General Motors (GM) is a global US car company which produced 9.8 million vehicles in 2015, sold in 125 countries, split between ten brands:

Chevrolet, Buick, GMC, Cadillac, Opel, Vauxhall, Holden, Baojun, Wuling and Jiefang. Since the early 1980s GM has built its global strategy on a series of wholly owned overseas investments as well as international strategic alliances. One GM chief executive called the policy of alliances

‘a faster and more capital-efficient way to grow’.

Over the years many partnerships have been created and some terminated. Some of them were local joint ventures established with a view to assembling cars. Some others were tie-ins with component manufacturers and finally some others were global strategic alliances, mainly in Europe and Asia. The following text describes their most well-known strategic partnerships.

Europe Italy: GM Fiat In 2000 GM took a stake of 20 per cent in the Italian company Fiat Auto for which Fiat Auto would receive 5.6 per cent of GM capital. GM also had an option between 2005 and 2010 to buy the remaining 80 per cent of Fiat. The objective of the alliance was to create synergies in component manufacturing, platform exchanges, joint purchasing and sales in Europe and Latin America. Poor performances at Fiat and GM led GM to decline to exercise the option, and led to the dissolution of the alliance. In 2014 Fiat acquired the American automobile manufacturer Chrysler and the merged group was renamed Fiat Chrysler. Fiat Chrysler attempted to recreate an alliance with GM in 2015 but this attempt failed.

France: GM Peugeot In 2012 GM and PSA Peugeot of France announced the creation of a strategic alliance with a stake of 7 per cent in the capital of PSA. The alliance concerned the sharing of vehicle platforms, components and modules; and the creation of a global purchasing joint venture for the sourcing of commodities, components and other items. However, in 2013 GM sold its share in the company although it maintained its desire to collaborate with PSA.

ASIA Japan: GM Toyota The New United Motor Manufacturing Incorporated

(NUMMI) alliance was created in 1983 as a 50/50 joint venture between General Motors and Toyota in order to manufacture a compact car in Fremont, California. GM’s main motive for participating in this alliance was to benefit from Toyota’s know-how and expertise in small cars, and learn about Toyota’s highly productive lean manufacturing system.

Toyota’s motivations were to get around potential US protectionist policies as well as to learn about the management of the highly syndicated American automobile workers. The joint venture continued until it was terminated in 2010 in light of GM’s financial difficulties, and the Fremont plant was closed.

GM Fanuc In 1982 GM created a joint venture with the Japanese robotics company Fanuc with a view to producing industrial robots for the automotive industry. This type of investment was considered as non-core by GM and the venture was terminated in 1992.

GM Suzuki In 1981 GM took 5.3 per cent of the capital of the car maker Suzuki. They jointly developed a small car that was sold both in the USA and Japan. In 1986 they created a 50/50 joint venture named CAMI, to jointly build a plant in Canada to assemble some Suzuki models. In 2000 GM increased its share of Suzuki to 20 per cent, then sold it back to Suzuki in 2008. In 2010 Suzuki stopped the joint development of a hybrid car with GM and in 2012 sold its share in CAMI to GM. It left the US market the same year, and went on to develop a strategic partnership with Volkswagen in 2016.

GM Isuzu In 1971 GM acquired a 34 per cent share of Isuzu, a small Japanese car maker. GM’s aim was to work with and support Isuzu in developing and marketing small cars for the GM network. The management was completely in the hands of Isuzu managers.

Over the years the alliance took many forms of collaboration. In 1999 GM increased its share to 49 per cent but in 2002 due to GM’s financial difficulties Isuzu repurchased 37 per cent of the shares owned by GM and the alliance was put on hold. The collaboration was reactivated in 2014 with a proposed alliance for the development of mid-sized trucks but in 2016 Isuzu and GM announced the end of their collaboration in this area.

South Korea GM Daewoo In 1972 GM acquired 50 per cent of the shares of a Korean car maker and in 1978 that Korean partner was bought by Daewoo, a Korean conglomerate.

In 1982 the management of the joint venture was handed to Daewoo and the active participation of GM was minimized. Following the Asian financial crisis of 1996 Daewoo sold its shares to GM. The company is now a wholly owned GM subsidiary, under the new name of GM Korea.

China In China GM has eleven joint ventures and two wholly owned subsidiaries. The major joint ventures are with the Shanghai Automobile Industrial Corporation

(SAIC) and First Automotive Work (FAW).

The SAIC-GM joint venture, launched in 1997, has four major manufacturing bases – Jinqiao in Shanghai, Dong Yue in Yantai, Norsom in Shenyang and Wuhan

– with eight vehicle plants and four powertrain plants.

SAIC-GM offers more than twenty product lines under the Buick, Chevrolet and Cadillac brands. The 50/50 joint venture between GM China and China FAW, launched on 30 August 2009, is based in Changchun and is focused on the production and sale of light-duty trucks and vans. It also engages in R&D, exports and after-sales support. The joint venture has facilities in Changchun, Harbin in Heilongjiang and Qujing in Yunnan. Its products include luxury vehicles, economy and premium sedans, MPVs and SUVs, and hybrid and electric vehicles.

Questions:

1 Why in your opinion were some of those partnerships terminated?

2 Do you think that GM has benefited from those?