Chinese to Buy GM, Chrysler

[A Horse With No Name]

http://www.thetruthaboutcars.com/breaking-...er/#more-156041

Read the link and comment, please.

This is Dire!

Chris

[Croc]

Heh, this will really rile up the politicians. If true, this pretty much guarantees a bailout. Maybe a republican or two will be convinced under the guise of "national security" crisis.

[A Horse With No Name]

...or perhaps the new Camaro will be Hot and Sour rather than Hot and Spicy...

Chris

[Robert Hall]

...or perhaps the new Camaro will be Hot and Sour rather than Hot and Spicy...

Chris

Wow....Kung Pao Camaro. These are surreal times. Maybe the Indians (Tata and Mahindra) will get in the game also... mmmm...Challenger SRT8 Vindaloo..

Edited November 19, 2008 by moltar

[A Horse With No Name]

As screwed up as things are getting, I'm worried that if I buy a new Camaro or Solstice it's perhaps going to bow to Mecca 5 times a day to pray.

I really despise the idea of China buying our auto industry. This just sucks...

Chris

Edited November 19, 2008 by 66Stang

[Robert Hall]

As screwed up as things are getting, I'm worried that if I buy a new Camaro or Solstice it's perhaps going to bow to Mecca 5 times a day to pray.

Chris

Well, we are already helping them when we fill up at the gas pump... strange days, these are.

[Intrepidation]

It will be the end of days if this happens.

Not only for the auto industry but for this country.

Edited November 19, 2008 by Dodgefan

[trinacriabob]

It will be the end of days if this happens.

Not only for the auto industry but for this country.

Thank top-of-the-heap American, and developed world, greed for making this happen...Enron, WaMu, etc. etc. Think of how many people are hurt by the actions of a few, and this is coming from someone who started out in the college of business administration....

[Intrepidation]

Yup, and the result of this will be America becoming a 2nd-rate nation, we are already well on the way now, this will merely seal that fate.

[FAPTurbo]

That is the best f*cking news ever!

Do we actually think the American government is going to let this go through? This probably would guarantee that GM will get a major cash infusion from the government!

[vonVeezelsnider]

$h!.

Hopefully this guarantees the Bailout

This will doom North America, US Canada and Mexico if it happens... Oh well. I'm not buying cars from a Chinese-owned company so if this ends up happening I'm heading over to Ford.

[BuddyP]

Yeah, read that a couple days ago and meant to post it. If a Chinese company bought GM I would no longer have any GM vehicle in my driveway. But I really doubt this will happen.

[A Horse With No Name]

I really hope it doesn't.

We had major greed during the robber baron era in this country during the 1890's, and then had reform under Teddy Roosevelt, Woodrow Wilson, and others...American Women got the right to vote, and the economy came back.

Hopefully we get a new era of reform and growth after our current era or greed, apathy and corruption.

A GM bailout can't happen quickly enough.

Chris

[Camino LS6]

Grim.

And that site is infested with adbots, not to mention that it sucks in general.

[Intrepidation]

Grim.

And that site is infested with adbots, not to mention that it sucks in general.

True that.

[Drew Dowdell]

This is not a political comment but an economic one:

Where did all the free market capitalists I used to do battle with go? This is classic stuff for them. Economic darwinism, global trade, etc.

[smk4565]

When you let market cap fall to $1.7 billion you run the risk of being bought. I am surprised Kirk Kerkorian hasn't come back.

[PurdueGuy]

This is not a political comment but an economic one:

Where did all the free market capitalists I used to do battle with go? This is classic stuff for them. Economic darwinism, global trade, etc.

The trouble is when you link a free market to one that's not. It's like having the olympics, but some countries can use steroids and other aids.

[Sixty8panther]

This is not a political comment but an economic one:

Where did all the free market capitalists I used to do battle with go? This is classic stuff for them. Economic darwinism, global trade, etc.

Even as a dumb kid back in high-school, ('93-'97)

already a self-proclaimed Republican, I was very

much disgusted with the idea of what we call

"FREE" trade and an open market.

[A Horse With No Name]

Exactly. The markets we have right now are anything but fair and free.

Chris

[Newbiewar]

Thank top-of-the-heap American, and developed world, greed for making this happen...Enron, WaMu, etc. etc. Think of how many people are hurt by the actions of a few, and this is coming from someone who started out in the college of business administration....

im not certain if u are considering wamu to be corrupt like enron, but if you are, you are stepping on some mighty big toes... the treasury is corrupt and might have taken lessons from enron on how to sell power/debt to other companies... but at some point... it stops and someone falls big... im thinking its going to be citibank... fdic tried to keep them afloat by giving them wachovia, but as u can see that failed to go through, and citi is stumbling, very badly.

[Daryl Z71]

If this happens I'll head straight for the Ford Dealership.

[thegriffon]

Gives a new meaning to breaking news—that's not just broken it's pieced back together with the words in the wrong order.

[thegriffon]

It has no chance of ever happening. The Chinese are grossly overestimated. Take Chery, widely expexted by many to lead the cha4rge into western markets:

"I wouldn't place much hope on it," says a former Chery executive familiar with the Chrysler deal. "Both companies have their own problems to deal with, and both have run out of money."

He says the substandard quality of Chery's cars was a major obstacle. "Chery knows there is no way for these cars to meet the safety and emission standards of the U.S. market in the near future."

Chrysler and Chery never said when Chery-made cars would arrive in U.S. showrooms. In a May interview with Automotive News, LaSorda's said plans for the U.S. showrooms were encountering difficulties.

"We need small cars," LaSorda, now co-president of Chrysler, said. "Chery's cars are still not ready for that exposure into these markets." He said China-built cars probably won't be ready to meet U.S. safety and emissions standards for "three years or more." …

…China's slowing auto market is hitting Chery hard, and sources say it is laying off employees and freezing development of some new models.

A Chery supplier, who declined to be identified, said Chery is cutting sales targets by at least 50 percent for the second half of this year.

Sound familiar?

SAIC and Dongfeng are publicly listed companies. You can buy shares. The government is not going to give them heaps of money to buy GM or Chrysler. Neither is large enough nor has enough money to repay debt or fund extensive model development, and unlike some Chinese rivals (e.g. Chery), they know it. SAIC is the largest and wealthiest of the Chinese Big 3, and the number of new cars it has developed? One, and that based on work already begun by MG Rover. No new engines, and not yet any transmissions (which they are working on in a partnership). It has its hands full just with Ssangyong, Roewe and MG. Dongfeng has, well none, just rebadged Nissans produced by the JV half owned by Nissan. The third big Chinese maker, FAW, produces only reworked Mazdas, Toyotas, and ancient Daihatsus and Audis, and only makes money building and selling vehicles under those and other JV import brands.

[FUTURE_OF_GM]

Heh, this will really rile up the politicians. If true, this pretty much guarantees a bailout. Maybe a republican or two will be convinced under the guise of "national security" crisis.

F*ck Washington... I'm so over this and this country...

(I'm as over america as PCS is Pontiac -- you know, once fiercely loyal, but now outcast and betrayed)

I hope every damn automaker we own gets bought by the Chinese.

I'll be a very loyal import buyer then.

[FUTURE_OF_GM]

$h!.

Hopefully this guarantees the Bailout

This will doom North America, US Canada and Mexico if it happens... Oh well. I'm not buying cars from a Chinese-owned company so if this ends up happening I'm heading over to Ford.

I certainly will...

In fact, I'll be on their doorstep applying for the top marketing position within hours of the purchase.

If america wants to cut it's own throat, then I'll help sharpen the knife. The Chinese could DOMINATE the in industry with these companies and the resources they have. So, after all, I'm just being greedy at the cost of others after someone was greedy at the expense of my standard of living.

If this happens, I'll tirelessly promote buying Chinese at the expense of everything else. Remember, I am loyal to these companies, not this country.

[Oracle of Delphi]

F*ck Washington... I'm so over this and this country...

(I'm as over america as PCS is Pontiac -- you know, once fiercely loyal, but now outcast and betrayed)

I hope every damn automaker we own gets bought by the Chinese.

I'll be a very loyal import buyer then.

You underestimate my loyalty Sir, I am fiercely loyal to GME and Opel. I don't think I'm considered an outcast by anyone within GM, especially not by CPF or the GME staff.

[regfootball]

You underestimate my loyalty Sir, I am fiercely loyal to GME and Opel. I don't think I'm considered an outcast by anyone within GM, especially not by CPF or the GME staff.

where's our Insignia on these shores, sir?

[daves87rs]

I can't simply see that happening....I'm agree with Griff on this-

I don't think the Chinese can afford to buy them....

[A Horse With No Name]

They can afford to buy them...but will they?

Chris

[thegriffon]

From ANE:

"…Supported by strong brands, the joint ventures of international automakers and major state-owned Chinese auto manufacturers are still profitable, though they are making less money than before.

The small automakers at risk include Chery Automobile Co., Geely Automobile Holdings Co., BYD Auto Co., and Great Wall Motor Co. Their vulnerability lies partially in heavy dependence on exports for profits.

By selling to emerging markets, they avoid competing head-on with international players in China. Market analysts say Chery, for instance, can make more than 10 times as much money selling a QQ small car in the Middle East as on the domestic market.

With the global economy sliding into a deep recession, exports of these companies have slumped.

Detailed figures are not available. But at a recent industry conference in Shanghai, Geely's president Li Shufu acknowledged that his exports to some developing countries have dropped more than 60 percent since September.

Geely has already cut its export target for this year to 40,000 cars from 60,000. Li estimates the exports of other domestic automakers have also declined sharply.

Exports are an even greater share of total sales at Chery and Great Wall.

All three companies have been expanding fast and therefore cash is tight. Both Chery and Great Wall sought to raise funds from the domestic stock market earlier this year. But Chery couldn't meet the stock listing requirements while Great Wall's listing application was rejected by market regulators.

Slumping sales will put pressure on their already weak liquidity positions.…

…Thanks to profits contributed by their joint venture partners, major state-owned automakers, such as China FAW Group and Shanghai Automotive Industry Corp., are still cash rich.

As long as major state-owned automakers can stay afloat, the government has little incentive to support the domestic industry. So the small automakers face an increasingly difficult future.

I wouldn't be surprised if one or two of them close down or are acquired by a major state-owned automaker."

Chery in particular has spent a ton of money paying European companies to engineer dozens of vehicles and engines for them (more new engines than every other automaker combined). They now don't have the money to introduce them as rapidly as planned and need to find OEM customers ASAP. Except no-one is buying. They are now, belatedly looking for JVs to prop up their business. These are companies that make the former Daewoo Motors' rapid expansion plans look careful and conservative, and we know how that ended.

The big three (SAIC, FAW and Dongfeng) are cash rich, relatively. But they remain small companies—the largest, SAIC, sold just under 2 million vehicles last year, including Ssangyong in Korea and medium/heavy trucks. and almost half of that revenue was split with GM (a quarter SGMW and a quarter SGM—SVW and Ssangyong make up most of the rest). All Ssangyong's earnings and more is spent on new models for Ssangyong—new unibody vehicles to supplement the fuel-sucking BOF trucks it builds now, sales of which are falling sharply. They are also spending heavily on new vehicles and transmissions for Roewe and MG. None of this though comes anywhere near what they'd need to spend on GM to make any more than a symbolic investment worthwhile, or even to develop new vehicles for Buick in China independently of GMs broader international operations. Neither does Dongfeng have the money to really make use of a Chrysler acquisition. They are already getting vehicles from Nissan they can rebadge as Dongfeng models, and Chrysler can't supply the smaller vehicles they really need. Should they even want the 300, Charger etc. they don't have the sales revenue to fund replacement models, nor the cash to enable Chrysler to do so.

[cmattson]

Wow! An article from TTAC that's just a speculative, steaming pile of !@#%$? Who'd have thunk it?

If I've got this right, this TTAC website has a 'Death Watch' on a company that's been running for what, 2 years? 3 years? During that time frame, GM has (tenatively) addressed every mess from legacy pension obligations to wage concessions, Fiat, and Delphi. All the while, every vehicle they put out has been increasingly better and better. Witness the every increasing change in sedans from the 2004-2007 era Chevrolet Malibu to the award winning Saturn Aura to the current generation Chevrolet Malibu. Each one incrementally better than the last. How about the CTS? The Corvette? The competitive w/the BMW 5-series Pontiac G8? How about a 37mpg Chevrolet Cobalt - that can best the gas milage of a Honda Fit - while delivering way more hp and torque. Powertrain tech. that mighty Honda doesn't have (6-speed transmissions) and a looming industry-changing vehicle in the Volt.

It's a shame GM had to lay down $38b to fund pension obligations - but long term, it sheds them of a almost-$5b/year cash drain. If they can extend themselves into 2010 to realize the gains of the new UAW contract, GM may finally be able to say they've turned the ship around. What will TTAC be at then? Death Watch #104683? At the point you reached >50 entries in that series, don't you think you've lost a bit of credibility regarding an iminent 'Death Watch'? Just sayin'

[Camino LS6]

TTAC is garbage, always was.

[A Horse With No Name]

Actually, I would like to se what TTAC would say if GM is in a really good position in about 2 or 3 years.

Chris

[CARBIZ]

When you get fired from the WSJ, you go work for TTAC.

[A Horse With No Name]

It is so hard to find good journalism anymore. Honestly, if it's not the Economist of the BBC, I am afraid to trust anything.

Chris

[FUTURE_OF_GM]

You underestimate my loyalty Sir, I am fiercely loyal to GME and Opel. I don't think I'm considered an outcast by anyone within GM, especially not by CPF or the GME staff.

You once were loyal to Pontiac.

Something pissed you off, so now you feel outcast and have turned against the brand as a result.

That was my point.

(And don't try to deny it... I know your affinity for certain Pontiacs

[ShadowDog]

Hmm, this just provokes thoughts on how much cheaper a Chinese-GM car would end up costing if the labor-rate for production is nothing more than a loaf of bread per day. I could own a brand new ChiVette for a third the price! I will prefer to wait and see.

[A Horse With No Name]

Well, if they do get bought by the Chinese, and they do bring back a cheapened Chevette from China (and put a diesel in it perhaps) there is one advantadge.

If you drive it on a date and get to go out with her (or him) again, you know that they love you for something other than your money.

Seriously though, I am so tired of crap from China filling our landfills I could just scream.

Chris

[Robert Hall]

I suspect if we eventually see Chinese cars in the US, they will be sold at Wal-Mart and Sam's Club under a store brand or at Costco as a Kirkland...since those companies sell massive amounts of Chinese products now, they would be a likely partnership venue..

[A Horse With No Name]

...this would be interesting. Since these cars would be too cheap to repair, walmart wouldn't need a service department to fix them.

Chris