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General Motors reports that it has come to an agreement to sell its Nexteer steering operations. Nexteer, which had $6.2 billion in revenue as recently as 2008, was acquired by GM as part of a deal to help Delphi exit bankruptcy. The buyer? Pacific Century Motors, which is part of The Tempo Group with ties to the government in Beijing.

The General has been publicly looking to offload Nexteer since January, but the bidding reportedly became more intense after 2,100 workers at a Saginaw, MI plant agreed to concessions. Nexsteer has 6,200 employees in total and 22 manufacturing sites around the world. The steering company also has 60 global customers, though GM accounts for nearly half of its overall work.

Nexteer is being offloaded in part because steering technology is deemed to be a non-core asset. Investing in steering technology takes cash from core technologies like powertrain development. According to General Motors vice chairman Stephen J. Girsky, "The sale of Nexteer to PCM supports our objective to focus on our core auto business and is the final step in our efforts to position Nexteer as an independent supplier."

Official GM press release available after the jump.

[Sources: General Motors, Automotive News – sub. req.]

Show full PR text
GM Reaches Agreement with Pacific Century Motors on the Sale of Nexteer Automotive


DETROIT – General Motors and Pacific Century Motors (PCM), an entity formed by The Tempo Group and an affiliate of the Beijing Municipal Government, today announced they have reached an agreement for GM to sell GM Global Steering Holdings, LLC, commonly known as Nexteer, to PCM. Terms of the sale were not disclosed.

The sale of the Nexteer business covers global steering and halfshaft operations including 22 manufacturing facilities, six engineering facilities and 14 customer support centers located in North and South America, Europe and Asia.

"The sale of Nexteer to PCM supports our objective to focus on our core auto business and is the final step in our efforts to position Nexteer as an independent supplier. The sale better enables Nexteer to take advantage of anticipated growth in the global auto industry with a variety of automakers," said Stephen J. Girsky, GM vice chairman, Corporate Strategy and Business Development. "Ultimately, it's a move we believe will make it a more vibrant and healthier business."

The sale of Nexteer to PCM positions the company for greater growth potential through expansion of its customer base and growth in key emerging markets, especially in the Asia-Pacific region, where PCM has an established presence and continues to expand in the dynamic Chinese automotive market.

"The new ownership is a tremendously exciting opportunity for Nexteer," said Robert J. Remenar, president of Nexteer. "Nexteer has grown to become a global leader in steering and driveline products, and our team will be working with the new owners to build on this great foundation."

The transaction is expected to close by the end of the year, pending regulatory approvals.

About Nexteer Automotive:

Nexteer Automotive is a global provider of advanced steering and related technology. The company designs, engineers, manufactures and sells electric power steering, hydraulic power steering, steering columns and driveline halfshafts for over 60 automobile manufacturers and tier one suppliers. Headquartered in Saginaw, Mich., Nexteer Automotive employs approximately 6,200 people. More information can be found at www.Nexteer.com.

About E-Town / Tempo:

E-Town is a state-owned enterprise serving as the financing and investing arm of the Beijing Municipal Government with a focus on investing in global technology companies. E-Town has over US$15 billion in various credit facilities for the purpose of financing acquisitions and providing growth capital. More information can be found at www.bda.gov.cn.

Tempo is a manufacturer of complex automotive components, serving automotive OEMs worldwide. Tempo has emerged as a multinational company with thousands of employees and a broad product portfolio. The company is headquartered in Beijing, with multiple manufacturing facilities throughout China, which produce components and modules for chassis, powertrain and driveline systems. Tempo has a global sales network covering North America, Europe, Asia, and Middle East, as well as an engineering center located in Detroit.

About General Motors:

General Motors, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.

Forward-Looking Statements:

In this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize successful vehicle applications of new technology; and our ability to comply with the continuing requirements related to U.S. and other government support.

GM's most recent annual report on Form 10-K and quarterly report on Form 10-Q provides information about these and other factors, which we may revise or supplement in future reports to the SEC.

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    • 1 Second Ago
      • 5 Years Ago
      2,100 more jobs to be lost in Michigan. Your tax dollars hard at work.

      Yes you can 'buy domestic' but 90% of the car is made over seas, just assembled in the US. Just like BMW, Mercedes, Toyota, Honda, Hyundai to name a few
        • 5 Years Ago
        Just give it time, we'll see.

        According to cars.com, Camry, Accord, Odyssey, Sienna are their top 10 most parts used from the US and built in the US. Slowly as foreign investors start scooping up domestic companies like this, there will be a small group that will continue to surely reside in the US, but not the same magnitude as it once did. They did it with a mass majority of the goods sold today already.

        F-150 for example was sitting at 80% parts used down to 55% used within the new model year. The writing is on the wall and it's sad.

        Steved32 - check your stats year, according to the same article Silverado and Sierra are down to 65% for 2010 that's not factoring in it's production is split between US and Mexico. For GM and Ford to be successful, it's not going to be American labor that does it. Ask the shareholders...and tax money doesn't mean you have a voice.
        • 5 Years Ago

        Hey Rudyhurfurth

        Silverado - 71% North American Parts Content
        Malibu - 75% North American Parts Content
        Impala - 75% North American Parts Content

        not talking assembly, we are talking parts content...so your thoughts of 90% being made overseas are incorrect. Maybe you should look up the facts prior to making comments as incorrect as yours are.

      • 5 Years Ago
      I wonder of the Chinese overpaid. There are so many Private Equity funds flush with cash looking to buy businesses with a positive cash flow that they can milk

      Perhaps the Chinese desire a smaller IRR than your average investment fund and is looking at the acquisition as a way into getting to GM's Tier-1 list of suppliers. Once in, they can begin to offer other parts (possibly Made in China as well).