General Motors has sold its Saginaw-based steering business, Nexteer Automotive, to Pacific Century Motors, a Chinese venture owned by a Beijing-based auto supplier and an investment and development arm of the Beijing government.
The Wednesday announcement comes less than a week after workers at Nexteer’s plant in Saginaw ratified a new five-year contract that rolls back a raise in exchange for $5,000 cash, requires buy-downs from skilled-trades workers and offers voluntary buy-downs to production workers.
The pay rollbacks were critical to the sale of the steering business, which GM purchased from Delphi last year, along with four other Delphi plants to help its former parts division end its bankruptcy case.
The deal puts more Delphi assets under the ownership of Beijing-based parts maker Tempo Group, which last year was part of a consortium that bought most of Delphi’s suspension and brake business.
The price wasn’t disclosed, but it may be about $450 million, a person familiar with the matter told Bloomberg News.
The sale of Nexteer, GM Vice Chairman Stephen Girsky said in a statement, “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.”
Matthew Beaver, first vice president of UAW Local 699, which represents about 2,200 workers at Nexteer’s Saginaw plant, said he is hopeful the move will help Nexteer diversify its customer base.
“I just hope they’re committed to a long-term business and keeping those jobs in Saginaw,” he said.
Kevin Marsh, director at Birmingham-based investment banking firm Angle Advisors, expects more acquisitions in the auto sector by Asian firms. “We’re seeing a lot of interest from the Asian buyers that are looking to acquire advanced technology,” Marsh said.
The Nexteer deal is to close during the fourth quarter, according to a statement from Tempo and E-Town International, the Chinese government-owned development and investment group. Nexteer will keep Bob Remenar as its president and its headquarters will remain in Saginaw.