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1 GM to form China venture, invest $293 million on Mon Aug 31, 2009 4:37 pm

rosco 357

GM to form China venture, invest $293 million
Sun Aug 30, 2009 7:33am EDT

By Fang Yan and Edmund Klamann

SHANGHAI (Reuters) - General Motors said on Sunday it has agreed to set up a light commercial vehicle production venture with major Chinese automaker FAW Group, with total investment of 2 billion yuan ($293 million).

The 50-50 joint venture, based in the northeast China city of Changchun in Jilin province, will make light-duty trucks and vans, GM said in a statement.

"For us in China, this is an important complement to the rest of our portfolio," Kevin Wale, president and managing director for GM's China operations, told reporters in a conference call.

"We are well established in passenger vehicles and mini commercial vehicles and we haven't had a presence in the truck segment. Adding a truck portfolio rounds that out."

The venture will use two existing FAW plants in Changchun and the city of Harbin, also in the northeast, with combined annual capacity of roughly 90,000 vehicles, Wale said.

A greenfield plant, currently under construction in Harbin, will add 100,000 units of capacity by the end of next year, he said.

Vehicles made at the venture will carry the FAW brand and will focus on supplying the China market, but they could be exported under a GM brand through the Detroit automaker's global network in the future, Wale said.

GM is making Buick, Chevrolet and Cadillac models at its flagship China venture with SAIC Motor Corp. It also makes minivans, pickup trucks and the Spark compact car in a three-way tie-up with SAIC and Liuzhou Wuling Automobile.

SAIC-GM-Wuling sold 87,925 vehicles in July, up 90.7 percent from a year earlier, helped by Beijing's stimulus initiatives to support the industry, including subsidies for buyers in rural areas.

GM, which now holds 34 percent of SAIC-GM-Wuling, has been seeking to raise its stake in the venture.

Domestic media reported earlier this month that GM had secured an initial deal to take over Liuzhou Wuling Auto's 15.9 percent stake for roughly 300 million yuan ($43.9 million).

Wale reiterated the U.S. automaker's interest in raising its stake in the venture but made no further comment on the issue.

($1=6.830 Yuan)


so/Rosco in your opinion is this a good step,will it benefit America?


Rosco how do you feel about thousands of jobs going overseas , of course low wages is pulling them away from the US. But I guess with bailout money in their pocket it makes for an easy move.


ssc I don't like it!! Keep industry here~it can be done


Bravo Gypsy I totally agree with you..We need those jobs here..

rosco 357

well i really hate to say this, i was in a union for 20 years, but in my union i did see things they should have been more flexible with the company not sure what part our union rules had to do with the company i worked for to close, they have plants all over the US.. only one other was union, both now are closed, i think the auto industry union has gone a bit out of bounds and this along with who knows what is why they seek other places, like the foreign car makers in my state the ppl make good money and benefits but not near as high as gm , ford ,and Chrysler's unions have, and the company's in my state, mercedes benz , honda , hyundia are not union, but pay fairly good wages, i heard the germans here mercedes is easier to work for than honda,

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