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| Chinese Automakers May Buy GM and Chrysler |
| 2008-11-20 |
| Chinese car makers SAIC and Dongfeng have plans to acquire GM and Chrysler, China's 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million.] The paper cites a senior official of China's Ministry of Industry and Information Technology-- the state regulator of China's auto industry-- who dropped the hint that "the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers." These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that? A take-over of a large overseas auto maker would fit perfectly into China's plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he's in deep trouble. At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China's more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world's markets with accepted brands, and proven technology. 21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: "It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis." Deloitte & Touche sees a trend: "Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global car makers such as GM and Chrysler." The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. "In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng's possible acquisition of troubled GM or Chrysler." Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China's largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005. Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China's Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means "East Wind") was founded at the behest of Mao Zedong himself in 1968. |
| Posted by:tipper |
| #21 Maybe the Pelosi GTxi SS/Rt Sport Edition from Congressional Motors might be a better idea. |
| Posted by: tipper 2008-11-20 19:48 |
| #20 This is just a scare tactic after Congress made the big three look bad. "Help us or we'll sell to the Chinese". Screw the big three and let them, their corperate jets, kickbacks, bonuses, and perks go. It will reset-read kill- the UAW and China will get screwed trying to make a car that meets our safety requirements. Bring popcorn, this will get fun! |
| Posted by: 49 Pan 2008-11-20 18:37 |
| #19 The Chinese are awash in trade surplus American $ that are burning a hole in their pocket right now. It's not like they need them to buy oil any more. They might as well trade in all those S&H green stamps for a couple of run-down old-school companies. They'd get their foot in the door, AND as legitimate businessmen, could lobby Washington much easier. Hey, it beats sitting on a mattress stuffed with greenbacks. |
| Posted by: Minister of funny walks 2008-11-20 18:01 |
| #18 As of January 20th, 2009 Obama's rehashing of the Clinton and Carter eras, will open the doors even wider to Red China's business agenda to dominate American industry. |
| Posted by: Mark Espinola 2008-11-20 15:49 |
| #17 any export restrictions on the tech can easily be over come with the appropriate campaign contributions... just like in 94-96... |
| Posted by: Abu do you love 2008-11-20 15:33 |
| #16 and lead paint, borgboy..... |
| Posted by: Cornsilk Blondie 2008-11-20 15:22 |
| #15 Then we will have "Dollar Store" quality cars for sell... |
| Posted by: borgboy 2008-11-20 15:12 |
| #14 Isn't there some sort of technology transfer restrictions in place that would ( should) prevent the Chicomms from actually acquiring these? i am under the impression that the DoS controls this via EAR processes. |
| Posted by: USN, Ret. 2008-11-20 14:53 |
| #13 Iron Rice Bowl |
| Posted by: DK70 the Scantily Clad7177 2008-11-20 13:14 |
| #12 It might be good for the world if the Chinese got ahold of the flexifuel tech and started exporting it to the third world. Seems some of the folks in our own congress are a bit to oil centric in their thinking. |
| Posted by: rjschwarz 2008-11-20 10:28 |
| #11 This will bleed China dry faster than putting Aircraft carriers out to see. Buu-bye money. Now if they threw the union out the Chinese might have a chance at profit.... |
| Posted by: DarthVader 2008-11-20 09:52 |
| #10 Does this include their pension commitments? |
| Posted by: Spot 2008-11-20 09:38 |
| #9 The UAW will then get what they want and what they deserve. Socialism and $100/month wages. |
| Posted by: ed 2008-11-20 08:50 |
| #8 Kissinger Associates' most important clients. ... Dresser Industries, Bechtel, AT&T, General Motors.... First they get the bailout, THEN they go CHICOM. Thank you Henry. |
| Posted by: Besoeker 2008-11-20 08:27 |
| #7 As if GM's vehicles weren't sh*tty enough already. |
| Posted by: bigjim-ky 2008-11-20 08:17 |
| #6 Chicomms and the UAW. A match made in heaven, I think they deserve each other. |
| Posted by: bigjim-ky 2008-11-20 08:10 |
| #5 Well, it may be one approach to reducing long term Medicare and Social Security costs. Matched to an increase stimulation in the morturary business and employment. |
| Posted by: Procopius2k 2008-11-20 07:27 |
| #4 They've got two choices; show up with deep pockets and finance the BK or show up with shallow pockets and be dragged along. Worthy of the Onion. |
| Posted by: Nimble Spemble 2008-11-20 07:05 |
| #3 Expect major culture shock as Chinese managers and engineers crash headlong into American safety and quality regulations... which are actually and severely enforced. |
| Posted by: trailing wife 2008-11-20 06:26 |
| #2 I was reluctant to buy GM, Ford, or Chrysler when American-owned. I'll NEVER buy one if the Chinese own 'em! |
| Posted by: Scooter McGruder 2008-11-20 01:24 |
| #1 Har har! The union heads had better head for the hills given the way the Chinese negotiate! |
| Posted by: gorb 2008-11-20 01:07 |