GM Sucking Profits From China To Keep GM NA Alive
No surprise there. But it’s nice to see someone else noticing that GM’s repatriating profits from foreign ops to keep the corporate mothership alive. [Note to GM’s BOD: we’d love to see some hard numbers on that.] That someone is Bertel Schmitt. I’m not sure where Berty gets his info, but the CEO Sinamotive Group (HK) Limited writes, “Bob Lutz, GM’s vice-chairman, said GM is making plans to move money from Chinese operations to the U.S. in order to compensate for North American losses. Since nobody seems to want to buy the Hummer brand, which GM put up for sale, repatriating profits from China is one of the few options left for GM. Draining the huge, vibrant and growing China market of funds while the rest of the world tanks doesn’t sound like such a good idea, but these are desperate times. ‘We do not rule out such a possibility under current conditions,’ Lutz said. (Translation: We are already preparing the transfer.) The withdrawal will not sit well with GM’s joint venture partners. When cash is king and credit is an endangered species, cashing in will be extremely unpopular.” Oh, did we mention that Chinese auto sales have stalled, and GM’s share of same has diminished? Seems churlish, but there you go.
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Robert... I agree. But you didn't say how much of the Chinese profits were transferred to the mother ship. I've re-read the post and it doesn't indicate that the Chinese operations are having their legs cut out from under them by an excessive revenue grab.
The Red Chinese are communists, not crazy. A GM attempt to plunder financial resources will result in nationalization with extreme prejudice.
This is news? They've being doing it for ages. It's just that there's so very few bright spots in the GM masterwork. Europe has been a drag, Aus barely holding its own and GM Canada funding all of NA with their profits which is like using a bicycle to pull a train. Can't you hear that giant sucking sound?