Filed under: Trends
GM sells Subaru stake to Toyota
Toyota Motor will buy an 8.7 percent position in Fuji Heavy Industries, parent company of Subaru, from General
Motors. GM, which currently owns 20 percent of Fuji, will sell its remaining 11.4 percent stake into a Fuji open-market
share buy-back program, completely liquidating its position in Fuji by the end of the week.
The Toyota part of the deal is worth $309 million to GM. The value of the Fuji share buy-back will be depend on the
open market value of the shares.
The deal allowed GM to restate its second quarter financials to show a $700 million to $800 million reduction in the
carrying costs of its Fuji Heavy position.
All Saab-Subaru joint developments will be dropped, except for ongoing supply for Saab's 9-2x.
Meanwhile, Toyota will benefit from access to Fuji Heavy's underutilized manufacturing facilities, especially in the
U.S., as well as key technologies such as advanced lithium-ion batteries and all-wheel-drive powertrains.
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Reader Comments (Page 1 of 3)
fazzster 10:49PM (12/18/2005)
Many of us have always been concerned about when GM would have poked it's clueless nose into Subaru's business and destroy it like it did Saab. This is the best news I have heard in a long time. There is an automotive God....!
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Motorin' 10:49PM (12/18/2005)
I'm starting to think that GM has some extremely special form of corporate retardation.
Of all of their partnerships, they get rid of the best and most attractive partnership to their biggest competitor? I think I'm almost ready to sway over to the "GM is hopeless" category. They seem to always do a few things right, then turn around a do something *really* stupid. Somehow I detect more super-short-term thinking.
At least they've still got Suzuki! (pure sarcasm)
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Joseph Willemssen 10:49PM (12/18/2005)
The General's liquidating and Toyota's financing it.
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matt 10:49PM (12/18/2005)
ALRIGHT! best automotive news in a while. Now saab is really screwed. This deal just saved suaru from a guaranteed death in the future. Now i'm hoping subaru learns something from lexus in terms of interior quality. I also hope Toyota does not mess with Subaru's mechanical components
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Alexey 10:49PM (12/18/2005)
Man I wish Toyota would buy SAAB as well. The brand is almost destroyed and this would be its only hope.
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Steve 10:49PM (12/18/2005)
You know its bad when cash liquidity is -that- important to GM. While clearly a 20% stake in a brand like Subaru isn't a cash cow, certainly Subaru had some immense value in the post-crossover world. Not to mention Subaru is the only nameplate that is appealing to people under the age of 50. Well, I'm glad that GM platforms won't be forced upon Subaru anymore (like they attempted with the Tribeca).
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Paul 10:49PM (12/18/2005)
gm should have kept the subaru investment and sold off its north american operations to Toyota. with it would go its uaw contracts, crappy car line and the idiot management. o but why would toyota buy that its not worth anything. they can buy the assets in a bankruptcy sale soon at a huge discount.
next in the chap 11 line for us industry is tire and rubber and aviation.
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Zane Riester 10:49PM (12/18/2005)
this is a death blow for Saab, I would expect an Oldsmobile type announcement in the next few months
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Jay Miller 10:49PM (12/18/2005)
Yeah I feel for poor Saab. Aren't there some rich Swedes who are apalled at what GM has done to their once proud brand?
The Trailblazer-7x should have been the final insult. At least Ford is smart enough to give it's Swede some freedom.
Give Saab engineering back to the folks that made it such a cult favorite. There are a bunch of folks still driving their 900 Turbos hoping that they'll hold together until Saab returns to their roots.
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steve urkel 10:49PM (12/18/2005)
this is welcome news. subaru's platform is exclusively awd and they use horizontally opposed cylinders. there were never any synergies between gm and scoob before because of the difference in platforms. what I would like to see is toyota and lexus sharing their expertise to do the following:
1. improve the reliability of subaru cars
2. improve the interiors
3. don't touch their boxer engine and don't mess with their proven awd system.
imagine a wrx branded as a lexus with a nice interior and reliability to boot. I would sooo hit that.
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BF 10:49PM (12/18/2005)
What did GM get from Suburu that really helped the North American operations? For that matter, what did they get that really helped out Holden in Australia which is why they took the 20% stake in the first place.
I think this is a good move, it provides a quick infusion of cash that can be used on R&D for new products, allows GM to keep focus on core brands and also shifts the Asian pfroduct soiurcing to lower cost markets such as Daewoo in Korea and even China.
As for the crossovers, the Lambda platform is near the end of development, with the new AWD Satrun Outlook headed to dealer by the end of next summer, with a Buick and GMC to follow.
Not to mention a 2008 AWD crossover built on the Epsilon II/Cobalt platform for Chevy.
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olderty 10:49PM (12/18/2005)
" Meanwhile, Toyota will benefit from access to Fuji Heavys underutilized manufacturing facilities, especially in the U.S., as well as key technologies such as advanced lithium-ion batteries and all-wheel-drive powertrains. "
Why the hell didn't GM do anything with technology it now used to own???
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BF 10:49PM (12/18/2005)
What did GM get from Suburu that really helped the North American operations? For that matter, what did they get that really helped out Holden in Australia which is why they took the 20% stake in the first place.
I think this is a good move, it provides a quick infusion of cash that can be used on R&D for new products, allows GM to keep focus on core brands and also shifts the Asian pfroduct soiurcing to lower cost markets such as Daewoo in Korea and even China.
As for the crossovers, the Lambda platform is near the end of development, with the new AWD Satrun Outlook headed to dealer by the end of next summer, with a Buick and GMC to follow.
Not to mention a 2008 AWD crossover built on the Epsilon II/Cobalt platform for Chevy.
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David Thomas 10:49PM (12/18/2005)
well a +$700 million will look mighty good on the GM sheets this quarter and perhaps keep Wall Street at bay until 2006. And while Subaru is an attractive partner the products weren't blowing anyone away with GM badges on them. So that's a plus. Besides, Saab will now be a rebadged Opel instead which is probably closer to what Saab is anyway. Of course Saab should be its own entity but that won't happen.
I can't believe Subaru is happy about the Toyota deal though.
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Ajay 10:49PM (12/18/2005)
Hahaha -- if I were a subaru employee, I would be clapping!!!
I'd like to see Subaru and Toyota collaberate to make a car that makes the 2007 Nissan GTR wince :)
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Lee Gibson 10:49PM (12/18/2005)
Ships deserting a sinking rat...
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Bob C 10:49PM (12/18/2005)
I posted this to the Ottawa Subaru forum earlier:
On the one hand, I'm happy that GM will have less bearing on Subaru's future, on the other hand, I have mixed feelings about Toyota getting into the picture.
Toyota is definitely a better company than GM, but they are more of a marketing company than an engineering company. They make some decent cars, but try as I might, I can't ever quite picture myself in one.
When I needed to replace my dying Integra last April, I thought about checking out Toyota, but they don't make anything that I want. The closest thing that I would be interested in is the Prius, but those are impossible to test drive and I've heard enough bad things about the way that they handle that I'd rather not go there sign unseen. (My must-haves in a car is good handling and a hatch.)
I think the problem with Toyota is that while they do make decent cars for getting from A to B, they generally don't really understand the soul of a driver's car. They are for people who want an appliance with four wheels and that gets them where they want to go, not for people who enjoy *getting there*.
I guess my biggest concern is that Toyota might be tempted to fiddle with the Subaru formula and make it into an over priced and dumbed down product. I don't see anything wrong with cars like the Camry or Corola for those that want an appliance with wheels and no feel, they're just not for me.
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Jay Miller 10:49PM (12/18/2005)
Yeah I feel for poor Saab. Aren't there some rich Swedes who are apalled at what GM has done to their once proud brand?
The Trailblazer-7x should have been the final insult. At least Ford is smart enough to give it's Swede some freedom.
Give Saab engineering back to the folks that made it such a cult favorite. There are a bunch of folks still driving their 900 Turbos hoping that they'll hold together until Saab returns to their roots.
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Steve 10:49PM (12/18/2005)
BF, we all know that money isn't being used for R&D (see Ford's laying off engineers despite being far less in money issues than GM). Its being used to write off their massive balance sheet deficit. My problem is that this is pennies in the bucket compared to the billions of dollars they are losing. Subaru could have provided GM a foothold in the large market out there who love imports (think WRX) but would prefer to buy American. It could have saved billions of GM's dollars re-inventing the wheel (aka proven crossover platforms). The problem is that GM tried to shoehorn Subaru into a dying luxury brand with a totally different aesthetic. And GM didn't have enough leverage to force Subaru into doing anything useful for them (see Subaru turning down the lambda platform when building the Tribeca or their reticence giving up STi for Saab). This is a shortsighted fire sale which doesn't solve any of GMs real problems.
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jamie 10:49PM (12/18/2005)
Somethin' fishy goin' on here!?!
$700 million is chump change for God-awful Motors. They already have a war chest $19.8 billion ready to squander on useless projects.
Are they hurting that much from their first quarter loss of $1.1 billion brought on by a $2 billion payout to Fix-It-Again-Tony? Yeah, they paid $2 billion for the rights to nothing (wish I could've got a piece of that action).
Also sounds similar to their questionable purchase of Daewoo. They left droppings big enough there you could drive a Mac truck through. Toyota almost scooped them up, or did they? Nothing like padding the competition's coffers when you're looking for an easy exit strategy.
Huh? Who said that Ricky's looking to saddle up with a different dance partner? The writing's on the wall...and Suburu is a nice gift gesture for the soon-to-be newlyweds. Yikes!
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