GM Invests $250 Million in China “Green” Research Center

By Brendan Moore

10.30.2007

General Motors has announced plans to open a state of the art research center in China to develop alternative energy vehicles. The scientific research center will be funded by an initial $250 million USD allocation from GM. The plan also calls for the research center to be part of GM’s new Shanghai “campus” where the company’s new in-country headquarters will be located.

“We believe China has the potential to become a leader in the adoption of alternative propulsion systems,” commented Rick Wagoner, chairman and CEO of GM, at a Beijing press conference on Monday.

The Chinese government is also keen for such research, for a variety of reasons, including the international prestige it brings to the country, the ability to leverage the results of the research for their own auto industry, and lastly, the positive effect lower levels of pollution would have on their smog-choked cities and China’s now-ravenous appetite for imported oil.

Many companies doing business in China are openly skeptical of doing basic research in the country because of fears their intellectual property will be copied and disseminated without adequate compensation because of China’s notoriously lax rules and enforcement regarding intellectual property. The Chinese government has assured companies that their rights will be protected in these instances, but it is a tough sell to the foreign corporations. The opening of the research center by GM can only increase their already-positive company standing in China, and most importantly, with the Chinese government.

GM plans to introduce hybrid vehicles in China in 2008. China is the second largest car market in the world, which means that any technology or design that shows up there will increasingly ripple out to other parts of the world.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. The Chinese copy everything they can with no regard to property rights. I don’t think this is a smart move by GM.

  2. How about some investment in America, GM?

  3. DOn’t be ridiculous. At a company as large as GM, $250M is a rounding error. Besides, have you ever stopped to think for just one moment that the profits GM makes overseas are what enables them to pay the bills for their struggling domestic operations? Stop being an idiot just for a second, and you’ll see how stupid it is to criticize any U.S. company for expanding overseas.

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