By now, you’ve no doubt heard the news: General Motors’ Chinese partner, Shanghai Automotive Industry Corporation (SAIC) will take a controlling stake in GM by purchasing the equity sold to the U.S. and Canadian governments during the bailout. But what does it mean for the future of GM?
The announcement was brief, cryptic and buried in the excitement over the multitude of concepts and new vehicles GM has just announced it will debut at the Shanghai auto show in a few weeks. The press release reads simply:
“Shanghai Automotive Industry Corporation (SAIC) and General Motors (NYSE: GM) are announcing today that an agreement has been reached with the governments of the United States and Canada that will allow SAIC to purchase the shares of GM owned by the respective governments. The sale is expected to be completed by this time next year pending approval from U.S., Canadian and Chinese government regulators.”
The implications of this announcement are enormous. The U.S. Treasury currently holds a 26-percent stake in General Motors after selling roughly half of its interest during the company’s Initial Public Offering in November 2010. The Canadian Government, meanwhile, holds nine percent of GM stock after selling of 17.4-percent of its stake during the IPO. Together, that’s 35-percent of the company.
3 comments:
Who didn't see that coming. The Chinese practically own us now. The path this country is on is dark if something doesn't change soon. Speaker Boehner needs to get a pair real fast or 2012 election may not make a difference.
American businessmen are selling out to foreigners. They are shameful. This is a way for them to avoid paying taxes. GM, you sell outs. I won't buy another vehicle from them. American citizens need to wake up. If GE, Wal Mart, GM and other rich big businesses think it's better to invest in other countries and not at home; we should just boycott these sell out. Don't purchase anythin from these company. Let's build and purchase American brand products.
who buys these products anyway? There are much better quality built cars on the market for the same if not less money!
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