By on December 4, 2009

Made by Cami: The 2010 Terrain. Picture courtesy cami.ca

What, GM actually has the money to BUY companies? Suzuki says they want sell the whole shebang in their 50:50 joint venture in Canada to their JV partner, General Motors, says the Nikkei [sub]. That would be the end of a more than 20-year marriage.

Interestingly, Suzuki says they will sell their 50 percent stake in the Ontario-based Cami Automotive Inc. to GM, because GM asked them to. (Of course, there must have been more than a short “Sumimasen, we‘d like our shares back.” “Hai, wakarimashita!”)

According to the Nikkei, the timing of the share sale hasn’t been decided, and mum’s the word on how much GM will shell out for Cami.

Question to the Best & Brightest: Why?

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19 Comments on “GM Buys Out Suzuki In Canada...”


  • avatar
    superbadd75

    I doubt GM wants it as much as they are getting it all to themselves, like it or not. Suzuki doesn’t sell the XL-7 anymore (did they ever really?), and the new crossovers for GM are expected to do far better than the old Theta POSs. So Suzuki wants out, GM could probably use the extra capacity for themselves, it just works.

  • avatar
    Lokki

    Here’s my pitch:

    Suzuki is valuable to GM in the small car business.  They’ve been the producers of North-American built small cars for GM.  

    GM has pledged to build small cars in North America; if I recall the specifics  they have promised the UAW that they will build a new plant (in Ohio?) dedicated to domestically built small cars.  (Correct me please, if I’ve gotten this wrong).

    Building (or refurbishing and ramping up) this plant is probably going to take  2 or 3 years, even if they start today.  Sales wouldn’t show up for 4 years minimum.  GM needs good numbers on domestic small car production a lot sooner than that. They have the press and the Obama administration to feed.

    So:  you buy a Suzuki plant, and slap Chevy labels on the cars and use them statistically as domestic/North American built small cars. 

    It’s not like they’ve never put their labels on somebody else’s cars before.
    Make sense?  

  • avatar
    Mr Carpenter

    It would make absolutely perfect sense, Lokki, except for one little fly in the ointment that you didn’t know about. 

    Suzuki haven’t built any small cars in the Cami plant near Ingersoll, Ontario for years.  They’ve been building their GM-platform based XL-7 SUV there in tiny numbers of late, and GM have been churning out SUV’s there. 

    But you may have a good point in that the plant is capable of building small cars and has done so in the past (as well as very small SUVs, also with both Suzuki and Chevy badges).   But it is largely what US companies and US car company apologists erroneously claim that the Hyundai plant in Montgomery Alabama is - Ingersoll is just an assembly plant for mostly foreign and domestic “bits” to be put together. 

    Conversely, Hyundai’s Montgomery, Alabama plant (and Subaru’s Indiana plant and Toyota’s plants and Nissan’s plants) are manufacturing facilities. 

  • avatar
    Extra Credit

    The one piece of information that is missing is whether GM asked to buy the shares in CAMI before or after Suzuki advised GM that the shares were to be offered for sale.  Perhaps Suzuki has found a new (better?) dance partner that is not tolerant of Suzuki’s past loves and requires complete fidelity. 

  • avatar
    FishTank

    Where does that leave us getting the awesome Euro Suzuki Swift? Wasn’t that supposed to be here by now?

  • avatar
    psarhjinian

    Because GM finally has a decent small crossover that’s selling really well and they need the production capacity, while Suzuki’s similar offering built at the same plant is a dead car rolling.

  • avatar
    Detroit-Iron

     
    US Taxpayer (with a little help from the Canadian Taxpayer) Buys Out Suzuki In Canada
    Corrected.

  • avatar

    Just for the sake of getting that production line at Ingersoll I would imagine.  We can’t keep Terrains/Equinox’s on the lot and the wait times are up there.  This would go a long way to fix that issue, means more on the road, more visibility etc etc.

  • avatar
    Ingvar

    As GM has sold its share in Suzuki, this just reinforces the split. Either they have plans of their own for that factory, or they are going to liquidate it. With excess capacity, Suzuki is now a competitor, there’s no need for a JV plant that doesn’t benefit GM. Look out for lay offs and closings in the future.

  • avatar
    psarhjinian

    An interesting side-note about the CAMI plant: across the street from it is a tattered and now closed Suzuki dealership.  That says it all about Suzuki in North America, really: if you can’t float a dealership across the street from the plant that makes your primary product for this continent’s market, you’ve got real problems.
     
    GM does something similar: you’d think that, with the Camaro being built in Oshawa and it’s being a major “image” car for GM that they’d put a picture of it up at GM Canada’s headquarters; instead, they’ve kept the same, tattered “Malibu” print up for a year and half and only now replaced it—but not with the Camaro.
     
    About the only sight more pathetic is Chrysler’s Brampton plant, where they’ve taped a piece of gray tarpaulin over the “Daimler” part of the sign out front.
     
    Meanwhile, Ford in Oakville looks very impressive** from the road:  a big, clean plant and office building.  Toyota’s Woodbridge assembly plant is even more interesting: it’s set well back from the road, without a logo, and behind discrete hills, with only a “TMMC Shipping and Receiving” sign at the entrance; the subtlety speaks volumes.
     
    ** you can still make out “Home of the Windstar” in the dust-marks, but you have to look hard.

    • 0 avatar
      gmbuoy

      psarhjinian : A month ago the malibu graphic was replaced with a new equinox.  I think that is the point you where making.  In Ontario, the sports car market is 2% of the car market, the small crossover is 25% of the truck market and growing. 

      GM Canada announced about a month ago as well that what un-utilized space remained at CAMI would be converted in a 90 million reno to improve the production capacity of the Equinox / Terrain.  At that point IMO Suzuki was down to a half interest landlord.  Their product plans no longer included Ingersoll and it made sense for everyone to wind up that venture. 

      Suzuki fell out of the product development orbit of GM when the decision on the Engineering centers was made years ago, The Majors : Opel = Mid, States = Trucks, Holden = RWD Cars, Korea = Small, with a minor amount of development for niche vehicles in the regions.

  • avatar
    psarhjinian

    A month ago the malibu graphic was replaced with a new equinox.  I think that is the point you where making.  In Ontario, the sports car market is 2% of the car market, the small crossover is 25% of the truck market and growing.
     
    I’ll buy that, but the Camaro was GM Canada’s flagship product.  You’d think they’d want to show something remotely resembling a little pride and perhaps some marketing chutzpah to go with it, rather than leaving the Malibu up there for over a year.

  • avatar
    cRacK hEaD aLLeY

    On the Motorcycle side of things, I’ve read (and talked to a GSX fanatic) there will be no 2010 Suzuki models.
    I bet if it was Harley without new inventory the net would be abuzz with tales of the end of the Motor Co and how they make models no one wants . . . alas since it’s Suzuki, no one really cares.  Suddenly it’s 1986 all over again.
    http://www.suzukicycles.com/Product%20Lines/Cycles.aspx?year=2010
    http://hellforleathermagazine.com/2009/11/no-2010-suzukis-planned.html
    By the way, I drove a SX4 AWD and really think its a neat little thing.
     
     
     

  • avatar
    autonut

    I wonder is this marriage is as pricey as Tiger Wood’s? Any idea?

  • avatar
    John Horner

    I wonder if Suzuki is getting ready to pull the plug on US sales? Suzuki USA is a joke without a punch line. Suzuki sold a grand total of 1,540 vehicles in the US this past month http://www.media.suzuki.com/auto/index.php?p=541 . 2009 YTD sales came in at 36,810, down 55% from 2008′s 81,212 number and massively off from Suzuki’s 2003 goal of getting to 200,000 unit per year in the US within five years from then.
    Saturn sold twice as many vehicles this past month as Suzuki did, and Saturn was widely known to be headed for the scrap heap!  http://www.prnewswire.com/news-releases/gm-reports-151427-total-sales-in-november-78239682.html
    Meanwhile, there are other markets in which Suzuki’s car business is healthy and growing. If I were in charge of Suzuki I would pull out of the moribund US market and put all my efforts into places where the company stands to make a lot of money. The US market is too crowded, too competitive and too growth challenged for Suzuki to keep throwing money at. Basically the same story as why it was smart for Hyundai to give up on Japan.
     

  • avatar
    p00ch

    It’s a divorce following Suzuki’s fling with Daewoo, which gave us the Verona bastard…

  • avatar
    tparkit

    Suzuki is exiting a losing investment. They know they have a gun to the head of Government Motors. GM and Washington (especially the White House) can not afford to be tarred with a visible failure. That’s what would happen if Suzuki unilaterally withdrew from the arrangement. That, of course, is exactly what is happening, but the format of a buyout allows GM to position the deal as a bold step forward that underlines GM’s confidence in a bright future.  In short, this is cosmetics… lipstick on a pig.

  • avatar
    dino467

    Technically if it was a visible failure GM would have walked away from it like they did at Nummi…and Saturn. Suzuki has been stalling adding products at the plant and GM took a lead hand in advancing product development. The J1 and J2 series were ran far too long under 3 badges..Pontiac,Chevy and Suzuki…the M1 through 3 quickly out grew their novelty and nothing was left to fill that “micro” car field. The 190 series platform was an attempt to bridge the gap in mid size SUV’s and the Suzuki failed miserably…no one goes to a Suzuki dealership to buy an expensive vehicle..maybe an expensive bike..but not a car. So it is more natural for Suzuki to exit the scene when the plant is being filled to capacity just trying to fill GM orders..there is no space left to add lines other than in the body shop..all this will do is increase the number of vehicles going through to final production.

    Mr Carpenter..what is the difference between an assembly plant and manufacturing plant?

  • avatar
    gmbuoy

    to : psarhjinian, just to clarify…….

    So putting up the equinox, which is in the fastest growing and biggest segment, of which there is some inventory, and which GM is expanding production on, is the wrong decision…………………

    …………….While putting up the camaro, “too show the pride”,  a vehicle that  has a very limited appeal to the general public, and is basically sold out,  is a better  decision ?


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