Chapter 147: North American Site Selection

A German company and a Chinese company have traveled thousands of miles to the United States to fight a lawsuit across the ocean, which may be a typical manifestation of economic globalization.

"After a thousand calculations, I didn't expect that Volkswagen would be the first to make a ruthless move!"

Han Hao formulated a plan to attack the North American market, and he took advantage of the subprime mortgage crisis to take advantage of the fire, but he didn't expect that it was the Germans who provoked the incident.

The PG30 does have a lot to learn from EA888, but Chunghwa Group deliberately circumvented Volkswagen's patents from a legal and technical point of view, and also applied for its own patent protection in China. At least from the standpoint of the company's legal team, Volkswagen cannot sue Zhonghua Group for infringement in China.

But the public chose the United States as the battlefield, so there are other variables.

The complicated and bloated US judicial system, once it enters the litigation stage, it costs a lot of money and energy, lawyers will look for all kinds of evidence in the eye of the needle, winning or losing may be the difference between winning and losing, and there is really no money to hire a barrister team to fight a lawsuit.

Many people are worried about the outcome of the lawsuit, and some people suggest that after the PG30 second-generation remodel, there will be no intellectual property disputes before going north, but Han Hao sees the overall situation, and he is more determined to enter North America.

"If the competitor is in a hurry, it means that we are doing the right thing!"

Zhonghua Group has changed from an ant to an elephant, exceeding the annual sales of 4 million vehicles, and it is unrealistic to make a fortune in a muffled voice, if you don't take the initiative to come to the door, others will come to the door. The only way to deal with it is that the two strong meet and the brave wins, and the public will fight a lawsuit in the United States.

At the beginning of the development of the PG30, it foresaw self-protection in terms of intellectual property rights, at least if it really fought a lawsuit, Volkswagen would have to fight.

To go abroad and conduct cross-border trade, we must follow the new rules of the game, and the means of competition are multi-dimensional. Intellectual property is an invisible trump card weapon, and the China Group must get used to surviving on such a battlefield.

The law firm that served China Group in its acquisitions of Land Rover and Volvo really loved this Chinese client, and soon after covering a large stack of money in his pocket, a new business order came.

Based on the premise of good cooperation in the past, Han Hao continued to ask the firm to form a team of barristers to respond to the lawsuit, with the goal of preventing Chunghwa Group's products from being banned in the US market.

Volkswagen is unwilling to make a fuss about the Chinese market before the result is heard, and Chunghwa Group is not willing to prematurely saddle the public opinion of plagiarism to wait for the results to come out.

It was a battle without gunpowder, and both sides did their best but controlled the situation.

Professional things are left to professional people to do, according to the American lawyers' group, only the lawyer's fees are in place, and they are even sure that the case will be brought to the Supreme Court, and it will not be impossible to end in three or five years.

If it can be found out in three or five years, then the second-generation engine of the PG30 may land, and the impact of the lawsuit will be greatly weakened.

However, Han Hao also made the worst plan, if the 2.0T is really banned, then the responsibility of breaking through the American market will fall on the ZHS hybrid 1.8L engine. Thanks to Toyota's tireless efforts to popularize the hybrid concept in the North American market, at least the ZHS hybrid can be used as an important replacement.

Regardless of the lawsuit, the next most important thing is to select a location for Chunghwa Group's North American base.

Unlike presidents like ***, who believe in global economic integration, many U.S. governors are very interested in the huge investment of up to $1.5 billion in the China Group.

You must know that although the United States now relies on Wall Street capital to dominate the world, but jobs have been lost abroad, especially in China, and now there are Chinese companies to invest in at least 4,000 jobs, which is a big bargaining chip for governors to be re-elected.

If, as the Chinese say, in addition to the main engine factory, there will also be many supporting enterprises, then the number of jobs will increase several times, which is a very tempting big cake.

At present, Toyota directly employs more than 50,000 workers in the United States and indirectly provides more than 500,000 jobs.

Because of the North American Free Trade Agreement, the United States generously ceded profits to Canada and Mexico, two major neighbors, and eliminated tariffs on each other.

This means that cars produced in Canada and Mexico can be considered the same as in the United States, except that the cost of local workers is lower, especially since Mexico has only one-fifth the labor in the United States.

In the face of rising labor costs in the United States and the tough stance of auto unions, more and more automakers are looking to Mexico to build factories in the country to reduce costs.

As a newcomer, Han Hao must be strategically positioned for the North American base of Zhonghua Group.

If Zhonghua Group wants to compete with giants such as Toyota and General Motors, in addition to coming up with better and newer products, it also has to work hard to control costs, so site selection will be a major key.

When Toyota entered the United States, it deliberately avoided the area around Detroit because of the large auto union power in the north. As it turned out, none of Toyota's 10 factories were members of the North American auto union, so while the big three giants of GM, Ford and Chrysler were dragged down by union benefits, many Japanese brands, including Toyota, were not affected.

In Michigan, where Detroit is located, it is already common for auto workers to join a union, but many southern states have no such rule, and workers are free to choose whether to form and join a union. The well-known United Auto Workers (UAW) is in decline in the southern region, and Han Hao must stay away from the UAW cancer if he wants to make a big move.

Under U.S. law, 30 percent of factory workers are required to nominate a union before the union can begin the process of organizing the election, which is overseen by the National Labor Relations Board (NLRB). If more than 50 percent of the workers in the audience who are eligible to vote agree, then the union will be established in the enterprise.

Of course, if you establish a union to join, according to the UAW, each worker has to pay an annual membership fee of about $500, which is also a lot of money.

In other words, if more than 30% of a factory's workers want to bring in UAW, and more than half of all employees vote for it, then the factory is highly likely to be under UAW control. Of course, if the vote is not passed, then the UAW will not be able to penetrate, and the factory can maintain relatively autonomous control.

The game between labor and management is an art and is legitimate, but if it evolves into a political organization like the UAW, where union leaders earn more annual salaries than even the president of the United States, and blindly pursues the so-called workers' rights without seeing the plight of the company, then it will usher in a lose-lose situation.

Especially in the context of economic globalization, capital can flow freely, and it is inevitable to move factories away from the United States to cheaper regions.

If the Chunghwa Group wants to enter the United States, it is inevitable to deal with UAW. Benefiting from the fact that the three major U.S. auto giants were just on the verge of bankruptcy by UAW, UAW's reputation plummeted. Just learn from companies like Toyota Motor and keep the UAW out of the factory gates.

From this point of view, there are not many options left for Han Hao, and choosing the southern region of the United States is the best choice.

Especially considering the cheap labor cost in Mexico, the construction of local factories in the future will form a linkage with the United States, so it is even more natural to choose a location close to the states in the southern region.

Han Hao probably made a decision in his heart, but he was still invited to travel around the United States and investigate.

Knowing that the Zhonghua Group was going to invest and build factories in the United States, a total of 8 states sent invitations to Han Hao for inspection, which was somewhat contrary to the arrogant American spirit, and it seemed that the landlord's family did not have much surplus food.

Government subsidies, tax breaks, and low-cost land, as well as manpower and infrastructure, are the capital that state governments have to invest in Chinese companies.

In order to win the landing of Chinese, the economic development offices of various states are now in a state of high-speed operation, like a courtship peacock to show his best side, and the service attitude is comparable to that of local governments in China.

Only when they came to the United States could they feel the warmth of capitalism, which flattered some employees of the Zhonghua Group who accompanied the inspection, and they felt that their roles had been reversed.

While the mainstream media in the United States has denied the prospect of Chinese cars entering North America, state governments have made the opposite decision and have gone to great lengths to woo the Chung Hwa Group, which would bring more returns than expected if it succeeded, providing a lot of jobs and tax revenue for at least the next five years.

Alabama, a southern state in the Caribbean that is home to Toyota, Hyundai and Mercedes-Benz factories, has created an industrial cluster effect and a large number of highly qualified workers. In addition, it is close to Mexico and the Panama Canal, and the geographical location is prominent, so it is no wonder that so many foreign brands choose to invest here.

Accompanied by Alabama Governor Kenny, Han Hao looked at the local reserved industrial land, which is 3,000 acres, enough for China Group to land. And the governor also said that he will soon pass a bill that would allow the state to increase the investment landing subsidy to $100 million.

It can be said that the state conditions are very good, with a large number of skilled workers and supporting enterprises, and the state government also regards the automobile industry as a pillar, but the upfront investment cost is high, the cost of workers' wages is high, and there is a mentality that beautiful women do not worry about marrying in terms of investment conditions.

Mississippi, which is also a coastal region of the Caribbean, is a neighbor of Alabama, and its geographical conditions are comparable to each other, but it also has its own unique advantages. Toyota has a factory in the state, and the initial industrial support has been formed. In addition, workers demand lower wages than neighboring states, and it is easy to recruit workers, so new factories can be built quickly.

Iowa, which offers loan forgiveness, tax breaks and tax rebates, claims to be the state with the lowest cost of doing business in the United States, and has no auto assembly plant, which can provide a lot of human resources. The disadvantage is that the supporting facilities of the automotive industry are basically zero, and it needs to be developed from scratch, and the geographical location is relatively biased.

Georgia, with its highway hubs, has a complete logistics network that makes it easy to ship factory-produced cars across the United States. The disadvantage is that there is not much preferential treatment in government taxation, and the long-term cost will be relatively high.

......

Looking at the 8 states in turn, before you know it, most of the time has passed, and at this time, a new state government temporarily invited Han Hao to visit, but it became the biggest dark horse.