Sen. Shelby: Let GM file bankruptcy so the Chinese Communists can buy them

Alabama Senator Richard Shelby is fighting hard against any bailout for the automotive agency as hard as he can. Instead of a bailout he proposes that they go through bankruptcy.

Of course, The automotive industry in Alabama is owned by Mercedes Benz, Honda, and Hyundai. There are no American automotive companies there, so he doesn't give a rat's ass about Detroit. They're his competition. So he is happy to see them go into bankruptcy.

But wait! If they go into bankruptcy, who buys their assets? It appears that the best positioned candidate to buy Detroit is -- the Chinese. EmptyWheel thinks so too. She quotes from Bertel Schmitt:

"Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [Snip]

The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?

A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology."

Who holds the most dollar-denominated US federal debt? China? Where are dollars most spendable? The U.S. Where can the Chinese get the best bargains in the dollar world? The U.S. Especially if the three U.S. automotive companies are sold at fire sale prices in a bankruptcy.

There are three million American jobs built around the U.S. automotive industry. Do we want them controlled by China? Frankly I really don't.

But apparently, Senator Richard Shelby, who has no problem with the Germans, Japanese and South Koreans owning the automotive industry in the backwards southern state of Alabama has no problem handing the entire U.S. Automotive industry as cut-rate goods to the only foreigners who have enough money to buy it.

I'll agree that the top management of the U.S. Auto industry need to be replaced and the industry needs to be restructured further (they've already moved a long way towards becoming more efficient), but definitely not by Chinese Communists.