Uh, Honda sells engines to GM. Why wouldn't they sell them to the Chinese?

If you'd been to a recent auto show and seen the Hyundai Azera, you wouldn't have made a comment like that. No innovation at all but for under $30k, you get a large V6, stability and traction control, premium audio, full leather, a legroom to rival the S Class MB....

Innovation usually happens at the top end and filters down as the technology is perfected and becomes cheaper to manufacture.

Rick:

Exactly.

There's more to manufacturing than innovation. Becoming low-cost auto parts supplier to the world, supplanting Japan and Korea, might be an attainable goal.

Anyway, at the moment Detroit isn't innovating very much. Its hybrid push is just a poke. Most of the new stuff in cars consists of electronic gadgetry of little added value. Then again, the auto industry is mature. Personal transport is a reality, and all newcomers can do is make it more affordable and less expensive to operate.

Hyundai is Korean, so I'm confused by the comparison. Would you buy a Fiat or Citreon because the 330 is a nice car? Also, the Russians took a lot of German plants (optics, etc) too, with likewise predictable results.

Lucky for us, our ancestors were the bravest, smartest, most ambitious and adventurous people from all the countries of the world. They came here to be free to let their imagination soar and that's why American Ingenuity can't be matched by repressive societies. Freedom is the crucial factor.

Engineers: Wouldn't it be cheaper and more efficient to build an entirely new plant?

What's the Chinese translation for "Yugo"?

Mike:

The same things pundits are saying about the Chinese were said about the Japanese and Koreans. Neither are real innovators but they do a good job of copying and then perfecting what was invented elsewhere.

It took the Japanese 20 years and the Koreans 10 years to become at least the competitive equal of Detroit. If China doesn't fall apart as OJ and other predict, how long will it take China to do the same and probably more quickly than Korea?

Rick:

That's the point, they top out at Korea.

Ed:

"Most of the new stuff in cars consists of electronic gadgetry of little added value."

Very true. I believe there is going to be a substantial crash at the very top of the market (MB S class, BMW 7 Series, etc.) in the next decade. Per my comments on the Hyundai Azera above, there is just not going to be a reason - beyond the status seeking - to pay $80k to $100k to buy/lease a car when you can get most of that for less than half the price.

Status moves America.

Everything else becomes cheaper, what other way to differentiate yourself?

It's getting harder for Hollywood to be trendsetters when the knock-offs can be gotten in very short order.

They have to keep moving to set themselves apart from the rest of us.

erp is correct that freedom is a crucial factor.

When we cease to be the freest, we will soon after cease to be the strongest.

I'm less optimistic that OJ on the idea that we will alwayst be the freest.

No One can be viewed as serious when comparing Communist Russia with China. The Chinese may not get the domination they desire, but they are long past proving they can outperform Russia.

The freeest will always fail. Liberty is the ideal, not freedom.

Let me revise and extend my remarks, liberty aka freedom is crucial.

I don't see any difference between freedom and liberty and neither does dictionary.com which lists the two words as synomyms.

Perhaps you are taking freedom to mean license.

oj. I don't equate freedom with license.

The Founders did:

http://www.brothersjudd.com/index.cfm/fuseaction/reviews.detail/book_id/1385/

At the rate they're going, the Chinese auto industry isn't going to mature any faster than the Japanese did, which will be much slower than the Koreans.

erp:

Wouldn't it be cheaper and more efficient to build an entirely new plant?

Yes.
However, hopefully what they really want to do is carefully document and blueprint this plant, so that they can replicate it exactly.

Even then, there's no reason why the Chinese couldn't hire some foreign experts to plan, build, and equip some modern auto plants...

This has to be a case where we don't know the whole story.

Or they could just buy GM at the firesale, in a few years.

Noam, in that case, we'll just have to wait for the "rest of the story" to be revealed.

If you will study Chinese history and Joseph Needham's monumental multi-volume Science and Civilization in China (and admittedly, he was very Left but he was also a fine scientist/scholar with a retinue of specialists available to aid him), you will see that until around the 15th century or so, China was technologically 400-800 years ahead of the West. Only the Benedictine monasteries, as Lewis Mumford pointed out, were keeping pace [with no contact]. Then something happened that is still conjectured but not satisfactorily shown. Europe suddenly began to pull ahead, and within a couple of centuries, dominated. Of course, during this period, the Chinese were not masters in their own house. But as one who for five years had a lot of contact with very bright Chinese, let me suggest we must never underestimate their intelligence or creativity. In R&D, the Japanese are superb at development. I'd put money on Chinese capacity in research and design.

erp: I suggest you look out Isaiah Berlin's famous differentiation between freedom and liberty. One of the problems of the Frecnh language (and therefore French mentality) is their inability to distinguish these two elements.

Rick:

Exactly. When I first saw ads (and reviews) for the VW Phaeton, I was stunned that they were actually selling a car for $68,000 (and up). VW!?! My reaction - WTF?!?

I have seen one, precisely one, Phaeton out on the road. I have seen several at the local VW dealer, gathering bird droppings. Maybe they sell in Europe, but here? Anyone who wants that kind of car is going to buy the BMW or the high-end Japanese cars. Or the Jag. The VW Passat is a good car (like you said, a nice V-6 with all the amenities, for about $30,000), but a $70,000 VW? Must be expensive electronics in there.