It’s been year since we blogged Chinese press reports that China’s SAIC might buy GM. It turned out to be one of many Chinese rumors that followed. We became the target of hate mongering—some idiots even accused us of driving down GM’s and Chrysler’s stock price. Duh, buyout rumors usually drive prices up. At the time, the GM stock was worth at least a little money: the market cap of GM was less than Mattel. Months later, the stock was worthless. GM and Chrysler went bankrupt. Instead of the Chinese owning GM and Chrysler, the American taxpayer ended up holding the barf bag.
It took a year and six days to dawn on CNN Money that a Chinese-owned GM might not be such an outlandish idea after all. “A Chinese-owned GM, it could happen,” headlines CNN Money today.
“GM could one day be Chinese owned. A shocking concept for the ultimate all-American company, but one some auto industry experts say isn’t too far-fetched.”
To prove their point, CNN trots out the notorious David Cole, who they identify as the chairman of the Center for Automotive Research, “a Michigan think tank.” Cole reveals to an aghast audience: “I can tell you right now the Chinese are shopping heavily in the U.S. auto sector.”
Two items of note:
One, Cole must have been under a rock. Since I’ve been writing for TTAC, the Chinese have been shopping in the U.S. auto sector more eagerly than Euro-trash at Macy’s. However, as amply chronicled by TTAC, nothing has come out of it. The China card has been played in every transaction, from Opel to Volvo, and nothing, nada, mei shen mo has happened. Even the Tengzhong-Hummer deal is still up in the air. In the meantime, the Chinese are packing up and leaving Mexico.
Two, TTAC readers know better than CNN. That “Michigan think tank” is nothing else than an industry and union funded organization, with the sole intent to separate the tax payers from their hard-earned money and to funnel it into bailouts. David Cole has been unmasked again and again as a mouthpiece of the UAW and GM, his analysis has been characterized by the dearly departed Robert Farago as “wildly exaggerated predictions of plague, pestilence and famine.” Apparently, this went right over the heads of CNN.
According to CNN, “Cole said such a deal isn’t imminent and wouldn’t happen until GM starts selling shares to the public, likely a year or more from now. But he says buying GM would be a major opportunity for the nascent Chinese auto industry.”
Let’s set aside the notion that Fitch just said that GM won’t be ready to sell shares to the public anytime soon. In its current financial state, GM would be delisted even from the pink sheets.
What is Cole up to? Is he talking up a stock that may be listed or not, God knows when? Or is he simply using the Chinese boogiemen to shake loose some additional taxpayers’ money for the supporters of his Michigan think tank? Which appears to have the depth of a puddle.
To make the slant-eyed boogiemen even scarier, CNN found Kim Korth, president of the auto consultancy IRN. She’s one of the few who thinks that GM’s dismal results “deserve to be applauded.” As far as the Chinese buying GM goes, Corth fears “there would be a national outcry in that regard.”
We beg to differ. If anyone, Chinese or Martian, would buy GM at a price that gets the taxpayers’ money back, there would be a tickertape parade for the unlucky buyer.
Never mind. It’s not going to happen. Clueless Cole says “the Chinese have a lot of our money and they’re looking to invest it.” Wrong. The US has more than a trillion $ of China’s money, already invested in US government debt. China is worried about the falling dollar and the creditworthiness of its debtor. They don’t need shakier investments.
Be on the lookout for more of these announcements. And watch your wallets.