GM Spinoff Nexteer Bought By China
Saginaw-based Nexteer Automotive has been purchased by PCM, an entity formed by PCAS and the Beijing E-Town International Investment and Development Co. Ltd., an affiliate of the Beijing, China municipal government.
Officials said the deal is effective Nov. 30 and represents the single largest Chinese investment in the global automotive supplier industry.
Saginaw will remain the worldwide headquarters for Nexteer and the key center for engineering, research and development. The current management team will remain in place under the leadership of Robert J. Remenar, CEO. According to Moelis & Company, the investment banker of PCM, the Nexteer business includes global steering and half shaft operations in 22 manufacturing plants, six engineering centers and 14 customer support centers in North and South America, Europe and Asia.
Under the terms of the agreement, PCM will support the recently approved 5-year labor agreement with the UAW.
"We are committed to building on the hard work and success of the management team and everyone at Nexteer," said Mr. Zhao Guangyi, chairman of the board of E-Town and PCM. "As the new ownership, PCM is proud to provide access to continued capital investment that will allow Nexteer to continue its global growth in technology and manufacturing, particularly in the China market."
"With a well-capitalized owner committed to growing the business, we can focus all of our resources on our industry-leading engineering and product development," Remenar said. "This sale was an important move for us to strengthen a diverse, global customer base and build on our current growth trajectory. While we will continue to build in high growth regions around the world, our owner's relationships will open new channels to the dynamic and rapidly growing Chinese automotive market, particularly among Asia-Pacific OEMs and manufacturers globally."
Nexteer Automotive customers include GM, Fiat, Ford, Toyota, Chrysler, and PSA Peugeot Citroen, as well as automakers in India, China and South America.
The Chinese automotive industry is expected to grow at an annual rate of 10 percent, creating tremendous opportunity for parts manufacturers. While the global market for steering is currently largely hydraulic, the industry is fast moving to electric power steering systems. Nexteer anticipates that EPS will be standard on more than half of the world's vehicles by 2020. Nexteer's product lineup is devoted to the development and commercialization of electric power steering, hydraulic power steering, driveline and columns. In the last 11 years, Nexteer has put 14 million EPS systems on the road globally, saving nearly 800 million gallons of fuel.
This transaction represents the culmination of 10 months of analysis and negotiations by PCM with Nexteer, General Motors and the United Auto Workers of America. PCM previously announced the signing of this transaction on July 7.
More at www.nexteer.com or www.bda.gov.cn.
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