recent Dodge Chrysler commercial boldly
proclaims, "Here's a couple of things America got right -- cars
and freedom."China's third largest automaker apparently
agrees with the former assertion. Shanghai Automotive Industry
Corporation Chairman Hu Maoyuan on Monday said that
his company was considering buying a stake in U.S. automaker General
Motors (GM) if "conditions are favorable".GM, like
Chrysler, is currently recovering
from bankruptcy. It has posted encouraging
financials despite having lost
yet another chief executive. It now awaits a key step in
its recovery process -- a major divestment of the U.S. government's
stake in the company via an initial public offering.The
company's return to profitability has come largely thanks to its
offloading of laggard brands. One of those GM brands -- Hummer
-- sold to
one of SAIC's Chinese rivals, Shanghai Automotive Industry
Corporation (though the deal has since stalled).SAIC CEO Hu
comments, "GM is our important strategic partner. We are
not clear about the details of its IPO. We will make the right
decision once we know details."An investment would not
be surprising, but would be a reversal of the pair's long-term
relationship. Today, thanks to a series of mergers and
acquisitions, SAIC produces 2.72m vehicles a year, but it has long
played the role of GM's smaller ally in China. The
pair launched two joint ventures -- Shanghai GM (1997) and
SAIC-GM-Wuling Automobile (2002). SAIC helped GM become China's
second highest selling foreign automaker, behind only
Volkswagen.Earlier this year, SAIC acquired a 1 percent
additional stake in Shanghai GM, making it the majority owner of the
company, a key business position.While the Chinese automaker
seems open to the idea of an investment in America's largest
automaker, the French/Japanese auto alliance Renault SA-Nissan Motor
Co. quickly dismissed speculation that it was interested in GM
stock. Carlos Ghosn, head of the alliance speaking at a plant
opening in Zhengzhou, central China, said his companies had no
interest in investing in GM.GM and China's government
recently were in a row over the government's refusal
to subsidize the Chevy Volt EV while it would happily
subsidize Chinese EVs. The U.S. government, by contrast showed
no interest in promoting American brands over foreign ones and offers
equal subsidies for foreign EVs like the Nissan
quote: For starters, they would go liquidated under Chapter 7.
quote: Chapter 13 also *might* have been an option for GM as well. Although it has a debt limit, and I don't know if GM was past that limit at the time of the bailouts.
quote: The FIRST people who get paid are the holders of any secured debt.
quote: Nevermind the government will make a PROFIT once it sells its shares in GM...
quote: They need to shake that Government Motors moniker, FAST!
quote: I got news: GM was going bankrupt, one way or another. The only thing the Feds did was make sure GM went the way of Chap 11 (Bankrupcy) instead of Chap 13 (Liquidation).
quote: While the Chinese automaker seems open to the idea of an investment in America's largest automaker, the French/Japanese auto alliance Renault SA-Nissan Motor Co. quickly dismissed speculation that it was interested in GM stock. Carlos Ghosn, head of the alliance speaking at a plant opening in Zhengzhou, central China, said his companies had no interest in investing in GM.