Chery - Chrysler deal hurt bailout hopes

Chinese manufacturer Chery had planned to build cars for Chrysler to sell in to North America as early as last year in exchange for a vital cash injection, there's no secrets there, but with a distinct lack of the engineering talent required to make cars of a quality acceptable to the US market, coupled with US politics and an anti-Chinese bias, the talks were abandoned.
- shares

It seems that despite Chrysler hurting, Washington is unwilling to help the car maker if Chrysler's turnaround plan includes closing local operations while spending millions of dollars to help a Chinese manufacturer build cars that they will in turn sell back in to the home market.

You see unfortunately the US consumer seems to blame China for job losses over the last decade and although the critics don't mention that inexpensive goods from China lower Americans' cost of living, or that automation has taken a huge toll on American manufacturing jobs, and while it is now considered the Chery - Chrysler alliance is being made a scapegoat for Chinese - US relations, in the eyes of the politicians at least, the risks of a deal with Chery were too high.


Perhaps it is just the US trying to protect their manufacturing jobs, or perhaps it is a case of history repeating itself for twenty odd years ago much the same could be said of Japanese manufacturers. Japanese automakers were blamed openly for the loss of American factory jobs. Auto workers made sport of smashing Japanese cars with sledgehammers.

Now Japanese automakers are widely embraced in the US. Why? Japan's automakers invested there. They opened factories and dealerships across the country. They became a strong part of the American economy.


There in lies a lesson for the Chinese, they should follow the same path. Chinese companies need to think globally and start investing in operations in America and Europe instead of holding so much of their operations base (and wealth) at home, and though it is probably too late to win back any hopes of an alliance for Chery and Chrysler, future co-operations could make for stronger operations across foreign shores helping car makers become less vulnerable to economic tough times.