With GM’s IPO S-1 now set for a Wednesday filing, The General is announcing a joint engine development project with its Chinese partner SAIC, spurring on rumors that the Shanghai-based automaker could buy into GM’s forthcoming IPO. Reuters reports that GM and SAIC have signed an agreement to develop a new range of 1.0-1.5 liter direct-injection, turbocharged engines in the vein of Ford’s EcoBoost mills. The ground-up joint engine development is significant because, as the WSJ [sub] reports
it marks the first time when GM and SAIC – partners for more than a decade already – are going to develop “base” propulsion technology, going a step further than simply integrating existing engine and gearbox technologies into automobiles.
GM has already moved much of its advanced technology development to new Chinese R&D labs, and this attack on Ford’s EcoBoost technology is likely to become a global engine. But what does the ever-increasing cooperation between GM and SAIC (which recently bought out GM’s controlling interest in their Shanghai GM joint venture) portend for the GM IPO?
Sheng Ye, associate research director at Ipsos’ Greater China region consulting, tells Reuters
The GM-SAIC partnership is the most successful one in China’s auto industry. There is a big chance that SAIC may take a stake in GM and bring their relationship to the next level
Another analyst indicates that, regardless of whether SAIC buys into the GM IPO, the two firms have big plans for their joint future, saying
There is no doubt that GM and SAIC may eventually launch small cars globally, but they would most likely focus on the China market to begin with
SAIC responded by saying it would not comment on GM’s IPO until it had a chance to review GM’s filing. But GM is reportedly looking at the option of including preferred shares in its IPO, a move that the WSJ [sub] says could “attract different kinds of investors” and make the Treasury’s exit more easy. It could be that preferred shares will be used as something of a hedge for “cornerstone investors” who GM wants to convince to put down close to $2b on the IPO. With SAIC already controlling GM Shanghai and GM’s Indian business, it would come as no surprise to find the Chinese automaker owning a large chunk of The General once the IPO dust settles.
Not saying it will happen, but it had already occured to my mind that a substantial SAIC buy-in is possible.
Will this still be a “win” for president Goodwrench if the govs stake is sold to the Chinese? At say, 0.20 on the Buck?
Would the UAW find this comforting?
Would it still be “buying American”?
Enquiring minds want to know.
Love & bullets,
Bunter
Being it’s a world market, the question should be, are you buying from an American owned company? Toyota, Honda, and all the others are in the same boat. The big difference is, where does the profit go to? Japan or the USA.
I, for one, believe in buying American…especially now that GM and Ford make vehicles, not just as good but better than the competition!
I feel like this will only further damage GM’s reputation if it happens. The media has already skewed most people’s opinions of Chinese products as junk, and GM is fighting the “Government Motors” label as well. I just don’t see how this is a good thing for GM. I understand from a cost saving stand-point, as I’m sure Chinese engineering is much cheaper than using their US engineers, but from a commercial standpoint it’s going to be a PR disaster.
“The media has already skewed most people’s opinions of Chinese products as junk…”
Just want to point out that between melanine scares, lead paint, and broken cribs, that label is largely justified — media bias or no. With that in mind, China + GM sounds like a marriage made in heaven.
I don’t think GM cares about that (nor really the government, everyone doesn’t want them involved if it’s on thier terms?), to them and probably correctly so, China is the future, I’m not going to go back and look, but I do recall predicting as GM slid into bankruptcy that SAIC would probably end up being one of the majority shareholders and that would be fine. If this all comes down the the treasury being repaid, what companies would have access to the capital to do so (one’s supported by chinese banks i.e. the chinese government), like leveno’s purchase of IBM’s PC business 15 years ago this would have significant meaning to the chinese (governement, people, etc) that we could not understand. Another point, if this was honda and GM developing engines and transmissions would that be ok? or would GM just be knocked b/c they need Honda to do it?
One thing is for sure, if SAIC does end up owning GM, Bertel Schmitt will have multiple orgasms, while Mikey and Silvy will have to go on Prozac.
No problem,as long as the Prozac is covered under my drug plan. To perfectly honest, Mikey couldn’t give a rats a$$ who signs his pension deposit. They could pay me in “Yuan” if they want. The currency conversion might be a little tough,but I will figure it out.
The Chinese owning GM? What koolaid have you been drinking?
Are the “Preferred Shares” the kind that the politicains can’t steal?
No wonder GM is moving to Asia…The Americans are too bratty and weak to be free. This is what happens when you cry like little girls for your politicians to steal from the productive.
I like how “free” and “productive” in your world completely ignores what amounts to indentured servitude.
Chinese partnerships and Chinese stakes will eventually lead to GM being a world car manufacturer with only a minor presence, if any, in the US. Watch market share drop to low single digits when Chinese engineering is combined with union labor. The GM brand won’t recover from that and the new Chinese overlords will sell cars in Asia and maybe Europe if they can.
As far as Mikey’s pension, good luck. When the Chinese shut down US manufacturing they will tell pensioners to go pound sand. If and it’s a big if, the insolvent PBGC takes over the pensions then they will be paid at pennies on the dollar.
And after all this the taxpayers still win’t get their money back.
@ MikeAr..Maybe in your dreams it might work that way,but you, and I both know,it ain’t never gonn’a happen.
Solidarity Forever eh?
You don’t get it do you? The gravy train is almost to the end of the line. The government is running out of other people’s money, consumers won’t be able to keep on buying hideously overpriced vehicles. When GM fails again and it will, your pension will be worth nothing. When I retire if I can, Social Sercurity win’t be there and all these people who work for the government or collect checks from it will be out on the streets because there is no money left.
It must be nice to have your sense of entitlemant and certainty. Does being in a union mean that you have to give up the ability to think for yourself?
Is it just me or are the mosts vocal anti-union people embittered white collar middle managers, railing against union blue collar workers that make 1.5x what they do while completely ignoring upper management that makes 4x, 5x what they do, or CEOs that make 500x?
Regardless, if you can post here from work (as most people, myself included, can) you have a better job environment than a unionized factory worker.
@BDB…No its not just you, I’ve been hearing it for years. I think the word is “envy” the bitterness is just part of the package.
BTW MikeAR I’ve been thinking for myself for quite some time now,and believe it, or not, I’m quite sucessfull at it.
Hey Mikey, since you worked at Oshawa (in the ’80s IIRC) did you help make my late grandma’s ’80s Buick Century (the A-Body)? That was a though little car, went to 200k with only minor problems.
Ex., it got rear-ended by Ford Probe in the middle of its lifespan, the front of the Probe folded like an accordion but the Century only had some bumper damage!
Anyway I don’t envy unionized blue collar workers. Why? Because I ‘d hate to do that kind of work, even if the benefits and pay were slightly better. I know from secondhand experience that it may be unskilled, but it is difficult in other ways.
@BDB… I worked B side untill 85, then went to Pontiac 6000,and Cutless Ciera. “A “side started the “W” Buick 2 dr in 87,I don’t think we ran the “A” Buick ever.
Your right its tough work.
Back in the late 70s I once tried to train a six foot, 200 lb young man to install gas tanks on B Chev/Pont. He could do the job but he couldn’t maintain the sixty job an hour pace. It was the third job that he tried and he coudn’t do it. He was still under probation,and management canned him.
The next trainee was a 120 lb, 30 something single mom. Whithin 2 hours she could do the job by herself. I read her name in the retirement page of the union paper a couple of months ago. She was 64 and put two kids through university,I think she earned her pension eh?
Of course,it would make the likes of “MikeAR” or AaronH very happy if she was to lose it. I guess that wouldn’t bother them.
The GM Defiance, OH foundary where my Grandfather worked from the late 50s till the mid 70s (cancer took him in 1978) was well known for chewing and spitting out farm boys at an alarming rate because of the hot, dirty, choking work. My grandfather had a job pouring engine blocks. He worked 30min on, 30min off because of the intense heat, he was a local boy, but many of his fellow UAW members were from KY and TN orginally. They heard about the men needed in the plant, headed up the highway, and found work. When asked by the locals how they could stand the work, the reply usually was, “It’s a dang slight easier than coal mining.”
Certainly a tough job. Saying it’s better than coal mining doesn’t give it much endorsement.
I will agree that the work truly is awful and that it’s really not appreciated by many people.
I did a summer in Brampton as a student and it sucked. Not quite as much as working in a fibreglass body shop did (dear lord was that a horrible job) but it wasn’t fun.
What always got me is people who work white collar and complain about having had to work to get their degree and put in X amount of unpaid time while untrained blue collar guys get paid more and see better benefits. I worked really hard to get my degrees. I put in a lot of overtime. I don’t, for a second, think I have it harder than someone working on the floor.
Put it this way: the absolute worst I’ve ever done (about eighty hours straight to keep a datacentre running during the 2003 blackout) would land me sleep deprivation and maybe mild burnout. If you work white collar, chances are you’ll never appreciate what “repetitive strain injury” really is.
My white collar guys who complain so bitterly might want to spend a little more time looking at the C-suite swingers pulling down orders of magnitude more than average, rather than the blue-collar folk making about the same.
Why do we keep enrichening the Chinese at the expense of our fellow Americans?
It bugs me to no end to think how much we have taught the Chinese about manufacturing at the expense of our own factories and our own employment numbers.
Admittedly we’ve done this to ourselves by demanding lower prices and making boring unimaginative products while the import guys come up with some interesting stuff. See the old American TV brands in the 80s while the Japanese were sending some really feature packed stuff.