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China stake a 'tricky sell,' even for global GM
The Detroit News

Daniel Howes
9/21/2010


It's probably a safe bet to say the feds didn't rescue General Motors Co. from imminent collapse just to sell a chunk of the new company to the Chinese.

Yet there's a good chance it will happen anyway, whatever protectionist sentiment looms in this fitful climb from recession, whatever the probable objections from the heartland and some in Congress, whatever the we-had-to-save-the-jobs rationale advanced by current and former members of Team Obama.

A Chinese stake in GM is a potentially real consequence of the Detroit automaker's initial public offering later this year, even if it risks inflaming latent nativist passions in the United Auto Workers and others who would bridle reflexively at the prospect of capitalists in the Chinese communist party using proxies to own pieces of an American icon.

Why? Because Chinese ownership of a small, single-digit stake in a recapitalized GM would be in the interests of the Obama White House (which has a political goal of seeing GM become independent again), GM management (which foresees more growth and fatter profits in China) and a Chinese automaker like SAIC Motor Corp., a government-controlled player and GM partner in China and India that is interested in owning shares of GM.

Think of it this way: The success of a new GM and its impending IPO would help protect SAIC's investment in joint ventures with GM. Holding a stake in the Detroit automaker could strengthen a GM-SAIC foundation that could morph into more extensive ties over the long term -- the key words being "long term."

Officially, the Treasury Department, which owns 61 percent of GM, says would-be GM shareholders could come to the IPO from "multiple geographies" and that it "will not involve itself in decisions regarding allocation of shares to specific buyers."

Right. That doesn't mean diddly in a white-hot campaign season that has prompted, among other things, bipartisan harangues over alleged Chinese currency manipulation as well as union-backed complaining about bilateral trade imbalances between the United States and China. If the recent past is prologue, Treasury's we'll-treat-everyone-the-same statement won't be the last word on who might own a piece of GM.


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