Dongfeng To GM: You Are Beyond Salvage
For quite a while, Dongfeng, China’s third largest automaker, had been rumored to be interested in taking over GM. Now, Dongfeng has lost all interest in the deal, China’s Securities Daily reports via Gasgoo.
It’s very interesting what Xie Dashun, a publicity officer at Dongfeng has to say. Yes, there were talks. And no. Dongfeng doesn’t like what they saw, or what they were not told: “Even though Dongfeng has contacted GM, the results are not available yet. Personally I don’t think Dongfeng has the ability to save GM, a company that neither its CEO or the U.S. government is able to save.” Strong words from the usually very polite Chinese, and from a company that is mostly owned by the central government. Even Gasgoo can’t help themselves from mentioning that GM’s “problem is far beyond the money value.”
Gasgoo cites an industry analyst who said that “it’s still early to talk about the acquisition of GM by a Chinese auto company before the U.S. automaker files for bankruptcy. Almost no Chinese enterprise has the might to buy out the U.S. auto giant, and the cash flow of Dongfeng Motor is far from enough to buy an American company like GM.” Note the “before the U.S. automaker files for bankruptcy.”
It’s interesting that the publicity officer with the strong words didn’t say a single word about Volvo. Dongfeng was named as one of the parties interested in the brand. All of GM may be too big to swallow “before the U.S. automaker files for bankruptcy.” A buy of boutique Volvo at Chinese prices would be way in the realm of the possible.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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"You Are Beyond Salvage" ??? Oh no. They ARE salvage. Salvage value is what GM's assets will be sold for.