GM Sells its Suzuki Shares, Will Still Cooperate on Technology

By Editors on November 17, 2008 1:29 PM

Seeking to raise critical short-term operating cash, General Motors has announced it will sell its 10-percent equity holdings in Suzuki Motor Corporation. The transaction, which includes transferring ownership of its nearly 16.5 million remaining shares of Suzuki common stock back to the Japanese automaker, is expected to add about $225-$230 million to the General's coffers. However, both parties took pains to indicate that the split is, at worst, extremely amicable.

Under their new working relationship, the two organizations will continue to cooperate on all existing projects and programs as well as to collaborate on various advanced technologies, including hybrids and fuel cells plus conventional powertrains. GM's decision also will have no impact on the operation of the CAMI joint manufacturing facility in Canada, collective global purchasing and vehicle cross-marketing agreements with Suzuki, or collaboration on vehicle launches in emerging markets. Both firms also have confirmed that GM would be welcome to reacquire some degree of equity interest in Suzuki should an opportune situation present itself in the years to come. GM's initial buy into Suzuki came in August 1981. Since then, it has continued to hold a position in the firm that varied between 20 percent and its current three percent.

"We highly value our strategic relationship with Suzuki," said Rick Wagoner, GM chairman and chief executive officer. "Despite the sale of our remaining Suzuki shares, this action will have no impact on our existing bilateral business relationships. We look forward to continue building on our success to date with our long-term partner." That sentiment was echoed by Osamu Suzuki, Chairman and CEO of Suzuki Motor Corp who confirmed that, save for the formal change in share ownership, he sees "no impact on Suzuki's current business plan" as it concerns his firm's involvement with General Motors.