GM to sell 20 pct stake in Suzuki Motor for $2.33B

[BigPontiac]

GM to sell 20 pct stake in Suzuki Motor - report

Sun Mar 5, 2006am ET

TOKYO, March 5 (Reuters) - General Motors Corp is planning to sell its 20 percent stake in Japanese compact-car maker Suzuki Motor Corp, the economic daily Nihon Keizai Shimbun (Nikkei) reported on Sunday.

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Full URL: http://yahoo.reuters.com/news/articlehybri..._T268646&rpc=44

[Newbiewar]

wtf...

why...?

[Northstar]

wtf...

why...?

Why not?

I don't see any reason to keep Suzuki... what does GM gain by it? Right now, GM needs money, and I don't think any resources Suzuki can offer GM are worth $2.33 billion. With that, GM can develop some kickass products.

[Guest Josh]

Ouch! That hurts Suzuki. With this and the impending cancellation of their codevelopment of vehicles it's safe to say Suzuki will pull out of North America for good.

But this begs the question, isn't GM thinking about bringing a version of the Swift over to compete with the Chinese towards the end of the decade? With the sale of Suzuki how could that still be feasible, especially at a profit generating stand point.

Furthermore, I wonder what Suzuki has cost GM compared to the $2.33 Billion it stands to make off this sale.

[rueben44]

Sorry this sounds crazy to me. Daewoo peddles their car to Suzuki which helps keep them making cars at a profit. Also GM has stake in a company that is doing well. Not to mention Suzuki is a way for GM to sell products to Japan. 2 Billion Is good but I would have rather they sell Isuzu stock than this!

All I have to say is we better see some great products with this money.

Edited March 5, 2006 by rueben44

[Newbiewar]

Sorry this sounds crazy to me. Daewoo peddles their car to Suzuki which helps keep them making cars at a profit. Also GM has stake in a company that is doing well. Not to mention Suzuki is a way for GM to sell products to Japan. 2 Billion Is good but I would have rather they sell Isuzu stock than this!

All I have to say is we better see some great products with this money.

Does GM know enough about the Duramax to redesign it from the ground up?

if GM pulled out of isuzu and suzuki they would both pull out of the US market, they both dont make anything competative...

thats less little mouths to feed... if GM sold that stock, the stock would probably fall very quickly...

this seems like a wise thing and a bad idea... but it seems GM hasnt spent much R&D with suzuki... i could be wrong, but...

[CaddyXLR-V]

Suzuki doesn't have much to offer GM anyway. They are good with small engines, but that is still of little benefit to GM, outside of sub-compact cars. Isuzi is much more valuable to GM with their experience in diesels, such as the duramax, and I'm sure they probably had a hand in developing the European diesels as well.

[Newbiewar]

Suzuki doesn't have much to offer GM anyway. They are good with small engines, but that is still of little benefit to GM, outside of sub-compact cars. Isuzi is much more valuable to GM with their experience in diesels, such as the duramax, and I'm sure they probably had a hand in developing the European diesels as well.

for what i've heard GM is going to be designing a 5.3 dsl under the chevy brand, or whatever... and it'll just be a chevy dsl instead of some kind of name brand duramax... because of the tapped out capacity on the duramax we will be able to see this 5.3 in the SUV's...

so if this is the case, GM already has the info they need from izusu what else could we take from them before liquidating that asset?

[thegriffon]

Technically all Isuzu's light diesel engineering capability and much of the production capacity outside Japan is owned by GM already. Isuzu talks like they are doing it, but when you dig down you find out that it is all GM now. BTW Suzuki would still be a major shareholder in GM Daewoo, so no reason to think supply of Forenza's would be disrupted. There never were any plans for GM to bring in the Swift, although Suzuki was considering it for the next generation. GM may have simply decided the strategic shareholding is redundant—any future co-operation can be done without it.

[Newbiewar]

Technically all Isuzu's light diesel engineering capability and much of the production capacity outside Japan is owned by GM already. Isuzu talks like they are doing it, but when you dig down you find out that it is all GM now. BTW Suzuki would still be a major shareholder in GM Daewoo, so no reason to think supply of Forenza's would be disrupted. There never were any plans for GM to bring in the Swift, although Suzuki was considering it for the next generation. GM may have simply decided the strategic shareholding is redundant—any future co-operation can be done without it.

in the transaction Suzuki would reduce their ownership of daewoo...

"Suzuki, in turn, is considering selling some of its 11 percent stake in GM's South Korean subsidiary, GM Daewoo Auto & Technology Co, Kyodo News Agency said, citing unnamed sources familiar with the matter."

Edited March 5, 2006 by Newbiewar

[Dragon]

But this begs the question, isn't GM thinking about bringing a version of the Swift over to compete with the Chinese towards the end of the decade? With the sale of Suzuki how could that still be feasible, especially at a profit generating stand point.

which swift, our swift or the Euro swift?

but in Europe, they have a toally different model

http://automobile.nouvelobs.com/mag/040920/suzuki_swift/images/270.jpg

[Ghost Dog]

I wonder what will happen with CAMI?

[thegriffon]

which swift, our swift or the Euro swift? 

but in Europe, they have a toally different model

http://automobile.nouvelobs.com/mag/040920/suzuki_swift/images/270.jpg

Ah, you have to realise one is the Swift, the other is the larger Swift+.

[The O.C.]

Ouch! That hurts Suzuki. With this and the impending cancellation of their codevelopment of vehicles it's safe to say Suzuki will pull out of North America for good.

But this begs the question, isn't GM thinking about bringing a version of the Swift over to compete with the Chinese towards the end of the decade? With the sale of Suzuki how could that still be feasible, especially at a profit generating stand point.

Furthermore, I wonder what Suzuki has cost GM compared to the $2.33 Billion it stands to make off this sale.

To show you how inept Suzuki management is........(this according to a friend of mine that worked at Suzuki....)

As the new Swift was being developed for Europe/Great Britain, the Japanese in Japan offered the new car to the Japanese management here in the U.S.A....and they resoundingly turned it down.

THEN the dealer body started seeing the new Swift in the magazines, etc....and were CRYING for the car. Alas.....at this time, it was too late to bring it over here because it doesn't meet U.S. certification and would cost way too much to redesign it to meet our standards.

The dealers apparently love the MINI-esque styling, the much-improved interior styling/quality, and the relative affordability that the car would have brought to the current Suzuki line.

Too bad....I think the new Swift could have been a much-nicer alternative to cars such as the Aveo, Yaris, Fit, and Verso.

[Shantanu]

Do you see Toyota or Honda buying stakes in foreign automakers? Of course not.

GM needs to dump its stakes in foreign car makers, and use that money to invest in its own products.

That's how Toyota and Honda are successful.

That's how the old GM was successful back when they had 50% of the U.S. market.

Fiat, Isuzu, Subaru, Suzuki... All a global coalition of losers. GM doesn't need them.

[The O.C.]

Do you see Toyota or Honda buying stakes in foreign automakers?  Of course not.

GM needs to dump its stakes in foreign car makers, and use that money to invest in its own products.

That's how Toyota and Honda are successful.

That's how the old GM was successful back when they had 50% of the U.S. market.

Fiat, Isuzu, Subaru, Suzuki...  All a global coalition of losers.  GM doesn't need them.

Uh, you need to recheck your facts before you declare Isuzu, Subaru, and specifically Suzuki as "global losers."

Fiat...? Maybe more of an argument there...

But you can't base a declaration of a brand being a "loser" just because it doesn't do volume in the U.S.A.

Last time I checked, Suzuki was the fourth-largest Japanese manufacturer world-wide....and wildly profitable to boot. Not to mention the successes they've had with motorcycles, ATVs, and (to a smaller extent) outboard boat motors.

[Newbiewar]

Uh, you need to recheck your facts before you declare Isuzu, Subaru, and specifically Suzuki as "global losers."

Fiat...?  Maybe more of an argument there...

But you can't base a declaration of a brand being a "loser" just because it doesn't do volume in the U.S.A.

Last time I checked, Suzuki was the fourth-largest Japanese manufacturer world-wide....and wildly profitable to boot.  Not to mention the successes they've had with motorcycles, ATVs, and (to a smaller extent) outboard boat motors.

yea suzuki i believe is the worlds largest motorcycle seller... i could be wrong, but last i checked...

also they are quite powerful...

and izusu has a good grip on dsl technology and medium duty trucks...

and subaru also builds pretty high quality cars, they dont want to sell a lot tho... they arent after volume... or so it seems... cause if they wanted to grow they could...

[Petra]

I don't know about this... On the one hand, it gives GM a little more money to work with. On the other hand, Suzuki would have been an excellent window into Japan for GM to import cars. I guess if they need the cash that badly...

[sciguy_0504]

I am kind of on the fence with this one. All of the pros and cons cancel each other out and a big question mark is left.

[Shantanu]

Suzuki's motorcycles aren't going to help GM in America.

Subaru's only collaboration with GM, the Saab 9-2X was a huge flop. It's butt ugly AWD cars sell well in upstate NY and Colorado, but don't make much of an impact in this country beyond that.

Isuzu? Let's not even go there.

If GM owned a 20% stake in say Toyota, or Honda, or even BMW, now that would be something.

But it bought up small chunks in all these companies that at the end of the day have been pretty much useless in terms of helping GM either in America or globally. And it's time to dump them, and put that money towards building cars that people actually want to buy.

[regfootball]

oh guys, you don't see this?

CMON!

this means GM will be selling all the Daewoos in the US now, not Suzuki!

this clears the conflict to enable GM to start loading up the showrooms with all the cheap to build GMDAT product and not have to worry about having a same version of it in the Suzuki showrooms!

in 5 years, half of chevy's lineup will be Daewoos now!

Edited March 5, 2006 by regfootball

[Shantanu]

I don't know about this... On the one hand, it gives GM a little more money to work with. On the other hand, Suzuki would have been an excellent window into Japan for GM to import cars. I guess if they need the cash that badly...

You're making it seem as if this tie up happened two months ago. GM has owned part of Suzuki for a long time, and they've haven't exported jack sh|t to Japan. Suzuki doesn't want GM selling American cars in Japan. The Japanese don't want GM selling American cars in Japan. It's as simple as that. GM's turnaround will take place in America, not in Japan.

[regfootball]

right. that too. I bet there is a sleeping giant part of the population that is not far from awakening....a very ANTI Japan sentiment.

[ehaase]

this clears the conflict to enable GM to start loading up the showrooms with all the cheap to build GMDAT product and not have to worry about having a same version of it in the Suzuki showrooms!

in 5 years, half of chevy's lineup will be Daewoos now!

That is a very possible scenario. North American trucks and Korean cars.

[I hope GMRULES again]

Wasn't CAMI schedules to get a Suzuki version of the Equinox to build? I guess that is out now. I was wondering why Suzuki just brought out a new Grand Vitara that is similair in size to the Nox but its from Japan.

[Variance]

It looks like there's some clarification on this issue put out by GM:

Automotive News: GM says it has no plans to fully sell Suzuki stake

[FUTURE_OF_GM]

I'm very on the fence with this one... But, keep in mind, GM *WILL* still be tied to Suzuki through GMDAT.

RE: Shantanu, I agree... The share holding(s) have done pretty much NOTHING for GM short of the Duramax...

RE: regfootball, I could see that as well. I'm not sure that I'm excited about it but GM *DID* say that Asia Pacific WOULD take the lead role in designing small cars for the company.

I guess this is a mixed bag.... I WOULD like to see GM use Suzuki to crack Japan though (Buncha communists)

[regfootball]

chevy in europe is daewoos. so it wouldnt surprise me to see the US get there eventually for its cars and small SUVs

[sciguy_0504]

A Korean Corvette? No thanks.

Call me old fashioned but having 50-90% of Chevy (or GM) cars come from Korea would be a major turnoff. After all, you could walk to the Hyundai or Kia dealership and get the same thing. I would rather have a craptacular Malibu.

[Shantanu]

A Korean Corvette?  No thanks.

Call me old fashioned but having 50-90% of Chevy (or GM) cars come from Korea would be a major turnoff.  After all, you could walk to the Hyundai or Kia dealership and get the same thing.  I would rather have a craptacular Malibu.

Hey buddy, whose to say GM's Korean stake isn't next to go? This is a company that's getting back to its basics, and back to its American roots.

[sciguy_0504]

Hey buddy, whose to say GM's Korean stake isn't next to go?  This is a company that's getting back to its basics, and back to its American roots.

I highly doubt GM is going to dump Daewoo because the cars are doing well in Europe and other areas of the world. GM just has to make sure to keep them in those areas.

[buyacargetacheck]

GMDAT is the one foreign venture that seems to be working at the moment. Daewoo will stay within GM's orbit. Hello, they got a hell of a deal on it! How could they lose at this point???

Suzuki, on the other hand: GM doesn't need it. But they do need the cash a Suzuki sale would provide.

Now, if they can ditch the other two albatrosses, Isuzu and Saab, they'll be on the way to shoring up their future.

[Northstar]

Apparantly GM is not selling all of its stake in Suzuki: GM says it has no plans to fully sell Suzuki stake

[TKR]

Do you see Toyota or Honda buying stakes in foreign automakers?  Of course not.

GM needs to dump its stakes in foreign car makers, and use that money to invest in its own products.

That's how Toyota and Honda are successful.

That's how the old GM was successful back when they had 50% of the U.S. market.

Fiat, Isuzu, Subaru, Suzuki...  All a global coalition of losers.  GM doesn't need them.

.........Holden, Vauxhall, Daewoo, Opel, SAAB. Yip GM should just stick it's head in the sand and stay in the good ol' US of A!

How did GM start? Oh yeah now I remember, they bought lots of smaller auto companies.

[TKR]

GMDAT is the one foreign venture that seems to be working at the moment.  Daewoo will stay within GM's orbit.  Hello, they got a hell of a deal on it!  How could they lose at this point???

Suzuki, on the other hand: GM doesn't need it.  But they do need the cash a Suzuki sale would provide.

Now, if they can ditch the other two albatrosses, Isuzu and Saab, they'll be on the way to shoring up their future.

Not everyone on this planet wants a full sized pickup. Isuzu supply GM with a great mid sized (small for the US) pickup that sells quite well in Australia and New Zealand (Holden badged). Where else would we get this type of product? The problem with GM is that is has been too NA centric (as per your comments) for too long while Toyota and Honda think on a global basis.

[regfootball]

you'll never see corvettes or camaros made in Korea. But malibus and cavaliers and maybe even impalas and luminas...........

Edited March 6, 2006 by regfootball

[Shantanu]

.........Holden, Vauxhall, Daewoo, Opel, SAAB. Yip GM should just stick it's head in the sand and stay in the good ol' US of A!

How did GM start? Oh yeah now I remember, they bought lots of smaller auto companies.

With the exception of Daewoo, all the other companies you've listed are part of GM.

There's a big difference between owning something 100% outright, in which case you call all the shots, and having some joint venture with an unreliable foreign partner, who doesn't give two $h!s about what your plans/needs are, and who has their own agenda to compete against your products.

One reason the Daewoo thing is going so well is that GM owns the biggest chunk of it, and calls most of the shots.

I know people here hate Toyota and Honda, but it's time to acknowledge smart moves that these companies make. When Toyota and Honda make money, they don't go blow it on stupid 25% purchases of foreign automakers, with whom their supposedly collaborating on some products, but competing against with others. They use that money to invest in new cars. That's a smart move, and it looks like GM has come around (finally) to seeing it their way.

Edited March 6, 2006 by Shantanu

[Newbiewar]

Suzuki's motorcycles aren't going to help GM in America.

Subaru's only collaboration with GM, the Saab 9-2X was a huge flop.  It's butt ugly AWD cars sell well in upstate NY and Colorado, but don't make much of an impact in this country beyond that.

Isuzu?  Let's not even go there.

If GM owned a 20% stake in say Toyota, or Honda, or even BMW, now that would be something.

But it bought up small chunks in all these companies that at the end of the day have been pretty much useless in terms of helping GM either in America or globally.  And it's time to dump them, and put that money towards building cars that people actually want to buy.

GM has rebadged vehicles selling out of Suzuki and Izuzu dealerships... so its more places to keep the GM factorys working... its a good thing, but if GM is going to close down a lot of its plants to increase production at others, i think they dont need the extra rebadged vehicles...

You're making it seem as if this tie up happened two months ago.  GM has owned part of Suzuki for a long time, and they've haven't exported jack sh|t to Japan.  Suzuki doesn't want GM selling American cars in Japan.  The Japanese don't want GM selling American cars in Japan.  It's as simple as that.  GM's turnaround will take place in America, not in Japan.

The question is... if this 20% shares are listed at 2.33 billion, how much did they buy it for in 1980, i can tell you for a fact it wasnt 2.33 billion, likely they are doing this, for a few reasons...

When GM sold their Fuji Industrial Motors shares they took a loss... although they accually received half a billion, on paper, to the government, and to the shareholders it looks like a loss... but in reality... its GM's money and now they have it back in their possession...

same thing here, although i think their investment has grown considerably... soo... this 2.33 billion would look like a huge profit if they were to liquidate their shares... so, it would attract more shareholders because people thought that GM was making a profit with their own automobiles again... lets go with the nissan way...

Shift_perception

weather it is a good long term idea or not... right now GM must focus on the real problem, they might not have 5-10 years down the road if they dont fix the problem that exists today...

[VenSeattle]

Do you see Toyota or Honda buying stakes in foreign automakers?  Of course not.

Uhm... Toyota is the one who bought half of GM's shares of Subaru/Fuji Heavy when GM sold not too long ago.

But also, Suzuki is not a "global loser" either. Suzuki is 4th largest of the Japanese manufacturers with global sales and profits increasing significantly over the past 5 years.

Check out their annual report etc...

[Dragon]

Wasn't CAMI schedules to get a Suzuki version of the Equinox to build? I guess that is out now. I was wondering why Suzuki just brought out a new Grand Vitara that is similair in size to the Nox but its from Japan.

With all the money CAMI has already invested in tooling, I doubt they would cancel it at this late stage and last I heard it was still a go

[CARBIZ]

In certain markets, the Suzuki/GM affiliation is not helping. When you can buy 3 versions of the Aveo with only a different emblem on the grille, that is just sad. In an area with a lot of recent Asian immigrants, many people would rather drive a Suzuki Swift + over an Aveo.

GM-DAT is an investment in the future. If GM cannot build sub-$13k cars in North America and make a profit, then they need to move those products off shore. It may be the only way to beat Toyota at their own game.

I agree with the North American-centric attitudes of GM. Those attitudes are fine at $2 a gallon, but at $4 a gallon they will be suicide. I've never seen the benefits of owning a piece of Suzuki, but more should be made of GM's other global affiliations and ownerships! Many Vauxhalls/Opels would do well, at least in Canada.

[Shantanu]

GM has done really well in China, but in India which is also growing very fast GM is not a big player.

Maruti-Suzuki which is a joint venture between Suzuki and the Indian government is the biggest car maker in India, so as a result of that GM has stayed out of this fast growing market because they own a chunk of Suzuki, and they didn't want to compete against something that they own a piece of.

So in this instance, GM's partnership has held them back from expanding in an important market.

I'm not North America centric. I think a GM comeback will also be based on putting the import brands on the defensive on their own turf. But any overseas success will have to be based on the China model, where GM did their own design work and only collaborated on the manufacturing aspect with other companies.

Edited March 6, 2006 by Shantanu

[ToniCipriani]

I don't see why not. Other than the Aerio, all the others are rebadged Daewoos, minus the Grand Vitara, which is similar to the Equinox. It's just more competition.

[thegriffon]

GM has done really well in China, but in India which is also growing very fast GM is not a big player.

Maruti-Suzuki which is a joint venture between Suzuki and the Indian government is the biggest car maker in India, so as a result of that GM has stayed out of this fast growing market because they own a chunk of Suzuki, and they didn't want to compete against something that they own a piece of.

So in this instance, GM's partnership has held them back from expanding in an important market.

I'm not North America centric.  I think a GM comeback will also be based on putting the import brands on the defensive on their own turf.  But any overseas success will have to be based on the China model, where GM did their own design work and only collaborated on the manufacturing aspect with other companies.

Suzuki has not stopped GM expanding in India. Rather it is lack of capacity and the right product. Now that it has GM Daewoo it has access to it's own A-segment model which should be a big hit in India, but with bureaucratic shambling destrying the old Daewoo India plant, have not had a place to build it. Their current plant just hasn't had the capacity, and it will take time to expand. As it is they have had to outsource engine production.

[thegriffon]

Wasn't CAMI schedules to get a Suzuki version of the Equinox to build? I guess that is out now. I was wondering why Suzuki just brought out a new Grand Vitara that is similair in size to the Nox but its from Japan.

(Sigh)

The Grand Vitara is significantly smaller than the Equinox - a small C-segment SUV, rather than a large D-segment crossover. The midsize Suzuki previewed recently is based on the Equinox.

[The O.C.]

Suzuki's motorcycles aren't going to help GM in America.

My point is....motorcycles aside.....Suzuki is the 4th largest seller of Japanese AUTOMOBILES in the world......

While their contributions to GM may be suspect, that doesn't mean you can classify them as "global losers."

[The O.C.]

Wasn't CAMI schedules to get a Suzuki version of the Equinox to build? I guess that is out now. I was wondering why Suzuki just brought out a new Grand Vitara that is similair in size to the Nox but its from Japan.

The next generation XL-7 is a stretched "Equinox" and is very much close to production and not likely to get cancelled in any way (according to Suzuki sources themselves.)

So you'll have a "new" XL-7 that will be significantly bigger (and with a third-row seat) than the "new" Grand Vitara just introduced. It's also got a 3.5L V6 engine....but my Suzuki sources couldn't confirm if it was the 3.5L HV V6 or the 3.5L Honda V6 (from the VUE.)

[The O.C.]

I don't see why not. Other than the Aerio, all the others are rebadged Daewoos, minus the Grand Vitara, which is similar to the Equinox. It's just more competition.

Grand Vitara shares nothing with Equinox.

The new XL-7 (on it's way) is another story.....

[drew770]

GM has to realize that it needs to refocus on the North American market. Like it or not North America is where GM is extremely weak on the car basis.

By unloading Suzuki GM has gotten some much needed cash that could go toward the bottom line.

Plus, GM is keeping 3% so when things turn around and GM is making a profit they can always increase their share of the automaker.

[carman21]

Ok, before somebody calls out "Fire!" in a theater. Hey, look Suzuki, Subaru, Fiat, Isuzu, etc. Are interesting investments but, Daewoo is a winner. GM got its own Hyundai. Now GM will develop product in the US, Germany, and Korea. Daewoo-based products will soon be built in NA. So, let's not jump off the deep end. Ok?