Ticked off because the average American tax payer can't get into the GM IPO? Irritated that GM is selling a small stake of its business to its Chinese partner SAIC? Wondering if America is the #1 concern for America's largest auto maker?
Well, it's time to wake up and see the world through the eyes of GM. And those eyes see the future through a global lens, and not a U.S. one.
Oh sure, the U.S. will always be critical to the new GM being profitable. We're the second largest auto market in the world, and with GM being #1 here this is where GM will continue to make huge profits. So why is the GM IPO road show pushing the global story?
Because that's where the growth is.
If GM can flourish in China, India, Russia and developing markets, it will sustain a profitable run. This is why it's a smart strategic move to sell a 1% stake of the company to the leading Chinese auto maker, SAIC. It brings both companies closer together. Soon they will team up to push business in India where Suzuki and Hyundai dominate sales in a booming auto market.
"The new GM is all about being a more global company. Not because the new leaders at GM are uninterested in the U.S. This is all about being better positioned to take on Volkswagen, Toyota, Ford, Hyundai and Nissan in developing markets."
If GM doesn't work closely with SAIC, it runs the risk of the Chinese auto maker looking to team up with another auto maker as it expands business around the world. As one consultant familiar with the China car business told me this morning, "SAIC has developed the best management team among the Chinese auto makers and they are anxious to be players on the world stage."
The new GM is all about being a more global company. Not because the new leaders at GM are uninterested in the U.S. This is all about being better positioned to take on Volkswagen, Toyota,Ford, Hyundai and Nissan in developing markets.
Those markets, and how GM uses its resources around the world will determine how profitable GM is. Ten years ago, people snickered at GM buying a bankrupt Daewoo in South Korea. Today, GM/Daewoo is responsible for a growing percentage of GM's small cars around the world.
So yes, this week we will hear all about how great it is that America's #1 auto maker is publicly traded again. Just remember, the real story behind that IPO is overseas.
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