Chinese Automakers may buy GM and Chrysler (lending, corporation, bankrupt)
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Chinese automakers may buy troubled Unites States Automakers General Motors and Chrysler, China’s 21st Century Business Herald, Chinese automaker SAIC, Dongfeng
Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports. LINK A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million]. This newspaper 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.
The editors of 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 carmakers 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."
We are so hurting for money that the gov't may let them do it.
Heck..the gov't is asking the Arab states for money..WE ARE BROKE folks !!!
US seeks 300 billion dlrs from Gulf states: report - Yahoo! News (http://news.yahoo.com/s/afp/20081120/bs_afp/financeeconomyusgulf_081120072928 - broken link)
And if I recall.. many years ago.. there was talk about not letting foreigners buy American... now look at it... in order to get out of this mess we have to go to the foreigners...
Interesting if it's true. I tell you what, I'd rather buy a vehicle from a bankrupt/bailed out GM than a Chinese owned GM... even if it saved U.S. jobs in the short run. I'm on my 3rd GM vehicle and I'm willing to look past the bankruptcy and even a bail out but the ultimate deal breaker is being owned by the Chinese... I'd rather buy a used, old, American made rust bucket...
We are so hurting for money that the gov't may let them do it.
Heck..the gov't is asking the Arab states for money..WE ARE BROKE folks !!!
US seeks 300 billion dlrs from Gulf states: report - Yahoo! News (http://news.yahoo.com/s/afp/20081120/bs_afp/financeeconomyusgulf_081120072928 - broken link)
maybe it is because of this:
Well, the buzz on the street says China's top most officials have ordered all over night lending to American Banks HALTED!
Whilst I can understand your dismay at 3 US institutions falling into foreign ownership, remember US companies bought out plenty of overseas companies when the shoe was on the other foot. Back in the hey day. It's called Capitalism. The free market.
What would you rather? - the tax payer foot the bill and they come back and ask for another bailout in 6 months? Because they will - just like AIG.
All 3 CEOs took private jets to their congress meeting so they were sure leading by example when it comes to tightening the belt. No sympathy for them at all.
I just hope that the workers end up with a way to put food on their table. If a Chinese buy out is the best way for that to happen so be it.
... remember US companies bought out plenty of overseas companies when the shoe was on the other foot. Back in the hey day.
I just hope that the workers end up with a way to put food on their table. If a Chinese buy out is the best way for that to happen so be it.
I've written this before in other threads, it's worth repeating here: sooner or later, probably sooner, the average Chinese, Brazilian et al worker will be funding the pensions and health care of the average aging American and European worker, with all that implies for the standard of living.
On top, except for the few US elite that have integrated with the Chinese ruling class, the US ruling class will become second rank to the Chinese, and the average US worker will be much lower on the chain than in the golden age of the 1950s-1990s. Shoe's on the other foot indeed.
I know a lot of grade schools in my town are teaching Chinese. Do you remember when eastern European countries used to teach their children Russian?
Back in the 1970s, Arnold Toynbee, the great British historian of civilizations, predicted the rise of the sleeping giant. Looks like history is proving him right.
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