KIA MOTORS BUILDS FACTORY IN DEEP SOUTH

World auto markets are in turmoil.  The NYT has an article about how Kia Motors from South Korea, is the only automaker to open a factory here in the last year. As per usual, this foreign company chooses a rural southern town and will have everyone work for hourly wages and no unions!  Yup.  Paradise.  Also, we get some pictures of the Chinese Shanghai Auto Show and I want to talk about the latest line-up of Chinese cars.  Lots of fun!

 

One Town’s Rare Ray of Hope – New Auto Plant – NYTimes.com

 

While much of the rest of the country remains mired in the depressing grey of recession, this rural town of fewer than 3,500 people on the Georgia-Alabama border, about 80 miles south of Atlanta, has somehow managed to draw the winning ticket in the nation’s economic lottery.

All foreign automakers are following the lead of the Japanese: if they can establish a few factories inside the US, their political power soars.  This way, they can insure that the US cannot protect itself from foreign competition.

A new Kia Motors Corp. automobile manufacturing plant is opening here later this year, an event that many residents of this former mill town, where life had slowly been ebbing away, can only describe as heaven-sent.

They were chosen because they are rapidly falling to third world status.

Foreign automakers have flocked to the South, drawn by huge incentives offered by state officials, cheaper labor costs and the non-union environment. (In the case of Kia, which is based in South Korea, state and local officials doled out some $400 million in tax breaks and other incentives.) But this year, Kia’s will be the only car factory to open in the country, drawing workers to one of the few regions in the country now with concrete hopes of quickly escaping the economic downturn….

These same states howled with rage when unionized automakers asked for help.  Then, they turn around and go off to Asia to offer tax cuts and all sorts of financial assistance.

Hourly jobs, which are not unionized, in contrast with those at the Ford and General Motors plants that recently closed in the Atlanta area, are still expected to pay between $14.90 and $27 an hour. The suppliers are now beginning to ramp up their hiring, too.

 

Another Asian automaker is aggressively moving into more and more of our markets and note that these are mostly hourly workers who are, status-wise, no better than burger flippers.  The only reason their wages are $14 an hour which is poverty wages up here in NY, is because Democrats have a minimum wage law.  Which has been allowed to fall ever-further behind the real rate of inflation.

 

All Asian automakers prefer to locate their factories in small, rural towns far from any major cities.  This way, they can control the workforce better.  Their political and financial power will overwhelm all other considerations.  The workers will get to vote for whoever they wish and elections will always be on meaningless issues like scaring them about gay men, but the action in DC or in the State Capitol will be, servicing Korean owners.

 

To sell these immense public give-a-ways, there has to be excited talk about better wages.  But in reality, this diminishes rapidly and the costs of building up a small, rural town will cause rising taxes, since the foreigners will not be paying much or any taxes at all, and rising cost of living due to housing pressures, etc.  Landowners, of course, will benefit if the price of real estate goes up.

 

But the people flooding into town hoping for ‘high wages’ will end up paying much more for their habitations.  And then, later, the school taxes become an issue.  I bet, the schools there are quite minimal.  Now, let’s meet the Glorious New Leader:

 

Welcome to Kia Motors

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I keep harping on this: we are in a major, major industrial downturn.  US organizations are going belly up while Asian ones are still expanding, despite very bad sales figures.  This is because they are CAPITALIZED while the US is not.  This is ultimately the reason why we have to stop imagining, we can fix things while still running our trade deep in the red.  Our trade statistics are improving only because of two things: global trade has collapsed.   And our competitors are aggressively moving into US markets, internally.

 

KIA Motors IR SITE

 

(SEOUL) April 16, 2009 — Kia Motors Corporation announced today that it has continued to gain market share in general markets, China, Korea and North America posting March sales growth of 19.9%, 10.4%, 6.1% and 0.9%, respectively.

By region, Kia posted year-on-year sales increases in general markets (22,546 units sold, a 19.9% year-on-year increase), China (14,540 units, a 10.4% year-on-year increase), Korea (30,043 units sold, a 6.1% year-on-year increase), and North America (28,279 units sold, a 0.9% year-on-year increase).

Sales in the Middle East & Africa remained particularly strong in March with 14,192 units sold, representing a 70% year-on-year increase.

Cumulatively through the first three months of 2009, Kia’s global sales increased in general markets, Korea and North America. General markets experienced the largest gain, selling 62,957 units to date representing a 20.1% increase, while the Korean and North American markets showed cumulative year-on-year sales increases of 6.7% (79,406 units sold) and 1.5% (79,494 units sold).

 

See? Korean sales are slightly more than US sales.  China and the Middle East are still a much smaller proportion of Kia markets.  But they are growing while the US market is stagnant.

KIMTF Stock Charts – Kia Motors Corp Stock Market Charts – Free Stock Charts

Here is their 5 year charts which topped out at $28 a share in 2006.  It declined to only $4 a share this year, which is only about 15% of what it was earlier, which is an 85% drop in value.  Yet, they are still able to ‘expand’ into the US!

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GM Stock Charts – General Motors Corp Stock Market Charts – Free Stock Charts

Below is GM stocks: they, too, were at $20 a share when Kia was $28 a share, in 2006.  

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Then, when credit collapsed in the summer of 2007, GM went down, rapidly.  This is why our leaders think, if only we get lots of credit flowing again, all will be well.   But if we look at a longer graph, we see the usual boom/bust cycle of excessive credit markets:

picture-185

The GM stock peak was during the Dot Com Bubble.  It shot up, very fast and fell, just as fast  As usual, it falls much further than it rises.  This crippled GM, of course.  But Kia is barely better off!  GM, on the verge of bankruptcy, is nearly the same value as Kia was during the worst of the global collapse.  

us:DAI Stock Charts – Daimler AG Stock Market Charts – Free Stock Charts

The German automakers are also in the news.  Daimler is in talks with the Chinese.  Here is their 5 year charts:

picture-192

 

Daimler held talks with China wealth fund: report | Deals | Private Capital | Reuters

 

German carmaker Daimler (DAIGn.DE) has held talks with Chinese sovereign wealth fund CIC over a possible investment by Beijing, its chief executive told the Frankfurter Allgemeine Zeitung newspaper.

“We have met several times in the past, and talks have not in principle been broken off,” Chief Executive Dieter Zetsche told the paper.

The China Investment Corp is a $200 billion fund that has seen sharp declines in its investments in Wall Street bank Morgan Stanley (MS.N) and U.S. private equity house Blackstone Group LP (BX.N) since buying stakes in the two firms.

 

Their chart peaks in the summer of 2007.  All sellers of cars are seeing difficulties due to lack of easy lending for buying cars which is why all governments who have large auto markets are worried about credit.  Today, it is shooting upwards [being well above both Kia and GM stocks, to begin with] due to the potential investment talks in China.

 

24 HOUR NEWS CHANNEL ::::::::::::::::::::: YTN (와이티엔)전체

Kia Motors Corporation, along with its joint venture Donfeng Yueda Kia (DYK), has taken the wraps off its locally-produced Forte C-segment sedan (export model from Korea known as “all-new Cerato” in many markets) today at Auto Shanghai 2009, which runs through April 28 at the Shanghai New International Expo Center. Also making its Chinese debut is the Korea-produced new Sorento Highline Cruiser which made its world premiere earlier this month at the 2009 Seoul Motor Show….

Kia Motors has been active in the Chinese market since 2002, when it formed the DYK joint venture and began local production of the TianLima sedan. Since then DYK has added numerous Kia models to its local production lineup and opened a second manufacturing facility in early 2008.  Kia Motors also supplies the Chinese market with vehicles exported from plants in Korea. 

Expanding market share is the game here.  

The Associated Press: Report: Toyota’s Japan output lowest in 31 years

 

Toyota Motor Corp. expects its output in Japan this fiscal year to fall below the level needed to maintain its full-time work force for the first time in more than three decades, a report said Tuesday.

Toyota sees the production of 3 million vehicles as necessary to maintain its full-time work force in Japan of about 69,400. But its output is projected to be only 2.8 million units in the fiscal year through March 2010 — its first dip below 3 million in 31 years, Japan’s top-selling Yomiuri newspaper said….Toyota’s global output in the year will likely stay at 6.2 million units, the paper said.

 

Kia is very much smaller than Toyota.  

TM Stock Charts – Toyota Motor Corp Stock Market Charts – Free Stock Charts

Here is Toyota’s 5 year graph:  Their peak was at the beginning of 2007.  And like Germany, the stock value is still very high compared to both GM and Kia Motors.  The lowest point was $55 a share but it is now $76 a share.  More than a 50% drop.  

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The fact is, even though both Germany and Japan have been hammered hard, they had more cushion for losses than GM or Kia, for example.  This is because Germany and Japan had the biggest trade profits for the last 5 years.  They are both hurting now and may even now be running trade deficits for the first time in many years.  

 

But again, they do this with significant cushions unlike the US which has only one thing going for it: the ability to generate seemingly endless amounts of international red ink.  Not something to lean on in the future, I may add!

 

Slowly, very slowly but increasingly fast, China’s sun is rising in the East:

 

Auto Shanghai 2009: China’s biggest motor show – Telegraph

Chinese automaker Chery

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Here is a cute little number!  I don’t have the faintest idea, how good the engine is or how well this runs, how smoothly or quietly, etc.  But it certainly is Barbie-doll cute!  Of course, all the guys will gag and run the other way but don’t forget, you all aren’t the only drivers on the road!

 

I hope it comes with a VANITY MIRROR.  Heh.

 

picture-83Chinese car producer Geely with their new model GE:   And move over, Barbie, here comes Muscle Beach Ken in his pseudo-Teutonic mega-Mercedes monster machine….grrrrr….run over the pink lady!  Ha. 

 

Sorry, buddy, you don’t run over the girls.  They will not like you for it nor will they kiss you afterwards.  Au contraire!

 

On the other hand, a good gangsta car.

 

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 Dongfeng Motor’s Mengshi, or Brave Soldier

And for all Chinese males who want a mini-Hummer to go about Tibet, this is the ticket.  I wonder if it gets better milage than our own machines?  From the looks of it, it probably does.  But the burning question is, is this thing bomb proof?  Can it run over demonstrators?

 

 

 

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This car could so easily be painted slightly differently so it looks like an anime cat-like creature.  Make the yellow a bit less green and you have…PIKACHU!

http://www.boston.com/news/globe/ideas/brainiac/2007/05/pikachu_vs_grim.htmlNow, this could be a big, big hit with the right people.  Turn the fenders into Pikachu’s paws, two red circles for his cheeks….yes, a real winner.

 




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  1. Pingback: KIA MOTORS BUILDS FACTORY IN DEEP SOUTH « Culture of Life News

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