http://news.yahoo.com/s/nm/20090830/bs_nm/us_gm_china

SHANGHAI (Reuters) – General Motors (GM.UL) said on Sunday it has agreed to set up a light commercial vehicle production venture with major Chinese automaker FAW Group, with total investment of 2 billion yuan ($293 million).

The 50-50 joint venture, based in the northeast China city of Changchun in Jilin province, will make light-duty trucks and vans, GM said in a statement.

"For us in China, this is an important complement to the rest of our portfolio," Kevin Wale, president and managing director for GM's China operations, told reporters in a conference call.

"We are well established in passenger vehicles and mini commercial vehicles and we haven't had a presence in the truck segment. Adding a truck portfolio rounds that out."

The venture will use two existing FAW plants in Changchun and the city of Harbin, also in the northeast, with combined annual capacity of roughly 90,000 vehicles, Wale said.

A greenfield plant, currently under construction in Harbin, will add 100,000 units of capacity by the end of next year, he said.

Vehicles made at the venture will carry the FAW brand and will focus on supplying the China market, but they could be exported under a GM brand through the Detroit automaker's global network in the future, Wale said.

GM is making Buick, Chevrolet and Cadillac models at its flagship China venture with SAIC Motor Corp (600104.SS). It also makes minivans, pickup trucks and the Spark compact car in a three-way tie-up with SAIC and Liuzhou Wuling Automobile.

SAIC-GM-Wuling sold 87,925 vehicles in July, up 90.7 percent from a year earlier, helped by Beijing's stimulus initiatives to support the industry, including subsidies for buyers in rural areas.

GM, which now holds 34 percent of SAIC-GM-Wuling, has been seeking to raise its stake in the venture.

Domestic media reported earlier this month that GM had secured an initial deal to take over Liuzhou Wuling Auto's 15.9 percent stake for roughly 300 million yuan ($43.9 million).

Wale reiterated the U.S. automaker's interest in raising its stake in the venture but made no further comment on the issue.

($1=6.830 Yuan)

I understand the economics.  In what?, 2020 over half the worlds population will be in Asia?  So I can understand why we would invest..

But really?  Right now? We have a president that just took over GM.  Now, we're going to take $293 Million and invest it in another country other than our own? 

I thought that was the goal, to use this stimulus money for the US, not China?  So they take our money and use it to create jobs in China? 

GM is raising its stakes overseas to bring more profit into the US.  Unfortunately due to our current tax systems, it's extremely more profitable for GM to build outside the borders rather than inside.

Fair Tax would eliminate that.  Fair Tax would bring the Chinese here to build factories and employ American workers.  You can't blame GM for trying to stay afloat.  But you can blame the government for forcing them into this situation.  And you can blame the citizens for allowing this to happen.

I share your sentiment, C-pher, but I'm also a firm supporter of a globalized market.  Unfortunately our country is in no way ready to flourish in such a market.

Fair Tax.

I understand fair tax.  I'm a big supporter of that as well.

Problem is that our country is going into the crapper.  And I get that any CEO that didn't globalize would be kicked out pretty quickly if they didn't.

But really, when we're complaining that we need to help OUR economy.  The Government takes over GM to save jobs…then sends them oversea's.  Is that really smart for your approval ratings?

Granted, 70% or more of the US will never know or care…it's still upsetting.

Well they didn't send GM overseas.  GM added to their previously established investment overseas.  What do you do if you're GM?  You've lost a huge foothold in the American market.  Are you going to open more factories in the US and build more cars no one wants to buy?  Or are you going to invest in a powerful market and reinvest your profits into R&D and marketing that has a clue?  It is simply not profitable for them, at this moment, to compete in this country on what they have available.  Part of that is because they lost focus on what Americans want, the other part is that it is way cheaper and easier to invest somewhere else.  I don't support them being bailed out, but now that the damage is done, I would like to see them not piss the opportunity down the drain.

Regroup, reinvest, and come back fighting.  The bailout wasn't a magic wand, it was a mulligan.  They still have to hit the green on their own.

And that's my point. 

I think that they need to find a way to get the UAW out of there.  That's a HUGE part on why they aren't profitable. 

I was VERY against the bail out for both the banks and the auto industry.  They could have done MUCH more with the bank bail out and made money for the government.  Thus he wouldn't have to go against his campaign promise and not raise taxes on the middle class.

If the Government would have loaned out that same money at 2%, then they would be the ones making the money back.  Instead, they give a free loan to the banks, which from the news today most aren't even paying back…and the banks get to loan it out at 5%.  They get the money…not really make any changes…not pay it back…and the government has to raise taxes to get it back.

I wouldn't write them off for investing further into the Asian market, however.  Jobs follow profit.

...in reasonable business cases.

Wow, Richard.  You really are on the Fair Tax boat.  If only we could get the rest of the country to buy in as well and force our legislators to pursue it.

I'm for the Fair Tax, too. It makes sense. Tax based on consumption, not income.

I think that they need to find a way to get the UAW out of there.  That's a HUGE part on why they aren't profitable.

I could not agree with you more. Back in the days when worker safety and long hours were issues, the union had its place. Now its just a fat cat group where the rank and file are lining the pockets of a few big wig union leaders.

How do I know this?  One of the guys who stood up in my wedding is a fat cat in the local UAW. He has not worked in 10 years. He makes about 75K a year for playing sheepshead in the union office and once a month, he travels to another union office and pretends to cook their books.

Fair tax does so much more than just tax based on consumption…by default it also taxes all the illegal immigrants and tourists that spend money in our fair country.