Dongfeng Motor still rumored to buy GM

Shanghai, December 3 (Gasgoo.com) Dongfeng Motor Group Co., Ltd., a leading automaker in China, is seeking to acquire at least some assects of General Motors (GM) through contact with financial advisors close to the US auto giant, SinoCast reported today citing unnamed sources.

Hu Xindong, secretary to chairman of Dongfeng, declined to comment yesterday. But he earlier said the nation's third biggest car maker has been contacted by financial groups which have close relationships with GM over a possible takeover, according to National Business Daily.

The management of Dongfeng Motor, however, has not confirmed the saying. "It has not started formal discussion yet," disclosed Hu.

"For the moment, Dongfeng Motor has had no intent to take over GM, but it is still looking for opportunities to acquire overseas assets, including auto parts and powertrain operations," the secretary said.

Shanghai Automotive Industry Corp (SAIC) yesterday denied it is considering buying GM, citing GM's huge costs of compensating workers and other follow-up expenditure as barriers.

The three U.S. automakers Tuesday submitted detailed plans to Congress on how they would use $25 billion of loans they say urgently need. The companies also reported sharply reduced sales in November as the effects of the credit squeeze and worsening consumer sentiment weighed on their business.

House of Representatives Speaker Nancy Pelosi said the stimulus plans have been received and that bankruptcy for any of the Detroit Big Three is not an option. Congress will hear from U.S. auto industry leaders on Thursday and Friday, with votes in both chambers likely before the year end.