There are increasing possibilities that GM will be owned by two governments: The American and the Chinese. After a lot of rumor and innuendo, Hu Maoyuan, Chairman of China’s government-backed SAIC went on record today and said he does not rule out the possibility of participating in GM’s IPO. That according to Reuters.
Reuters had heard in September that SAIC had told GM to send them the prospectus. Now, if Reuter’s sources are right, SAIC has expressed an interest in acquiring a “single digit” share in GM. Well, it’s a start.
SAIC’s Chairman Hu Maoyuan had only the warmest words for his joint venture partner: “We are positive on GM we believe the restructuring is very good for GM. We can see that it is moving to a healthy direction of development,” told reporters. “We will study and pay close attention to it, and yes, this is such a big IPO, and GM is moving to a very positive direction. I believe demand in the U.S. will pick up as the economy recovers. We are positive on GM.” SAIC has a vital interest in the wellbeing of GM. Together, they make more cars in China than GM in the U.S.A.
And they have the money: SAIC said this week it expects net profit for the first nine months of the year to grow by at least 140 percent from a year earlier on strong vehicle demand. They also have a flush lender, should cash ever become an issue.
Actually, it’s an interesting start. GM owns 49 percent of the China JV (they used to own 50 percent, they sold the 1 percent for bupkis). Now assume they end up owning 9 percent of GM that owns 49 percent of the Chinese JV. Get my drift?
Welcome to the end of GM as an American company. Any sizable Chinese control will be the death of GM in North America. Not that it matters much anyway since China is the future of the company. But it will suck for the UAW and CAW and our jobs and industrial base.
China’s got a great thing going here.
#1 force American politicians to weaken the trade laws so that all OUR jobs are shipped over there, along with our factories so we can’t work anymore.
#2 Make the stores carry nothing but Chinese made garbage that we’ll have to keep rebuying every other week. Stuff made by their slave labor.
#3 use our transferred wealth to turn around and BUY OUT OUR COMPANIES.
Sometimes I applaud American citzens who get sick of the scum in office to actually DO SOMETHING ABOUT IT.
There’s an argument to be made that business partners who are as interdependent as GM and SAIC should own stakes in one another. SAIC’s stake in GM is unlikely to come within a country mile of “control” — think 5% or thereabouts. From SAIC’s point of view, it’s a good investment. They may actually be right.
Think of the camel’s nose under the tent, eventually the rest of the camel follows. China does not take stakes in anything without a plan to control their so-called partners.
@MikeAR: I’ve found that the real world is rarely as simplistic as those in talk radio (etc.) would have us believe. I don’t think, for example, that you can speak of the world’s most populous country as a single actor and expect to be taken very seriously.
Wrong there, for all practical purposes, it is a single actor. Remember, China is controlled by a small group of mostly old kleptocrats. They act as a whole for their benefit and the continuation of their system. You try and learn more about the world before you post.
The paper you posted here about 1 year ago will become prophetic, as prophesy fulfilled.
“There are increasing possibilities that GM will be owned by two government: The American and the Chinese.”
If said event occurs the resultant owner’s manuals of the auto output should make for interesting reading.
Those who opposed the bailout and wanted GM to disappear now cry foul that a small part of GM MAY be owned by people other than Americans. What do you want no GM or GM employing Americans partially owned by non-Americans? Also those who opposed the bailout want “their” money back. Well that involves people buying shares, so again what do you want? Bust should I expect consistency from talk radio listeners??
Don’t assume anything, I never listen to talk radio and you ought to give up that old bogeyman. In your little world talk radio is a code for stupid and untinking. I resent that greatly. You are the one who needs to look around and diversify your reading and listening so that you can get out of your knee-jerk echo chamber.
If GM had gone into liquidation (instead of reorganization), GM’s assets would likely already be owned by the Chinese.
Maybe, even probably so, but at least the rule of law would be intact. I couldn’t care less if GM was Chinese owned, they aren’t a company who I will ever buy from again anyway. In fact I think it would be great, the UAW would be left out in the cold as GM was shut down in the US.
+1000 MikeAR. That’s exactly how things should have played out!
The ChiComs would have all the Buicks they could stand, while Americans would be spared the possibility of ever wasting their hard-earned money on a low-quality GM product again. Taxpayers would have been spared tens of billions of dollars, and the UAW would be dead and buried.
Oh, to ponder the possibilities.
Now might be a good time to consider establishing:
1. Class-B shares with super-voting control (like the Ford Family uses to control FMC, i.e. something like 10% of the equity controls 40% of the votes);
2. A poison-pill provision in the GM Corporate CHarter.
Did no one see this coming? Remember the brouhah when the Japanese bought Rockefeller Center? Many Americans ’bout had a cow, but then quickly forgot, and, remarkably, life went on.
As far as the Chinese wanting their “system” to continue, that’s rotting from the inside out and that will take care of itself as well. The U.S. is no different, but America’s time at the top-of-the-heap is all but over, unless they want to nuke everyone, but that’s not going to happen, either.
The modern world is more inter-connected than at any time in history, and no one stands alone. Meanwhile, the sun goes on shining, the earth dutifully continues on its merry orbit around the sun, no matter what man and nations do.
Chrysler / Fiat, GM / SAIC. All right, Ford, you’re next!
obbop, welcome back!
If SAIC wants to spend good money on our old crap, I say let them. Maybe we have some more junk in the attic we can dump on them?
You mean “junk in the trunk”, don’t you?
Any suggestions?
Eventually Ford, too. Boeing? Colt? After all, 99.5% of all insurgents prefer the AK-47 over their M-16 and its variants. All defense contractors? Remember, America’s weapons are too expensive and needlessly complicated. Might as well sell ’em off and import Chinese weapons for half the price. Fight apples with apples.
Not a pretty picture, eh?
Yep. We do better making new ventures anyway. Attempting to preserve the positions of legacy companies is a fool’s errand, as they’re about as dynamic and useful as “legacy” college admissions and tolerated for the same stupid reasons.
China is not buying the prize US company GM was in the 1950’s, it is buying a much thinned out shell.
It’s akin to buying Polaroid or Xerox or rights to the Plymouth trademark.
When GM dropped the Pontiac and Oldsmobile name plates, it was admitting there was much less beef on the bun.
Rats! I just bought stock in some company that makes machines that use magnetic tape to record TV programs and play movies!
“There are increasing possibilities that GM will be owned by two governments: The American and the Chinese”.
Do you not know that GM is also owned by the Canadian and Ontario Government as well? Much to my chagrin.
This isn’t even news. This was predicted back when the editors of this site first posed the question; “Who would want to own a piece of GM?”