General Motors has set itself a pretty ambitious target of paying back the US$50bn in bailout money doled out by the American taxpayer within “a couple of years.”
New CEO Dan Akerson has prudently not committed himself to an exact timetable – the vagaries of global economics and the omnipresent spectre of the infamous double dip are causing even the most seasoned economists to err on the side of caution – but he has nonetheless fired the starting gun.
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As a measure of intent, GM has already paid back some US$8.4bn in loans to the US and Canadian governments – a not inconsequential figure.
The US government wants its money back and GM is fed up with being labelled ‘Government Motors’ – a parallel set of pressures that has led Akerson to his bold assertion that a cool US$50bn will be back in Treasury hands in a relatively short amount of time.
And speculation is starting to ratchet up that a certain Shanghai Automotive Industry Corporation (SAIC) is waiting in the wings to capitalise on GM’s need for cash.
This from one Asian report today: “SAIC is closely watching progress of GM’s IPO. As a strategic partner of GM, SAIC wishes success for GM’s IPO.”
It’s not exactly a “come and get me,” but it’s not exactly a denial either.
GM and SAIC have been close allies in China and elsewhere for quite some time and the mood in the States might be ripe for a more formal tie-up.
But that’s quite an ideological leap for the American public to take despite China’s surge onto the global economic hit parade as the world’s second largest economy – powering past Japan – and its country increasingly opening up to foreign investors.
Despite that reticence, the US Treasury eased the door open a tad by carefully noting: ” We expect potential investors will be sought across multiple geographies with a focus on North American investors, in line with what is typical in similar transactions.”
That doesn’t rule SAIC in or out – or any Chinese investor otherwise for that matter – but the Chinese automaker’s chairman Hu Maoyuan will have noted the “multiple geographies” reference with interest.
Indeed, he is reported to have said: “GM is our important strategic partner. We are not clear about the details of its IPO. We will make the right decision once we know details.”
That essentially leaves the door wide open to any invitation but would the US heartland wear Chinese investment in a company that practically shouts out Made in USA?
There seems to be a China of two vastly differing arenas – political and economic – but GM’s co-operation with SAIC in the country that now boasts a staggering 200m cars – and rising – could ease an entry into a potential IPO stake.
The other major fly in the ointment however, could be upcoming US Congressional elections – how will selling China into the US go down on the doorsteps of Des Moines?
