Dongfeng Motor not to buy troubled GM

Shanghai, December 16 (Gasgoo.com) China's third largest automaker Dongfeng Motor has no intention to acquire the troubled General Motors, reported Securities Daily yesterday, citing a publicity officer of the company.

As a $14 billion loan package for the three Detroit-based automakers failed to pass the U.S. Senate later last week, GM has become the most troubled of the Big 3, though GM CEO Rick Wagoner is still unwilling to admit that the auto giant has come to the verge of bankruptcy. But sources said that Wagoner has decided to engage external advisors for this matter.

At this moment, Xie Dashun, a publicity officer of China's Dongfeng Motor which had been rumored to buy GM assets, told Securities Daily on Dec. 14 that Dongfeng has no intention to acquire the falling GM, though the U.S. auto giant now still has a book value of more than one billion dollars. But the problem is far beyond the money value.

"The media shouldn't be so excited about the guess that Dongfeng will buy GM," said Xie. "Even though Dongfeng has contacted GM, the results are not available yet. Personally I don't think Dongfeng has the ability to save GM, a company that neither its CEO or the U.S. government is able to save."

An industry analyst noted that it's still early to talk about the acquisition of GM by a Chinese auto company before the U.S. automaker files for bankruptcy, almost no Chinese enterprise has the might to buy out the U.S. auto giant, and the cash flow of Dongfeng Motor is far from enough to buy an American company like GM.