GM gives SAIC control of it's China operations

[PT1]

NEW YORK (AFP) – US auto giant General Motors has reached a deal to hand control of its joint venture with China's SAIC Motor Corp to the Shanghai-based car maker, the New York Times said Thursday.

SAIC said Thursday its shares had been suspended from trading pending an announcement on a "major assets restructuring."

The company's board of directors were to meet next Wednesday to discuss the planned restructuring, SAIC said in a statement to the Shanghai Stock Exchange.

A SAIC spokeswoman told AFP trading was suspended for a "share transfer."

According to the Times, the troubled GM will sell SAIC 1.0 percent of its stake in their joint venture which would then give China's largest car maker a 51 percent share of the company.

In return, GM will keep equal voting rights with SAIC and reserve the right to buy back the 1.0 percent stake at a later stage.

There was no immediate comment from General Motors on the report, and it was not known how much the sale would raise for the US giant which is undergoing a major restructuring.

But one person close to GM told the Times: "It's a big deal, it's a good deal."

Auto expert Michael Dunne told the daily the move would impact on GM's influence in the huge Chinese car market.

"Dropping below the 50-50 partnership is huge. There may be a way to preserve voting rights, but symbolically, it is a step down," Dunne said.

SAIC shares, which closed down 0.04 percent at 25.53 yuan (3.8 dollars) on Wednesday, will resume trading after the plan is announced, SAIC said, without elaborating.

 

[hone eagle]

Could this have been 'the last straw' for Friz Henderson,lost the argument then his job?

 

[PT1]

Originally Posted By: hone eagle
Could this have been 'the last straw' for Friz Henderson,lost the argument then his job?


Hmmm...seems quite possible. But it leaves the door open for SAIC to completely take over that portion of GM if the US domestic goes belly up. So they can acquire the growth part of GM without taking the huge loss of having to acquire the US operations.

 

[Papa Bear]

Scary ...

 

[mechanicx]

I'm not exactly clear on how it works but doesn't China basically own these American operations that set up in China anyway? Something about the requirements where they have to continue paying leases and can't take the profits out of China or something like that.

 

[Shannow]

SK do stuff like that.

Want to build a power station, then you'll do it in our factories...who then rip off the technology, and claim to have built X-Many power stations.

But it's OK 'cause its S.K

 

[benjamming]

Shannow,

Just to be clear, I assume that SK means South Korea?

 

[PT1]

Originally Posted By: mechanicx
I'm not exactly clear on how it works but doesn't China basically own these American operations that set up in China anyway? Something about the requirements where they have to continue paying leases and can't take the profits out of China or something like that.


It means they have controlling interest....they do whatever they want..GM is now just like a horse fly on a horse's butt along for the ride. Sweet deal for the Chinese. Soon they will own it all. As GM becomes more cash starved they will buy more shares with the profit they make selling GM cars in China....what irony...how sad.

 

[hone eagle]

Not sad just business.
If the Chinese get control will they offer stock?
Who will buy it?
If americans buy the IPO then its all good,if it makes money gooder
The danger is if they move jobs out of the country,but big companies tend to do that anyway.
So what if they buy GM ,be a stock holder (or not) ,if you are a worker you are at themersy of the whims of the market place and decisions by big shots and gov, nothing really new there.