Global automakers and suppliers are scrambling to respond to the massive dislocations in their supply chains caused by the coronavirus that broke out in China.
How did we get here? China does offer colossal market opportunities and unmatched industrial scale. But it is not a place to put all of your eggs. No market is.
But American automakers and suppliers could not resist. For the past 20 years, they put virtually all of their Asian investments into the People's Republic.
We know what happened next: Chinese incomes soared. Car sales exploded from 1 million in 2001 to 24 million in 2019. China became the world's largest producer and consumer of vehicles — by far.
Times were not just very good; they were sensational. "We are making more money than God," the president of GM China confided over a lunch during the halcyon years.
Suppliers such as BorgWarner, Lear, Magna and Aptiv followed quickly. They built scores of factories employing hundreds of thousands. For good reason: China was a profit machine like no other.
In fact, American companies grew so comfortable with their successes in China that they withdrew from other powerhouse Asian markets, including Japan, Vietnam, Indonesia, Thailand and India.