GM And SAIC Strengthen Ties Ahead Of IPO
With GM’s IPO S-1 now set for a Wednesday filing, The General is announcing a joint engine development project with its Chinese partner SAIC, spurring on rumors that the Shanghai-based automaker could buy into GM’s forthcoming IPO. Reuters reports that GM and SAIC have signed an agreement to develop a new range of 1.0-1.5 liter direct-injection, turbocharged engines in the vein of Ford’s EcoBoost mills. The ground-up joint engine development is significant because, as the WSJ [sub] reports
it marks the first time when GM and SAIC – partners for more than a decade already – are going to develop “base” propulsion technology, going a step further than simply integrating existing engine and gearbox technologies into automobiles.
GM has already moved much of its advanced technology development to new Chinese R&D labs, and this attack on Ford’s EcoBoost technology is likely to become a global engine. But what does the ever-increasing cooperation between GM and SAIC (which recently bought out GM’s controlling interest in their Shanghai GM joint venture) portend for the GM IPO?
Sheng Ye, associate research director at Ipsos’ Greater China region consulting, tells Reuters
The GM-SAIC partnership is the most successful one in China’s auto industry. There is a big chance that SAIC may take a stake in GM and bring their relationship to the next level
Another analyst indicates that, regardless of whether SAIC buys into the GM IPO, the two firms have big plans for their joint future, saying
There is no doubt that GM and SAIC may eventually launch small cars globally, but they would most likely focus on the China market to begin with
SAIC responded by saying it would not comment on GM’s IPO until it had a chance to review GM’s filing. But GM is reportedly looking at the option of including preferred shares in its IPO, a move that the WSJ [sub] says could “attract different kinds of investors” and make the Treasury’s exit more easy. It could be that preferred shares will be used as something of a hedge for “cornerstone investors” who GM wants to convince to put down close to $2b on the IPO. With SAIC already controlling GM Shanghai and GM’s Indian business, it would come as no surprise to find the Chinese automaker owning a large chunk of The General once the IPO dust settles.
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@BDB... I worked B side untill 85, then went to Pontiac 6000,and Cutless Ciera. "A "side started the "W" Buick 2 dr in 87,I don't think we ran the "A" Buick ever. Your right its tough work. Back in the late 70s I once tried to train a six foot, 200 lb young man to install gas tanks on B Chev/Pont. He could do the job but he couldn't maintain the sixty job an hour pace. It was the third job that he tried and he coudn't do it. He was still under probation,and management canned him. The next trainee was a 120 lb, 30 something single mom. Whithin 2 hours she could do the job by herself. I read her name in the retirement page of the union paper a couple of months ago. She was 64 and put two kids through university,I think she earned her pension eh? Of course,it would make the likes of "MikeAR" or AaronH very happy if she was to lose it. I guess that wouldn't bother them.
Why do we keep enrichening the Chinese at the expense of our fellow Americans? It bugs me to no end to think how much we have taught the Chinese about manufacturing at the expense of our own factories and our own employment numbers. Admittedly we've done this to ourselves by demanding lower prices and making boring unimaginative products while the import guys come up with some interesting stuff. See the old American TV brands in the 80s while the Japanese were sending some really feature packed stuff.