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GM selling stake in Fuji Heavy Industry

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Here is the press release: DETROIT – General Motors Corp. (NYSE: GM) today announced the sale of its approximate 20 percent equity stake (about 157 million shares) in Fuji Heavy Industries (FHI). The alliance between GM and FHI will end and GM will refocus its efforts and resources in the Asia Pacific region’s high-growth markets and with its other strategic partners. Toyota Motor Corporation will purchase 68 million shares, or approximately 8.7 percent, of FHI shares outstanding, from GM for JPY 520 ($US4.60) per share, or about US$315 million in cash. GM intends to divest its remaining 11.4 percent interest by offering for sale its shares (89 million shares) into FHI’s 90 million share open-market buyback program announced earlier today, and through market sales if necessary. “We’ve had a good partnership; however both GM and FHI came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach,” said Troy Clarke, GM group vice president and president, GM Asia Pacific. “We have a great deal of respect for FHI and Toyota . We wish them well in their new relationship.” The divestiture of GM’s stake in FHI is expected to be completed in the fourth quarter. Since GM acquired a stake in FHI in 2000, the companies have been involved in various joint projects in product development, advanced technology, global purchasing and supply chain management, and product distribution. GM currently partners with FHI on one production vehicle, the Saab 9-2x, which will continue. Other joint arrangements with FHI will be dissolved over time. For example, GM and FHI’s previously announced Saab crossover vehicle development program will be cancelled. Also today, GM will file a Form 8-K at the Securities and Exchange Commission describing a restatement of its second quarter 2005 financial statements to reflect a reduction of between $700-$800 million in the carrying value of its FHI stock. The sale by GM of its interest in FHI, including cash proceeds received and any potential gain on sale, will be recorded in the fourth quarter. I do find it interesting that they are still continuing with the next 9-2x, however, Saab will not be getting the crossover.
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To Toyota of all people.....................Anyway, since they announced no Tribeca-SAAB crossover will be made, what will they use? The SRX was deemed too costly to make different enough for SAAB. Wonder if that new Opel crossover will be a possibility?
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Good! Fuji was not willing to share its technology and was somewhat of a pain in GM's side. It is however upsetting that Toyota picked up more shares. The only technology that Fuji had that was worth while for GM was a quick AWD application, but with Theta, Lamda and the Epilson II Utes we are so close to having GM's own AWD system improved and use expanded that it is too late for Fuji to be of any help. Edited by jd2b
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Well, GM states that they want to look into other partnerships in the Asia-Pacific region. I hope they work more closly with Suzuki to develop some more small engine tech (Don't they own 50% of Suzuki?). I think that would be a better investment than working with Subaru. Subaru has given GM a low volume 92x, a future low volume 96x, and.............and............? Subaru can give GM MUCH more meaningful contreibutions.
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Subaru can give GM MUCH more meaningful contreibutions.

[post="24226"]<{POST_SNAPBACK}>[/post]


I mean Suzuki
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Well, GM states that they want to look into other partnerships in the Asia-Pacific region. I hope they work more closly with Suzuki to develop some more small engine tech (Don't they own 50% of Suzuki?). I think that would be a better investment than working with Subaru. Subaru has given GM a low volume 92x, a future low volume 96x, and.............and............? Subaru can give GM MUCH more meaningful contreibutions.

[post="24226"]<{POST_SNAPBACK}>[/post]


And the worse part is that Subaru was unwilling to share is best WRX technology for the 9-2X with GM, granted not many companies would want to share their top products but in Subaru's case only their top technology is of any use to GM. Quite frankly they would have more to gain from GM then the other way around.
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GM owned 20% of Subaru and got very little out of the deal. Toyota will own only 8.5% and probably won't get much more out of Subaru than GM got. The only real plus for Toyota is access to Subaru's Indiana manufacturing plant.
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The only real plus for Toyota is access to Subaru's Indiana manufacturing plant.

[post="24240"]<{POST_SNAPBACK}>[/post]


I hadn't thought of that one; interesting.

A big plus for GM would be if the Wall Street Analysts like it and raise their bond rating. Also may help a little with UAW negotiations (as in see we really need th e money).
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If you put your money into something, that money is tied up. GM's Subaru stake was a useless investment. Roger Smith thought that he could get robots to make cars for GM in the 1980's. Along those same lines, Rick Wagoner went buck wild in the 1990's and bought up a whole bunch of stakes in automakers like Fiat, Subaru, Isuzu, etc. thinking that GM could have other companies build cars for it, so that it's CEO's could play golf all day. Needless to say, it did not work. Subaru's technology was incompatible with GM's. Something having to do with wierd engine arrangements. After several years of nothing, they collaborated on one project, the Saab 9-2X, which was a mega flop. Basically GM needs to free up some cash and use that money to invest in GM's own divisions. That will be the only way GM can redeem itself.
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Basically GM needs to free up some cash and use that money to invest in GM's own divisions.  That will be the only way GM can redeem itself.

[post="24283"]<{POST_SNAPBACK}>[/post]


nice....

so true


CAMARO!
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Suzuki is owned by FHI.  Sorry, missed that first paragraph since it was so littered with stock symbols.

[post="24235"]<{POST_SNAPBACK}>[/post]


you mean suburu right?
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I agree with Clownzilla - they should concentrate on Suzuki - I think up their stake to 51% and merge it with Daewoo I think in terms of volume Suzuki is actually number 3 in alot of Asian markets - including Japan - because they are so strong in the small cars that dominate there. With Daewoo's low-cost manufacturing capacity it would be a kller combination.
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I agree with Clownzilla - they should concentrate on Suzuki - I think up their stake to 51% and merge it with Daewoo

I think in terms of volume Suzuki is actually number 3 in alot of Asian markets - including Japan - because they are so strong in the small cars that dominate there.  With Daewoo's low-cost manufacturing capacity it would be a kller combination.

[post="24360"]<{POST_SNAPBACK}>[/post]


i'm assuming, Suzuki, is behind Toyota, and Nissan...

but how much stock doest GM have in Suzuki? and if its 51% or around that amount, why dont they just buy it all?

i guess money is in short supply...

what advantages does Suzuki give to GM?
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i'm assuming, Suzuki, is behind Toyota, and Nissan...

but how much stock doest GM have in Suzuki? and if its 51% or around that amount, why dont they just buy it all?

i guess money is in short supply...

what advantages does Suzuki give to GM?

[post="24390"]<{POST_SNAPBACK}>[/post]


I'm pretty sure that GM has 49% or 50% of Suzuki, 51% is considered a majority in stock ownership. At that point, they could do a lot more than they could do at 50%. The whole company would be nice but Suzuki might not want to sell to GM, plus it might take money that GM dosen't have. Suzuki would be great because they are VERY dominent in the Japanese compact, subcompact, and micro car markets. They know how to make compacts, subcompacts, microcars, and small engines. True, many won't be legal in the USA but they could adjust some for the USA and/or use their small engine knowhow for the USA market. Plus this would create MASSIVE inroads to the USA market for GM. Here's an idea (some will be angry for me saying this), if the only thing keeping GM from buying Suzuki were money, how about selling off Opel, Vauxhall, Holden, SAAB (in any combination) to make enough money for the purchase. Would any of these GM brands be worth the sacrafice? Just a question.................
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Plus this would create MASSIVE inroads to the USA market for GM.

[post="24402"]<{POST_SNAPBACK}>[/post]


The sentence should read Japanese, not USA
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Those who believe GM got absolutely nothing out of this and that the only vehicle it begot was the lowly 9-2X... sorry to disappoint you but GM got this: 1. Diesel technology and engines and a lot of help on the ground up design of the Duramax; 2. Heavy Duty Fuji trucks for the W class GMC and Chevy lines; 3. Colorado and Canyon; 4. Sheet metal stamping technology that reduces the amount of time and material needed to produce one mold; 5. Expansion and products into areas of Asia GM never sold to; Those who think this was a waiste of money just don't see the facts. GM spent good money to get good intelligence. Without this think tank GM would have never had a competent disiel program. They essential took the knowledge and technology and now build their own... smart on GM's part... NOW what do you think Toyota wants??? I am guessing or betting on a light duty diesel engine... for what you say??? Hmm... maybe a plant in Texas...
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Those who believe GM got absolutely nothing out of this and that the only vehicle it begot was the lowly 9-2X... sorry to disappoint you but GM got this:

1.  Diesel technology and engines and a lot of help on the ground up design of the Duramax;

2.  Heavy Duty Fuji trucks for the W class GMC and Chevy lines;

3.  Colorado and Canyon;

4.  Sheet metal stamping technology that reduces the amount of time and material needed to produce one mold;

5.  Expansion and products into areas of Asia GM never sold to;

Those who think this was a waiste of money just don't see the facts.  GM spent good money to get good intelligence.  Without this think tank GM would have never had a competent disiel program.  They essential took the knowledge and technology and now build their own... smart on GM's part...

NOW what do you think Toyota wants???  I am guessing or betting on a light duty diesel engine... for what you say???  Hmm... maybe a plant in Texas...

[post="24419"]<{POST_SNAPBACK}>[/post]


Hmmm...aren't 1-3 Isuzu and not Fuji/Subaru JVs?

Isuzu is not part of the Fuji/Subaru alliance..

Point 5 is being achieved with GM Daewoo... Edited by moltar
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Isuzu is a part of FHI likewise the Isuzu heavy duty trucks are Fuji trucks. I don't think GM divesting itself of FHI is bad especially given your latter point about GMDAT but, I don't think that the investment was a dumb move either. This invesment played out much to GM's advantage more that the Fiat debacle did.
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Isuzu is a part of FHI likewise the Isuzu heavy duty trucks are Fuji trucks.

I don't think GM divesting itself of FHI is bad especially given your latter point about GMDAT but, I don't think that the investment was a dumb move either.  This invesment played out much to GM's advantage more that the Fiat debacle did.

[post="24428"]<{POST_SNAPBACK}>[/post]



Interesting...first I've heard of a relationship between Isuzu and FHI...I thought they were competitors. There is no mention of any such relationship on the FHI or Isuzu corporate websites that I can find.. Edited by moltar
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