HOW THE “NEW” WORLD ECONOMY WORKS ... I THINK

I know zippo about economics, but here’s an example — I think — of how the new world economy works.

Chrysler signed a new OEM (original equipment manufacturer) agreement with Nissan today (Nissan sunsidiary JATCO has been supplying transmissions to Chrysler since 2004, so this isn’t out of the blue).

This came about because Nissan agreed to supply Chrysler with a new car based on the Nissan Versa for limited sale in South America.

The new contract allows Nissan to manufacture an all-new small car based on a Chrysler concept or design to be sold in North America, Europe, etc., in 2010. The vehicle will be manufactured in Nissan’s Oppama Plant in Japan.

In return, Chrysler gets to manufacture a full-size pickup for Nissan, based on a Nissan design. This truck will be built in Chrysler’s Saltillo Assembly Plant in Mexico.

In order to accommodate the production of the Nissan pickup, the present volume from the Saltillo plant will be shifted to U.S.-based plants (unnamed) that produce Chrysler pickups. This starts in 2011.

Both companies expect to, “explore further product-sharing opportunities,” according to a press release issued today.

I dunno’ about you, but … I have no idea what it means … I found it interesting nonetheless.