Here's something to think about: a Chinese company taking a stake in General Motors.
Does it scare you?
Or does the idea leave you shrugging your shoulders and saying, "so what?"
Either way, the news shouldn't surprise you.
Whether or not you like GM, one fact you can't deny is the potential value in GM.
The Chinese see it, and so do a lot of other foreign investors. And with the largest American automaker about to go public you can bet a lot of large foreign investors (sovereign wealth funds, major companies) are looking at GM and sizing up whether or not this is the time to buy GM.
SAIC,which has a long relationship with GM, has reportedly made an informal inquiry about taking a single digit stake in GM. The SAIC interest in GM is a no-brainer. The Chinese automaker knows GM and also knows an investment in the American automaker could pay off in the bottom line and in future opportunities. It's the idea that a Chinese stake in GM could lead to the Chinese controlling an American icon that worries people.
It's easy to see why people are worried.
GM, despite all its problems, is a quintessential American firm. Its future may increasingly be tied to succeeding in the booming Chinese auto market, but if the shots aren't being called in Detroit, people won't be happy. Americans won't be happy. That said we are moving towards a world where foreign ownership in GM is a distinct possibility. Especially as Chinese firms grow their bottom lines and look to buy into undervalued foreign operations.
The SAIC interest in GM right now may not lead to anything, but the day of Chinese ownership in American auto firms is coming.
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