Assuming this story is real — I’ll let those who can translate Chinese check out the original source, which, of course, could also be wrong — the US government isn’t going to let this happen.
But I’m gonna print this because the non-primary source, The Truth About Cars, is pretty credible, and because I can put this under the category (gallow) humor:
By Bertel Schmitt
November 18, 2008Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million.] The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?
A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.
At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.
21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”
Deloitte & Touche sees a trend: “Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler.”
The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. “In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng’s possible acquisition of troubled GM or Chrysler.”
Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.
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What will the GOP say to that now?
LOL, the organized crime of the UAW against the Red Army, what a show.
Tie the millstone around the neck of the Chinese instead of the American taxpayer. Brilliant.
Above qouted from Hippo
My own:
Sell or we’ll switch currencies.
Dill Weed
Sounds ok to me. After all, its our money they now have to play with.
Ahh the choices….. Either sell the companies to the communists or nationalize them… go the free market!
Well, it did wonders for the Rover Group in the UK …
I can’t decide how I feel about this. I’m wondering where Big Oil the best buddies of the Big Three have been during all the grovaling to Congress they have been doing. If true why aren’t the Big Two leaking it as a form of mild blackmail to get the Republicans to move to their side? I thinkl I have to side with Barak Obama on this we will need those factories and the re=organized work force (minus current managment) to make American Jobs making our own Smart Cars.
I think it is probably referencing this story, sent to me by a friend in Beijing: http://www.huliq.com/ 3169/ 73178/ saic-dongfeng-buy-gm-chrysler-not-comfirmed
Hmm. China is a relatively new kid on the block of automaking. Japan seems like a more usual suspect, so to speak.