colorado, it is one of the least talked about and unknown project GM is on. I wish I knew more about it.