GM selling it's stake in Subaru

[Mike Jung]

https://www.tdcanada.wallst.com/tdw/...NE&source=DJNF

...The auto sector was in focus as General Motors Corp (GM) announced it was selling its entire equity stake in Fuji Heavy Industries Ltd, the owner of the Subaru car brand, in order to refocus its Asia-Pacific strategy toward high-growth markets.

The world's largest carmaker, which is in the midst of a wrenching restructuring program, said cash proceeds received and any potential gain on the Fuji Heavy sale will be recorded in the fourth quarter.

Meanwhile, the Detroit news said GM and the United Auto Workers are close to striking a deal that would save the automaker $1 billion in annual health care costs. On Tuesday, GM shares fell 96 cents to $30.08 in pre-market trade on Instinet.

Share of Delphi Corp. (DPH) slumped 46 cents, or 16.6% to $2.32 in pre-market dealings on a New York Times report the cash-strapped auto parts maker will only avoid Chapter 11 bankruptcy protection if it can wring concessions from former parent GM and from the United Auto Workers' union...

[Mike Jung]

GM selling Subaru parent stake on CNN Money by Dow Jones Newswires

I guess we can forget about hi-performance AWD cars from GM.

[AMRAAM4]

Originally Posted by KmanGT1

I guess we can forget about hi-performance AWD cars from GM.

Did you really expect it to happen anyway?

But then again...they did make that really great and high performance G6 GTP Coupe

[SikMindz]

Oh good. Let's keep Saturn, Suzuki and Saab but sell off shares to a company that is making a profit. Schmucks...

[Mike Jung]

Oct. 5, 2005. 10:23 AM
Toronto Star newspaper

Toyota buys GM's stake in Subaru's parent


YURI KAGEYAMA
ASSOCIATED PRESS

TOKYO — Toyota Motor Corp. has agreed to buy an 8.7 per cent stake in rival Japanese automaker Fuji Heavy Industries, the maker of Subaru cars, from General Motors Corp. for about $315 million (U.S.).

GM, the world's biggest automaker, also plans to sell its remaining 11.4 per cent Fuji stake and dissolve its alliance with Fuji, the companies said today.

GM said "there were not enough collaborative projects" to sustain the alliance and that it planned to find other partners and markets in the Asia Pacific region for its resources.

Once GM's sales are completed, Toyota, Japan's biggest automaker, will be the top shareholder in Fuji.

The sales come in the wake of the U.S. automaker's losses of $1.1 billion in the first quarter and $286 million in the second quarter.

But Toyota executive vice-president Mitsuo Kino$hita denied the move was a bailout for GM.

"We absolutely do not have help for GM in mind," he told reporters at a Tokyo hotel, where he appeared with Fuji Heavy president Kyoji Takenaka to announce a new alliance between the Japanese automakers.

Toyota chairman Hiroshi Okuda had expressed worries lately about a possible political backlash from U.S. automakers because of Toyota's bright results at a time when GM and Ford Motor Co. are faltering. Toyota's Kino$hita said GM and Toyota have been talking about the stock sale for several months.

Tsuyoshi Mochimaru, auto analyst with Deutsche Securities in Tokyo, said the benefits for Toyota in the deal were still unclear but the move showed that GM and Fuji both saw that their alliance wasn't bearing fruit.

"In that sense, GM's alliance efforts with Fuji failed," he said. "But it will take time to assess whether synergies can grow between Fuji and Toyota."

Access to Fuji's plants could be a way for Toyota to raise its production capability at a time when its sales are on a roll, but Mochimaru said Fuji, a relatively niche market player, runs only one plant in North America and is unlikely to deliver much of a boost in production for Toyota.

Toyota is paying 520 yen ($4.60) a share for the roughly 68 million Fuji shares it is buying from GM. That is below the closing price for Fuji shares of 540 yen ($4.70) today before the deal was announced.

The price of GM's remaining 89 million shares will be determined in the marketplace as GM offers the shares back to Fuji as part of Fuji's open-market share buyback program and through market sales.

That stake was worth about $418 million at today's closing Fuji price.

Toyota and Fuji, meanwhile, are starting talks to agree on future collaboration soon, they said. Possibilities are in working together in product development and production, although nothing has been decided, Kino$hita said.

Access to Fuji's plants could be a way for Toyota to raise production capabilities at a time when its sales are on a roll.

Detroit-based GM also owns stakes in Japanese automakers Isuzu Motors, a truck maker, and Suzuki Motor Corp., which makes small cars.

"We've had a good partnership; however both GM and FHI came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach," said Troy Clarke, GM group vice-president and president of GM Asia Pacific.

Clarke resigned as director of Fuji's board today.

Since GM acquired a stake in Fuji in 2000, the companies have been working together in product development, advanced technology and global purchasing.

GM will continue to work with Fuji on one production vehicle, the Saab 9-2x, GM said. But other projects will end, including the joint development of a crossover vehicle, announced last year.

Also today, Fuji revised its profit outlook for the fiscal year ending March 31, 2006, to 12 billion yen ($105 million), down from the earlier forecast for 15 billion yen ($131 million), to account for an unfavourable exchange rate and lack of sales momentum.

GM and Toyota have a long-standing partnership to share environmental technology, and they run a car assembly plant in California together, although the ties do not involve holding stakes in each other.

Out of concern for GM's plight, Okuda has recently suggested Toyota raise the price of car models in the United States. Toyota raised prices soon after, but denied the move was to placate U.S. automakers.

In May, Toyota reported its best-ever fiscal year profit of 1.17 trillion yen ($10.3 billion) as sales grew in North America, Europe, Japan and the rest of Asia.

Toyota, based in central Japan's Toyota city, holds stakes in two other Japanese automakers, Daihatsu Motor Co., which makes small cars, and Hino Motors, which makes trucks.

Toyota shares, which have held steady over the past year but gradually rose since May, edged down nearly 1 per cent to close at 5,250 yen ($46) before the deal was announced.

[Braves299]

awesome

[Vintalage]

This is great news for Suburu. Imagine if Toyota applies their standards (build quality, high quality interior, refinement, etc.) to Suburu, then this deal will be fantastic. I would expect no less. Win - win situation for both companies as far as i'm concerned.

GM appears desperate.

[ViperGTSR]

Yay!

Originally Posted by AMRAAM4

Did you really expect it to happen anyway?

But then again...they did make that really great and high performance G6 GTP Coupe

No, I really didn't expect GM to build a Hi-Po AWD car.

. Oh, that G6 GTP is such a fast car.

[GregFarz78]

[sarcasm]wow another smart move for GM[/sarcasm]

[bigbenSC]

In other news, Saab loses (at least) 25% of it's sales and the only vehicle in the lineup most of us on this forum would care to own. Moves like this make me wonder why I even care about GM. Isuzu is a better company to be associated with? Toyota will outsell GM by the end of the decade or sooner if this continues.

[hotgt]

^^well, I agree...except, I like the Legacy GT too

[Ant]

[guinness professor] BRILLIANT [/guinness professor]

ya know, it's almost as if GM brass LOOKS for the bad choices to make.

[onesexyga]

Subaru performance (ex WRX) + toyota styling (ex Supra) = GM killer for sure.

edit: assuming its supra/celica styling, not camry.

[ViperGTSR]

ok uh just for you people who didnt know. They are taking over the 20% of FHI stock...FHI owns subaru, now that doesnt mean there is a direct correlation between Toyota and Subaru, and also no huge influence. There was also little direct correlation between GM and Subaru.
What GM did was open up a schlew of cheap suppliers and stuff for Subaru, but there was hardly any influence into the cars subaru put out at all.

[SpyhunteR]

Originally Posted by ViperGTSR_500hp

ok uh just for you people who didnt know. They are taking over the 20% of FHI stock...FHI owns subaru, now that doesnt mean there is a direct correlation between Toyota and Subaru, and also no huge influence. There was also little direct correlation between GM and Subaru.
What GM did was open up a schlew of cheap suppliers and stuff for Subaru, but there was hardly any influence into the cars subaru put out at all.

no ****...

[ViperGTSR]

well im glad YOU knew, but as you read most people thought they would start making car babies together, which obviously wont happen

[mr_eh]

you know what i heard last night, the hsv(sp) model of the monaro in australia is awd... 400whp awd... scary... it comes with 19s too..

anyway, i will nnneeeeeeeeeeeeeevvvvvvvvvvvvvvvvvvvvvveeeeeeeeeee eeerrrrrrrrrrrrrrrrrrrrrr own a gm car again - when i got in the neon i put the windows down and you know what, i wasn't afraid to roll them back up with window scratches (and i dont mind the back windows not going down either) =P

[Mike3800]

There goes the Saabaroo.