Yesterday, we relayed a Reuters report that SAIC might buy out the Chinese part of GM, that GM might take the money and bail. Today, true to form, the denials arrived. Again according to Reuters, GM says they have no plan to sell shares in its joint venture SAIC. This according to Henry Wong, a spokesman for General Motors China. Reuters is positive that GM held talks with SAIC Motor about selling part of its 50 percent stake in the joint venture, or other assets. As if on cue, GM’s plan to enter a joint venture with SAIC’s competitor FAW received new traction today. The plan had been on hold for a while.
In the meantime, the speed dating game between Chinese companies and desperate Detroit companies who want to swap their corporate children for cash continues. Today on the radar screen, again: Volvo. Reuters has picked up indications that Chinese car maker Chery Automobile has held talks with several European auto brands, including Ford’s Volvo, and is interested in an acquisition. What is interesting is that Gasgoo didn’t simply reprint the Reuters report.
They added their own story, in which they quoted the man himself, Yin Tongyao, CEO of Chery as saying Chery would not rule out the possibility of buying a troubled European auto brand, and that “Volvo is believed to be one of the choices.” Now that’s something else.
Gasgoo added that Chery received a 10 billion yuan ($1.47b) loan to fund its global growth from Export-Import Bank of China last December. “We were also granted the flexibility of a credit line by the bank,” Yin added. Knowing that Gasgoo is owned by Chery is adding extra credibility to that story.
“Volvo is the most solid brand compared with other brands the Detroit automakers have put up for sale,” said Yankun Hou, industry analyst with Nomura International. “It could be a big help for Chinese automakers who lack core technology but seek to climb up the ladder.”
As for Chery’s credit line, Nomura’s Hou said: “I think Chery is able to get more money if it will indeed go ahead with a bid for Volvo.”
Chery is one of China’s most aggressive exporters. They have sold their self-developed cars to more than 50 countries, mostly in the developing world. Chery’s been seeking to tap mature markets. An established brand, especially one with a strong safety cachet, might perform miracles on Chinese offerings.
According to Reuters, “the tables have turned for Detroit’s automakers.” Earlier this decade, GM, Ford (kind of), and Chrysler (haphazardly) scoured Asia for automotive bargains, capitalizing on the region’s financial crisis to snap up assets at fire-sale prices. Lately, especially GM used China’s growth machine to make their anemic numbers look good.
Now, Detroit automakers have reached out to Asian automakers to sell their unwanted and unloved brands. “They could be the buyers of last resort, the only ones left with a good bank balance, for now,” said Larry Rinek, automotive consultant at Frost & Sullivan.
“There is also a good chance the overtures will fail,” says Reuters. “The global recession, tight credit and sinking auto sales make any auto asset an extremely tough sell, and Asian automakers have also been forced to scale back production and investment.” But it doesn’t keep them from trying. According to Reuters, Ford has reached out to several Asian companies including Hyundai, SAIC, Geely and Chongqing Changan Auto, about its Volvo brand.
Executives of Kia, led by Kia President Eui-sun Chung, have had discussions with GM over the Saab premium brand.
Last year, Chrysler talked to companies including Renault-Nissan and Hyundai about its Jeep brand or other assets before reaching a pending deal with Italy’s Fiat.
GM and Ford say they have had contact with potential bidders for Saab and Volvo, respectively, but have declined further comment.
In addition to Saab, GM is trying to sell its Hummer SUV line and is reviewing its Saturn brand. Chrysler claims it has three bids for its Viper sports car business.
Reuters: “The wide-ranging talks between Detroit automakers and their Asian counterparts show how the balance of financial power has shifted in the industry over the past decade.”
Things got so bad that Chinese companies may even get what they want for a price every Chinese company would love: “With private equity firms in retreat, analyst say the industry’s distress has opened the way for more transactions that could involve little or no cash,” says Reuters, reminding the world of the deal between Chrysler and Fiat.
Chery is the company which signed a contract with Bricklin and his associates, the man who initially brought in Subaru cars, then started his own car company, then later brought in the Yugo. Then Chery simply walked away from a signed contract to go in with DaimlerChrysler, which has now unraveled.
Ford needs to know that unless Chery shows up with the money, talks are only talks (and as we say in America, talk is cheap).
In the meanwhile, Bricklin – which had assisted Chery in many ways – is left out in the cold. Business practices like the ones they indulge in do no good for Chinese companies in the world of public opinion.
Not all Chinese companies are like this any more than all American or European companies are like this, I might add.
Perhaps Chery executives were just naive with Chrysler and hopefully have learned. Doesn’t help Bricklin and the people who backed him, though, does it?
“Chinese” Cherry? Really?
Brainwashing children with stereotypes, one “funny face” at a time. No wonder why the resurgence in “chink” face is so popular in the media… Et Tu, TTAC?
The face of the Peoples Republic of Poison should be the skull and cross-bones!!
Brainwashing children with stereotypes, one “funny face” at a time. No wonder why the resurgence in “chink” face is so popular in the media… Et Tu, TTAC?
I think this is more social commentary, much like images of a Blackface crooner from the early part of the last century, or the Arabian Nights caricatures of south Asians in, say, British children’s books from the same period. Or the recent New Yorker cartoon depicting Barack Obama as an Al Quaeda loyalist.**
Or like, say, the image of a pregnant woman drinking and smoking in Mad Men. The anachronism is supposed to be shocking.
It’s so blatantly racist that the only people who could possibly miss that point are already well-marinated in bigotry.
** I was so ashamed of fellow lefties who were offended by that. You’d think they wouldn’t recognize satire if it attacked them with a chainsaw.
The anachronism is supposed to be shocking.
The “koolaid” packet may be from a different era but there is NOTHING anachronistic about this; Miley Cyrus, several Spanish Olympic teams; choose your poison.
Boy, google ads does some strange stuff. This article brings up ads from chnlove.com, a Chinese mail order bride type site, surrounding it on my screen. Downright surreal.
hahaha, how delightfully politically incorrect. I love it.
I’m of Chinese heritage and I’m not offended. I use to drink funny face drink mixes as a child in the late 60‘s or early 70‘s. It was a different time. How did you come up with that image, did you drink it as a child too? My old boss says the selection of images on this site to make a point is outstanding.
The context here and in the linked articles from another poster is that nobody should be offended because this came from the country that invented “Jackass”.
Used to be, only the French and the Arabs hated us, them were the good old days.
Why am I getting Google ads about single Chinese women?
What, no Photoshop of jailbait?
Getting offended (for me) is a completely emotional and irrational reaction. I can’t always explain when/why it happens, but this didn’t hit that tripwire. I found it amusing as well.
I’m getting ads for remanufactured ECMs and ECUs. Where are MY ads for piao liang xiao xies?
Now I’m getting offended.
On a more serious note, it’s a sad sign of times that people get their knickers in a knot over a picture of a Pillsbury fizz drink mix, while the firesale of American brands to the lowest bidder receives nary a mention, good or bad. Shows where our priorities are.
Disclosure: The author lives in China, as the only lao wei in an otherwise true and true Chinese setup, and he is married to a Japanese wife (eat your heart out.) The author reserves the right to further non-PC remarks and pictures.
When the United Snakes of America can’t compete anymore on the global car market, its apologists like Herr Schmitt resort to racist caricatures like that picture above.
Typically, Herr Schmitt plays the PC card to cover his ass. Whining about “political correctness” is the standard propaganda phrase that White boys trot out when they don’t have an argument.
Pathetic.
But that’s to be expected from these Proud Amurikans.
And if American corporations are being sold to the lowest bidder, too damn bad.
That’s Capitalism. Survival of the fittest.
I guarantee you these same Americans weren’t shedding a tear when American vultures… sorry… corporations were going around the world buying up entire industries for pennies on the dollar like after the 1997 Asian financial crisis.
Or where were these hypocritical American nationalists when US “Free Market” parasites were demanding that developing nations (including China) privatize their industry … to be bought by American corporations all in the name of “economic reform” and capitalism?
What’s good for the goose is good for the gander.
Americans love to dish it out, but when they get a taste of their own economic medicine, they cry like a typical White prison bitch.
Here’s a big box of tissue for your American Pity Party, Bertel.
Maybe, the poor little helpless American auto industry needs another trillion dollar US government bailout–just like Wall Street. LOL.
All these issues, you will never hear Americans acknowledge, because they don’t have the guts or balls to do so.
It ain’t Patriotically Correct, after all, to question the self-styled Land of the Free and its Free Market hypocrisy.
@crackerkilla: Herr Schmitt is neither American, nor is he a racist. He also reminds you of the no flaming policy.
So….are we going to see a replay of Longbridge being taken apart and carried off to the other end of the world one piece at a time? I thought about this scenario in the context of GM and figured “probably not”. It’s probably more advantageous of Chinese automakers to build cars either at home or in Mexico and ship them into the US. Yeah, you have factories set up in the US, but most are firmly in UAW turf and who knows what strings the US government might attach on the entire venture?
Meanwhile, people keep joking about the possibility of Wal-Mart selling chinese-made cars for literally pennies on the dollar, while hinting that they wished they could buy cars the same way they buy appliances. It seems far fetched, but you might see some automotive metal that’s actually for sale in the automotive department of your local Wally World. Stranger things have happened.
@John Williams: The likely first scenario is that the Chinese manufacturers will use the Western brand to sell cars made in China, or, as you said, assembled in lower wage countries like Mexico. There is a lot of first rate production capability in China, brought in by the joint ventures, that is at par with Western production. Even at the risk of getting flamed, I have seen Chinese manufacturing sites at JVs with European or Japanese companies that exceed U.S. sites, simply because they are using the latest machinery and are unencumbered by the fight of the UAW against armies of robots. With these factories, there is no need to break down an assembly line somewhere, crate it up and ship it to China. That is ancient history. The design and tooling of a new car can be – for all intents and purposes – sent via e-mail (or more secure ways of data exchange.) That’s why more and more cars are made in China a year or even months later than their introduction in Europe. The cars made in China that way – virtually identical to their western or Japanese counterparts – could be immediately sold abroad. This is currently prohibited through JV contracts. (Actually, some VWs made in China are sold in Australia and NZ on a trial basis, and nobody notices.) If the brand is owned, the export prohibition falls.
On the Wal-Mart angle, there are indeed indications that for instance BYD plans to sell their cars through Costco.
For any future article regarding Tata, there’s an “Injun Orange” flavor out there in Googleland also.
:-)
Looks like Chinese Cherry “evolved” into “Choo-Choo Cherry” to be more “PC” – I wonder if Pillsbury realized that the new moniker could offend hyper-sensitive Koreans as well…
Completely off-topic, but that photo threw me into “wayback mode”.
John Williams: Sears tried this with a rebadged Kaiser Henry j back in the 50s. The car used Allstate [Sears branded automotive]parts: batteries,tires, etc.and was sold in Sears stores.
Maybe the time has come.Just hope they don’t try to sell automobiles like they do electronics though ; “For the last %##$^&%*& time: I don’t want the extended warranty !!!!!!”
Bertell:
True that about the niceness of some Chinese factories. My company has 4 plants in Wuxi, and some of them are nice enought to eat off the floors. New equipment, efficiency, cleanliness, error-proofing, etc all as good as (and better than some) our US operations. For the record, I’m based in Shanghai.