General Motors and Pacific Century Motors (PCM), announced that they reached an agreement for GM to sell GM Global Steering Holdings a.k.a. Nexteer, to PCM. For those who don't know, Pacific Century Motors (PCM) is an entity formed by The Tempo Group and an affiliate of the Beijing Municipal Government.
Last year, GM acquired Nexteer from Delphi Corp. But GM is now selling the steering business because it's considered to be a non-core asset.
Mike Wall, an analyst with research firm IHS Automotive, said that selling Nexteer will enable GM to concentrate on the engineering core parts of the car, including engines and transmissions. Doing so will also allow GM to outsource smaller systems to parts suppliers.
Wall explained that GM "doesn't need to be the expert in steering" and that GM can buy the parts from somewhere else. He believes that for some of these Asian parts companies, it's logical to get into other parts businesses.
Last month, almost 2,100 hourly workers at Nexteer's steering plant in Saginaw, Mich., reversed a previous vote and approved concessions. Previously, the rejection of wage and other concessions was cited as putting a damper on the division's prospective sale to one of two bidders.
In the latest vote participated in by 1,965 workers, the new concessions passed by 73%, according to a clerk at UAW Local 699, which represents Nexteer hourly workers in Saginaw.