BEIJING HEAVY LIFE 6 billion US dollars to win Delphi?

Following the beginning of the month, BWI and Delphi entered into a subscription agreement for the global brake and suspension business, and on the 9th, there was news that the Beijing municipal government had prepared a 6 billion U.S. dollar gift to prepare for Delphi in three years. Behind the rumors of the rivers and lakes is Beijing's feelings for Delphi. People who understand the Beijing auto development plan earlier stated that any piece of Delphi’s assets is useful and its technological advantage is 15 years ahead of ours.

After the "Auto Industry Adjustment and Rejuvenation Plan" was issued, a blueprint for a 300 billion yuan high-end parts park and high-end automotive electronics park surfaced. Beijing's determination to expand and strengthen its parts and components industry was clear. We have reason to believe that BWI’s $90 million acquisition of Delphi’s business is an “advanced force” dispatched by Beijing. The important role of BWI in relation to the blueprint for the parts of the capital has not yet been played in this drama. There is currently no climax.

However, if Beijing intends to accept Delphi completely, the U.S. government will not easily nod. Delphi is a component pillar of the three major auto giants in the United States. If it is completely acquired, it can cause the United States to shed heavy debt and welfare burdens in the short term, but it is not conducive to the long-term development of the US auto industry.

In fact, the current difficult state of survival of local parts and components companies has attracted the attention of the U.S. government. A few days ago, it passed a $5 billion aid bill that could ease the financial difficulties of parts and components companies led by Delphi to some extent. However, referring to the US example of aiding Chrysler and General Motors, this $5 billion is obviously not a "free lunch" and will surely come with harsh restrictions. However, since suppliers interested in participating in the program should directly contact Chrysler and GM, Delphi has certain advantages over other parts companies. However, taking into account the complex checks and balances between businesses and the government, and previous negotiations with General Motors ended in failure, Delphi should not place his hopes on such assistance.

For the purpose of self-help, Delphi will still not give up its intention to divest non-core businesses. The plan to sell the steering system to GM has been frustrated in the near future. Due to the tight cash flow, Delphi may not rule out some of its core business operations under favorable conditions. It can be said that the cooperation between Beijing and Delphi still has some imagination.

However, the olive branch will really only throw one direction to Delphi. In the financial crisis, the world auto market has shrunk sharply. The automaker has sneered and parts companies have caught cold. Since the beginning of this year, many parts and components companies in Japan, Germany, and the United States have announced production cuts or bankruptcy directly, including many companies with leading technologies. I believe that when Beijing is looking for acquisition opportunities, it will not just hang in a tree.

Flour Milling Machine

Cleaning Equipment,Flour Milling Machine Co., Ltd. , http://www.flourmillequipments.com