GM restructuring China joint venture
Sunday, April 22, 2012
BEIJING (AP) — General Motors Co. has agreed with its main Chinese partner to restructure their joint venture and give the American automaker an equal stake.
The president of GM’s China unit, Kevin Wale, said Sunday that the partners were seeking Chinese government approval of the change.
GM and Shanghai Automotive Industries Corp. had a 50-50 partnership, but GM sold 1 percent to SAIC in 2009 to raise cash. That allowed SAIC to record the venture’s revenues on its own books under Chinese financial rules.
Wale said the restructuring would give GM and SAIC equal stakes in an engineering company to make key decisions. SAIC will own 51 percent of a newly created sales company, allowing it to keep recording sales revenues on its own books.
GM and SAIC have expanded their alliance in China and abroad.