Report Says GM Shopping For-Sale Assets in China; GM Denies It

Dongfeng Motor Group Co., China's third-largest automaker, said it had received proposals from investment banks to buy assets from General Motors as the carmaker tries to generate desperately needed cash, Bloomberg News reported Wednesday.

A spokesman for Dongfeng, which partners in China with Nissan, Honda and PSA Peugeot Citroen, said it had received e-mails and investment materials asking if the company would be interested in buying some of GM's assets. The spokesman, who wouldn't reveal the investment banks it was talking with or the assets offered for purchase, told Bloomberg it hasn't reviewed the materials and has not responded to GM.

A GM spokesman based in Shanghai denied the report, saying there were no grounds to the rumors.

Still, it comes as no surprise that GM would go to foreign companies, especially those in emerging markets like China, to offer its wares. GM has assets to sell and the Chinese have access to cash. And Ford was successful in selling off its distressed assets of Land Rover and Jaguar to India's Tata Motors.

GM has put a number of assets up for sale including Hummer and AC Delco. So far, GM has found no takers. A deal to sell its medium-duty commercial truck business to Navistar fell apart as the economy worsened. Further, in its viability plan submitted to Congress on Tuesday, GM said it was considering "options" for Saab and Saturn as well. Saab could be sold; Saturn likely would be dismantled or its vehicles folded into other GM divisions.

Chinese companies are likely targets as buyers for GM's assets since they have access to capital and ambitious global expansion plans with sites set on North America in particular. A Shanghai analyst told Bloomberg capital for overseas investment is not a problem for Chinese companies, though other possible risks include issues regarding local legal regulations and labor unions.

More than likely, GM also has talked to its own Chinese partner, SAIC Corp., China's largest automaker. SAIC already has expanded into Europe with the purchase of design rights to MG Rover and South Korea with its stake in Ssangyong Motor Co.

And interestingly, the Chinese government in November opened a consulate office in the Detroit suburbs of Troy, Michigan, the home to SAIC's offices.

Jaguar Land Rover Beg for Government Aid, Report Says

LONDON -- Struggling Jaguar Land Rover, which was purchased by India's Tata Motors from Ford Motor Co. earlier this year, reportedly is seeking $1.5 billion in  government aid, although the automaker won't confirm it is seeking aid for itself.
Rather, the automaker acknowledged it has joined the U.K.'s Society of Motor Manufacturers and Traders and the European Automobile Manufacturers' Association (ACEA) in lobbying for government help to help the country's ailing auto industry, the Financial Times reported Monday.

Jaguar Land Rover employs about 15,000 people in the U.K., has three British manufacturing plants and two engineering centres. Ford sold Jaguar Land Rover to Tata in March for $2.3 billion. Since then, its already sliding sales have plummeted. As a result, Jaguar Land Rover announced the elimination of 600 jobs. Its managers are being given a four-week sabbatical at 80 percent of their pay.
"The automotive industry is facing unprecedented trading conditions as a direct fallout of the banking crisis and turbulence in financial markets," the company said. "We are, of course, keeping government appraised of the impact on our business."

Jaguar Land Rover is not the only struggling automaker in the U.K. Last week, Honda announced it would close its Swindon plant for February and March to cope with the slowdown. Toyota, Nissan, GM's Vauxhall, Ford and Bentley have all announced either temporary shutdowns or job cuts in recent weeks.

Automakers argue government help is needed to improve liquidity in the supply chain, support continued investment in carbon-reduction technology and stimulate consumer demand.