GM Eyes Bigger Stake in Chinese Venture
By NORIHIKO SHIROUZU
November 11, 2008 6:17 a.m.
BEIJING – General Motors Corp., which is lobbying for a bailout from the U.S. government, is in talks to increase its stake in a Chinese joint venture that makes small, inexpensive cars and vans, people familiar with the situation said.
The U.S. car maker is in negotiations with the government of Guangxi province in southwestern China to expand its holding in SAIC GM Wuling Automobile Co., said Hu Maoyuan, chairman of Chinese car maker Shanghai Automotive Industry Corp., the majority partner in the joint venture.
Mr. Hu said Shanghai Automotive, which owns 50.1% of the Wuling venture, was not involved in the talks and he was not able to provide details. GM now owns 34% of Wuling. State-owned Liuzhou Wuling Motors Co. owns the remainder, and GM apparently would be buying some of that stake.
An official at the Guangxi State-Owned Assets Supervision and Administration Commission, the regional government agency that owns Liuzhou Wuling, confirmed that it is in talks with GM. She refused to give her name or elaborate. Officials at Liuzhou Wuling couldn't immediately be reached for comment.
GM spokesman Henry Wong declined to say whether GM is engaged in talks with Liuzhou Wuling or the Guangxi government. "We communicate with our partners regularly and those discussions are private and confidential," he said. "We have nothing to announce at this point."
Detroit auto executives, looking for government support, told U.S. congressional leaders last week that if one or more of their companies fails, millions of Americans could lose their jobs. GM last week warned that it faces a significant risk of financial collapse by the middle of next year.
The Wuling joint venture manufactures Sunshine vans, with one-liter engines that sell for about $3,700. The Chevy Spark, a minicar also made by Wuling, sells for about the same price. GM has looked to Wuling as important part of its effort to boost sales in emerging markets to offset declining sales in the U.S.
Mr. Hu mentioned GM's involvement in talks in a Saturday interview with Bloomberg News.
--Ellen Zhu in Shanghai contributed to this article.
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