AND 
Guest Post: Saab Deal Falls Through…And GM to be Owned by China?
“General Motors confirmed Tuesday that the proposed sale of its Saab subsidiary to Koenigsegg Group AB was terminated at the discretion of the buyer.”
(via GM’s media website)
Sound familiar? It should. GM made a near identical statement only six weeks ago, when the sale of the Saturn brand to Penske also died at the last minute.
Of the four brands that were initially put up for sale under the flag of viability, only the smallest of that group (HUMMER) now has a chance to close. Saturn and Saab have both had their suitors back out, while GM suffered seller’s remorse over Opel, and has terminated the pending deal with the Magna Group earlier this month.
GM President and CEO offered this statement: “We’re obviously very disappointed with the decision (of Koenigsegg) to pull out of the ***insert car brand here*** purchase. Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB.”
Unlike with Saturn, where GM announced that brand’s wind down immediately, they offered no such definitive guidance on the future of Saab saying, “Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week.”
GM’s board next convenes on December 1st, where the fate of Saab will likely be decided. GM could decide to retain Saab, as they did Opel, however GM has been aggressively selling-off and winding down operations in anticipation of the closure of this deal to Koenigsegg…and Saab is not considered vital to GM’s ongoing operations internationally.
While no official reason on the deal’s failure, other than timing, was given by Koenigsegg, it is a good bet that the decision by the EIB to give out the EUR400 million funding in tranches, rather than in the form of a ‘oversized lottery winner’ check in advance of the deal (as Koenigsegg had requested) had a little something to do with it.
Wild rumor of the Day: China to buy GM?
Such speculation used to just be the fodder for fringe websites and conspiracy theorists, however the notion is starting to penetrate into the mainstream media of late. ‘Industry Experts’ are suggesting a Chinese-run GM could become a reality. Well, David Cole, chairman of CAR (Center for Automotive Research) is suggesting it.
Sidenote: CAR bills itself as a Michigan think tank…but as far as I can tell, it is essentially just a 3rd party shell made up of ‘Big auto’ and its affiliates, and mostly funded by the US taxpayer. (Dave Cole is also the son of former GM President Ed Cole…coincidence I am sure)
“I can tell you right now the Chinese are shopping heavily in the U.S. auto sector. The Chinese have a lot of our money and they’re looking to invest it.” Mr. Cole said. He adds that this kind of deal is not likely to happen in the short term, but that GM’s planned IPO may give the Chinese the opportunity to start the process, as our own government is eager to rid themselves of their 61% stake in the domestic automaker.
Bob Schulz, an auto analyst at Standard & Poor’s, does not shoot that theory completely out of the water, but does wound it by saying “Assuming there’s no government restrictions on something like that, anything is possible.”
Personally, if I had a nickel for every time I heard that a Chinese company was about to take over something in the auto business, GM would probably be receiving my payment for the Volt in 5 cent pieces.
/Happy Thanksgiving to the extended GM-Volt family
94 Responses to “Guest Post: Saab Deal Falls Through…And GM to be Owned by China?”
Recent Posts
- Ford Unveils Transit Connect Electric Cargo Van, Will Enter Production This Year
- Chevrolet Chief on Volt Supply and Demand
- Jaguar Says Only ‘Self Charging’ Extended Range Electric Cars Make Sense
- Op-Ed: Prius Halo Damaged; Toyota Pressured to Announce Recall on 270,000 Units Already Sold, as CEO President Finally Breaks Cover
- GM Sends Dealers 2011 Model Year Ordering Guide: Includes Volt
- GM Partners with NASA to Build Next Generation Robots
- If Electronics are to Blame for Toyota’s Vehicle Failures, What Does this Mean for the Volt?
- The Chevy Volt Fuel Tank will be Sized to Deliver 300 Miles of Gas Range
- Video: How the Volt Works
- GM CEO: Volt Will Roll out Simultaneously in US, and a Billion Dollars Couldn’t Bring it Sooner
Recent GM-Volt Forum Posts
- Volt Test Drive by Vancouver EV Association February 8, 2010VANCOUVER, BRITISH COLUMBIA -- General Motors issued a very special invitation to the Vancouver Electric Vehicle Association last week to drive the... […]WopOnTour
- gasoline cars are like smoking . . . . February 8, 2010interesting article, better presenting what I've had a hard time putting into words (which is why HE's a writer and I'M... […]prowler
- A common European strategy for electric vehicles February 8, 2010I coudn't resist to cut and paste the next excerpt : Link :... […]Jean-Charles Jacquemin
- Run flat option or standard? February 8, 2010I suspect that run flats might be standard because they get rid of the space and weight taken by a spare tire and may result in less fatal accidents... […]1nk
- Engine Thermal Management in a Series Hybrid February 8, 2010I've just recently discovered how different the environments under which a conventional (even parallel hybrid) ICE and series hybrid ICE are... […]XGC75
- electric car with wind generator February 7, 2010My design of ELECTRIC CAR WITH WIND GENERATOR: http://velkovelkov.blogspot.com/ I think this conception is original and realistic. The low position... […]Velko Velkov
- Please provide complete home solar systems. February 6, 2010Please provide both a volt charging solar system and a complete whole house solar system that takes the user completely off the grid and stays on... […]1nk
GM-Volt.com is not affiliated with General Motors Company
All contents copyright 2007-2010 GM-Volt.com, LLC - All Rights Reserved
Home | Contact | Privacy Policy | About | Back to Top
November 26th, 2009 at 8:50 am
OFF TOPIC
I wish a happy day of Thanks Giving to all on this site regardless of politics, religion, or where you live.
November 26th, 2009 at 8:51 am
The government should never have gotten its claws into GM. The free market should have decided its fate!
November 26th, 2009 at 8:52 am
Saab is an elegant brand… I was sad to see that GM wanted to get rid of it. Perhaps they will roll the useful parts of the company into existing projects.
The Chinese will invest heavily but what they really want is information and the ability to build cars themselves on Chinese soil.
November 26th, 2009 at 8:58 am
Regarding the fate of Saab, I would expect even a complete shut-down of the brand (ala Oldsmobile, Pontiac, Saturn) to have only a minor impact on GM’s future business outlook ….and I believe that impact would be positive in nature.
As to China owning a controlling interest in GM, I would hope the US Government thru existing technology transfer restrictions imposed by the Commerce Department and the Pentagon would prevent this from ever happening. In fact, the extensive Intellectual Property (patents, design details, etc) of Voltec alone should be of sufficient importance —even potential strategic military importance— as to prevent such a sale!
November 26th, 2009 at 8:58 am
This would certainly put a new twist on the term “rice-burner”.
November 26th, 2009 at 9:10 am
Too true.
November 26th, 2009 at 9:12 am
That is almost assured for the US but maybe they’ll roll it under Opel and continue European operation.
November 26th, 2009 at 9:13 am
Happy Thanksgiving to all.
What will be will be.
November 26th, 2009 at 9:16 am
Chinese ownership would eliminate GM from my vehicle purchasing plans as well as roughly half of their US customer base, I suspect and hope.
Happy Thanksgiving to all GM-Voltites!
November 26th, 2009 at 9:18 am
Why not ? Thanks to all for your comments and wishes … and Statik for a piece a litterature we begin to be acustomed to.
JC NPNS
November 26th, 2009 at 9:24 am
I’d also like to echo a Happy Thanksgiving to the extended GM-Volt family.
/today is a ‘regular’ day north of the border…so appropriately, Lyle gets a rare day off
November 26th, 2009 at 9:28 am
Hey
Read this :
http://www.saabsunited.com/2009/11/gp-baicgm-conflict-sunk-koenigsegg-group.html
Interesting,
JC
November 26th, 2009 at 9:28 am
Happy Thanksgiving !!!!!
November 26th, 2009 at 9:29 am
They do not own it already? China funded the bailout with their purchase of our treasury bonds…
Besides they can buy a Cruze well before we can. Lets hope that it is in there interest that we be energy independent.
Thanks for the post Statik.
Happy Thanksgiving all…
November 26th, 2009 at 9:39 am
Also off topic, but mildly interesting. The Orion plant, pushed out the last US built Pontiacs yesterday.
/white G6…fleet sale…no fanfare
http://www.detnews.com/article/20091125/AUTO01/911250416/Orion-plant-rolls-out-last-Pontiac-for-U.S.
The ‘last’ last Pontiac will roll out of the San Luis Potosí Assembly Plant in Mexico sometime before the Christmas shutdown in December.
That particular model will be a Pontiac G3 Wave of some type. The Wave is a subcompact exclusively sold in Canada (Aveo rebadge)…needless to say it won’t be me buying the last Pontiac.
November 26th, 2009 at 9:44 am
Thanks Statik, nice piece. If anything worries me about the credibility of a Chinese involvement, it’s that you’re reporting it!
Not much we can do about it (like most things), but speculation is “job one” here (g).
A Happy Thanksgiving to all!
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
November 26th, 2009 at 9:47 am
I think it would be nice if we did not need government support in difficult times but living conditions in Detroit are already close to those in a 3rd world country. I hate to think about what would happen to the entire south east Michigan area without a vital auto industry.
Happy Thanksgiving
November 26th, 2009 at 10:06 am
Happy Thanksgiving to all – all over the globe.
Can the Saturn dealers become Opel/Saab dealerships? or maybe Opel and/or Saab can be sold under the Buick/GMC dealership brand.
The product offerings are not the Chevrolet knockoffs of the Pontiacs so it would give the dealerships a wider product offering???
What to do?? I don’t know the operating numbers of Opel or Saab, but anything is possible.
Longterm GM is wise to pull out of the deals that would hand over the intellectual rights to the Chinese
November 26th, 2009 at 10:09 am
In 2003, I was shopping for a new sedan, but the last Oldsmobile ran about $35,000, whereas a nice Avalon ran $30,000. So now, every time I see the last Olds, I have feelings of regret and ponder what might have been. I never owned a wide track, or the other extinct brands, but the failure of GM management to sustain itself in a free market, suggests to me at least, that the free market does not extend to management. These people behaved stupidly yet remained in power. Something is rotten in Denmark.
November 26th, 2009 at 10:11 am
Thanks JC. There is always more than meats the eye involved.
Personally, I think GM is right to be concerned about losing its intellectual property to the Chinese.
Regards
David
November 26th, 2009 at 10:12 am
“The Borrower is Servant to the Lender.” (human nature never changes)
GM is a servant of the US Gov’t. The US Gov’t is Servant to the Federal Reserve Bankers. http://www.themoneymasters.com/faqs.htm#q1
The US Gov’t is ALSO a servant of China. ObaMao and the Regressive-Socialists in office who AGREE with Social-Fascism are working VERY hard to STRENGTHEN OUR indentured servant status to BOTH the Fed Bankers and China by borrowing and spending 4X MORE in ONE year than Bush did in EIGHT and BUSH was a Regressive too!
We had a Right of Contract until the Regressive bailouts and backroom deals killed our legal right to liquidate our debtors to recoup our investment.
November 26th, 2009 at 10:24 am
Why would foreign investment in an American automaker surprise / alarm anyone? They would get board seats and some policy influence, but unless they bought a majority stake, they wouldn’t control it.
November 26th, 2009 at 10:27 am
The Chinese Communist Party and UAW both owning GM the majority shares of GM. Now wouldn’t that be ironic!
Happy Thanksgiving All!
November 26th, 2009 at 10:34 am
“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.”
http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-and-chrysler/
______________________
The last president to truly try and control big government was Reagan, but his “if they don’t have it they won’t spend it” tax limiting philosophy was quickly circumnavigated by the “OK we’ll just borrow” philosophy ever since. Now the lender (China) is looking to cash out.
Thanks Alan Greenspan, thanks Bush 1, thanks Clinton, thanks Bush 2, thanks Obama, thanks sleepy U.S. voter.
(see how thankful I am)
November 26th, 2009 at 10:35 am
Thanks NZD, my opinion too.
JC NPNS
November 26th, 2009 at 10:41 am
Happy Thanksgiving to all!
Now, time to take my new electric out for a spin….ok, its just a toy, buy hey you need to start somewhere.
PS: This little electric car toy is not silent, and I am surprised actually that something with such a big electric motor is really that silent. Oh, well, lets not rehash the silence yet again…
November 26th, 2009 at 11:13 am
Here’s an idea from left field, how about the IRS allow tax payers the option of receiving their tax refunds in the form of new GM shares. Sounds crazy, but it might be appealing and beneficial for some tax payers as well as for the US Government image.
NPNS!
November 26th, 2009 at 11:15 am
I just wanted to add my wishes for a Happy Thanksgiving.
And I apologize if I came across yesterday as the guy that wants to kick the crutch out from under Tiny Tim. That really was not my intent.
To the topic at hand: I guess we will all have to chip in and buy all the GM stock so China can’t…..
November 26th, 2009 at 11:15 am
Happy Thanksgiving, all; and thank you statik for taking the hint.
“Personally, if I had a nickel for every time I heard that a Chinese company was about to take over something in the auto business, GM would probably be receiving my payment for the Volt in 5 cent pieces.”
We’ve got to have a little talk about all this flagrant optimism, young man!
Don’t the Canadians have something very like Thanksgiving another time of the year?
November 26th, 2009 at 11:21 am
Y’all have a HAPPY THANKSGIVING !
November 26th, 2009 at 11:23 am
There will be no government restrictions against China buying GM since they do not make anything considered a matter of national security. (like missle guidance systems, nuclear reactors, etc…)
Slowly but surely, our country is being sold off; industry by industry. In 60 years all that will be left that is truly “American” will be…. Healthcare? Insurance? Fast Food?
Something to ponder….
Could you pass the yams, please?!
November 26th, 2009 at 11:24 am
Happy Thanksgiving to Everyone!
Carcus1, you must have eaten too much already! Only brain cramps brought on by too much of the gobbler could explain your wildly inaccurate revisionist history. Everyone knows that Reagan was never a fiscal conservative. He was the founder of the “Deficits Don’t Matter” branch of “conservatism. Basically his idea was that you could spend like a drunken sailor so long as you cut taxes and borrowed. In fact Dick Cheney, when justifying turning the largest budget surpluses in US history into the largest deficits in US history, claimed that Reagan had “proved” that “deficits don’t matter” both economically and politically.
The fiscal shift in the Reagan years was staggering. In January 1981, when Reagan declared the federal budget to be “out of control,” the deficit had reached almost $74 billion, the federal debt $930 billion. Within two years, the deficit was $208 billion. The debt by 1988 totaled $2.6 trillion. In those eight years, the United States moved from being the world’s largest international creditor to the largest debtor nation.
http://www.washingtonpost.com/ac2/wp-dyn/A26402-2004Jun8?language=printer
It’s so amusing to find so many faux conservatives complaining about deficits since making the US the world’s biggest debtor is largely the result of their “conservative” agenda, Where we these clowns during the Reagan and Bush II years? Oh yeah, they were busy getting rid of the “pay as you go” rules and and keeping the Iraq war cost off-budge (as if that helped). Like I keep saying, part of the 12 step recovery program is owning up to your mistakes rather than trying to blame others.
FWIW the valuation on GM today would probably be somewhere in the $40-$50B range. No idea about Chrysler but probably not pretty.
November 26th, 2009 at 11:27 am
It would be a shame if Chinese interests took over GM.
Mind you, American citizens would have nobody but to blame but themselves if they choose not to buy the IPO stocks when they come out. For those who don’t want to buy a so-called “awful” car from “Government Motors” (oh, ha ha, that’s original!), they’re only hurting themselves.
November 26th, 2009 at 11:37 am
Yes indeed. May everyone here have a happy Thanksgiving day.
Thank you statik for an excellent post.
November 26th, 2009 at 11:46 am
The hint wasn’t very subtle, (=
…and I had to have a little quasi-optimism for Thanksgiving, that is about as good as it gets from me.
Sidenote: We have ‘the Thanksgiving’ as well, but we hook it up on the 2nd Monday of October…and it is nowhere near as big of a deal.
Historical Moment as Interpreted by me:
-I believe our Thanksgiving tradition started because some guy in a boat 400 or 500 ago didn’t die when he tried to find the Northwest Passage. Vive le non-successful, non-’ending in death’ historical moment we still celebrate. (…just don’t quote me on it)
November 26th, 2009 at 11:50 am
I’d like GM to turn SAAB back into the niche brand it was back in the days when it first was imported into the USA. Forget about trying to mainstream the brand – SAABs were meant to be solidly built and uniquely quirky in personality.
Price its models for profitability, and don’t worry about big sales numbers. Just set the price level high enough to be in the black. If that means reducing size of manufacturing capability and work force to tiny proportions, so be it. Just make sure that the car stands out in whatever price range it ends up in. The SAAB name has a respected legacy; if GM were to deepen those old roots they’d return some luster and value to the SAAB name.
November 26th, 2009 at 12:04 pm
You’re new on this site, aren’t you ? Only in your mind is there such a thing as a free market. In reality, it’s a whole different story. Search in the previous threads to learn more.
November 26th, 2009 at 12:16 pm
If I recall well, Clinton didn’t have a deficit in the last years of his tenure. I don’t want to trigger anything here between D’s and R’s, just pointing out a fact.
———————————————————————
http://archives.cnn.com/2000/ALLPOLITICS/stories/09/27/clinton.surplus/
———————————————————————
From CNN White House Correspondent Kelly Wallace
September 27, 2000
Web posted at: 4:51 p.m. EDT (2051 GMT)
WASHINGTON (CNN) — President Clinton announced Wednesday that the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history and topping last year’s record surplus of $122.7 billion.
November 26th, 2009 at 12:23 pm
From :
http://en.wikipedia.org/wiki/United_States_public_debt
Public debt in dollars quadrupled during the Reagan and Bush presidencies from 1980 to 1992, and remained at about the same level by the end of the Clinton presidency in 2000. During the administration of President George W. Bush, the debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008, rising from 54% of GDP to 75% of GDP.
November 26th, 2009 at 12:29 pm
Why doesn’t GM just sell Saab to the Chinese?
(warning: bad pun ahead)
So… was this a Saab-story?
November 26th, 2009 at 12:30 pm
Saab profitability (or lack thereof) is and always has been tricky to assess. As Jean Charles here can probably attest, it is expensive to make money in a lot (if not all) Euro-zone countries. GM does (has done) its darndest to avoid ever booking a profit in Sweden, so any theoretical profits are banked elsewhere in the GM-o-sphere. (Or you can choose to believe GM just really loved losing money since 1990 when they took a majority stake)
It is a good bet that GM themselves long lost track of ‘what side is up’ at the company, and just wants to be rid of it at this point.
As for the ‘niche’-good quality moniker and ‘quirky personality’, that was true to some degree in the past…but that would be tough to get back now (imo), at least on the cheap.
You have a lot of rebadging going on now at Saab(from Opel’s Epsilon, and GMTs 360 platform) , and the new 9-5 which was looked to for future direction/success for Saab, has a base-ton of problems (it rides on the new Epsilon II platform), has cost GM a lot of money, and is languishing under a bad reputation atm. You may also note this is the same platform for the Buick LaCrosse (Insignia for our international firends)…which was delayed also becuase of some quality issues.
November 26th, 2009 at 12:34 pm
The difference in debt increase between Reps and Dems is basically one of intensity; do you want Light speed, or Ludicrous speed?
At this rate, we’re going to go “Plaid.”
… thank you for pressing the self – destruct button. have a nice day!
November 26th, 2009 at 12:36 pm
http://www.usdebtclock.org/
November 26th, 2009 at 12:40 pm
You know what DonC? You’re right. I should have said, “The last president to preach really hard about limiting government spending was Reagan”.
The True Federal Deficit
http://www.craigsteiner.us/articles/32
The Myth of the Clinton Surplus
http://www.craigsteiner.us/articles/16
November 26th, 2009 at 12:52 pm
I don’t really have an opinion about SAAB. I hope for their sake that it can be folded into Opel. But, given the imminent loss of jobs elsewhere in Europe, the last thing they need is capacity elsewhere. Especially since the Swedish government, unlike most of the other governments involved, has shown no interest in exchanging loans for jobs. I can’t say I blame them.
As far as the Chinese government buying GM, it wouldn’t surprise me in the least. There is a reason people have been talking about China buying pieces of the auto business. They have the money. And they want technology for it. We’re the ones who ran our economy based on consumption now! It’s a little late to complain about the consequences.
That said, as an American, the thought makes me feel actively ill. It’s enough to make me want to buy shares of GM at the IPO. But the small amount I could afford (even if I thought of it as an actual investment) wouldn’t make any difference. The Chinese government has enough cash to buy whatever they want. They could buy Toyota (at a market cap of 122 billion) if the Japanese would sell it to them.
Happy Thanksgiving to all. I’m sorry I couldn’t be more optimistic for the holiday…
November 26th, 2009 at 12:58 pm
What a slippery slope it is once the politics creep into a thread.
Happy Thanksgiving anyway (g).
Be well and count your blessings,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
November 26th, 2009 at 1:15 pm
Politics IS the thread.
November 26th, 2009 at 1:22 pm
About the politics–can we please stop arguing about who got us into this mess? It doesn’t matter anymore who did what. (And, believe me, I could come up with a list of grievances against each party.) What matters is that in we’re in major trouble. And we need to work together to get out of it. If we even can at this point.
Basically, at this point, IMHO we need to start prioritizing the long term over the short term. Living within our means a country. Investing for the future. When we take out a mortgage it needs to be to buy a house, not pay the grocery bills. Taking out loans to start businesses rather than buy flat screen TVs. Letting production rather than consumption be the driving force behind our trading policy.
November 26th, 2009 at 1:23 pm
And here I thought it was about GM. My bad.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
November 26th, 2009 at 1:26 pm
I think you are right. I am one of those (fools) people who thinks it is good for our country (and our workers/engineers (especially the engineers)) for me to buy from GM. I have done this consistently with the exception of my one Ford purchase. GM moving to far towards chinese design and built cars would drive me to spend my money with Ford.
November 26th, 2009 at 1:30 pm
Hey Laura, glad to see you in this thread. Gives me a good excuse to ‘talk shop’ about Ford (not like I can really make it a thread topic…unless Lyle starts a ‘Ford-BEV-Focus.com ’site, which I don’t see happening anytime soon, heeh)
Fair warning: ***This is anyone else’s chance to stop reading and skip the rest of this post if you don’t like negative trips down the foxhole about other auto manufacturer’s finances***
Ford completed that debt swap they were offering earlier in the month on Tuesday (got over 90% to go for it). Moving the deadline out on that pile of credit they owed (10.7 billion) from 2011 to 2013.
This kind of deal/kiting reminds me of GM constantly pushing the ball a little further down the field, at higher and higher costs to themselves…not that they had any choice. Ford couldn’t pay back that 11 billion (plus everythiing else) by the end of 2011…especially with only a little over 22B on the books.
Just looking at the details, it cost them a good buck to do it. They are going to have to pony up 1.9 billion next week, convert 750M to a loan (and still pay 900 million to the holdouts in 2011). The other kicker (aside from the cash incentives and immediate cash hit) is they had to adjust the rate from UK prime +2.25 to +3.25 on the balance.
I guess the creditors really didn’t have much of a choice after witnessing what happened to similar lendors with GM (quick rinse through C11), but they certainly got paid to do it regardless…all because Ford wants to keep playing the ‘we are ok, we didn’t take the bailout’ card a little longer.
We will have to see how the last quarter’s ’success on paper’ profit translates when they try to hock the 2.3 billion notes (mat 2016@4.25) …and sell another billion in stock.
/not good (imo)
Source linky to Ford’s 8-K:
http://biz.yahoo.com/e/091125/f8-k.html
November 26th, 2009 at 1:39 pm
Once the U.S. Treasury took a 61% stake in GM, any discussion of sale/ownership to the Chinese or any other is political by default.
Putting on a happy face and burying it in the sand doesn’t make any of this go away.
Happy Thanksgiving!
November 26th, 2009 at 1:42 pm
The Chinese aren’t really interested in GM’s share of the North American market. I mean, I’m sure they’d like it, but it’s basically window dressing. What they want is GM’s technological know how for their own auto companies. Once they have that, they can undercut the competition by 40%. (They can afford to lose money for the first few years if necessary.) And a lot of short-sighted Americans will flock to them.
For whatever it’s worth, I’d buy a Ford Fusion Hybrid or even a Prius before I’d buy a Chinese manufactured Volt. Regardless of the price.
November 26th, 2009 at 2:14 pm
Last month’s paper profit? From what I read, they made a profit in both Ford Financial and actually selling cars. Their market share is up. And so are their margins per car. And Consumer Reports recently said their quality is as good as, if not not better than, many of the imports. Isn’t that all good news? What am I missing?
Yes. The debt is a serious obstacle, but they have now have some breathing room, which has to be good? Even though they had to pay for it? And the UAW didn’t make those concessions. But, from what I understand, that simply means production’s moving to Mexico?
By the way, given their current stock price, I think they might be able to raise $1 billion from the equity markets. It’s not like Mulally hasn’t said he plans to issue more stock. Although I expect the market to crash at some point, which could make it more difficult. On the other hand, I’ve been expected it to crash for a while now, so what do I know? But if the dollar rebounds short term, we could have another sharp correction…I think it’s just a matter of time…but that could be a while..and I could be wrong–I’m hardly an expert on the stock market…
November 26th, 2009 at 2:17 pm
Amen.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
November 26th, 2009 at 2:19 pm
I will never purchase a GM vehicle if China buys it.
Volt included.
This should never be allowed to happen.
November 26th, 2009 at 2:53 pm
China is not going to own GM in any fashion or they would lose the majority of their most important customer base, here in the United States. Gm knows this for sure so I have no fear in this regard.
November 26th, 2009 at 3:21 pm
I think your right about the prospects from the equity market. Investors seem to really support domestic automakers…even past the point of no return it seems.
And your right they (Ford) have more breathing room as well. I guess you can look at their last quarter’s report as a sign of a potential turnaround (first positive result since 05)….all good debates. I will note that GM did also have a ‘miracle’ profit quarter before doing some debt swapping/fancy dancing ahead of bankruptcy themselves (891M Q2-2007). and Ford did make a pile of cash off of really good placement/pricing from CFC..unlike GM or Chrysler. They sold a lot of full price vehicles w/low incentives during CFC, not sure that continues.
I guess I’m just old school. When I see a headline of ‘we made 997 million’, and they immediately also announce a billion dollar stock sale/2.3 billion note sale, and a 11 billion dollar debt refi at a higher interest rate…the hairs on my arm getting all bristly.
It is a interesting discussion either way, and the next couple quarters (and revised 2010 guidance) will give us a pretty good indication of the future at Ford.
Sidenote: I’m with you on the market, but it keeps right on going and going undaunted. Personally, I think we are more than due for crash/correction…but as long as the money stays liquid…and flowing out to the unworthy, all the balls stay in the air. (That Dubai thing today is ominous…too many things like that and we are headed for some action, I’m sure there is going to be some fallout when the US markets open. If it spurs protectionism, that is the bigging of the end.)
November 26th, 2009 at 3:23 pm
I agree. Some people say that they wouldn’t buy a GM vehicle because of of U.S. government ownership. Well… I’d say that’s a lot better than Chinese ownership.
November 26th, 2009 at 3:55 pm
At all cost, the US government should not allow that to happen!!
November 26th, 2009 at 4:17 pm
TallPete,
I am not new to this site, and I would classify myself as a believer and supporter of the “free market”.
While the govt’ can always push its will, the ultimate solution lays with the people. I believe that the govt needs to be reminded regularly, that they are here to serve the people, and when they start dabbling in things above the general infrastructure, they are not actually helping.
PS: I am on my second bottle of wine, and starting to feel some effects. So, maybe I make little sense (my wife would agree with this statement…).
HT.
November 26th, 2009 at 4:28 pm
NO!
Not with my money.
Go ahead and invest all you like in the GM IPO, and good luck.
November 26th, 2009 at 4:34 pm
They had to do the stock sale and debt refinancing because of their debt coming due. No. It’s not a sign of strength, but it’s not like anyone thought they were a healthy company to begin with. Personally, I think they needed to do it while investors were still throwing money at practically everything moving.
I agree that the next few quarters will tell us a lot more. I do think Mulally’s doing an amazing job though. If anyone can pull it off, I think he can. I still wouldn’t buy the stock though. Even if I thought the market, in general, was going up, which I don’t.
About the stock market–Honestly, I’m surprised anyone’s surprised about Dubai. What did people expect to happen there? Either Abu Dhabi will bail them out or it won’t. But there was never any guarantee. I’m pretty sure they will, but there will be consequences. But It’s not like Dubai’s problems are news to anyone. I guess I haven’t been paying enough attention…
November 26th, 2009 at 4:39 pm
It wouldn’t be about money. The US government can block any such purchase the same way they did with Unocal. The problem is that we’re in a much different situation in terms of balance of power than we were.
November 26th, 2009 at 4:50 pm
Just to keep everything in contest:
I’ll echo the praise for Mullaly. In my opinion, he has done a terrific job for Ford, near flawless. All things considered, Ford has performed at the very highest end of expectations over the last 24 months…so they get points there too. Will it be enough? Will the market hold it together to give Ford a shot at viability in 2010/2011? All good questions.
(Dubai/market…I think everyone fears the domino effect maybe getting going on stories like that, where it gets out of hand quickly and people try to lock in short term gains before they turn into losses)
November 26th, 2009 at 5:32 pm
But it’s not like the market hasn’t absorbed and ignored what I thought was worse (and more unexpected) news…I guess we’ll see monday…
November 26th, 2009 at 6:03 pm
I feel we should demand our fair share of stock since WE the people own it. Bailed it and saved it.
The argument was to save a USA manufacturing base.
Man this feels just like the Wall Street crap more and more…WTF
November 26th, 2009 at 6:15 pm
Just look back & see hw many mistakes GM had made …no wonder GM went bankrupt …no forward thinking …they cud have sold these brands when the economy was booming …but no the greed of their top management …serves them right ..
November 26th, 2009 at 6:57 pm
Chinese GM and Wall-Mart ?
The perfect Merger?
Not for me.
November 26th, 2009 at 6:57 pm
I seriously doubt your thinking with a clear head today if you believe that GM was the sole contributor to it’s failure.
The Government (and those who elect them) and the Union have been walking around for years in some sort of dellusional haze thinking that things would keep on going the way they were. The Union has had too much power and Gettelfinger is an amature.
But with all those government loans, and liabilities, I don’t think GM would be able to sell to China.
It would be a good deal for China given the popularity of GM products over there. They would also get the Volt technology without having to do the R&D.
Maybe with China running the show GM could get rid of the Union and finally show a profit. What say you “Mr Gettelfinger”; is it back to the parts line for you ?
November 26th, 2009 at 7:49 pm
OK!!!! I guess that is only fair cinsidering that China owns the U.S.A.. Would you say that the country and GM has been mismanaged. ?????
November 26th, 2009 at 8:36 pm
72.
Guy Incognito Says:
November 26th, 2009 at 8:36 pm
Did anyone who read the CNN November 24th Article “A Chinese-owned GM, it could happen” notice that there was’nt even one mention of the Volt in the whole article?
http://money.cnn.com/2009/11/23/news/companies/gm_china/index.htm
On that page, there is a CNN link to a related article:
“GM 2012: Future cars”
http://money.cnn.com/galleries/2009/autos/0908/gallery.gm_future_product/index.html
The article states:
“General Motors recently showed reporters and select members of the public what it plans to build over the next two years.”
Indeed, the models showcased were:
-The Chevrolet Spark
-The GMC Terrain
-The Cadillac SRX
–The Buick LaCrosse
Anyone notice the glaringly obvious fact that the Volt is’nt even mentioned?
November 26th, 2009 at 10:07 pm
Correction–to myself. The market is open tomorrow. I hate it when that happens…When I say something stupid in real life, at least there’s no record of it.
November 26th, 2009 at 10:42 pm
sounds like GM never meant to sell anything….
November 26th, 2009 at 11:10 pm
…just a half day though with lots of AWOL investors, (=
November 26th, 2009 at 11:46 pm
True, but it’s enough to gauge the Dubai fallout. We have a few mini-Dubais here that could have a far more dramatic effect on the markets here, IMO. But what do I know, the problems with the huge property development in NY that surfaced this past week didn’t have much of an affect. Perhaps it’ll take a couple of these problems to become newsworthy simultaneously for the puzzle to be better visualized.
November 27th, 2009 at 12:11 am
Since you point out that Clinton doesn’t belong in those mentioned, I would also like to point out that Alan Greenspan worked under Clinton’s and Bush’s administration. In “The Price of Loyalty”, former Secretary of the Treasury, Paul O’Neill, George W. Bush’s first Secretary of the Treasury, met frequently for early breakfasts with Alan Greenspan. Together they contemplated how part of the surplus could be used to save Social Security, and other uses to benefit U.S. citizens. I wont comment on President Obama other than let’s see where we end up under his administration (although you can easily find out where I stand by reading my past blogs).
Happy Thanks Giving and Happy Trails to you ’til we meet again.
November 27th, 2009 at 12:57 am
China is playing MONOPOLY on a global scale,and as soon as they have enough money they will buy everything on the board of value
and we will be left with baltic Ave.
November 27th, 2009 at 1:25 am
Some more financial hand waving news on GM.
http://finance.yahoo.com/banking-budgeting/article/108209/us-teaches-carmakers-capitalism
November 27th, 2009 at 1:40 am
I hope everyone in China chose to boycott GM&Chrysler, just like patriotic American should boycott Obama Motors. Vast majority of Chinese hate US government (most still like the country and have good will toward America, but only hatred toward US government).
When I was at a major Chinese auto company, their recruiting office, the phone just kept ringing, and many many unemployed GM/Ford/Chrysler engineers wanted an interview (that was 1:30AM in Detroit), and that was two years ago. You know what, the debacle of Detroit in the last 2 years will undoubtly benifit China and India, and a stronger auto industry from India or China will only bring more job losses in the heart of USA.
Also many many engineering departments in top universities throughout the country report that much fewer students are ursuing auto related engineerings for the obvious reason, plus the much damaged supply chain make the Us even weaker against Japanese, so in the long term, the US auto industry will be weaker and weaker. Now the GM bailout is likely to be a failure, so within several years, if GM or Ford need bailout, it will be even harder to get bailout money and GM or Ford may just plunge death.
America is a country lack long-term vision, one thing can be seen is recent reports:
1). UK commander in Iraq blasted American counterparts as “martian aliens”
2). US betrayed UK again by forbidding UK obtaining source code of F-35
BTW, GM is likely to be in failure mode before 2015 because there will be huge backlash against GM for their inability to bring Volt to a commercial success! Ford’s strategy will prove itself.
November 27th, 2009 at 1:55 am
BTW, I never buy American products if one of the following is true:
1). If there is a better product from Asia. (Electronics, etc)
2). If the company is owned by Us government. (like GM)
3). If I do not like the company, such as P&G, GE, DELL, Ford, Motorola, RCA, HP, Lexmark, Xerox, Merck, Linksys/Cisco, Western Digital, Kodak, Citibank, Chase, ExxonMobil, Chevron, Verizon, Kraft, GMAC, PhilipMorris, Kellog, Starbucks, Goodyear, Whirpool, Nike, Iomega, GAP, Coke, DishNetwork, Dow chemical, Disney.
I like the following American companies due to positive image they presented to the society:
Discover, Church&Dwight, Apple, Publix, Scottrade, Costco, 3M. Not really that many, (too bad).
BTW, one should support local small businesses, because they are the one who create the most job while hit the hardest during this recession with the least help from the non-sense bailout by Obama. Scottrade is an excellent employer, so I give them my business iinstead of Schwab..
November 27th, 2009 at 2:13 am
The US GDP values are “cooked” by the us gov.
Take away the “fudge” adjustments and the US has been in recession for several years.
- explains a lot!
Who are they trying to kid ? the average US citizen I guess….
With the trillions in deficit I don’t understand why the USD is worth anything when compared to other currencies?
In the long run unfortunetly the usa will have to lower their living standard to that of China or below to repay their debt.
It’s going to get ugly and we have all seen nothing yet ….
November 27th, 2009 at 2:56 am
In the long term, US will face more and more competition from Asian countries, China, Vietnam, India, Korea, Japan, etc. Not necessarily a bad thing if the innovation continues in this country, but unfortunately, the global competition gradually decimates corporate R&D, and eventually academic R&D, so there will be less and less innovation coming out of america, more and more over-leveraging, more and more short-sighted activity which will NOT produce any tangible results.
November 27th, 2009 at 3:08 am
Right Statik, personnaly I find very difficult to assess the (non)profitability of Opel or Saab… do you have a balance-sheet (a true one) of Saab or Opel ?)
If your answer is positive I would like to see it … but I doubt external observers of GM could produce them.
Regards,
JC NPNS
November 27th, 2009 at 3:39 am
http://theeestory.com/articles/196
Ian Clifford is still fronting for EEStor and is sticking to showing something by the end of the year, That’s 34 days from now. I kind of believe that they are going to show something pretty dramatic. I’ve been following the Boeing 787 story as well and both EEStor and Boeing have promised something pretty revolutionary but both have been beset by delays in bringing their products to market. Check out the clifford interview if you haven’t seen it already.
November 27th, 2009 at 8:06 am
I did have one, but unfortunately I forgot in my unicorn’s saddle bag, and now they all seem to have disappeared.
November 27th, 2009 at 10:23 am
If China buys GM and moves any manufacturing out of this country, that would be a Volt deal-breaker for me.
I have been waiting a very long time for an exceptionally fuel-efficient, U.S. made vehicle and I won’t comprimise on that simple requirement. I am willing to pay extra and concede on some other preferences, but I will not continue to have to either buy a U.S.-made gas guzzler or a car made with foriegn labor (when we deperately need jobs) and then had to be shipped here from a far-away place.
November 27th, 2009 at 11:05 am
[...] here, you might want to subscribe to the RSS feed for updates on this topic.Powered by WP Greet BoxYesterday morning, I saw this article from GM-Volt.com. It’s a good thing I hadn’t eat… Could this have been some kind of evil Thanksgiving Day trick? Something funny from those who [...]
November 27th, 2009 at 3:32 pm
The most interesting part of the article speculating on Chinese ownership of GM was:
—————————————————
More importantly, China is already in the lead for GM in terms of profits. While it does not break off earnings from China specifically, the country was the major driver of the $429 million it made in the Asia-Pacific region in the third quarter, which ran from its emergence from bankruptcy July 10 through Sept. 30.
The rest of GM’s overseas auto operations lost a combined $192 million in the same period, while its North American losses came to $651 million during that period.
All that strength in China could leave GM’s U.S. ownership somewhat vulnerable. If GM’s major Chinese partner, SIAC, wanted to buy a controlling stake in GM, the company would have a difficult time saying no, given its importance to the company’s future.
——————————————
Granted N. America sales should improve, but still interesting.
November 27th, 2009 at 4:27 pm
Seeing so much hatred toward China, the only wish I have is to see GM going total failure!
November 27th, 2009 at 8:40 pm
You make a fair point about the free-market not bringing about change in GM management — but then again, its pretty difficult to have free-market change when the government is ready and desirous of stepping in on a moment’s notice.
In the past, when management did a bad job, and wasn’t removed by the company directors, the failure and collapse of said business via the free-market would effectively remove them (plus said directors). Today, when management does a bad job, they are bought out by the government and retire on golden parachutes.
It’s precisely because of government interference that private business is unable to function properly.
Respectfully,
Dr. Ibringdoh
November 27th, 2009 at 9:39 pm
The very first sentence of that article says:
After revealing an eye-popping projected fuel economy figure for the Chevrolet Volt, General Motors took visiting journalists on a behind-the scenes tour of the carmaker’s design studios for a look at its future product line-up.
The fourth sentence says:
The Volt is obviously the biggest news coming from Chevrolet, but an upcoming redesign of the popular Malibu will make plenty of news of its own.
It’s as though they are trying to say the Volt is the biggest news coming from Chevrolet, and it has eye-popping projected fuel economy
And I’d say the article showcases the Chevy Malibu more than the Chevy Spark.
But thanks for the links – especially the one titled:
November 29th, 2009 at 3:08 pm
再见 GM.
December 1st, 2009 at 11:26 am
要小心 China.