Speculation Over Chinese Ownership of GM Resurfaces Amid Industry Upheaval
Fresh reports suggest Chinese automakers could one day own General Motors, but experts and recent history point to major obstacles and shifting global priorities.
Fresh attention has returned to the idea of a Chinese takeover of General Motors, following a CNN Money report in November 2009 suggesting such a deal could be possible in the future. The speculation comes more than a year after initial Chinese press reports linked SAIC and other Chinese automakers with possible bids for GM. In the months since, GM and Chrysler entered bankruptcy, and the US government became the main stakeholder in both firms, upending the context for any foreign acquisition.
Renewed speculation, old obstacles
The latest round of speculation centres on comments from David Cole, chairman of the Center for Automotive Research, who told CNN that Chinese companies were actively seeking US auto sector investments. Cole said a Chinese acquisition of GM was unlikely to happen soon, pointing to the need for GM to return to public trading before any such deal could be considered. He described the prospect as a major opportunity for China’s growing car industry, but acknowledged the deal was not imminent.
Other analysts, including Kim Korth of IRN, pointed to the likelihood of a national outcry if such a move were attempted. The US government’s majority stake in GM, following the company’s 2009 bankruptcy and bailout, means any sale to a foreign buyer would require political approval. At the time of the CNN report, GM’s financial position was still weak, and the company was not expected to return to public trading for at least a year, according to ratings agency Fitch.
Chinese ambitions and global realities
Chinese automakers have shown repeated interest in acquiring Western assets, with high-profile but ultimately unsuccessful efforts including the proposed Tengzhong acquisition of Hummer. While Chinese firms have invested in US manufacturing and have entered joint ventures, there have been no completed takeovers of major American carmakers. The Chinese government holds large reserves of US debt, but has shown caution about riskier direct investments, especially in politically sensitive sectors like automotive manufacturing.
The speculation comes against a backdrop of growing Chinese influence in global car markets, but also rising scrutiny of foreign ownership in the US. Previous buyout rumours have not resulted in completed deals. For comparison, Chinese companies have had more success acquiring European brands, such as Geely’s purchase of Volvo, but even these deals have faced regulatory and political hurdles.
No imminent deal, but ongoing interest
Industry watchers expect more talk of Chinese interest in US automakers, especially as GM continues to recover and as Chinese carmakers seek global expansion. For now, any real move towards a Chinese-owned GM remains blocked by government control and the legacy of the 2009 bailout. The idea remains a topic for speculation rather than negotiation.
For more on recent Chinese activity in the global car market, see our coverage of the proposed Tengzhong-Hummer deal at/hummer-ceo-tengzhong-to-give-cash-only.
