• Oct 5, 2005
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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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  • 43 Comments
      • 9 Years Ago
      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.
      • 9 Years Ago
      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.
      • 9 Years Ago
      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 :)
      • 9 Years Ago
      #51. I don't know where you're from but here in New England Subaru's are EVERYWHERE! (proud owner of a WRX)
      • 9 Years Ago
      Well, now that there has been at least 15+ posts of mindless GM bashing, maybe we should all take a look at this from a pure business perspective: How did the Subaru-relationship really benefit GM? My opinion is that it didnt add a whole lot... The Saab 9-2 can still continue to be provided under contract, any parts-sharing can probably still be continued (if need be), and GM already has other significant investments in Asia (i.e. Daewoo). I highly doubt GMs balance sheet was better off with Subaru investment, considering they probably have to revalue it on a quarterly basis, adding a source of volitility to their (much) scrutinised financials. Given they still are a pubically traded company, the Wall Street analysts win...and if there is a view that GMs capital is not generating the kinds of returns they could get elsewhere, then they need to reploy it in places that will. All said, I dont think this sale is a big deal ...GM will use this money for something else that seems like a better investment for them now, and that will tide over Wall Street for the short-term. I guess only time will tell if its the right thing to do...
      • 9 Years Ago
      A much more detailed article on the deal is here: http://www.businessweek.com/bwdaily/dnflash/oct2005/nf2005105_5508_db039.htm
      • 9 Years Ago
      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.
      • 9 Years Ago
      Brad, Which would you rather have, a WRX STi or an Aveo? You can't run business based on finance alone. And even if you did, you wouldn't be floating billions worth of debt (which has been noted as junk-worthy) as GM has done. Nissan appealed to the enthusiast with cars like the G35 and won. GM on the other hand has basically given Subaru, the one nameplate they had a stake in with a genuine enthusiast reputation, away. Now, we'll see how GM messes up the Holden relationship.
      • 9 Years Ago
      Subaru has ONE factory in the U.S., where it produces Legacy, Outback and Tribeca. The Saab version of Tribeca (9-6X) was to be produced there also, so there's a little extra production capacity, but I don't think Toyota could pick up much. Probably not worth the cost of setting up a production line. I would imagine Subaru would want to keep the capacity for upcoming products anyway. Toyota could benefit from Subaru's recently announced hybrid system, which seems superior to Toyota's in some aspects, and could benefit from Subaru's superior AWD technology. Turbo systems? Maybe equal. Subaru's interiors are much improved the last few years (see Tribeca and Legacy/Outback), so I don't really want to see Toyota influence there (no center instrument cluster for me, thanks). Maybe Subaru could pick up some tips from Toyota for creating more efficient engines, but I can't see a whole lot else Subaru would want Toyota to offer. Maybe to use as an outlet in China? I've read elsewhere that Toyota's 8.7% does not constitute enough for a vote on the board, so we may not really see much collaboration or technology swapping.
      • 9 Years Ago
      Folks: Sorry for the double post. Weblogs sent me 2 confirmation e-mails and I clicked on both. Not enuf tea yet ... apologies.
      • 9 Years Ago
      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....!
      • 9 Years Ago
      Well in these JD Power and other surveys, GM quality is improving while Toyota is declining. There's proof of your marketing machine Toyota--they have people believing they are quality and that's all that matters. They've brainwashed some of you to the point you idolize them, and they can sell you another boring average car.
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