Here is a test of your knowledge of acronyms.

What does “GM” stand for? If you answered “folly,” 10 points. The folly of a CEO who, 3 years ago, signed an agreement giving 90% of his United Auto Workers employees most of their salary even if the production lines shut down. (The CEO of Chrysler did the same). What business promises to pay its employees even if they are not working? Today a Chrysler worker complained bitterly on BBC’s World Service, that he was laid off, got paid for 36 hours of work a week anyway, drew unemployment insurance (!) – and was worried lest Chrysler run out of money. How many businesses would not run out of money if they paid their workers without producing and selling anything? Perhaps GM stands for Gross Mismanagement.

What does BYD stand for? Don’t know? Never heard of it? You will. It stands for Build Your Dreams. And – it stands for an upstart car company that plans to be #1 in China by 2015 and #1 in the world by 2025, according to its President Wang Chuanfu.

Wang is a genius. He invented a revolutionary battery that powers a third of the world’s cell phones. And now, he has leveraged his knowledge of battery technology to build electric cars, that can charge in as little as 15 minutes. 

Founded in 1995, BYD employs 170,000 workers in 7 huge plants, and has 10,000 engineers and scientists in its R&D centers. Evidence that BYD is on the right track? An investor named Warren Buffett bought a 9.89% interest for $230 m.  

BYD hopes to make 200,000 cars this year, and double that number in 2009, despite the global recession.  

How did BYD transition from making cell phone batteries for Nokia, to making cars? It bought a Chinese car manufacturer four years ago. Car production, according to BYD, is rather low technology. BYD uses its high-technology experience, to upgrade the technology of car production. 

BYD is a sort of Chinese role model. According to the New York Times, 

“In April, Credit Suisse forecast that one-third of all export-oriented manufacturers could close within three years. And a study released in March by the American Chamber of Commerce Shanghai and Booz & Company, the consulting firm, says foreign investors are growing bearish on China and that rising costs are driving American manufacturing out of the country.”

Look for America and Europe to bring back home some of its manufacturing. Look for China to respond, by moving up the value chain and upgrading its factories, to build branded high-quality high-technology products, like BYD’s electric cars. This has been China’s vision from the outset. We will all watch closely, now, to see if they can implement it.  

FO Car

BYD's FO Car