General Motors gaining more confidence in China
Jeremy Hobson: General Motors is holding its board of directors meeting this week in China. Today, GM announced it would help its Chinese partner develop electric vehicles.
But as our China Bureau Chief Rob Schmitz reports, GM wants something in return.
Rob Schmitz: In 2009, GM was on the verge of bankruptcy. In a desperate move for cash, the company sold a 1 percent stake of its China joint venture to its Chinese partner for $84 million. That 1 percent gave its partner SAIC a 51 percent majority control of its China operations.
Michael Dunne, author of a book about GM, says GM’s wanted it back ever since.
Michael Dunne: When you have 51 percent of a joint venture in China, it means you set strategy, you appoint members of the board of directors, and you’re also in charge of the money.
— but if GM reclaims its 50 percent stake —
Dunne: All those important strategic topics must be agreed upon before any decision are taken. That’s the difference.
GM hopes to buy back that share this week. The move is part of a larger display of GM’s new found confidence in China. GM just announced a new electric vehicle partnership with China, but CEO Dan Akerson said earlier this week that he’s not about to share the most crucial electric vehicle battery technology with China — proof that cooperation with China only goes so far.
In Shanghai, I’m Rob Schmitz, for Marketplace.
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