Chinese Plan to Buy Stake in GM

[Frank Booth]

Source: Wall Street Journal

NEW YORK—In a sign of the changing fortunes of the world's top two economies, China's biggest auto maker, SAIC Motor Corp., is negotiating to acquire a stake of about 1% in General Motors Co. worth about $500 million, according to a person familiar with the matter.

The U.S. auto maker also is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia. Combined, the sales would give foreign investors roughly 16% of the shares to be sold next week under an initial public offering of stock, and give them a stake of some 4% in the Detroit auto maker. GM declined to comment on the investment talks.

The issue of overseas investors buying GM shares in the company's IPO has been a sensitive one for the U.S. government, which plans to reduce its 61% stake in the auto maker to around 35% through the IPO.

The investment in GM by government-owned SAIC would be the latest in string of deals giving Chinese companies stakes in big-name Western companies. In 2007. China's sovereign wealth fund, China Investment Corp. took a 9.9% stake in securities firm Morgan Stanley. Pacific Century Motors recently took over GM's former steering unit, now called Nexteer, and Shougang Corp. bought Delphi Corp.'s brake unit.

Read more: http://online.wsj.com/article/SB10001424052748704865704575610771579286344.html?

[BanzaiBonnie]

1. Is that really a good idea?

[ixion]

2. So what will all those folks who only buy American cars drive?

:rofl:

[ProudDad]

26. Toyotas made in South Carolina ...

The "American" car was history by the late 80s...

[Vinca]

3. Probably a back door move to undercut the market for U.S. cars

with their own products. Let's face it. The Chinese want to keep their people employed. The Americans? Not so much.

[dmallind]

4. Did everyone miss the 1 repeat 1%??

OOHH that's dangerous! Those inscrutable yellow offshore magnets will be able to rename Chevy "Die round eyed scum Cars", introduce the Cadillac tricycle and make every Buick smell like General Tso's chicken with that kind of stake!

[Kolesar]

5. 1%

500 million dollars

Probably is a hedge against the US dollar losing value.

[bossy22]

14. 1% is no where close to the majority share

[Psephos]

18. It's the first appearance of the camel's nose under the tent.

Do you really think they'll stop at 1% if they want more?

Similar incremental approach has been used by the anti-smoking lobby and by MADD over the past 20 years, to great effect.

[sofa king]

25. It could be the beginning of the end for the Chinese.

If the legendary quality and design foresight of GM wears off on the Chinese... they're finished.

Cadillac Cimarron:
http://auto.howstuffworks.com/1980-1989-cadillac3.htm

Chevy Vega:
http://en.wikipedia.org/wiki/Chevrolet_Vega

Pontiac Aztek:
http://en.wikipedia.org/wiki/Pontiac_Aztek

A teaspoon of wine in a gallon of sewage makes sewage. A teaspoon of sewage in a gallon of wine... also makes sewage.

[trof]

6. Gee, maybe they'll give me back my $20,000.

The money I invested in GM 7.5% Senior Notes that they reneged on when they declared bankruptcy.
Yeah, right.
:eyes:

[Historic NY]

7. China account for a major portion of GM sales.1.8 million cars in 2009..

http://www.cbsnews.com/stories/2010/01/04/business/main6052403.shtml

I seems like a small stake even if they manufacture & import somo here.

http://www.leftlanenews.com/gm-to-import-china-made-vehicles-by-2011.html

I guess they figure they have to go where the money is. Ford & Chrysler have overseas operations also. Maybe they can finish off paying the loans.

[ElsewheresDaughter]

8. Rosetta Stone anyone?....

[kentauros]

23. Try Live Mocha. It's free

http://www.livemocha.com

And Mandarin Chinese is one of their choices available, too :D

[panzerfaust]

9. What is good for GM is good for China

To paraphrase

[happygoluckytoyou]

10. too big to fair

[David__77]

16. Oh my...

Just couldn't resist?

[sarcasmo]

11. More reasons to never buy another GM product.

[bossy22]

12. its 1%

the majority of shares will still most likely be held by americans making it an american compnay

[sarcasmo]

13. I don't care if it's .5 percent. Still haven't paid the Government back.

It's hard for me to not buy one because my Dad worked their for 30 plus years. The quality is average at best.

[Vinnie From Indy]

15. What a world! Just a few decades ago Americans were conditioned to HATE communist countries

Now, it seems, our wealthy elite cannot offer up the American middle class fast enough on the altar of profits. They must have figured out that there was far more money to be made by doing business with "godless" communists. Our corporate overlords simply conditioned Americans to replace the evil communists as a group to be deathly afraid of with the evil Muslims in order to keep those defense dollars rolling in. Gotta have a bogeyman don't ya know!

America has gone mad!

[dflprincess]

17. Yet we're still not allowed to travel to Cuba

go figure.

[ProudDad]

27. Probably becuase is Cuba continues on their present path

they have a sustainable future...

We can't have that kind of bad example corrupt the Empire...

[Psephos]

19. 50 million dead Chinese in Mao's communist "reforms"

Stalin was good for 20 million. (Read the Gulag Archipelago for how that worked.)

Pol Pot and the Khmer Rouge were pikers at only 2 million.

Check out this list.

http://www.scaruffi.com/politics/dictat.html

There were reasons enough in the 20th Century to hate a fair number of communist countries.

[KansDem]

22. Right! We feared those godless commies might be marching down MainStreet, USA

...now we buy their goods and services on MainStreet, USA.

I'm beginning to wonder if the "fear commies" hysteria was a part of CorpUSA scam to raid the US Treasury, just like the "fear terrorists" hysteria of today...

[quakerboy]

20. wait a sec.. how does that match up

to all the repubs talking about "government motors" and how bad an investment it is and how no one wants anything to do with it?

[sarcasmo]

21. I am no repub and I want nothing to do with GM and their poor quality vehicles.

[quakerboy]

24. Which is an entirely seperate issue.

Why does China want to buy into GM, even at such a relatively low level, if they are worth nothing?

[sarcasmo]

28. In order to get in the door and take the Corporation over would be my guess.