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.]
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.
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.