10:25am: GM, Chinese partner join forces in India
BEIJING (AP) - General Motors Co. and its main Chinese partner announced a venture Friday to sell vehicles in India, uniting in the two fastest-growing car markets in a deal that reflects GM's reduced status as a global automaker.
As part of the deal, GM gave majority ownership of its main China joint venture to Shanghai Automotive Industries Corp., which is to invest up to $350 million in the India initiative. GM said they also would collaborate in future efforts to sell vehicles in other emerging markets such as Southeast Asia.
GM has struggled for market share in India's fast-growing car market and a company official said bringing in SAIC and its investment meant the Indian venture could develop more quickly.
The deal comes on the heels of GM's board and CEO Fritz Henderson parting ways Tuesday, the board upset that the automaker's turnaround wasn't moving more swiftly and Henderson frustrated with second-guessing, two people close to the former CEO said. Board Chairman Ed Whitacre Jr. has taken over as CEO while a global search is conducted.
Analysts said the moves in China and India reflect the U.S. automaker's pressing need for money as it overhauls operations following a restructuring in U.S. bankruptcy court. The U.S. government owns 60 percent of GM after providing billions of dollars in loans.
"We have an outstanding relationship with SAIC," said Nick Reilly, president of GM's international operations, in a conference call with reporters. "It seemed to us very sensible and a big opportunity to deepen that relationship and broaden that relationship outside of China."
GM agreed to turn over 1 percent of Shanghai General Motors to SAIC, which will give the Chinese partner 51 percent of the company. Reilly said GM valued that 1 percent at $85 million. He said the transfer will give SAIC the right to approve the joint venture's budget and the appointment of senior managers, but he said the partners already operate that way and both are satisfied with management, so there should be no major changes.
Reilly said SAIC wanted majority ownership of the China venture so its financial results could be reported as part of SAIC's earnings. He said GM agreed to that "to get their full cooperation and the full cooperation of the Chinese government in other things," though gave no details.
"It also helps us, obviously, share the large investment that is behind this program and therefore get it done faster, and bring in other products than we envisaged in our GM-only plan," Reilly said.
Total investment in the India venture is expected to be more than $650 million, Reilly said. GM was contributing half in the form of factories and a distribution network in India and SAIC would provide the rest, he said, though declined to say whether that would be cash or other assets.
The venture also will sell Chinese-made GM cars and mini-commercial vehicles
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texaspat
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12-08-09 12:23 AM
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I worked at Packard for 30 years. Of course I saw silly grievience filed. But all the contracts G.M. signed because they thought it was fair. The mistake the union made is believing GM would live up to their end of the contract. When they moved the jobs to China it was the beginning of the end. I want to know how many cars the Chinese are going to buy.
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rnccf07
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12-07-09 6:13 PM
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Midname, I agree with you about many unions. Someone who worked at Packard once told me they were filing a grievance, because they didn't like the way a supervisor looked at them (it was not related to sexual harassment). They won the grievance. Reminded me of grade school.
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midname
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12-07-09 4:19 PM
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***** CATS ARE GOOD TOO! MMMMMMM
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FlashGordon
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12-06-09 10:32 PM
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My neighbors dog looks delicious!
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midname
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12-06-09 11:24 AM
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THANK YOUR UNIONS THAT INDUSTRIES ARE LEAVING THIS COUNTRY,TOO MANY DEMANDS,TOO HIGH OF WAGES POOR WORKMANSHIP.THATS WHY. GREEDY AMERICANS, STRIKE FOR THIS,STRIKE FOR THAT. THE FACTORIES DONT WORRY ABOUT UNIONS IN CHINA.THEIR WAGES ARE LOW,BUT SO IS THE COST OF LIVEN..$2.50 HERE FOR A LOAF OF BREAD, .50 CENTS THERE. AND NO'I DONT WANT TO LIVE THERE. IM RETIRED.
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rnccf07
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12-04-09 11:58 PM
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and have to wonder, if factory workers with a high school education or less were making $30 or +/hr, what are...
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rnccf07
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12-04-09 11:54 PM
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FORD
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rnccf07
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12-04-09 11:53 PM
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and my mechanic told me that it would take 3 years before the brake pad would arrive
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rnccf07
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12-04-09 11:47 PM
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Guess I can't spit shine my Camaro anymore.
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rnccf07
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12-04-09 11:44 PM
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More American jobs. Yahoo!
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KevinB
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12-04-09 10:20 PM
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Good to see GM is doing all it can to create jobs in China!
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frankSpooner
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12-04-09 5:49 PM
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look out Tata
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eyesonyou
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12-04-09 4:27 PM
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Swelterstat, not only do we need to clean up congress and the parasites that live and " breed" off of their treasonous acts, We need well informed people to make this happen. Unfortunately,the masses of this once great republic have been dumbed down by a well crafted and well financed diatribe of lies and slander, namely the MAIN STREAM MEDIA. People are more enamored about what nitwit will win american idol or what some plus sized princess will pick for her next meal. Before we can clean our house in Washington, we must first clean our own house of this filth.
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GraphicsMonkey
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12-04-09 4:03 PM
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Mmmmm.... Chinese Food..... DINER SOLVED! Thanks guys.
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Swelterstat
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12-04-09 3:59 PM
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Eyesonyou...FREE TRADE..WHAT A JOKE WE GIVE OUR JOBS AWAY AND THEY GIVE US NOTHING BUT GREAT DRYWALL AND FOOD TO DIE FOR..SAD ISNT IT...WE NEED TO CLEAN HOUSE IN WASHINGTON
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eyesonyou
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12-04-09 3:39 PM
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Man I am tired of this global trade bulls**t. Why can't we go back to making things in this country for us and by us. Why do we need to trade up (or down) with countries ( China ) that don't provide a livable wage and social safety net like western cultures. It seems that the big corporations that once were nationalistic are now traitors instead of traders.
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Salamiboy
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12-04-09 3:38 PM
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Hey morons, most of America has two plus vehicles, the only new place to sell casrs is in China and India...its about new markets to sell and survive, not just to pay the UAW worker 10 times what an average American makes......
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HubbardGuy
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12-04-09 1:53 PM
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SAIC is partially owned by the Chinese government and GM is partially owned by the U.S. government so...now we're actually in business with China? Strange days indeed.
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JACK64155
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12-04-09 12:55 PM
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In some ways it is a bit amusing to read some of the comments that some people post on this comment board when it comes to the subject of GM. Some of you have stated that you understand what & why GM does with there business practices, and yet when an announcement is made like the one stated above, your comments display anger, hostility, and surprise like these type of decisions are outrageous and terrible. Goes to show how little some of you know about GM. GM will do and have done whatever it takes including take Taxpayer money and use it whatever way they want to and then tell the US to go straight to H***. I'm not surprised, why are you ?!?!
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Xbuckeye
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12-04-09 12:55 PM
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looks like government motors is delivering up some real "hope" and "change". just not locally.
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DrSpankit
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12-04-09 11:18 AM
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...'A friend of my enemy,is my enemy.'
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Billdog
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12-04-09 11:02 AM
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How does this benefit the American people? This is just another move all the work outside the US venture. American made cars made somewhere else. It might be good for the company but not so good for those in this country looking for a job.
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bruISback
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12-04-09 10:58 AM
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stimulant Funds off to india/china. not much left for Warren Appalachia Ohio
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