GM Finalizes Sale of Steering Biz, But Nobody's Talking Price
By Bill Visnic November 29, 2010The sale of one of the former General Motors Corp.'s historic business units is complete today with the purchase of Saginaw, Mich.-based Nexteer Automotive - once the Saginaw Steering Division of GM - by China-based Pacific Century Motors.
Although PCM said in a press release its acquisition of Nexteer marks the single largest investment from China in the global automotive supplier sector, neither it nor GM will disclose the sale amount, leaving speculation as to how much, if any, cash was exchanged in the transfer of the wide-ranging but long fiscally troubled Nexteer operations.
President and CEO Robert Remenar told reporters in a conference call that after a vast restructuring and considerable concessions from its United Auto Workers union in the U.S. - "Without that support, we simply would not be here today," - Nexteer now is profitable and remains one of the world's top three global steering-components suppliers.
He also said the acquisition by PCM will enable Nexteer to expand into the growing Asia automotive sector and "enable us to capture more of the Chinese market."
Pacific Century Motors is an investment vehicle of PCAS and Beijing E-Town, an affiliate of the Beijing municipal government. By purchasing a supplier of foundation components, Reminar said China is trying insure it's positioned to support its rapidly-expanding passenger-vehicle market.
"We are committed to building on the hard work and success of the management team and everyone at Nexteer," said Zhao Guangyi, chairman of the board of E-Town and PCM, in a statement. "As the new ownership, PCM is proud to provide access to continued capital investment that will allow Nexteer to continue its global growth in technology and manufacturing, particularly in the China market."
Reminar said the new owners will allow Nexteer to continue with full-scale investment in new technology and product lines.
"With a well-capitalized owner committed to growing the business, we can focus all of our resources on our industry-leading engineering and product development," said Remenar.
"This sale was an important move for us to strengthen a diverse, global customer base and build on our current growth trajectory. While we will continue to build in high growth regions around the world, our owner's relationships will open new channels to the dynamic and rapidly growing Chinese automotive market, particularly among Asia-Pacific OEMs and manufacturers globally."
The Nexteer business includes global steering and halfshaft operations in 22 manufacturing facilities, six engineering facilities and 14 customer support centers located in North and South America, Europe and Asia. The company will remain headquartered in Saginaw.
GM Anxious For A Buyer
Despite its own fiscal tribulations, General Motors kept Nexteer afloat during the depths of the global recession; Nexteer once was a part of Delphi Corp., formed when GM in the 1995 spun off a number of its components-making operations under the Delphi umbrella.
But early in 2009 and prior to its own bankruptcy, GM effectively was forced to reacquire the steering partsmaking business from Delphi - which itself was in a protracted bankruptcy proceeding - in order to assure a stable supply of the critical components. But almost from the start it was known that GM did not intend to retain the operations, and this July, barely a year after it emerged from Chapter 11 bankruptcy, GM announced it would sell Nexteer to PCM.
The transaction this week "represents the culmination of 10 months of analysis and negotiations by PCM with Nexteer, General Motors and the United Auto Workers of America," PCM said in a statement.
Photo courtesy General Motors Archive
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