The consequences of the acquisition of Ssangyong "unpredictable" SAIC expansion thrills

The acquisition of Ssangyong by SAIC may not necessarily be a good news. The danger is not only from the obstacles of the Korean trade unions and the uncertainty of future development, but also from the influence of SAIC Motor's own funds. Once the SAIC Group has a problem with the capital chain during its crazy expansion, SAIC Group is likely to become another Delong. The other danger is that if SAIC Capital Group has a capital chain problem like Delong, it will be the country that ultimately pays for it. This is the difference between SAIC Group as a large state-owned company and Delong, which may also be the reason why Hu Maoyuan dared to take such a drastic step out of the country to acquire Ssangyong. The acquisition of Ssangyong results in “unpredictability.” From late last month to this month, SAIC Motor’s acquisition of Ssangyong Motor Co., Ltd. has been a hot spot for Chinese and foreign media. However, in this process, few people have noticed that in South Korea, especially in Ssangyong Motor Company, a strong wave of opposition to the acquisition has been released in the brewing. Anxious to acquire the SAIC Motor Corporation of Ssangyong Motor, it is in a dilemma. On July 27, SAIC and South Korea's Chao Ching Bank (CHB) reached an agreement in Korea on the terms of the binding memorandum of understanding for the acquisition of the control of Ssangyong Motor (SYMC), and signed a memorandum of understanding on the sale of Ssangyong Motors. According to the memorandum signed this day, SAIC Motor Group will conduct a verification and verification of Ssangyong Motor Co., Ltd., and then sign a formal contract. After approval by the Chinese government and the Ssangyong Motor Creditor Financial Institutions, SAIC Motor will acquire 48.9% of the shares of Ssangyong Motors. According to reports from the South Korean side, SAIC Motor will acquire a 48.9% stake in Ssangyong Motor at a consideration of 10,000 won and purchase Ssangyong Motor’s shares from Daewoo Heavy Industries and other investment funds, which will increase the stake in Ssangyong Motors. To 51%. According to estimates, SAIC Group may have to pay 500 million U.S. dollars. However, although SAIC Group has agreed to hire an operating management team led by Sungyong Motor’s current president Soh JinKwan, it will invest hundreds of billions of won in the next five years to develop new models and increase production. However, SAIC Group will still face major obstacles, which may be the trade union organization of South Korea's Ssangyong Motor. South Korea’s Yonhap News Agency reported as early as July 19 that the Ssangyong Motor Company’s union organization planned to strike on July 22. During the strike on July 22, the Ssangyong Motor Union proposed the "Special Agreement on Capital Transfer for the Construction of Overseas Plants and Cooperation." This program includes the requirements for trade unions to participate in the operation of the content, specifically: the establishment of a labor-management overseas business strategy committee; to allow trade unions to participate in the decision-making process of the board of directors; the introduction of a responsible operating system; protection of employment of trade union membership and domestic facilities; Through these contents, it is not difficult to see that the Ssangyong Motor Union’s strike has a direct relationship with SAIC Motor’s acquisition of Ssangyong Motors. Ssangyong Motor Union has always opposed the sale of the company. Before the SAIC Group, Bluestar Group, which wanted to acquire Ssangyong Motor, was largely abandoned by unions because it was not "welcome." For a long time, the influence of the trade union organizations in South Korea on the companies has been enormous. Some Hong Kong media even said that “the trade unions have caused the Korean economy to face a crisis”. The “Asian Wall Street Journal” AWSJ? report said: “South Korean strikers demand high wages, improved working conditions, and stable employment. Therefore, companies have moved abroad, and some trade union groups have also clashed with government agencies such as prosecutors. However, in fact, the wages of Korean workers are already quite high, which is a very unfavorable factor in the control of production costs of products. Hu Maoyuan, president of SAIC, pointed out that the acquisition of Ssangyong is an important strategic move for SAIC Motor to carry out international business. SAIC Group is very optimistic about the prospects of working with Ssangyong and believes that this new partnership will not only bring benefits to both employees and shareholders, but will also greatly promote the economic and trade cooperation between China and South Korea. In fact, the SAIC Group may face more than just the obstacles of trade unions. "The development of the Korean auto industry has its distinctive features, that is, a strong national sentiment. Almost all South Koreans are ashamed to buy foreign goods. This will affect the future operation of Ssangyong Motor by SAIC Motor," analysts pointed out. This person believes that the current saturation of the Korean automotive market is very high. Hyundai-Kia has a 70% monopoly in the Korean automotive industry. In this context, the consequences of SAIC Motor's entry into Ssangyong Motor are "unpredictable." Expansion of the huge funding gap for assets of more than 100 billion yuan, the passenger car production and sales in the Chinese market to maintain the number one in the last year, the Shanghai Automotive Group, "even if the acquisition of South Korea's Ssangyong Motor successfully, paying 500 million US dollars is not a big deal However, in the next three to five years, the SAIC Group's capital chain is tight, and the serious point is that it is insecure, because the gap is too large.” Some people familiar with the insider of SAIC revealed to the CIEN reporter. According to the information already disclosed, the total investment plan that SAIC Motor has established in the next three to five years or the total investment plan that has to be carried out will be as much as RMB 50 billion. “The first part of SAIC's investment plan comes from the influence of its partners.” Analysts pointed out that “GM and Volkswagen have recently announced a huge expansion plan. SAIC must work with them. This is no other choice. During this year's Beijing International Auto Show, General Motors (China) announced that in the next three years, Shanghai General Motors will invest 3 billion US dollars, involving new car R & D facilities, new product planning, automotive financial services and other business. By 2007, the total vehicle production capacity will be increased from the current annual output of 530,000 vehicles to 1.3 million vehicles. Behind this huge plan, in accordance with the bottom line of the 50% controlling power in the national automobile industry policy, SAIC Motor must use the same amount of money as GM to invest. Similarly, as the current leader of the international auto giant in the Chinese market, Volkswagen has also launched a plan that "by 2007, Shanghai Volkswagen will invest 3 billion euros to ensure its annual production from 350,000 vehicles to 700,000 vehicles." In the same way, SAIC Motor, like the general public, will use the same amount of money for additional investment. For these two projects alone, SAIC will need to spend at least RMB 40 billion. While GM and Volkswagen's frantic expansion, SAIC Motor’s own expansion has never stopped. In addition to the acquisition of Ssangyong Motor, as early as 2002, SAIC acquired a 10% stake in GM Daewoo for US$59.7 million. At the end of 2003, SAIC and Shanghai Lingang Economic Development Group signed a letter of intent for strategic cooperation and plans to invest in a new automobile production base with a total investment of approximately RMB 1 billion. In addition, SAIC Motor’s acquisition of Rover, a veteran British automotive company, is also underway. SAIC Motor intends to acquire a 50% stake in Rover; SAIC Motor intends to cooperate with Fuji Heavy Industries to produce a complete vehicle. "If these plans are put into practice, the demand for funds will exceed 500 billion yuan. This amount of money is not a small amount for the SAIC Group," informed sources told CIEN reporter. Difficulties in financing the capital chain risk For such a huge amount of money, SAIC Motor itself is clearly very clear. "There are three main sources of funding: First, listed financing, followed by loans, and the other is the introduction of other hot money." Analysts pointed out. There are many news about the plan of overseas listing and financing of SAIC Group in the near future, but the latest report stated that “the road to listing is still very far away. So far, the overall listing plan is still conceiving and changing, with regard to specific issuing locations and listed assets. The total amount of funds raised, etc., may have a definite answer after at least one year.” “Listing is not a simple matter. SAIC has a large number of stalls and there are many complicated issues. It will be difficult to see the results at 1h50.” A person close to the senior management of SAIC Group confirmed to the CIEN reporter the authenticity of the above report. The person also told CIEN that even if the listing is successful, it is estimated that it can only finance up to 2 billion U.S. dollars. For the shortfall of over 500 billion yuan in funds, the difference is still too much. The second financing channel for SAIC is loans. However, the macro tightening measures of the country’s monetary tightening will not relax for a time. Moreover, the current asset-liability ratio of SAIC is already close to 50%, and the difficulty of loans can be imagined. The idea of ​​introducing hot money is also not realistic. With the intensification of competition in the domestic automotive industry, car profits have dropped significantly, and the risks in the auto market have increased significantly. In this case, some capital has begun to consider the withdrawal of the automotive industry, and investment in the automotive industry will gradually decrease. In particular, for companies with huge funding gaps such as SAIC, many hot money owners are still worrying about the failure of the Delong people, and are worried that SAIC Motor will become the next Delong. As a result, no one wants to take his own hard-earned money to take this risk. "If all kinds of financing channels cannot solve the thirst for SAIC's funds, the safety of its capital chain is a big problem. The best way is to slow down the pace of expansion. Otherwise, Deron's tragedy is likely to repeat itself!" CIEN reporter Lin Xin Beijing Report
View related topics: SAIC commercial vehicle expansion

Farm Equipment Gear Hobbing Machine

Farm Equipment Gear Hobbing Machine,Cnc Gear Hobbing Machines,Cnc Gear Cutting Equipment,Gear Hobbing Machines

Zhejiang Toman Intelligent Technology Co., Ltd , https://www.tomanmachines.com