GM's Chinese Joint Venture Was Just Fined $29 Million For Monopolistic Pricing

Then-SAIC and GM executives Hong Chen and Thomas Stephens sign an agreement for “Global Next Generation Advanced Powertrain Technology Co-development” in 2010. Photo credit: AP
Then-SAIC and GM executives Hong Chen and Thomas Stephens sign an agreement for “Global Next Generation Advanced Powertrain Technology Co-development” in 2010. Photo credit: AP

1st Gear: That’s Not Great

Capitalism is great (in theory) because (in theory) the consumers win when everyone competes. One of the best ways to see that is when you’re buying a car, and you shop around to different dealers to see who will give you the best price. It doesn’t work when corporations set minimum prices for their products, which is what the Chinese government is saying that General Motors did with its joint venture partner, SAIC (via Reuters):

Shanghai’s pricing regulator said it would fine GM’s venture with China’s largest automaker SAIC Motor Corp Ltd (600104.SS) for setting minimum prices on certain Cadillac, Chevy and Buick models, according to China Central Television.

“GM fully respects local laws and regulations wherever we operate,” the U.S. automaker said in an emailed statement. “We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter.”


GM can almost certainly afford a $29 million fine, so it shouldn’t sting too bad. But it’s a strong shot across the bow.

2nd Gear: Lincoln Is Expected To Triple Sales

Speaking of China, Lincoln is expecting its total 2016 sales figures to triple its 2015 numbers, according to Automotive News. If you’re ever still left wondering “what’s the point of Lincoln?” Much like Buick, it’s China.

Galhotra said Lincoln sales in China were about 11,000 in 2015. “That may not sound like very many, but we were the first [foreign] brand to sell more than 10,000 in our first year,” he said.

Through the first three quarters of 2016, Lincoln sales in China were 20,996, nearly triple a year ago, Ford said.

Of course, all things are relative, and 21,000 cars isn’t a lot when you consider that Lincoln’s main rival, Cadillac, sold more than 100,000 cars in China this year, as AN notes. Lincoln’s tripled sales, but it’s got a much longer way to go.

3rd Gear: Those Self-Driving Ubers Are Off To Arizona Because Of Tweet

Uber’s fleet of self-driving prototypes was kicked off the streets of San Francisco after the company reportedly didn’t have the right permits for the operation. So they were off to Arizona, instead. You might be wondering how Uber picked Arizona then – was it just names out of a hat? Was it because “Arizona” is near the top of an alphabetical list? Or maybe it’s just a winter thing?

It was apparently this tweet from Arizona governor Doug Ducey, as Bloomberg points out:


Tweets, man. Makin’ things happen.

4th Gear: FCA To Recall 43,000 SUVs

Another day, another recall. This time the Detroit News says that FCA is about to recall 43,000 SUVs – a smattering of model year 2016 Dodge Journeys, Jeep Compasses, and Jeep Patriots – because of a crankshaft issue:

The company said Friday 43,071 vehicles are set to be called back because their crankshaft or camshaft sensors may only work intermittently, increasing the possibility of engine stalls. The recall is expected to begin on Jan. 27, 2017.

“If the engine stalls, there is an increased the risk of a crash,” FCA said in a notice that is posted on the National Highway Traffic Safety Administration’s website.


Please do not crash.

5th Gear: Office Vacancies In Downtown Detroit Are Plunging

Detroit was in a really bad way just a few years ago, with 25 percent of offices in the city’s once-vaunted downtown available for rent. It’s still not great, but things are doing a lot better than they were, with only 13.3 percent of offices available to rent in Detroit’s downtown. Again, from the Detroit News:

Ten years ago, one out of every three office spaces was vacant. Data from Jones Lang LaSalle and other real estate databases show downtown’s office vacancy rate has not been lower than the current 13.3 percent for at least a decade. Several veterans in the local development scene could not recall when downtown Detroit’s office vacancy rate was ever this low.

“This is a good problem to have. That’s the sign of the times,” said Rod Miller, president and CEO of the Detroit Economic Growth Corp., the city’s quasi-public agency that promotes development. He said the market is strong and the perception of downtown continues to improve.


For reference, downtown Manhattan, in New York City, has an office vacancy rate around 9.6 percent.

Reverse: Road Contamination Prompts Evacuation Of Town

On this day in 1982, the Missouri Department of Health and the federal Centers for Disease Control (CDC) inform residents of Times Beach, Missouri that their town was contaminated when the chemical dioxin was sprayed on its unpaved roads, and that the town will have to be evacuated and demolished. By February, the federal and state governments had spent $36 million to buy every house in town except one (its owners, lifelong residents of Times Beach, refused to sell). In 1985, the city was officially disincorporated.


Neutral: Merry Christmas, Happy Holidays, And A Happy New Year!

This time of year is traditionally considered a time to spend with family, but we all know family can drive you nuts. Got any fun driving planned? Where you headed? Name your best winter roads!

Deputy Editor, Jalopnik. 2002 Lexus IS300 Sportcross.



Can someone break down why setting a price floor for dealers is monopolistic? No one says the customer has to buy that car? I would think colluding with other makers to set floors would be punishable, but setting price floors theoretically hurts the company if they do it in a vacuum, right?

Or is that the issue, the dealers were complaining?