GM sells Nexteer to Chinese Group;

GM has agreed to sell its Nexteer division to a Chinese investment group. The business will be sold to Pacific Center Motors which is based out of China. The company is partially owned by the Chinese government. GM's major foreign competitors include Nissan, whose models can be found in a Nissan that is sold at St. Louis Nissan, and Volkswagen, whose models can be purchased at a local Volkswagen Dealer. Nexteer is an auto parts producer whose parts can be found in various brands and models. Discounted prices can be found for GM models as well with KSMO used car loans.

The sale will include 22 production plants, customer support centers, and engineering plants. GM has made efforts to sell Nexteer for the past year or so, but the efforts were hampered by union negotiations. Before GM sold Nexteer, an agreement was made with union representatives, and Chinese investors wanted a deal to be brokered before taking on the unit.

The deal is expected to be finalized by the end of 2010. Both the United States and Chinese government's regulatory centers must approve of the deal for it to be official. The deal must also be approved in any other countries that the division has locations in.

GM does not consider its Nexteer division a crucial asset to the company. GM purchased Nexteer from Delphi, Corp. last year. GM will likely focus its production efforts on powertrains and transmissions and outsource the production of other parts such as the steering systems that Nexteer formerly produced.

Mike Wall, an analyst with IHS Automotive said, “GM doesn't need to be the expert in steering...” He also said that GM could purchase parts from Asian manufacturers.

Nexteer workers agreed to a deal last month with concessions that were formerly rejected by the workers. The workers approved a vote with a 73 percent majority for concessions and approximately 2,000 workers voted on the deal.