GM Continues Sell-Out To China
In a deal to prop up their books, GM is selling more assets to the Chinese. GM sold its Nexteer Automotive steering-parts unit to China’s Pacific Century Motors, a company formed by China’s Tempo Group and the Beijing government’s investment arm E-Town.
Bloomberg thinks the deal netted GM some $450m. The deal is expected to close this year, GM said in a statement.
GM had bought Nexteer from bankrupt Delphi in 2009. Delphi’s core assets were purchased by a group of private investors.
Beijing shows continued interest in buying GM technology for pennies on the dollar, or rather fen on the yuan. In March 2009, Delphi’s brakes and suspension business was bought by a consortium consisting of China’s Tempo Group, China’s Capital Iron & Steel Co. and the Beijing government. They formed a new Chinese company called Beijing West Industries Co. Ltd., based in Beijing.
Tempo, headquartered in Beijing, makes parts for chassis, powertrain and driveline systems. It has an engineering centre in Detroit and sells its products in North America, Europe, Asia, and the Middle East. A little steering systems company with 6,200 employees was missing in their collection.
This reminds me. In my talks with people involved with the Chinese auto business, I have a standard line: “If you are really interested in foreign know-how, forget the car companies. Buy systems suppliers. They develop the technology that will show up in new cars 5 years from now, and they work for many car companies.” Says Automobilwoche [sub]: “Auto makers are worried about their trade secrets when a supplier is sold to the competition.” If you are concerned about IP, now it’s time to be very afraid.
Each time an article is posted on TTAC about GMs IPO, in the back of my mind a little voice says: "GM will be a fully Chinese owned and controlled company before the end of the decade."
Do you really think Big Ed gives a rats about IP, long term survival or anything short of taking his humongous bonus/severance, and riding off into (another) retirement? Of course not. And, I am not worried about the Chinese buying GM during the IPO. I don't think the Chinese give a rats about GM either. Now, buying up the company, taking choice tech and trademarks back to China, and dumping the dessicated (it's already worthless) husk on the American people, yeah, I can see that. If the dealers and unions think they have problems now, they may be in for a rude awakening to the term "problems" if the Chinese pull a "corporate raider"/"strip and dump" on GMs' carcass. Bruce
educatordan that little voice you hear will be shouting from the rooftops pretty soon.
So they are selling the US Govt-controlled steering division to a China govt-controlled JV. Seems perfectly logical. Maybe the owners will make the union-memebers in the uS wear Mao suits, which would be most appropriate. "The Heartbeat of Guang Dong" Has a nice ring to it.