SAIC shopping for Vauxhall

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The Telegraph leads with a scary headline today, ‘SAIC makes approach for Vauxhall‘ it might be a scary headline to those that worked for MG-Rover which SAIC took over via the backdoor once MG-R was bankrupt and no longer in need of a partner, but someone to buy its assets. To everyone else though, it looks like a little bit of window shopping by the Chinese auto giant, who are eager to take on new technology so they may rise from the ashes with a strong brand to take on those Western automakers who probably won’t spend much on development in these lean years.

A SAIC take over of Vauxhall, and potentially Opel, is far from happening as various governments would need to offer state subsidies and guarantees to any suitor, Chinese or otherwise.

Shanghai-based SAIC has requested a sale document from General Motors (GM), the stricken US car-maker, which has warned that it may file for bankruptcy in an effort to ensure its survival.

Commerzbank, the German banking group, is orchestrating the sale process on behalf of GM, which is to establish a new subsidiary comprising Vauxhall and Opel, the German car manufacturer. A new investor would be invited to acquire a controlling stake in the company, with GM potentially retaining a minority interest.

Vauxhall employs about 5,000 people in Britain at its plants in Luton, Beds, and Ellesmere Port on Merseyside.

Efforts to sell a stake in the new Opel-Vauxhall company will be complicated by separate negotiations taking place with a number of European governments, including in Britain, about State guarantees worth up to €3.3bn. SAIC’s interest will prompt questions from union officials about the security of jobs at Vauxhall. The Chinese car-maker acquired the assets of MG Rover, which collapsed four years ago, when it merged with a domestic rival.

Geely Automotive, the Chinese company which owns a stake in Manganese Bronze, the maker of London’s black cabs, has also requested the information from Commerzbank.

The sale will exclude Saab, which GM is attempting to sell separately, and the European sales operations of Chevrolet.

Other interested parties include at least one consortium of private equity firms, although many financial buyers have lost their appetite for investing in the industry because of the travails of Chrysler, the Detroit car-maker which is owned by Cerberus. GM declined to comment on the process.

The auction of a controlling stake in the European arm of GM comes amid the biggest shake-up in the history of the automotive industry. Ford Motor is auctioning Volvo, while Daimler last month sold a small stake to an Abu Dhabi-based investor.

CCT can see a combined British-German saviour of Opel and Vauxhall, rather than another Chinese takeaway.