As for China, we have long-stated that China will continue to favor the U.S. until they no longer need us. To wit, China is importing technology from us that would have taken them years to develop on their own. China also has a vested interest in keeping the U.S. consumer alive and spending. Still, our sense is that once China has sucked this country dry of its proprietary technologies, the recycling of its tradable-goods dollars will wane.
at least American businesses are not alone:
World Trucks Blog: Volvo CNHTC Deal Set to Dissolve
Trebles all round in Gothenburg we assume. The Volvo-CNHTC JV has been a dog. In fact, it’s been rather embarrassing to watch the Swedish leg get lifted higher and higher. As one-way deals go, it’s been textbook. Last year, a magnificent 200 vehicles were moved, and we assume that CNHTC has higher hopes for its own Howo product – which bears a striking resemblance to Volvo’s own vehicles. Farcical.
So Volvo stands to lose up to SEK 500 / £36.6 / €55.32 / $72.04 million on the deal. We say it’s lucky to get out with a pair of shoes still on its feet – this was an ill-conceived, badly executed nonsense, and the shareholders should be celebrating on the one hand, whilst beating AB Volvo's management into a bloody pulp with the other. Should make for a good session tomorrow (Friday) when AB Volvo reports its 2006 numbers.
Now we wait to see what lessons have been learned as the DongFeng deal gets inked. Let us observe - and merely as an aside - that when supping with the Devil, the use of a long spoon is appropriate.
So our industries are busy sowing the seeds of their own destruction. Of course given how the corporate chieftain class thinks one quarter ahead at most that's not surprising.