Chinese Want To Buy the Big 3 Automakers

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krogoth's picture
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Chinese Want To Buy the Big 3 Automakers

Jane Hamsher

Posted November 19, 2008 | 01:02 PM (EST)

Chinese Want To Buy the Big 3 Automakers


It appears that the Chinese car makers SAIC and Dongfeng have plans to acquire the Big 3:

A take-over of a large overseas auto maker would fit perfectly into China's plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he's in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China's more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world's markets with accepted brands, and proven technology.

All the Shock Doctrine fanatics cheering to drive the the Big 3 into bankruptcy "restructuring" (like Mitt Romney, who can kiss future hopes of electoral victory in Michigan goodbye) might want to think about the implications of this.  

Of course the same legislators clamouring for bankruptcy could block the sale.  (This assumes they have the fortitude to stare down the Chinese, who currently hold a whopping portion of US debt, and deny them something they really want). But in doing so, and at the same time refusing a bridge loan to the automakers, they are basically legislating the destruction of the Big 3. They will be forcing them to stiff all their creditors and stockholders and tear up their union contracts by refusing to let the "free market" they love to bang on about step in and assume the company's legitimate debts. Or were all those insufferable lectures about "personal responsibility" when the bankruptcy bill was going through just so much claptrap?

Because selling the company would be far preferable to the Big 3 and those who are dependent on them than Chapter 7.  But long-term it would not be without peril for the US.  As one FDL commener noted:

With no big three making cars what to stop Toyota and Honda from moving the plants to Mexico where costs are really low. Its only the threat of being shut out of the American market that keeps the Japanese building cars here.  If we no longer have cars made in America by American companies we will have no choice but to buy their cars no matter where they are made.

I know long-term thinking isn't his forte.  But as Richard Shelby is salivating at the prospect of yet another BMW SUV plant in his right-to-work state, it might be something for him to consider.

krogoth's picture
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China holds 1 of 10



bearing01's picture
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Re: Chinese Want To Buy the Big 3 Automakers


I think it would be great for the Chinese to buy all the big  3.  They have enough US dollars and they got to spend it some way.

This is exactly why you loose when you have a trade deficit for a long period of time.  Foreigners accumulate your dollars and then have to spend them somewhere.  When you are weak they come in and buy all your assets... Eventually all the americans will be working for the Chinese.  They will eat our lunch.  Control / dominate the Americans without the bloodshed.

How ironic.

rlee's picture
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Re: Chinese Want To Buy the Big 3 Automakers

I'm in New England, so I'll take one with all wheel drive!

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Re: Chinese Want To Buy the Big 3 Automakers

gm has been selling out to china for over 20 years.

this is nothing new just the size.

they started in the eighties when they gave away rare earth magnet technology

so they could sell trucks in china. china has 80% of the rare earth in the world.

the magnets are used in anything from computer hard drives to missile guidance systems.

deng's daughter owns the company. what socialism ?  what communism

this is capitalism how do you like it america? get used to it we are about to get a real

ass whipping. learn mandarin

ajparrillo's picture
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Re: China holds 1 of 10

Check this out...I noticed this one morning after my kids left for school (  Ni Hao, Kai Lan is a  hand drawn 2D children's TV series created by Karen Chau, produced by Mary Harrington, and debuted on Nick Jr in 2008. The series introduces youngsters to Mandarin Chinese along with Chinese culture and customs as well. It's very much like Dora the Explorer and Go, Diego, Go in many ways. The show targets preschool to 7 year olds and introduces cause-and-effect problem solving, reinforcing supportive attitudes, emotional situational responses, and a chinese vocabulary.
I cannot help my mind from wandering...this type of show makes cultural sense in terms of acculturation to spanish speaking peoples and cultures in America, but why for Chinese.  Yes, understanding other people's and cultures are important, but learning the language at an early age.  Is this another indicator of the Chinese moving into our forclosed homes?  One day a knock on the door and there is a chinese family ready to move in and you can "stay on" as help.  This is tongue in cheek to a degree, but the questions beg to be asked with the shifting of global hegemonic power.

krogoth's picture
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You and your children should embrace China

If you have your kids in school learning Spanish, stop it. You are wasting time. Chinese will be the language for all our children to learn. I know a lot of you are scared about this, and I would have been dumping in my pants saying this 10 years ago, but it's unavoidable. Better than Three times US pop. and growing. If they lift the ban on the 1 child deal, watch out.

You can make your arguments now about fear of China taking us over, but China may be our only salvation. To be frank, China loves and hates us at the same time. They love our freedoms and our culture, but they hate our freedoms and our culture.

This is not Japan, folks, it's CHINA. You know, that extremely populated, economic powerhouse setting records for all sorts of economic milestones? When China was silent for the most part and pure communist, then you could be scared of it, but that is not today's China, and you better start teaching your children that.

They are prepared and getting more prepared for the future. They are getting more educated. They are moving into markets they never had a chance to.

Don't like it? Too bad because you can't really buy anything anymore without China being involved. We slept while they planned that power away from America a long time ago.

You think the American government can or will do anything about this? Yes they can! They will be lining up to kiss China's ass in a collective. My children will speak and write Mandarin Chinese, English and Taiwanese. It's a byproduct of working in these countries, and a good one for my babies.

Tai Jen (means goodbye) migrozan (means American or America)

I am an American getting fluent in Chinese as quick as my 42 year old brain will allow me to




EndGamePlayer's picture
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Re: Chinese Want To Buy the Big 3 Automakers

So right krogoth-

They don't give their children vacinations laced with mercury or let their children sit in front of tv for hours a day or preach extentialism (that a higher power will be your salvation so no matter what you do - you only need to believe and give your money to the church). They have the spirit of a young country but are thousands of years older than any other organized country and have been through so many different challenges that they alone can search for long term solutions for the whole world.

Without them, the world can not be at peace. Hopefully, they can lead the way by doing a quantum leap over fossil fuels to sustainable technologies for their own good and the world will follow.

Live in peace-


krogoth's picture
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Re: Chinese Want To Buy the Big 3 Automakers


I like you and respect your posts, but I live in Taiwan and China most of the year, and I need to make some corrections to your post.

TV is not so much the problem, gaming is. The drug of China is internet gaming. In a country where you cannot really do things on a social level with the opposite sex until you are married, young teens and men up to 30 are being consumed with Internet cafes and online gaming. It's addiction is so bad and rampant, clinics are open and opening all over China just to treat addicted gamers. That is equivalent to TV if not worse in my opinion.

China could give a damn about the environment or worker issues. If you work in a factory and lose your arm, your life is over. A very tiny settlement (like 1 month's pay) and your sent back to your village to rot away for the rest of your life. They are not handicapped friendly like they are in the US, and handicapped people in any capacity from retarded to disabled are simply look at as a weakness, or a past life mistake you are paying for in this life.

Religion- Completely and utterly a non-issue (right now) in China. In Taiwan, religion is big, and has a great impact on society and culture here.

China has strange ways dealing with executives that mess up. Remember the toy paint scandal? Well, the owner of that factory simply committed suicide, but the company still exists, it's just being run by a new boss. So in essence they don't FIX the problem quickly, the CEO kills himself, then the problem gets fixed slower. Melamine is being found all over America, so they are moving SLOWLY to correct this. They can move slowly because they have the power to move slowly. If you are an economic powerhouse, you can do that.

I wonder how many American CEO's would be gone if we followed China's example? How many politicians? How many crooks? And in China, gone is gone, like 6 feet under gone. Sure you have corruption in China, and favoritism and bribes, that's part of any country. they just don't do it so blatantly or brazenly like America on a large scale, right in front of our face with the ignorance of the majority of Americans being the only weapon they have.

China is doing so well, and yet they are going through these incredible growth pains, as we did in America. If they have these pains now and are so powerful, how do you think they will be in 10 years when they sort out all these issues? In my opinion, a world power on a scale so large we and the world will tremble, and has never been experienced yet. Let's just hope they don't develop a Navy that can rival the US or British Navy like Germany and Japan did before and during WW2, then we are in trouble because not only will they be an economic powerhouse, but a military powerhouse as well. Plus, China hates Japan, so if they start messing with Japan, we will be forced by treaty to defend Japan.

Own the ocean and you own the world.




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