GM to sell stake in Isuzu.
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GM to sell stake in Isuzu.
AP
GM in Talks to Sell Stake in Isuzu Motors
Thursday March 30, 6:06 am ET
By Chisaki Watanabe, Associated Press Writer
General Motors to Jettison Another Japanese Tie Up, Targeting Sale of Isuzu Stake
TOKYO (AP) -- General Motors Corp. said Thursday it is in talks to sell its stake in Isuzu Motors Ltd. as the troubled company jettisons assets to drum up badly needed cash and hang onto its title as world's biggest automaker.
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Disposing of GM's 7.9 percent stake in the Japanese truckmaker would mark the latest retreat for a company besieged by staggering losses, labor problems and mounting competition, especially from archrival Toyota Motor Corp.
The move would also highlight GM's rapid pullout from Japan. Earlier this month, Detroit-based GM sold 17 percent of Suzuki Motor Corp. for about $2 billion, leaving it with a 3 percent stake.
That followed last year's sale of GM's entire 20 percent stake in Fuji Heavy Industries, the maker of Subaru cars.
GM once looked at shares in these smaller Japanese competitors as a window to cracking the tough Japanese market. But after making few inroads here and facing dwindling market share at home, the company has more urgent priorities -- like becoming profitable again.
"Isuzu is aware that GM is in an important phase of going back into the black in its North American operations and reviewing its investment portfolio, and needs to strengthen its balance sheet and liquidity," Isuzu said in a statement announcing that the two sides were examining a stake sale.
General Motors has shopped the Isuzu stake to three Japanese companies, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank Ltd., and they are still considering the offer, spokesmen from the three companies said.
GM and Isuzu said in separate releases that no decision has been reached, and there was no word on a possible price.
General Motors holds about 90 million shares in Isuzu, which makes trucks, buses, sports utility vehicles and engines, with the entire stake valued at about 38 billion yen, or $320 million, according to Isuzu spokesman Naruhito Furuta.
GM said it was discussing a "private transaction" but that the sale is not expected to affect cooperation with Isuzu, in which it first invested in 1971.
"Isuzu is a core alliance partner with which GM has many long-term mutually beneficial projects, and the level of activity between the two companies continues to increase," GM said.
Isuzu's shares, mostly flat the past six months, rallied to the news, jumping 2.3 percent to finish at 436 yen ($3.73).
General Motors has seen its U.S. market share shrink, largely due to Asian competition, and has outlined a plan to cut 30,000 jobs and close 12 facilities in North America by 2008. The company lost $10.6 billion in 2005.
By contrast, brisk sales at Toyota have put it on pace to surpass GM as the world's No. 1 in the next year or two.
Toyota reported a 34 percent rise in profit for the quarter ended Dec. 31 of 398 billion yen ($3.4 billion) as sales jumped in North America and Asia.
Highlighting the reversal of fortunes, Toyota bought an 8.7 percent stake in Fuji from GM back in October for $315 million to replace GM as the company's top shareholder. Toyota recently announced plans to produce about 100,000 Camrys at Fuji's plant in Indiana starting the spring of 2007.
GM has also been trying to sell a 51 percent stake in its financing arm, General Motors Acceptance Corp. That sale could be one way to separate the division's debt rating from GM's own junk rating and raise as much as $15 billion.
Itochu spokesman Masahide Kitagawa said that GM contacted the trading company in mid March about a possible sale of its stake and that Itochu is considering the purchase "positively." He said that nothing has been formally decided.
Mitsubishi spokesman Eiji Hashimoto also said his company was considering a purchase, but that no decision has been made. Mizuho spokesman Misao Yoneyama said the bank is also considering buying a stake.
Mitsubishi already owns a 0.2 percent stake in Isuzu, while Itochu has 0.7 percent and Mizuho has 2.8 percent, according to Isuzu spokesman Naoki Ariizumi.
GM in Talks to Sell Stake in Isuzu Motors
Thursday March 30, 6:06 am ET
By Chisaki Watanabe, Associated Press Writer
General Motors to Jettison Another Japanese Tie Up, Targeting Sale of Isuzu Stake
TOKYO (AP) -- General Motors Corp. said Thursday it is in talks to sell its stake in Isuzu Motors Ltd. as the troubled company jettisons assets to drum up badly needed cash and hang onto its title as world's biggest automaker.
ADVERTISEMENT
Disposing of GM's 7.9 percent stake in the Japanese truckmaker would mark the latest retreat for a company besieged by staggering losses, labor problems and mounting competition, especially from archrival Toyota Motor Corp.
The move would also highlight GM's rapid pullout from Japan. Earlier this month, Detroit-based GM sold 17 percent of Suzuki Motor Corp. for about $2 billion, leaving it with a 3 percent stake.
That followed last year's sale of GM's entire 20 percent stake in Fuji Heavy Industries, the maker of Subaru cars.
GM once looked at shares in these smaller Japanese competitors as a window to cracking the tough Japanese market. But after making few inroads here and facing dwindling market share at home, the company has more urgent priorities -- like becoming profitable again.
"Isuzu is aware that GM is in an important phase of going back into the black in its North American operations and reviewing its investment portfolio, and needs to strengthen its balance sheet and liquidity," Isuzu said in a statement announcing that the two sides were examining a stake sale.
General Motors has shopped the Isuzu stake to three Japanese companies, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank Ltd., and they are still considering the offer, spokesmen from the three companies said.
GM and Isuzu said in separate releases that no decision has been reached, and there was no word on a possible price.
General Motors holds about 90 million shares in Isuzu, which makes trucks, buses, sports utility vehicles and engines, with the entire stake valued at about 38 billion yen, or $320 million, according to Isuzu spokesman Naruhito Furuta.
GM said it was discussing a "private transaction" but that the sale is not expected to affect cooperation with Isuzu, in which it first invested in 1971.
"Isuzu is a core alliance partner with which GM has many long-term mutually beneficial projects, and the level of activity between the two companies continues to increase," GM said.
Isuzu's shares, mostly flat the past six months, rallied to the news, jumping 2.3 percent to finish at 436 yen ($3.73).
General Motors has seen its U.S. market share shrink, largely due to Asian competition, and has outlined a plan to cut 30,000 jobs and close 12 facilities in North America by 2008. The company lost $10.6 billion in 2005.
By contrast, brisk sales at Toyota have put it on pace to surpass GM as the world's No. 1 in the next year or two.
Toyota reported a 34 percent rise in profit for the quarter ended Dec. 31 of 398 billion yen ($3.4 billion) as sales jumped in North America and Asia.
Highlighting the reversal of fortunes, Toyota bought an 8.7 percent stake in Fuji from GM back in October for $315 million to replace GM as the company's top shareholder. Toyota recently announced plans to produce about 100,000 Camrys at Fuji's plant in Indiana starting the spring of 2007.
GM has also been trying to sell a 51 percent stake in its financing arm, General Motors Acceptance Corp. That sale could be one way to separate the division's debt rating from GM's own junk rating and raise as much as $15 billion.
Itochu spokesman Masahide Kitagawa said that GM contacted the trading company in mid March about a possible sale of its stake and that Itochu is considering the purchase "positively." He said that nothing has been formally decided.
Mitsubishi spokesman Eiji Hashimoto also said his company was considering a purchase, but that no decision has been made. Mizuho spokesman Misao Yoneyama said the bank is also considering buying a stake.
Mitsubishi already owns a 0.2 percent stake in Isuzu, while Itochu has 0.7 percent and Mizuho has 2.8 percent, according to Isuzu spokesman Naoki Ariizumi.
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Joined: Dec 1999
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From: Annapolis Md. USA
Re: GM to sell stake in Isuzu.
SELL SELL SELL!!
When I see Gm selling everything, I think this show some sort of despiration on GM's part. Not good to see at all. If Delphi strikes, GM will burn through billions at a drop of a hat.
When I see Gm selling everything, I think this show some sort of despiration on GM's part. Not good to see at all. If Delphi strikes, GM will burn through billions at a drop of a hat.
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Joined: Dec 2000
Posts: 8,504
From: Ohio
Re: GM to sell stake in Isuzu.
Originally Posted by jpolz
Personally, I think this is a good thing. Isuzu just seemed like dead weight.
I agree. I think they've put themselves into so many other things that it spread them out too thin, and made it hard to focus.
I don't have an issue with them dumping off stakes in all these other companies.
Bring the money back to the core company, and use it to better the part that really matters.
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Posts: 10,285
From: Albany, NY
Re: GM to sell stake in Isuzu.
Other than Diesels, why would you want GM to have anything to do with Isuzu?
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
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Joined: Mar 2001
Posts: 13,713
From: The Golden State
Re: GM to sell stake in Isuzu.
What was Isuzu but a way of getting a Colorado or Trailblazer with better warranties?
With Daewoo and Holden combining to do all the Asia vehicles, and the Colorado done, GM really doesn't need Isuzu anymore.
With Daewoo and Holden combining to do all the Asia vehicles, and the Colorado done, GM really doesn't need Isuzu anymore.
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Joined: Nov 2000
Posts: 16,176
From: Chicagoland IL
Re: GM to sell stake in Isuzu.
Originally Posted by Z28x
Other than Diesels, why would you want GM to have anything to do with Isuzu?
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
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Joined: Feb 2003
Posts: 658
From: Madisonville, Louisiana
Re: GM to sell stake in Isuzu.
This is an even better descision than the subaru thing in my opinion. Isuzu really doen't add much to the company so sell it off. I still think the GMAC thing is a bad idea.
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Joined: May 2001
Posts: 1,238
From: Wet Coast
Re: GM to sell stake in Isuzu.
that seriously sucks with GM ditching everything. As much as I like my Toyota, I don't think they would benefit from being #1 automaker, it just wouldn't feel right if GM were 2nd to another company. But again I look at the mid-90s cars and shake my head.
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Posts: 848
From: Melb, Aust
Re: GM to sell stake in Isuzu.
Originally Posted by guionM
What was Isuzu but a way of getting a Colorado or Trailblazer with better warranties?
With Daewoo and Holden combining to do all the Asia vehicles, and the Colorado done, GM really doesn't need Isuzu anymore.
With Daewoo and Holden combining to do all the Asia vehicles, and the Colorado done, GM really doesn't need Isuzu anymore.
Do you know what Holden will do as a Rodeo replacement? I don't think any of the US trucks come in RHD?
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
Re: GM to sell stake in Isuzu.
Originally Posted by AnthonyHSV
Do you know what Holden will do as a Rodeo replacement? I don't think any of the US trucks come in RHD?
WRT to the subject matter, note that this is only a ~$350M sale, which is perhaps equal to the annual profit on the Duramax diesel. It seems to me that GM could use more diesel technology right now, not less, but I don't think they're in any position to sit around and ponder how to best exploit Isuzu at this time.
Last edited by Eric Bryant; Mar 30, 2006 at 05:15 PM.
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Joined: Dec 2005
Posts: 280
Re: GM to sell stake in Isuzu.
Originally Posted by Z28x
Other than Diesels, why would you want GM to have anything to do with Isuzu?
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
GM is letting Isuzu take over GMC big truck operations overseas, from what I hear. That's fine if that is the eventual reality. They are good at commercial trucks.
I never liked Isuzu gasser vehicles (I owned a 93 Pickup that was carbed--that carb was a joke!), but their diesels....very nice. Isuzu selling GM rebadges was an insult to all parties involved, much less the consumer.
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Joined: Dec 1999
Posts: 538
Re: GM to sell stake in Isuzu.
Originally Posted by Z28x
Other than Diesels, why would you want GM to have anything to do with Isuzu?
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
Question is what Diesel is going into the H3 now that GM is ditching isuzu? I assumed before it would be a 3.0L I4.
From a previous post here..... August 2002 GM lessens it’s overall ownership of Isuzu to 12% and at the same time takes full control of DMax LTD and acquires rights and technology of Isuzu Motors diesel operations. This includes factories and all engine designs.
There is a small diesel offered in the Isuzu DMax truck (GMT355) offered overseas. This most likely doesn't meet current or future US emissions requirements. Only thing I have heard about a small diesel was under the hood of a full size truck. It was identified as a V6 diesel that had appearance much like the production V8 Duramax. This came from a group of journalists invited to GM's proving grounds.
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