WCA September 2015

From the Americas

had begun to express concern about a possible default on debt. In a filing related to its first-quarter results, GM said that it is changing the way it values assets and liabilities denominated in non-US currencies. Ford Motor said in January that it would take an $800 million charge deriving from the difficulty of converting bolivars to dollars.

More than one problem can be recorded per vehicle. This year’s study included 215 models and 33 brand rankings. South Korean brands led the industry in initial quality by the widest margin ever, averaging a score of 90 problems per 100 vehicles. For the first time in this study, European brands, with a score of 113 per 100, surpassed Japanese brands, with 114. American makes, with 114, equalled the Japanese for only the second time. The Times ’s Cheryl Jensen noted that communications technology continues to be the biggest problem category, with voice recognition again leading the complaints. The majority of models equipped with voice recognition systems had ten or more problems related to that feature per 100 vehicles. And the number of owners reporting voice recognition problems increased to 67 per cent in the 2015 study from 57 per cent in 2013. The German luxury brand Porsche was ranked most reliable for the third consecutive year. After Porsche, with a score of 80 problems per 100, rounding out the top 10 were Korea’s Kia, 86; Jaguar (British), 93; Hyundai (Korean), 95; Infiniti (Japanese), 97; BMW (German), 99; Chevrolet (American), 101; Lincoln (American), 103; Lexus (Japanese), 104; and Toyota (Japanese), 104. (“Kia and Hyundai Show Improvement in J D Power Quality Study,” 18 th June)  This year’s study is based on responses from 84,000 owners or lessees of 2015 model year vehicles. It put 233 questions about possible problems including mechanical defects and malfunctions as well as design issues. Elsewhere in automotive . . .  At last count, the death toll from faulty ignition switches in small cars made by General Motors had risen by two to 111, and GM had paid $200 million to settle claims filed with its administrator Kenneth Feinberg. By the 31 st January deadline Mr Feinberg’s compensation fund had received 4,342 claims, of which 88 per cent were deemed deficient or ineligible. Some four per cent remain under review. The families of victims are being offered at least $1 million each. In addition, GM has agreed to offer payment to 220 people who were injured in crashes caused by the switches. GM acknowledged it knew about problems with the switches for more than a decade, but recalled 2.6 million of the older-model cars only last year.  In other news of General Motors, on 25 th June its chief accounting officer told analysts that GM expected to take a $600 million charge against second-quarter earnings due to devaluation of Venezuela’s currency, the bolivar. Declaring that the charge would not impact operating income, Tom Timko said, “Despite the impact of this, the Venezuelan market remains very important to us.” As noted by Greg Gardner of the Detroit Free Press , Venezuela is not a large market for any automaker. But the South American country’s economy has suffered from declining oil prices and runaway inflation, and bondholders

Business

Chinese-owned companies, on the rise in the USA, could generate up to 400,000 new jobs over the next five years A recent report on Chinese business firms operating in the United States found that the number of American workers employed directly by such companies increased more than fivefold in the past five years. The number of US employees of Chinese-affiliated firms jumped from fewer than 15,000 in 2009 to more than 80,000 in 2014. The analysis was conducted by the research firm Rhodium Group and the National Committee on United States-China Relations, both New York-based. The committee, a non-profit that promotes sound dealings between the two nations as serving vital US interests, has former US secretary of state Henry A Kissinger as a vice-chairman. Andy Szal of Manufacturing.net briefed down the report, which said 1,583 Chinese firms were established in the USA at the end of last year. The spending of the Chinese employers grew along with their numbers: to nearly $46 billion between 2000 and 2014. Although the bulk of Chinese investment in the US over that period stemmed from acquisitions, new establishments contributed to the total. (“Report: 80,000 US Workers Now Employed by Chinese Companies,” 26 th May) “Fears that Chinese acquirers could systematically move acquired assets and related jobs back to China have not materialised,” the report asserted . “Instead, new Chinese owners have, in most cases, sustained and expanded local employment after they acquired US assets.” Larger manufacturing and service industry projects were found to have increased significantly in the 18 months previous to publication of the report. The authors believe that direct US investment from China is only at the beginning stages and could generate up to $200 million in spending and up to 400,000 new jobs over the next five years. The report acknowledged that “perceived trophy assets” – such as the famed Waldorf-Astoria hotel, in New York – dominate the headlines about Chinese acquisitions in the USA. But it stressed that the “benefits of Chinese capital are distributed nationwide.” According to the report, North Carolina and Illinois lead the states in foreign direct investment from China. As to the distribution of the Chinese-owned firms, they operate in more than three-quarters of congressional districts across the USA.

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Wire & Cable ASIA – September/October 2015