Hummer: the conclusion?

Following up from an essay I wrote long ago on the Hummer, A friend just passed along a link to the news that the Hummer brand will likely be sold to a Chinese company. At the jump, the article says:

General Motors Corp. has struck a deal to sell its Hummer truck unit to a Chinese industrial business, the two companies confirmed Tuesday.

Privately owned Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., based in China, will acquire the truck brand, which has been part of GM since 1999. Tengzhong said it plans to keep Hummer's management team.

The Chinese company are really just buying the trademark (i.e. the IP), just like GM did in 1999--though now with all the social improvements made to it through the process of cultural efficacy over the past decade (the Chinese corporation now owns all those little references you have to the H2). When GM made the H2, they just built it on a chassis for one of their trucks (I think the Tahoe). In other words, ultimately the only thing that is changing is the brand relationship. And in this case, the local cultural experts--the management of GM which always only in charge of the marketing and design of the more fashionable H2--are being kept on. So the real change is just who is going to supply the credit--and who will get the most profits. In this case, the Chinese corporation is now replicating the relationship of the Chinese state to the US treasury: supplying credit and expecting returns. The job losses the article mentions are from the closure of dealerships. And in that case, one could basically argue that the losses are the collapse of the move to make cars more consumer oriented--with a variety of brands that can supposedly identify with a particular consumer. On the other hand, this could be only the first of several purchases by Chinese corporations--Saab, Saturn, etc. could all get sold this way. It is a predictable way for them to move up the value chain quickly in the US and world market. Who knows, it might also be purchased by Chinese companies that already produce counterfeit cars or car parts.

And I don't know that GM ever made the Hummer (as opposed to the military Humvee) on its own; I think it always contracted with the company that originally made the Humvee of gulf war fame, which makes most of its money from making actual Humvees for the army.

So, contrary to the article, AM General makes most of the H2 and 3s, though on a contract from GM. It should be a more striking fact that, if all the arrangements remain the same, a Chinese company will be contracting with a company that primarily makes US military vehicles to make a supposedly civilian truck. From the article, it looks like the answer is to move all production of Hummers to Shreveport, where GM currently makes some of the H3s.

As part of the deal, some GM plants will continue to build the Hummer brand for the new owner, at least for awhile. The company said its Shreveport, La., plant will keep building Hummers for the new owner until at least 2010

But in the interim, it is likely that the US military contractor will help the Chinese with both the production in the meantime and the conversion in Shreveport. I point this out not because I'm trying to illuminate some traitorious relationship of the US government or US business, except in so far as I'm saying that it is always ultimately that. In other words, the main reason the government and capitalism work so closely is that the one is always the foundation of the other. My earlier essay pointed to this in the early development of both the Hummer and the consumer SUV. Now the difference is that capitalism is global--and capitalists in question are supposedly communist.

So in the future, not only will the communists lend us the money and sell us the rope with which we'll hang ourselves; but they will also have US workers produce that rope. One could say that this would be a final way to make the Communism global--by injecting its political economic power into the US like a virus. In other words, they will defeat the US by coopting it into their financial orbit. A few years ago, Barry Lynn speculated that the control over the world's labor supply would ultimately create monopoly control wielded by both Asian manufacturers and states.

If terrorists ever want to strike at the heart of American manufacturing, they need not sneak into Ohio to do so. More certain success, with more concentrated results, awaits along the industrial boulevards of Taiwan. And what of the Philippine colonel or Indonesian autocrat who one day wakes to find that the electronics industry, in its rational wisdom, has placed 80 percent of the world's chip-assembly, or even chip-testing, operations in his country? Must we now abide and buy off cranks such as Malaysia's Mahathir the way we must abide the Dos Santoses of the world and the families Saud? As our companies continue to scatter industrial capacity to the far comers of the globe, then to trim slack at home until they come to depend on that distant capacity, are we not witnessing the creation of a new strategic commodity like oil, control of which can be exploited to wrangle away our wealth and security? And once a country expropriates industrial capacity in this way would it not be able to use its influence to prevent the affected industry from ever building competing capacity elsewhere again?

I still think there is much that is correct about this--though, again without the nationalistic moralizing. My dissertation is largely centered around how IPR makes much of this possible. By making the IP the only thing that links US brands to US corporations, it is all the more likely that more production will be shipped overseas. In this way, the only thing keeping Lynn's nightmare from coming true would be the use of IP. But what Lynn neglects to note is that this relationship would supposedly be limited by the fact that the consumers for those products would be predominantly located in the US--thus the Taiwanese producer would find little joy in owning a plant to produce cars that were mostly purchased by US consumers unless it could also guarantee the legal sale of its products to those US consumers. The key relationship, therefore, was between the capitalist and the state protection of IP and trade.

I imagined that the situation would ultimately result in the closure of US plants, but lately Asian corps are setting up shop in US to buld cars they will ultimately sell to the US. In this, the capital relationship proves to be equally mobile in the opposite direction. THe fixed equipment of the US might be put right back to work--provided there is transnational control over US labor standards--using Chinese capital and to the benefit of the continued stockholders in these companies, many of which would be US citizens as well. In short, far from the divisive relationship predicted by Lynn, China would not hold the US hostage by withholding labor; instead, China and its Communist government would coopt US labor (much like US car corporations did in the 1940s) and much of US society. It would never need to build up its military or engage in a top down revolution: it would simply own more and more of the world's capital and therefore eventually be able to dictate the labor standards. I have no illusions about how many legs are good or bad (in this case, it's hard to tell if there are any pigs involved) but it is an interesting scenario which would provide the Chinese government--which could probably nationalize any of these companies and their capital and labor supplies at any time--with an amazing lever over the future development of US industry. They would never need to fire a shot. IP, therefore, would prove to be an unlikely pivot to having the Chinese state gain control of US society. On the other hand, this replays the xenophobic debates in the 90s about the Japanese owning the US, so I wouldn't want to push it too far.

I will have to review my Arrighi, but there is surely something in the pattern of capitalist development here--he touches on the Japanese connection in Long Twentieth Century, but I have yet to read his new book on China. (something here about venitians, Dutch or Spain not having their own army.) On the other hand, as I understand it, the Russian mafia is supposedly integral to the trade in conuterfeit goods (discussion I'm hoping to follow on in looking at the book McMafia). These organizations might be willing to pony up some money if it meant buying a legitimate US shop for really cheap. But I don't know how strong that brick of the BRIC is in this great wall.