The spin off process is continuing in bankruptcy with several deals in the works.
Detroit-based GM said it has reached a memorandum of understanding with a buyer for Hummer, though it did not name the buyer or the price. The automaker said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships. The New York Times reported Tuesday that the buyer would be a machinery company in western China, The Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., that would like to become an automaker. . . .
The automaker also said Tuesday that it has 16 buyers interested in purchasing its Saturn brand, while three parties are interested in the Swedish Saab brand. . . . GM would like to keep the money-losing Saturn brand's dealership network, contracting with the new buyer to make some of its cars while the buyer gets other vehicles from different manufacturers. At the same time, bridge loan discussions with the Swedish government are progressing . . . .
[T]he German government on Tuesday said it paid out the first 300 million euro ($425 million) in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the U.S. Over the weekend, the German government agreed to lend Opel $2.1 billion. The loans are part of a deal in which Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of the company. GM nailed down deals with its union and a majority of its bondholders and arranged to sell off most of its Opel operations in Europe in order to appear in court Monday with a near-complete plan to quickly emerge with a chance to become profitable. . . .
[GM] wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would take 12.5 percent of the "New GM," with the United Auto Workers union getting 17.5 percent and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.
Fiat's bid to pick up GM's European operations in addition to Chrysler has apparently been rejected. The spin off of Opel will create a new giant European industrial company, with a German heart.
The notion that a purchaser would be found for Saab, a small brand with a distinct identity, which isn't particularly profitable in the U.S., but has valuable technology and the Swedish government interested in bailing it out, makes sense. The Hummer deal is also unsurprising, although the fact that the buyer is Chinese is notable.
The most surprising news is that Saturn might be saved after all in some form. Pontiac, in contrast, still appears to be a doomed brand.
Several big question marks remain. Will consumers be interested in buying "New GM" vehicles? Will governance by a mix of government appointees, union representatives and bondholders with a minority interest in the company work? How much will be left of GM once it sheds its many sold or shut down divisions and models? What would a new Saturn company look like? What does this mean for future car design? Will Fiat models become common in the U.S.? How will Ford compete with two major competitors who have gone through bankruptcy to rid themselves of legacy obligations when it has not?
What ever happened to economies of scale? The fracturing of various car companies suggest that economies of scale are far less important in the automobile industry than had been previously presumed?
Canada's Magna International Inc. would get a 20 percent stake in Opel and state-controlled Russian lender Sberbank would take a 35 percent stake. GM will retain a 35 percent holding, while the remaining 10 percent will go to Opel employees.
The proposed deal for Hummer will allow it to continue to contract vehicle manufacturing and business services from GM during the transition process. The Hummer sale is expected to close by the third quarter's end.