Breaking News: TOYOTA BUYS GM'S STAKE IN SUBARU!

[Perian]

Link: http://www.marketwatch.com/news/yhoo...72E93065C67%7D

GM TO END LINK WITH SUBARU

By mutual agreement, GM also intends to end its alliance with Fuji Heavy, bringing to an end their Saab crossover vehicle development program. Instead, GM will work with its other strategic partners in Asia.

Both companies "came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach," said Troy Clarke, GM's group vice president and chief of its Asia-Pacific operations.

GM, in the midst of a wrenching restructuring program, said cash proceeds received and any potential gain on the Fuji Heavy sale will be recorded in the fourth quarter.

Toyota Buys Stake in Fuji Heavy From GM
Wednesday October 5, 6:50 am ET
By Yuri Kageyama, AP Business Writer
Toyota Buys Stake in Maker of Subaru, Fuji Heavy Industries, From General Motors

TOKYO (AP) -- Toyota has agreed to buy an 8.7 percent stake in Japanese automaker Fuji Heavy Industries from General Motors Corp., officials from both companies said Wednesday, in a deal that will make Toyota the top shareholder in the company that makes Subaru cars.

GM and Fuji agreed to dissolve their alliance and capital relationship, said Toyota executive vice president Mitsuo Kinoshi ta and Fuji Heavy President Kyoji Takenaka at a joint news conference. GM will sell its remaining 11.4 percent stake in Fuji in the market.

Toyota Motor Corp. and Fuji are setting up a steering committee to try to reach an agreement on future collaboration as soon as possible, the companies said.

Toyota has been on a roll lately, boosting sales in North America, Europe and other parts of Asia and recording booming profits. GM, based in Detroit, has been in trouble, losing $1.1 billion in the first quarter.

GM and Toyota have a long-standing partnership to share environmental technology, and they run a car assembly plant in California together, although the ties do not involve holding stakes in each other.

Toyota Chairman Hiroshi Okuda has expressed worries lately about a possible political backlash from U.S. automakers because of Toyota's bright results at a time when GM and Ford are faltering.

He even suggested Toyota raise the price of car models in the United States. Toyota raised prices soon after, but denied the move was to placate U.S. automakers.

Toyota, based in central Japan's Toyota city, holds stakes in two other Japanese automakers, Daihatsu Motor Co., which makes small cars, and Hino Motors, which makes trucks.

Kyoji Takenaka, President and CEO of Fuji Heavy Industries LTD.,speaks to the press as Mitsuo Kinoshi ta, Executive Vice President of Toyota Motor Corporation looks on:

[pkd87]

Ah, ya beet me to it. i was going to post this topic, oh well.

[Perian]

Originally Posted by pkd87

Ah, ya beet me to it. i was going to post this topic, oh well.

Take the credit - I don't mind!

Where does this leave the Saab projects?

[pkd87]

In not shure about Saab, another article I read says GM will look to other asian makers for Saab but who knows.

[PaleGreen]

This is bad news! I was looking forward to Saab's take on the Tribeca. (Along with possible AWD Cobalts, G6s, et al)

[Ming]

Wow. I didn't see that coming, even with the talk of Subaru using Toyota's hybrid tech.

At least this will stop the media from its drumbeat of "Toyota doesn't need to acquire any other car companies (except Daihatsu)."

[JoeT]

I didn't see that one coming either.

And to think, some Subaru products were to be badge as Holden's five odd years back, until Fuji Corp said no. 'A Subaru is a Subaru! Not some GM badge-engineered product!'

Its a smart buy for Toyota. I can see why GM sold their share's in Subaru, especially now GM owns Daewoo.

[Mrbowtie]

I think this is a great move.

How was this relationship helping GM? This allows GM to have a more focused product strategy.

Unless GM can turn around SAAB in the next 3 years, they should let that loose too.

[CADILLACSIXTEEN]

Originally Posted by PaleGreen

This is bad news! I was looking forward to Saab's take on the Tribeca. (Along with possible AWD Cobalts, G6s, et al)

Highly doubt there will be an awd cobalt any time soon! as for the G6, you will get your wish when the EpsilonII platform comes out... It never had anything to do with subaru in anyway.

[5 watt]

This is a good move by GM. They really weren’t getting all that much from owning part of Fuji Heavy Industries. Plus the get some cash that can be used for other projects.

[dindak]

Too bad. It's hard to see the up or downside to this story for GM. Subaru helped GM with it's AWD technology but I guess GM got all it could out of the deal.

In the end I don't see any big impact for GM or Toyota.

[Ming]

Originally Posted by dindak

In the end I don't see any big impact for GM or Toyota.

The impact for Toyota is further domination of the Japanese domestic market, and performance credibility with the cult-like following of the WRX/STI.

The upside for GM is getting to focus on a more tightly integrated global alliance between GMDAT, Suzuki, Holden & Opel without the worry of where Subaru comes in and their reluctance to share technology (remember they weren't happy with the Saab 9-2x deal).

[Perian]

Originally Posted by CADILLACSIXTEEN

Highly doubt there will be an awd cobalt any time soon! as for the G6, you will get your wish when the EpsilonII platform comes out... It never had anything to do with subaru in anyway.

The following quote was taken from a Saturn thread:

"I am an employee at GM Lordstown. I have heard we are a lock to build the new Ion. We build 450 units per shift, three shifts per day, six days a week. Our field supply on the Cobalt is so low that they have us on max overtime until sometime in 2006. They want around 115000 Ions per year - (rumor)...an increase in line speed could give them the cars they want.... also i have seen pics and have heard about AWD supercharged versions of both cars for 2008."

[joey]

GM would probably use Korean and China for future development of smaller cars for all the global divisions. Better profit margin then rebadging Subaru.

[saturnsteve]

Wow, I guess that this is the end of the Sabbaru 9-2X!