BMW Building X5 in Thailand to Deal With Chinese Tariffs

[evanevery]

Originally Posted by Flying Ace

you're assuming BMW/Harley plant workers and their friends/family/neighbors and people who get direct and indirect economic benefits of these plants understand how to crunch numbers you just crunched.

Condescending much?

In any case, I have a hunch that these folks will know what production slowdown and layoffs looks like...

[Blubaron79]

Another recession this spring. It's coming..

[desertfox73]

Originally Posted by F32Fleet

Fake news in that the decision to build in Thailand was made well before any of this tariff talk.

It's not fake news, it's actual news. And the OP clearly stated that the factory dates to 2016, so they aren't being deceptive.

[evanevery]

Originally Posted by Maverik259

So much uneducated stupidity in this thread. Why does everyone find a need to bring politics into a car thread.

No one has lost their jobs in SC because of this. The plant wasn't built overnight in Thailand and has been long a plan for BMW (even before Trump) for quite some time as it's still much cheaper to get vehicles from Thailand to China than from anywhere else.

Yes the tariffs will have some growing pains. Theyre taxes of course it's going to cause some initial pain. But it's not just about the US economy here. China is still to this day being treated like an aspiring 3rd world economy in the economical markets. They aren't even closely taxed or treated the same as most other major economic powers when it comes to world economic dealings. Read/listen to something other than a major 24hr news show and you all might learn something.

No bring on the anti trump ANTIFA hate mail. I'm ready!

Perhaps no one has lost their job YET (at least that we know of)...

...and the article says production at the Thailand plant will be INCREASED to help offset the Chinese tariffs. Do you not understand that the associated capacity will be moved from Spartanburg?

You can call folks "uneducated" but how many global Companies do YOU own or operate (I own two). Both of my AMERICAN MANUFACTURING companies are seeing component price increases directly due to the import taxes imposed. One, in fact, is seeing a 25% import tax on component PCB's we import from China (and NO, there is no one here in the US who makes or manufactures similar components). These are by far the largest cost we have in a couple of our premier products. Enough so, that we will likely have to increase the wholesale price of the completed items by at least 20%. So this makes it very hard for my little AMERICAN Company to complete in a global market (say vs competitors in China, Europe or Mexico). Yes, placing Import Taxes on the components we purchase from China makes it harder for me to compete with finished products produced by Chinese companies. Placing Import Taxes on Chinese components actually help make Chinese Product manufacturers more globally competitive (vs the U.S.). Ironic, don't you think?

...and TWO of the products my AMERICAN MANUFACTURING company designs, manufactures, and sells are exclusively sold and distributed by ANOTHER AMERICAN COMPANY. So they are going to get hit with the same tax increase. ...and these two products basically make up their entire product line. So thats TWO AMERICAN COMPANIES which are significantly impacted and disadvantaged by this tax on a single product stream. Nice!

So no, I can't source these components in the US because they aren't made here. So this forces me to raise the product prices to help cover the Republican Tax Increase. This makes my company less competitive in the global economy and will undoubtedly reduce my market share. Its unlikely I will be able to wait for some other US company to develop the talent, expertise, and manufacturing facilities into the US so I can have an untaxed domestic source. Hell, even if a company like Intel (with all their established IP and processes) wanted to simply MOVE a manufacturing facility from Asia to the US it would take 3-5 years just to build the facilities. (Like the Chinese Foxconn is currently doing in Wisconsin). The time for new companies to be CREATED with the requisite talent and IP is far, far greater...

You want to artificially boost the development of American Manufacturing Sources in the US? You don't tax the imports that existing companies rely on and pull the rug out from under them. You provide subsidies to promote the growth of the competing domestic capability so dependent companies are not left in the lurch... By the time anyone builds the Talent, IP, and Resources to backfill the sourcing hole created by the Republican Tax Increase, many of the smaller companies will have fallen to global competition. The larger companies will simply move their final manufacturing and assembly offshore to escape the tax war. (Like BMW is doing)

Hey, but what do I know, right? All I have is "uneducated stupidity"...

[dkhm3]

Originally Posted by F32Fleet

Fake news in that the decision to build in Thailand was made well before any of this tariff talk.

It is ramping up production at the plant. This is a reallocation on resources to counteract market tariffs. This means there will be more opportunities shifted exporting from SC, to other markets. BMW is a business and it makes more sense now to make more cars elsewhere instead of exporting the cars from America. We need to find ways to export more of our stuff to other countries and not the other way around. Otherwise things just become more expensive to American consumers from Tariffs our OWN government hits us with.

"it will simply build more SUVs at its Thailand facility."

"CEO Harald Krueger told analysts ramping up production in Thailand was one action to counteract the tariffs."

https://www.carscoops.com/2018/08/bm...china-tariffs/

[menelaos]

Originally Posted by Maverik259

So much uneducated stupidity in this thread. Why does everyone find a need to bring politics into a car thread.

No one has lost their jobs in SC because of this. The plant wasn't built overnight in Thailand and has been long a plan for BMW (even before Trump) for quite some time as it's still much cheaper to get vehicles from Thailand to China than from anywhere else.

Yes the tariffs will have some growing pains. Theyre taxes of course it's going to cause some initial pain. But it's not just about the US economy here. China is still to this day being treated like an aspiring 3rd world economy in the economical markets. They aren't even closely taxed or treated the same as most other major economic powers when it comes to world economic dealings. Read/listen to something other than a major 24hr news show and you all might learn something.

No bring on the anti trump ANTIFA hate mail. I'm ready!

There's no uneducated stupidity as to the big picture sir.
Eventually, jobs will be lost... Just ask the subsidized farmers who are being kept hostage of DJT's stupidity.

[dkhm3]

Originally Posted by evanevery

No one has lost their job YET (at least that we know of)...

...and the article says production at the Thailand plant will be INCREASED to help offset the Chinese tariffs. Do you not understand that the associated capacity will be moved from Spartanburg?

You can call folks "uneducated" but how many global Companies do YOU own or operate (I own two). Both of my AMERICAN MANUFACTURING companies are seeing component price increases directly due to the import taxes imposed. One, in fact, is seeing a 25% import tax on component PCB's we import from China (and NO, there is no one here in the US who makes or manufactures similar components). These are by far the largest cost we have in a couple of our premier products. Enough so, that we will likely have to increase the wholesale price of the completed items by at least 20%. So this makes it very hard for my little AMERICAN Company to complete in a global market (say vs competitors in Europe or Mexico).

So no, I can't source these components in the US because they aren't made here. So this forces me to raise the product prices to help cover the Republican Tax Increase. This makes my company less competitive in the global economy and will undoubtedly reduce my market share. Its unlikely I will be able to wait for some other US company to develop the talent, expertise, and manufacturing facilities into the US so I can have an untaxed domestic source. Hell, even if a company like Intel (with all their established IP and processes) wanted to simply MOVE a manufacturing facility from Asia to the US it would take 3-5 years just to build the facilities. (Like the Chinese Foxconn is currently doing in Wisconsin). The time for new companies to be CREATED with the requisite talent and IP is far, far greater...

You want to artificially boost the development of American Manufacturing Sources in the US? You don't tax the imports that existing companies rely on and pull the rug out from under them. You provide subsidies to promote the growth of the competing domestic capability so dependent companies are not left in the lurch... By the time anyone builds the Talent, IP, and Resources to backfill the sourcing hole created by the Republican Tax Increase, many of the smaller companies will have fallen to global competition. The larger companies will simply move their final manufacturing and assembly offshore to escape the tax war. (Like BMW is doing)

Hey, but what do I know, right? All I have is "uneducated stupidity"...

Amen, next people will be calling you an "ELITIST"

We are simply going to import from another country cheap goods like we have always done. See Japan, Taiwan from the 80's-90's. The cure is to export more of our goods, you know the ones that got hit with tariffs from other countries.

[raysspl]

So Much Winning Here!!!

[positiveions]

People are quick to judge. As if we are not loosing jobs to China and Thailand already?????
People on this site KNOW how to bring jobs back to the US. Really? You guys would rather see an American out of job and out of money than give him or her mode of survival.
Has anyone interviewed all those companies that lost jobs to China prior to Trump when Clinton , Bush, and Obama were in the office? Has anyone asked “hey why did steel manufacturing industries closed its doors in some of the states?”
Has anyone asked why China keeps manipulating its currency. Geez I wonder why.
For to all those people that think Trump is to blame, we all are to blame! We all bought in into Chinese made products (trash) and filled our houses with them.
If a democratic president does the same as Trump you all will hail him as hero.

[bmwmotorrad46]

I wish it was little bit fair for United States. When Germans send their vehicles, we say welcome to America with 1% tax but when we send our Ford Mustang to European Union countries, they say "look, this is foreign car tax it! "

Ford had to close its business in Japan due to this situation, South Korea is also taxing foreign cars but do we tax South Korean and Made in Japan made cars here ? I don't think so.

It seems everybody, not just China or Europe, but here we the people are abusing this system by buying cheap stuff from Walmart or let politicians to shut down a plant here to open a new one in Mexico due to the stupid NAFTA.

I really wish to see the upcoming BMW 3 & 4 Series to be built in United States, not in Mexico but again that's gonna happen next year.

[evanevery]

Originally Posted by positiveions

People are quick to judge. As if we are not loosing jobs to China and Thailand already?????
People on this site KNOW how to bring jobs back to the US. Really? You guys would rather see an American out of job and out of money than give him or her mode of survival.
Has anyone interviewed all those companies that lost jobs to China prior to Trump when Clinton , Bush, and Obama were in the office? Has anyone asked “hey why did steel manufacturing industries closed its doors in some of the states?”
Has anyone asked why China keeps manipulating its currency. Geez I wonder why.
For to all those people that think Trump is to blame, we all are to blame! We all bought in into Chinese made products (trash) and filled our houses with them.
If a democratic president does the same as Trump you all will hail him as hero.

Keep drinking the Kool-Aid...

We are not manufacturing steel in the US anymore simply because other countries can do it cheaper... They, among other things, are not paying folks $30/hr to sweep the floors...

However, there are MANY things that we do better here in the US. Apple just passed the 1 Trillion dollar mark. They do their design here in the US and have their electronics assembly done overseas. Why is that bad? Do you own an iPhone? Its designed in the US by the first Trillion Dollar AMERICAN company and assembled in China (by Foxconn)!

The answer to your problem is not artificially trying to compete with everyone else in doing all possible things. Its fostering the growth and education here in the US to do what we do best. Unfortunately, its not manufacturing, its design.

The two companies I own which are being hit hardest by the Republican Tax Increase are both design companies. We do the design in the US and have many of the component PCB's produced overseas. (Like Apple) Our final product assembly is also done in the US.

China manipulating their currency? I've been paying basically the same price for my component PCB's for several years now. Perhaps you can explain to me what that means. ...and how it effects my businesses. ...or is that simply just a phrase you've heard somewhere?

"We all buy products from China". Yup, and its all NOT trash. Its all not just USB Thumb Drives and iPhone cases. China rules the market in some very high tech products like Drones (ever heard of DJI?). They are also outpacing us in Artificial Intelligence. Rather than isolating our markets, and pandering to Coal Miners and Steel Workers, we should be supporting forward thinking technologies through education and research. Remember DARPA and the Internet?

But Politicians work on a 4-Year cycle so they want something quick. They don't want to invest in the long term. That doesn't get them re-elected. They want to snap their fingers and impose trade tariffs. They can do that now and the effect is virtually immediate (unfortunately). Invest in education? Spend the time to foster knowledge and motivate innovation? No way - that will take YEARS to pay off! They will never see the benefits during their OWN term. Neither politicians or their constituents want to make the long term investment in our country that will REALLY help the economy in the long run...

Our politicians tell us "Its Us OR Them"! We hoot and cheer as we shut out the "Evil Chinese". It has to be "Us or Them" or who would our Politicians tell us we need protection from? Politicians foster fear so they can be the designated saviors! How stupid are we really?

Why can't it be "Us AND Them"? Apple Does it... My companies do it... I've been working with my Chinese and Taiwanese partners for many years. Together we make great products and there is profit for everyone. (...at least there WAS...)

You seem completely myopic to the Steel Industry. Do you not care if my two high-tech companies close their doors and people lose their jobs due to Trumps Trade War? What about Harley Davidson? BMW moving jobs overseas? Chevy and Ford losing global sales?

I'm not worried about bringing jobs BACK to the US. I'm now worried about KEEPING my jobs in the US at all.

[allinon72]

Hopefully there's someone out there with more than a half-second attention span willing to let this play out.

[Z K]

Originally Posted by positiveions

People are quick to judge. As if we are not loosing jobs to China and Thailand already?????
People on this site KNOW how to bring jobs back to the US. Really? You guys would rather see an American out of job and out of money than give him or her mode of survival.
Has anyone interviewed all those companies that lost jobs to China prior to Trump when Clinton , Bush, and Obama were in the office? Has anyone asked “hey why did steel manufacturing industries closed its doors in some of the states?”
Has anyone asked why China keeps manipulating its currency. Geez I wonder why.
For to all those people that think Trump is to blame, we all are to blame! We all bought in into Chinese made products (trash) and filled our houses with them.
If a democratic president does the same as Trump you all will hail him as hero.

Holy... if you knew the story of steel manufacturing, you wouldn't even mention it. The US steel companies fucked themselves.

Steel was a very big product and the US was one of the #1 producers of it. But the US steel companies didn't innovate. In Europe, they created a new process to create steel much more efficiently at less cost. The US decided not to use it because of the extra cost in infrastructure and stayed with the old system. People were greedy and wanted to keep costs low so they can pocket the extra money. They didn't see the long term ramifications.

In a few decades, everyone in the world was making steel faster and cheaper than the USA. THEN, US steel companies decide to use the newer process.. but it was already too late. That's why US steel companies collapsed and manufacturing of it moved overseas. It's the US's fault for becoming complacent in a competitive market.

[evanevery]

Originally Posted by allinon72

Hopefully there's someone out there with more than a half-second attention span willing to let this play out.

You don't jump off a cliff and then say "lets just wait and see how this plays out".

Smart folks don't jump off the cliff in the first place... Smart folks know it isn't going to end well...

[Igor_M5]

Originally Posted by Z K

Holy... if you knew the story of steel manufacturing, you wouldn't even mention it. The US steel companies fucked themselves.

Steel was a very big product and the US was one of the #1 producers of it. But the US steel companies didn't innovate. In Europe, they created a new process to create steel much more efficiently at less cost. The US decided not to use it because of the extra cost in infrastructure and stayed with the old system. People were greedy and wanted to keep costs low so they can pocket the extra money. They didn't see the long term ramifications.

In a few decades, everyone in the world was making steel faster and cheaper than the USA. THEN, US steel companies decide to use the newer process.. but it was already too late. That's why US steel companies collapsed and manufacturing of it moved overseas. It's the US's fault for becoming complacent in a competitive market.

Ha, sure does sound like Murca. I assure you the automotive industry is on the same path.


Whats happening now is a simple a process of dusting the gap where the middle class stood last.
End of the day.. anyway you look at it, never forget that the rich get richer, the poor get poorer.


How bout dem lease rates tho?

[Igor_M5]

Originally Posted by evanevery

You don't jump off a cliff and then say "lets just wait and see how this plays out".

Smart folks don't jump off the cliff in the first place... Smart folks know it isn't going to end well...

But the smart folks are on the other side though... you know, the ones who come up with these ideas that lead to THIS in the first place....

And that smart guy is the guy who's rolling in dough, cause he don't give two fucks about what happens to your country, its government, its people, their dogs & cats, even if it leads to an American Genocide... as long the papers rollin in.

No srsly.

Edit: I think if all facts considered... the real smart man said "peace" to America and never looked back.

[Z K]

Originally Posted by Igor_M5

Ha, sure does sound like Murca. I assure you the automotive industry is on the same path.


Whats happening now is a simple a process of dusting the gap where the middle class stood last.
End of the day.. anyway you look at it, never forget that the rich get richer, the poor get poorer.


How bout dem lease rates tho?

I can totally see that about American cars. Dodge is the biggest offender.

They are still using the old chassis from their days with Mercedes Benz... the Grand Cherokee is an old ML, the Challenger is a SL, and the Charger is a E class. Which is fine, but they haven't changed since then. They just update the body styling and add more power to a very dated car. Short term you get a ton of profit on Hellcats and such. But long term they are screwing themselves with no R&D into future chassis and other technologies.

And when they don't sell, cheap leases to move cars!

[evanevery]

Originally Posted by Igor_M5

But the smart folks are on the other side though... you know, the ones who come up with these ideas that lead to THIS in the first place....

And that smart guy is the guy who's rolling in dough, cause he don't give two fucks about what happens to your country, its government, its people, their dogs & cats, even if it leads to an American Genocide... as long the papers rollin in.

No srsly.

Edit: I think if all facts considered... the real smart man said "peace" to America and never looked back.

I give lots of fucks about what happens to my country, its people, etc... I'm not claiming to be the sharpest pencil in the box, or the richest, but you might very well shit if I told you what I pay in taxes every year (I really should get some new accountants...) I don't begrudge my Country its taxes. I have all I need and then some. I just wish we did better, more meaningful, stuff with the money I hand over...

We don't have any problem escalating the military budget to product our citizens from what? Invasion? Terrorists? But we wont spend the money to protect our people from much more common and widespread threats like sickness, ignorance, and poverty...

I've said more than my fair share here. Someone else can "carry the flag" from this point on...

[howiegu]

SC strong! I stand by you, taking delivery from you next month.

Orange "businessman", where is the beef in "making great"?

[hans007]

Originally Posted by bmwmotorrad46

I wish it was little bit fair for United States. When Germans send their vehicles, we say welcome to America with 1% tax but when we send our Ford Mustang to European Union countries, they say "look, this is foreign car tax it! "

Ford had to close its business in Japan due to this situation, South Korea is also taxing foreign cars but do we tax South Korean and Made in Japan made cars here ? I don't think so.

It seems everybody, not just China or Europe, but here we the people are abusing this system by buying cheap stuff from Walmart or let politicians to shut down a plant here to open a new one in Mexico due to the stupid NAFTA.

I really wish to see the upcoming BMW 3 & 4 Series to be built in United States, not in Mexico but again that's gonna happen next year.

Except that we put a 25% tax on trucks / vans, so a mercedes sprinter / mercedes sprinter, VW amorok etc can't even be sent here without a bunch of workarounds etc

[MacOSR]

This situation had absolutely nothing to do with the current “tariff wars.”

The problem is that there hasn’t been free trade for a very long, long time. China has had a 25% import tariff on cars not produced in China and hefty tariffs on car parts as well. Thus, auto makers like BMW are “encouraged” to build plants in China and produce cars there.

I find it very interesting how other countries react when the US imposes reciprocal tariffs.

Here is what will ultimately happen...
Step 1 - The US has announced tariffs to combat tariffs that exist on our products entering other counties. Example: Chinese 25% tariffs...so...the US will put a 25% tariff on cars coming from China.
Step 2 - Those other countries announce and impose HIGHER tariffs than what they had already
Step 3 - The US matches the new tariff rates
Step 4 - Those other countries are ultimately forced to remove their tariffs

Why will this happen? The world has become dependent on the US economy.

Isn’t it fair to have the same tariffs...reciprocal tariffs...and let there be free trade?

[Germanauto]

Look at all these economic experts here.

Fact is that nobody, not even God, know what the long-term implications of these tariffs will be. Only time will tell. BMW building a few X5s abroad is not a marker for the entire economy.