SAIC may pass combined value of GM, Ford

Nov. 17 (Bloomberg) -- China's largest automaker, SAIC Motor Corp., is poised to surpass the combined market value of General Motors Corp. and Ford Motor Co., as Detroit's two largest automakers seek a bailout from the U.S. government.

GM, the largest overseas vehicle maker in China, makes cars including Buicks in the country with SAIC. The companies are also partners in a van and light-truck manufacturing venture.

The CHART OF THE DAY compares the combined capitalizations of GM and Ford with SAIC's through Nov. 16. The matchup begins in May 2000, when the U.S. pair was worth $100 billion, about 50 times the value of China's top assembler at the time. The difference was $570 million at the end of last week.

GM stock "is an option on the company's ability to secure near-term financing and eventually gain access to the capital markets or raise cash from asset sales,'' said a report by Soleil Securities Corp., which cut its target price on GM to $3 per share. The U.S. government is likely to step in with a rescue package, halting the need for a bankruptcy protection filing, analyst Michael Ward wrote in a report last week.

"Ford is actually not in that much better straits,'' though it has better access to cash, said a separate report by JPMorgan Chase & Co. That extra liquidity means an industry-wide rescue package could be more "punitive" for GM shareholders, because terms could include the government getting GM warrants, in addition to preferred shares, but no warrants from Ford, JPMorgan said.

GM most recently traded at $3.01 per share in New York Stock Exchange composite trading and Ford was at $1.80, for a combined market value of $6.14 billion. SAIC shares ended the week at 5.8 yuan (85 cents), for a value of $5.57 billion.