GM opens new US$200M diesel engine facility in Thailand; first to produce new 4-cylinder Duramax diesels
09 September 2011
General Motors opened a new diesel engine plant in Rayong, Thailand. The US$200 million facility, which is adjacent to the automaker’s vehicle manufacturing plant, represents GM’s most significant powertrain investment in Southeast Asia. The new 54,275-square-meter facility, GM’s first diesel engine plant in the region, is the first-in-the-world to produce the all-new family of Duramax four-cylinder diesel engines.
The plant has the capability to manufacture approximately 120,000 engines per year for use in vehicles built in Thailand and other global markets. GM expects to source US$94 million worth of Thai-built components for the production of engines at its Rayong facility by 2012.
The first engines to be manufactured by the facility will be installed in the new Chevrolet Colorado pickup that will be produced in Rayong following engineering development work and retooling of the vehicle assembly line.
The opening of the facility comes a month after GM announced that it will invest US$150 million in the reactivation of its Bekasi manufacturing facility in Indonesia for production of a new line of people movers for Southeast Asian markets. The new powertrain facility takes GM’s investment in Thailand to US$1.3 billion since 1998.
The new powertrain facility has a compact manufacturing footprint. It has adopted advanced computer and laser-guided equipment and is extremely flexible, with the ability to switch between production of 2.5-liter and 2.8-liter engine variants in line with changing market demand.
The plant has adopted technologies to keep the facility dust free and is fully climate controlled to manage humidity and create the most suitable environment for quality engine production.
GM Thailand has also employed environmental-protection processes throughout the facility, including using lighting that consumes 40 percent less energy compared with regular systems.
Duramax diesels. The newly developed 2.5-liter and 2.8-liter diesel engines are the newest members of the Duramax truck-engine family. They feature overhead cams, turbocharging and durable aluminum cylinder heads for refinement and durability.
The four-cylinder Duramax engines were tested in extreme conditions in Africa, Asia, Europe, North America and South America. They meet the Euro IV emission standard and can be used in front-, rear- or all-wheel-drive applications.
Additionally, they were subjected to the same validation process as the Duramax 6.6-liter turbo diesel, which is sold primarily in North America. More than 1.3 million Duramax 6.6-liter engines have been sold since 2001.
Can those GM Duramax diesel match the performance of the newest Mercedes, BMW, Peugeot units?
Posted by: HarveyD | 09 September 2011 at 12:06 PM
This is an example of what's wrong with globalism. Now, a patriotic American consumer who wants to buy American-made products will get confused and doesn't know what to do! This is why all the gov.'s job stimulus programs will fail and will only deepen the budget deficit!
Posted by: Roger Pham | 09 September 2011 at 01:39 PM
Sheez only $200 million?.. in the US you would only get an office building for that kind of money.
They probably serve live monkey brain in the cafeteria :) Yes I know that was a hateful comment.
"This is an example of what's wrong with globalism. Now, a patriotic American consumer who wants to buy American-made products will get confused and doesn't know what to do!"
Its very confusing, and a lot of them would like a small diesel pickup with limited pollution and safety equipment.. probably its also a bargain.
Posted by: Herm | 09 September 2011 at 04:32 PM
@HarvyD
It depends what you mean by performance. It is a truck engine and probably does not have as high a hp/displacement ratio but I would bet that it costs less to own which is what is important for the given market. If you want a higher hp GM diesel for cars look at the Opel Ecoflex engines. A version of the diesel Ecoflex engine is scheduled to be sold in the US as an optional engine for the 2013 Cruze.
@Roger Pham
What is your complaint? GM is a global company and build cars and trucks on 6 continents and sells in well over 100 countries. The truck that is being made in Thailand is mostly for the Asian market. A version of that truck is made in the US or Canada and is also made in South America (Brazil?) for the South American market. Will we get the 4 cylinder Duramax engine? Not for now.
Posted by: sd | 09 September 2011 at 06:11 PM
My complaint is that cars destined for the American market like the Chevy Aveo, sold in the USA, is made in Korea and the Ford Fusion, sold in the USA, is made in Mexico etc etc...Buying American name plate can no longer guarantee that one can help American workers landing more jobs. The rate of unemployment in Michigan is about the highest in the nation, while GM and Ford and the rest of the companies are busy opening factories elsewhere in the world. Honda just opened a large factory in Mexico.
It used to be real simple when I grew up: American brands were made in the USA, Japanese brands were made in Japan, English brands were made in the UK, German brands were made in Germany...Life was much easier back then and less confusing!
Posted by: Roger Pham | 09 September 2011 at 07:21 PM
Roger
You are right. It is no longer so simple. It is a global economy. I am involved in the design of a specialized piece of equipment that uses a small John Deere turbo diesel. The engine is made in the US but the radiator come from Turkey and the charge cooler is made in Romania. However, we hope to sell our equipment in at least North and South America, Europe, Asia, and Australia.
The new version of the sub-compact Aveo, which is called the Chevrolet Sonic, is made in Michigan for the US market. The engine and I believe the transmission are also made in the US. However, the even smaller Chevrolet Spark will be imported from Korea. The Ford Fusion and the Fiesta are made in Mexico. However, these are at least made with a balanced flow of goods in that the value of automotive imports and exports to Mexico (and Canada) roughly match. Ford is probably shipping F-150s, etc. to Mexico.
Posted by: sd | 09 September 2011 at 09:42 PM
GM got to keep all their tax-loss carry-forwards from their years of losses from before the company was turned over to the unions.
They don’t have to pay $45.4 billion in taxes on future profits.
So while there is still cash (our cash) they invest it in Thailand.
US workers are unlikely to emigrate to Thailand, so no US jobs.
Simple enough.
Posted by: ToppaTom | 10 September 2011 at 05:19 AM
sd....you are right on. USA will, in the future, produce large pick-ups, large SUVs and trucks (with imported parts) and import smaller more efficient lower cost vehicles. The transition has been going on for many months (years).
TT....you may be 100% correct this time. What will current and future USA workers do? How can USA regain its lost manufacturing base?
It is very difficult for $35+/hour workers to compete with $2.50/hour workers in Asia. One easy way to make wages more competitive would be to replace all Income Taxes (for all workers below $50k or $60k/year with at selective 20% sale tax. This could be revenue neutral but would allow lower wages and add an indirect 20% tariff on all imported goods including imported crude oil via the 20% fuel sale taxes. Of course people making more than $60k/year would pay both Income and Sales taxes. Since electricity would not be taxed, it would promote the transition to more efficient electric cars.
Other similar changes could be done to help but the naysayers and elephant party fans would probably not agree. Bleak future ahead.
Posted by: HarveyD | 10 September 2011 at 09:22 AM
Why do you think the government should be the one to spend our money ? (By "our" I do not mean to necessarily include you).
And in today's vernacular, people who use common sense are called naysayers by those unskilled in the art.
Posted by: ToppaTom | 10 September 2011 at 10:30 AM
TT...more of the same is not an acceptable solution. Going deeper in debt is not sufficient either. The years ahead represent new challenges and will have to be addressed with new politics and new approaches. We never had such a strong and numerous competitor before. What worked in the past century may not be enough to pull ahead this time around. We are in deeper than we have been before. The accumulated fat is melting away at a fast unsustainable rate.
Long costly oil wars, costly crude oil imports, very high budget and trade deficits, higher national debt, wild unchecked speculations, staling bickering politicians, very high security cost, unbalanced wealth, unfair tax structure, sky high health care cost, reduced manufacturing base, etc etc have taken their toll on the US economy.
Bold moves are required to make the majority realize that we have to change if we want to better compete, maintain our ways and high standard of living.
Posted by: HarveyD | 10 September 2011 at 01:01 PM
@HarveyD,
You are right in stating that "It is very difficult for $35+/hour workers to compete with $2.50/hour workers in Asia." But, it was Henry Ford who had the foresight to pay his workers decent wages so that they can buy the products that they are making.
With $2.50/hr rate, these workers won't be able to afford to buy $20,000-30,000 vehicles. Yet, they are taking away the $35+/hr jobs in the developed countries who CAN afford to buy those vehicles, who no longer have these jobs and have to flip burgers at minimum wages or collecting food stamps. The end results is that investments was made to build factories to produce stuffs that fewer and fewer people can afford to buy...and investments will go bust, banks will fail, world-wide economic downturn will result...like now.
Third-world workers live in overcrowded conditions, ride bikes or buses to work, work in dangerous conditions in polluted cities, lack of worker compensation or disability benefits...No wonder they can survive on $2.50/hr. Is that how we would want our cities and working environment to turn into in order to compete with these third-world workers?
With the high level of productivity of the American workers today, we can afford to pay them decent wages and still have high living standard for everyone who work. Products will be more expensive to buy, however, people will tend to take better care of them and there will be less toxic waste in making more stuffs that we don't really need. When the PC was made in the USA in the 90's, it cost $2,000-3,000 to buy a set, but so what? Everyone who really needed a PC was able to afford to buy a PC, jobs was plentiful. Now, a PC set can be purchased for a ridiculously low price of $500 or less, but so what? We are paying a huge price for a lot of unemployment and job insecurity now...most young college graduates cannot find work doing what they they've learned to do. It is very demoralizing to see them have a huge student loan debt, yet unable to find the kind of jobs, like engineering and science...fewer students will go into science and engineering nor paying attention to science and math in the classroom, and then we started to blame our school for failing the students in math or science...but the truth is the other way around. When manufactured goods can be bought so cheaply, people tend to discard them more often instead of taking the time to repair them for minor problem...the result is problem with environment toxic wastes released from these products as they decay in the landfill: Lead, cadmium, arsenic, mercury, PCB, etc, etc...At the same time, factories in third-world countries are dumping toxic waste all around their environment with insufficient local governmental regulation nor enforcement due to local corruption...We see a huge acceleration in polluted use of coal in developing countries...
To reverse these trends, we need to educate the entire world to see the foolishness in the globalization that big corporations are pursuing right now. Corporations are big enough to buy off local governments and elected officials so that they will look the other way when these big corporations are destroying our world and our way of life!
Countries who are victims of unfair cost advantage resulting in massive job outsourcing will need to get together to form a Free-Trade Zone and to enact appropriate tariffs for non-members to make it fair.
Posted by: Roger Pham | 10 September 2011 at 07:33 PM
Roger, some very good pts, and i agree with much of it. There is one advantage of globalism, however. The likelihood of world war diminishes. Corporations have too much invested all over the world to engage in irrational destruction.
Posted by: danm | 11 September 2011 at 07:01 AM