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A Little Sunshine at General Motors

Aug 18, 2010 • 163 Views

A question: How are a little Sunshine and the U.S. taxpayer similar?

The answer: Both are helping General Motors grow.

The Wuling Sunshine is the most popular car in China. Manufactured by General Motors with 2 Chinese partners, it is a no frills minivan that sells for as low as $4,500. With AC a $366 extra, thinner bumpers, no airbags, a top speed of 80 mph, and lots of hard plastic and plastic liner, the Wuling Sunshine is what the rural Chinese small business person is willing and able to pay for. As the most popular car in China, it is a profitable low cost prototype that General Motors plans to replicate in India and beyond.

The Economic Lesson

While the global reach of U.S. multinational corporations extends around the world, so, too, do the activities of foreign multinationals. Called foreign direct investment (FDI), in China, General Motors has 10 joint ventures, 10 assembly plants (11 in U.S.), and 32,000 employees (77,000 in U.S.).

In 2005, the latest year for which we have detailed data, 5.5. million Americans were employed by foreign firms doing business in the U.S. Led by the UK (think BP), other firms with a major U.S. presence are Japan (autos, for example), Canada (banking and finance), the Dutch (oil), Germans (media), and the French.

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