As it stands, automobiles exported from China and imported to the United States face a hefty 25-percent tariff as both countries engage in trade war practices. General Motors is one of many automakers that potentially will feel the effects of said practices with its China-built Buick Envision crossover.
But, the automaker has officially petitioned to exclude the Envision from the tariff. Reuters reported Thursday that GM had filed an exemption for the Envision on July 30 to keep the luxury crossover out of the trade war’s crosshairs. The Envision is one of many goods companies have filed to exclude from tariffs.
GM argued building the Envision in its home market is not an option.
“Assembly in our home market is not an option” for the Envision, the petition reads in part. GM cited sales figures in China, where the model sells 200,000 units yearly, compared to U.S. sales of 41,000 in 2017. GM added the “vast majority” of Envisions are sold in China, which makes building the CUV locally the best option.
The automaker has already prepared for a scenario where the Envision is not excluded. GM reportedly imported a six-month supply of Envisions to the U.S. from China last month, which should keep dealers stocked through the end of 2018. It also allowed GM to pay the 2.5-percent tariff as the vehicles entered the U.S.
Ahead of the tariffs, Buick announced the 2019 Envision would cost $2,500 less than the previous model year to better rival other brands. Should GM choose to pass along the added cost of tariffs, the crossover’s price could rise as much as $8,000.
According to sources familiar with GM’s plans, the automaker will not move Envision production to North America or any factory outside of China.
Comments
How utterly arrogant. The US taxpayers lost $11 billion on the GM bailout under the pretense that the company was good for America and created jobs here. On the heels of that infusion of cash, GM rapidly started developing plans to import Buicks and Cadillacs from China. That was a true slap in the face to the American people who bailed them out. So, no, GM, there is no goodwill gesture that you’ve earned. Nobody believes for a second that you’ll use the monies earned “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.” Rather, it’s more likely you’ll continue to transfer the Buick brand to China. If I were rendering a verdict on GM’s exemption request, it would be a polite no, hell no in fact.
And who is to blame for this? The same U.S> citizen that buy foreign brands assembled in the U.S>!! Tell the POTUS to tax these brands first and we will see more domestic brands sold and more local jobs.
Ci2Eye, I don’t think you have idea how modern economics work. This is free market at work. Besides, there is not a single car out there that purely made in one country.
Mr. David,
I don’t see a comment on the workings of the modern economy in anything I said but feel free to enlighten me.
I think what I said was that the US taxpayers saved GM and in exchange GM starting drawing up plans to import vehicles from China.
In a pure free-market international economy, GM’s decades-long bad management would’ve resulted in their assets being auctioned off with bits and pieces of the former icon being cast across the globe. American taxpayers and willing politicians saved them from that fate.
GM is getting nervous. lol Looks like President Trump’s trade battle is taking hold. China recently announced it would drop tariffs and open its market more to American goods.
Our President just keeps on winning!
P.S. No need for the Envision when you can buy a much nicer, more advanced, more comfortable, better value and Made-In-America by American workers helping American communities Buick Enclave for about the same price. Why buy a vehicle that is made by Chinese and only benefits Chinese, and then pollutes the world because it has to shipped and trucked half way around the world for sale???
I got a deal . bring chevy blazer to lordstown and we have a deal
China has lowered tariffs for imported cars from 25% to 15%, but in retaliation to Trump’s trade war, China as slapped a 25% extra import duty for car imports from the USA, resulting in a total of 40% import tariff instead of before 25%. That is the work of POTUS Trump.
That the Chinese hit with that primarily BMW and Mercedes, who are the first and second companies exporting cars from the US, is an irony… BMW has already announced price hikes in China for two models imported from the USA.
“Enclave for about the same price” as the Envision?
Enclave starting at 39,995 USD
Envision startng at 33,995 USD
6000 USD = 18% more is not “about the same price”, in my view.
They should be nervous. They allowed way too much exposure to a political movement they had to see coming years ago.
They are basically phoning in everything related to Buick in the US today. Time to put some effort into it.
@Jonas: Trump is not winning, but whining.
“Oh, how unfair of the others to be better than me!”
Obama should never have gotten involved with the GM bankruptcy, and it’s true the shareholders and bondholders took quite a haircut because he shielded the UAW. However, GM paid back all of the equity the U.S. government invested in the new General Motors Company.
Obama did screw over the owners of GM’s debt to give hand outs to his union supporters. He completely ignored bankruptcy law to do that.
If he really cared about American workers, some measure would have been taken during his tenure to address unfair trade practices with China.
How is it that GM is “one of many automakers that potentially will feel the effects of said practices” when GM is virtually alone in importing cars from China to the US? There are some Volvos that will be in the same situation but not much else; that hardly puts GM in the company of “many”.
There will be a flood of cars in the coming years .
Its not only about assembled cars, but also about automobile parts. Trump’s destruction is total (“Wollt Ihr den totalen Krieg?” comes to my mind).
Those Volvos are also made in Belgium, so they have another avenue to the US.
General Motors took a bail out and became a forerunner in importing cars from China. Now they are being extremely disingenuous about their inability to produce the Envision in North America. The car has two platform mates made in North America.
And frankly, the Envision is about as bland and boring as it comes. It’s a poor fit for the American marketplace anyway. GM should cancel it or replace it with a model that doesn’t make people yawn.
Seems pretty unlikely the Envision will be exempted … the US and China just exchanged a fresh round of additional tariffs this week ($60 billion issued by each country).
Worth a try, though.
I would actually be upset if General Motors was except in this case while their competitors aren’t.
The tariffs were setup to undermine the exact practice that General Motors is undertaking with the Envision. It’s like it was undertaken to cut back on products like the Buick Envision that could easily be manufactured in North America.
Maybe it could be assembled in North America, but apparently not in profitable numbers. It would rather not longer be offered in North America. It would not be the only Buick not marketed in NA. Understand: Buick’s “home market” is China.
Besides, which cars are being imported from China to the USA?
I hear of the hybrid Cadillac CT6, and a Volvo. What else? So why this hullaballo with penal duties on car imports from China?
Trump is making the USA poorer.
“Assembly in NA is not an option”? Why? There are assembly plants in NA that currently produce CUV’s that could assemble 3000-4000 Envisions per month and GM “here” would make more profit because they wouldn’t have to share with SAIC. The obvious reason they “can’t” do that is…………… SAIC says China only!
Yes, just like GM told us assembly in America wasn’t possible for lots of cars and trucks that are now being made in America again. A whole load of bs from a company that is just trying to kiss butt with the Chinese for political reasons.
Time to protect the American worker, quality jobs, communities, intellectual property, etc. Enough is enough! Thank God we have President Trump who has the American worker backs.
To “protect the American worker”, those workers need to unionize or revitalize their unions, unionize the South, not follow this pied piper arch enemy of workers who is a money grabbing real estate shark with a long record of bankruptcies.
There is no other way to defend working class interests than to fight oneselves, and to confront the fascist agitation of types like Trump.
US assembly is a job-creator, yes?
Germany and Japan both have large-scale assembly operations here.
Not sure how parts (some from abroad, possibly tariffed) works for us.
If crossovers are “here to stay”, which all indications would seem to indicate is true, then GM should invest in retooling Lordstown to be capable of a true flex line, Cruze or CUVs, and bring the Envision there along with giving them room for future product, like the EV crossovers they promised are coming.
This type of news is why the culture of “Buying American” is almost a thing of the past. This is also literally a slap in the face to those who were just laid off in Lordstown, OH. Buick used to have it’s own city, now GM fights to import them from China. I know it’s one vehicle and 41,000 units a year by comparison really isn’t much. The question is why? Well why did they badge engineer cars for decades? Why did they start building cars and trucks in Mexico? Why do the majority of car parts come from other countries? The answer, GM is and always will be loyal to one thing and that is the all mighty dollar, and all this started with one car, one plant, and one part. If importing the Envision becomes a success, why not do one more.
Thing of the past, so said the Canadian?
Really, from the country of Canada where every second commercial on tv is “Buy Canadian”, “Made in Canada!”, “Proudly Canadian made”…And a Canadian government that never shuts up with jingoistic neo-nationalist rhetoric….
Sorry, but America finally got smart under President Trump and is taking care of itself first. Seems the leeches around the world don’t like this. Tough for them because Trump is here to stay and the American economy is roaring back to life once again…
These are like the final months of an upswing which began long ago and is followed by a crisis. That is the law of capitalism, periodic crises.
The problem is that wages hardly grow, only there where lots of recent immigrants work and who have waged nationwide labor struggles, like the janitors and also the restaurant workers. And recently the teachers.
The old unions, built in the strike wave of the mid 1930ies which brought the industrial unions federating in the CIO replacing the craft unions of the AFL, those unions are today ossified and under burocratic control. They need to be revitalized to struggle for workers rights, for generalized health care, shorter hours, and higher wages.
It’s weird how Canada has nationalistic pride. Canada isn’t even a real country.
Yes, nationalism is foolish.
If auto workers had the same George Soros money as the anti- american activist groups that care about feeding central american illegals , then this practice of firing american workers to import vehicles from abroad would stop. They don’t because the afl-cio and UAW feel pressure the union movement which leadership and orinins have always been with the leftist progressive movement. The workers have always been pawns in the game. Why no protests? Because the leaders of the protest movements are all paid agitators . Regular folks work to feed their families
Biggest seller is Encore from South Korea, yes?
Buick has an enviable 3 CUV/SUV lineup – two are imports.
Up to GM to make the arrangement work for the US.
What platform is the Envision built on?
I thought it was shared with other CUVs; CUVs that ARE produced here in the States.
GM says it’s not possible. Why?
Is there a technical reason it’s not possible? Or are there legal and/or political reasons?
General Motors is importing the Envision from China to cut cost. There is no other reason and their appeal doesn’t pass the smell test.
It’s not like this is some kind of niche vehicle. This is a mid sized crossover…one of the most popular segment in the US right now. They opted to import that from China despite the complaints from both customers and employees.
Envision is built on the Delta platform. It’s siblings are the Equinox (Made in Canada and Mexico) and Terrain (Made in Mexico). The only Delta products built in America are the Volt (Made in Detroit) and Cruze (Made in Lordstown). Lordstown will never build a CUV or SUV, too expensive to retool for that.
Isn’t the Envision on the same platform as the new Cadillac XT4……why is XT4 cost effective to build in the USA and the Envision is not ???????
The XT4 is built on the Epsilon2 platform shared with the Chevy Malibu. That is why it is built in Fairfax Kansas. Fairfax lost the Lacross to Detroit-Hamtramck so had space for new product.
Cost always throws people in a loop. I really think some people forget GM is a business, not just an American business, but a business that has to compete globally with other globally focused companies. And if it is cheaper to build where you sell more Envision than to import them to the same market, than GM does have a valid reason in my mind not to build here. And why add more cost tooling an assembly plant when your only gonna sell less than 50,000 vs one that’s already capable of pushing 200k. Remember GM is a business that has to remain competitive, and cost effective…it can’t always satisfy the American market if it is more cost effective to import. Same with the CT6 Hybrid. The American market is not the end all be all!
Thank you for speaking the truth.
There are some really valid reasons but GM or most other automakers can not release this kind of info due to competitive reasons.
Home market? The home market of the Envision and of the Buick brand as a whole is China.
Sales of Buick branded cars in 2017:
in China: 1.223.517
in USA: 219.231
Sales of Buick Envision in 2017:
in China: 236.229
in USA: 41.040
Source: Carsalesbase.com
The chinese automobile industry and market are about 3 times that of the USA.
Real Americans buy real American cars.
I wish that was true. Most real Americans anymore shop price and buy Hyundai’s then justify that they are from Georgia as being American.
What is a “real” American car? Does it need wheels?
And what is a “real” American? America spans North to South from Cape Columbia on Ellesmere Island to Cape Horn.
Is a BMW X3 an American car? Asking for a friend.
Is BMW X3 an American car? Depends on what is meant by “American car”.
One fact at least is certain: the BMW X3 has ben built exclusively in BMW’s plant in Spartanburg, South Carolina, until March of this year, when production of the X3 was starting in BMW’s South African plant, and in China.
They say, that the Spartanburg plant is BMW’s biggest one.
re BMW Spartanburg: I assume that this plant does not manufacture engines, and that the engines are being imported from Europe.
Let’s face it, the Envision–regardless of where it’s made–is not a compelling vehicle. Even if GM wanted to move production here, it would take many months, if not years, and by then it would most certainly be D.O.A.
Knowing GM, they’re going to milk the Cruze for everything it’s worth, then retire it. If there’s a potential volume seller that can replace it, and it makes sense economically, they’ll replace it and Lordstown will live to die another day. Whatever happens, it’s not going to happen on a whim.
There are two of the Envision’s platform mates in production in North America right now.
GM is full of crap. They could easily move Envision production in the US or offer a Buick crossover to American consumers that is built in one of their many crossover assembly facilities.
They knew the political winds were shifting years ago, they heard the complaints about importing a car from China, and they ignored it all and did it anyway. And now their attempt to exclude the Envision from this is as disingenuous as it comes.
Do you know if they have Capcity? The Canadian plant has already had to farm out production to two other plants to build the Nox.
I am not sure where the Mex plant is at production wise but people would complain about it too.
Springhill is off the board now too as some used to come from there as over flow production. They are full with the Acadia, XT5 and future models already planed.
The Canadian plant before had to land train the bodies to the other plant. Not very economic.
To go to Lordstown would take a big investment p, several years and the total models build would not help their volume problems. They are a big plant and need a lot more volume.
Wow
In the end here China and USA will feel a pinch here but in the end they will meet and come to a new agreement that is more reciprocal to each side. There is no al, out win just a better deal than we have now.
China may be larger but their economy is much more fragile and unstable. Both dudes need each other but one needs the other more.
This, NAFTA and the EU will come to terms with USA by the end of the year.
As for GM the small number of vehicles here is not a major issue since the build most of what they sell there.
Moving the Buick and Cadillac here for less than 50k units a year at this price point is just not going to work. American lines need higher volumes or higher prices.
It all comes down to making numbers work. Porsche does not build many of their vehicles in Germany due to the numbers.
This is also putting leverage on the Germans. If the cooperate in Germany their brands built here may get some help with China.
If Trump would be interesting in a trans-atlantic level playing field, he would not have discarded the TTIP treaty which was nearly out-negociated.
Instead, Trump is only interested in setting up an authoritarian rule by assembling a reactionary and subvervient mass base by his fascist agitation.
TTIP = Transatlantic Trade and Investment Partnership.
The major flaw with the TTP is guess who was not part of it China.
Second the deals in the TTP did not help America any more than NAFTA.
It also failed in privacy issues since China was not involved.
The TTP was a product of lobbiest that rounded up support from both parties and from the most untrustworthy of both parties. You know the ones with foundations.
While scott3 replies to my previous comment, but does not address the issue I wrote about, and I am not sure what he means with TTP, for just in case that he might have wanted to talk about TPP, the Trans-Pacific Partnership, then I agree that China should not have been kept out of TPP. But that was a deliberate decision of the US government, who wanted to realize the US dream of the Pacific Ocean as an “American Mare Nostrum”, ruled of course by the USofA, and hence the exclusion of China. With China in it, which would be logical for the second largest economy on the Pacific Rim, the US domination inside TPP would not be secured.
https://en.wikipedia.org/wiki/Trans-Pacific_Partnership
Trump is a fool to have withdrawn the USA from this privileged position.
TPP without China would have been a paradise for US companies as NAFTA is — OK, well, they would have to compete with Japanese rivals. With NAFTA, poor Mexico only came under more foreign domination as a cheap labor export platform for foreign capitalists. Mexico should not have signed NAFTA, but pushed more for Latin American and Caribbean integration excluding the USA.
Sorry but China has th be part of the dance.
The economic of the world are all tied together and while we spoon not want them to hold a unfair advantage we can not afford for the to fail as they could take us all with them.
Like it or not they are now a part of mutually assured economic destruction. This prevents anyone of use from taking anyone country fully out.
As for the program that was negotiated no one was going to budge on it. But blow it up and get everyone back to the table for a more balanced deal for us.
Like most other negotiated dealers in the last how many years we are yielding to others advantages we should keep.
Also China left out could possibly take the poison pill and take us all out economically if they are not included.
Besides any deals done on the past admin has been a problem. Like the line in Syria it like others are failed policies.
Yes. I again recommend to ponder this interactive table showing the production of passenger cars and commercial vehicles by country for 2017, compiled by the OICA, the International Organization of Motor Vehicle Manufacturers (français: Organisation Internationale de Constructeurs d’Automobiles):
http://www.oica.net/category/production-statistics/2017-statistics/
This shows China producing nearly 30% of all automobiles worldwide, Europe (including CIS, i.e. Russia) 23%, NAFTA 18% (USA only 11.5%), and Japan 10%. Numbers rounded.
One would need a figure showing the number of cars produced by head of population.
As to a possible China “poison pill” — think about the possibility of China, the largest creditor of the USA, selling those US debt certificates on the financial markets of the world.
Move it to Lords town as the Blazer and it would be good
Ok let’s do this.
Where does the Cruze go?
How much to move it?
How much to build a line for the Buick?
How many sell? Can the build sales higher than the already struggling Cruze from a vehicle selling 41k units.
The Blazer was already sent to another plant long before the Cruze sales went flat. To move it now could delay production 1-2 years could GM hold out that long? Then how much cost to make the changes.
There is even more involved here and more questions to answer. I wish it were as easy as just saying let’s move it.
While I agree socially it would be good economically would prove troublesome.
In some point I agree with you, but an envision made in the us would help the supply chain and the availability of the car in dealership better than an imported car. Yes it’s an investment but if the car sells well it will be a good investment. Finally, as you said socially it would be good as GM will employ us peoples and GM could play on that as for all of its car produced Ind USA and could coca cola slogan ” made with proud in USA ” .
we wouldn’t be reading this article if the damn car was built in NA . don’t care about national trade – care about AMERICAN workers. maybe gm would sell more of them if they were built in NA.. hey gm I want my money back that I gave you for the buyout .. BUY AMERICAN BRANDS
American workers from Alaska to Fireland have one common interest: to defend their common class interests against the bosses.
Buick is an American brand.
GM paid us the people back for their loan. Did we get any money back from the Banks we bailed out?
Why is everyone upset with GM making business decisions all of a sudden? Are they not a business?
Is Ford American?
They do sell and produce cars in Europe correct? This argument on where something is built is utterly pointless. Everything is basically being built everywhere around the world. What we should be arguing is to get Americans real wages. What happened to Union jobs. That is what the argument should be. Everything cannot and will not be produced in America. Period.
Like why are “Foreign” automakers at a breakneck speed to open up factories in the South all of a sudden? Because for years Toyota, Honda, Nissan, VW, and BMW have been taking advantage of paying workers less since they are not in the UAW. That is what we should be fighting against. GM and Ford are in a huge disadvantage in their Home Market. Why are Presidents past or present not disusing this issue? Union jobs are disappearing at an alarming rate and Washington has completely turned their backs on them. That is the main problem in my opinion. Either the UAW needs to disappear so GM and Ford can be at a level playing field, or the UAW needs to be added to all manufacturers as well. I prefer the later.
As a side note, I nor anybody I know works or has worked for the UAW. I just love the Automotive World and obviously a huge GM fan or I wouldn’t be on this site. I think this is a huge issue on why American manufacturers are falling behind.
I’m glad that Momolos raises the issue of the trade unions, and that large parts of the US industry are not unionized, especially the former slave holding states in the South.
What the USanian worker really needs, is to revitalize the unions as fighting unions, interested only in workers interests, and not the bosses’, and to support building unions where they do not yet exist.
Real wages of workers in the US did not rise since the 1970ies, but that is not due to the fact that people from south of the Rio Grande move north, on the contrary, those bring a fresh combative spirit, and not due to the fact that new industrial plants have been built in the non-unionized South, but because the union leadership aggreed to the “give back” demands of the capitalists.
One thing is sure: in order to revitialize the workers movement in the US, this can happen only in the spirit of “an injury to one is an injury to all”, and not on exclusion of “the other” and a company union perspective, but an overall solidarity with all workers beyond all borders.
That’s some convoluted logic the GM crew is pushing. I’d turn em down flat. The evidence is in, global trade only works (for the working class) if we are at least some where near zero or in the plus column on trade. There are 2 major reason wages have been stagnant for so long (decades) : 1. Mass unchecked immigration (legal & illegal) : 2. Globalism ie Shipping jobs overseas. These 2 policies by themselves have destroyed wages for working American citizens. Do not believe ANYTHING from the fake news / msm crowd. They work for the Globalists not you.
Fornly condemms the very existince of the USofA as the reason for stagnant wages: the USA is product of massive immigration, mostly illegal, since the people coming with the Mayflower and later did not apply for a visa before going ashore. Those immigrants then waged a war of extermination against the original inhabitants of America. fornly thinks that such a colonial settler state is the guarantee for low wages, and he is right in a certain way.
“Globalism” is product of this war of conquest of North America, and it started real with the war of 1898 to rob Spain’s remaining colonies in America and the Pacific. It reached a new height with the US intervention in the so called First World War, which made the US a major European power, and then with the 2nd World War, by which the USA made herself the dominant power of this planet. Today, the USA is a real globelist power, with fleets of aircraft carriers in all seas of the world, and military bases on all continents. When “fornly” thinks that globalism is bad, then wage a campaign to bring the boys home, get them out of harm’s way and and withdraw the US military behind the US borders.
And mind you: your boss will not give you a wage increase by himself, it needs the union of all workers to force him. As I wrote above: if the wages stagnate since the effects of the decline of US world power was felt in lower profits, then this is mainly due to the fact that the union leaderships bowed to the bosses demands instead of leading a fight back against the demands for “give back”.
Judging by the images of the Envision, which I was able to see, I consider the car to be good looking. I also think that this might have been the “second flag ship model” for the Opel range promised by Mary Barra for the end of this century. The Envsion then might have been built also in Germany as Opel something. But then GM decided to cut off their European arm.
Crain’s “Automotive News” writes in http://www.autonews.com/article/20180803/RETAIL/180809889 that the price increase for the Envision by the punitive Trump tariffs would force the Envision from the US market, and that without the Envision, the Buick brand would falter in North America. Buick might become a China only brand.
GM needs to revisit its opportunity costs when it comes to manufacturing strategy and consumer sentiment. An abundance of desirable products reside in the marketplace and consumers are becoming more and more fickle every year. Because national jobs are becoming politically sensitive, it be heeds GM to enhance its customer base. Since US sales of the Envision are essentially insignificant, GM should pay the tariff and stop whining.