GM completes sale of Nexteer unit to Chinese entity
General Motors said Monday it had completed the sale of its Nexteer equipment unit to Chinese-based Pacific Century Motors, an entity that includes the Beijing municipal government.
The Michigan-based Nexteer, once called Saginaw Steering Gear, was part of GM for nearly 90 years before being spun off with parts giant Delphi Corp. under the US auto giant's restructuring.
"It's a landmark deal," said Robert Remenar, a former GM and Delphi executive who will be Nexteer's chief executive.
"It's the largest Chinese investment in the global automotive supply chain," said Remenar, who added that the deal will help Nexteer expand operations in Michigan and abroad.
Neither GM nor Nexteer's new Chinese owner disclosed the terms of the deal. The deal, which is effective Tuesday, was originally signed in July.
"It's not a merger or an acquisition," Remenar said. "It's the creation of a new entirely new entity."
He said Nexteer offered its Chinese investors an opportunity to purchase a company with advanced technology and customer roster that includes automakers in North America, Europe and Asia.
The new firm called Automotive PCM was formed by PCAS and Beijing E-Town International Investment & Development Co., Ltd., an affiliate of the Beijing municipal government.
The owners will get Nexteer's electric power steering system, said to improve fuel economy by eliminating the need for the hydraulic steering pump.
Nexteer has 8,300 employees and serves more than 60 customers in every major region of the world, selling steering systems to GM, Fiat, Ford, Toyota, Chrysler and PSA Peugeot Citroen, as well as automakers in India, China and South America.
GM recently launched a massive share offering that highlights its new traction after a government-backed bankruptcy restructuring.