GM And SAIC Strengthen Ties Ahead Of IPO

Edward Niedermeyer
by Edward Niedermeyer
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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  • Mikey Mikey on Aug 18, 2010

    @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.

    • See 1 previous
    • Psarhjinian Psarhjinian on Aug 18, 2010

      I will agree that the work truly is awful and that it's really not appreciated by many people. I did a summer in Brampton as a student and it sucked. Not quite as much as working in a fibreglass body shop did (dear lord was that a horrible job) but it wasn't fun. What always got me is people who work white collar and complain about having had to work to get their degree and put in X amount of unpaid time while untrained blue collar guys get paid more and see better benefits. I worked really hard to get my degrees. I put in a lot of overtime. I don't, for a second, think I have it harder than someone working on the floor. Put it this way: the absolute worst I've ever done (about eighty hours straight to keep a datacentre running during the 2003 blackout) would land me sleep deprivation and maybe mild burnout. If you work white collar, chances are you'll never appreciate what "repetitive strain injury" really is. My white collar guys who complain so bitterly might want to spend a little more time looking at the C-suite swingers pulling down orders of magnitude more than average, rather than the blue-collar folk making about the same.

  • Joeaverage Joeaverage on Aug 23, 2010

    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.

  • Morley Wasn't that the war where the Brits came down from Canada and burned the White House to the ground?
  • Master Baiter I'll wait for the actual driving reviews. User interface quality and range are big question marks.
  • Jeff S Years ago Kentucky issued a license plate with a horse running with the words "Unbridled Spirit." The religious right objected and did not want the plate because they believed it encouraged people to go to the race track and bet on horses. Anyone who knows anything about Kentucky knows its famous for raising horses and yes there is Churchill Downs where the Kentucky Derby is run but horses in themselves are not sinful. It got so bad that the state issued a blank sticker to put over the horse and the logo. Kentucky also issued a plate for those who were offended stating "In God We Trust." The latest KY plate has no logo and nothing. I always picked the horse because I thought horses were something to be proud of and associated with Kentucky.
  • Old Scold As a Marylander, I got those plates assigned to me when I purchased my car in 2016, 4 years after the so-called anniversary. I figured they were using up NOS, and it never occurred to me to check out the URL. I still don't care. It's a stupid issue, but I have my tag number memorized should I need it.
  • Hpycamper I drive a car with automatic braking and have nothing good to say about it. It has activated going around corners on mountain roads when the hillside is close to the road, when lawn sprinklers turned on and sprayed the car, and driving past cars on the shoulder that are making right turns. Luckily these phantom brake activations have not caused a wreck. The systems are just too dumb.