xin_09040318100363621151.thumbnail.jpgPer Marcy, who predicted it --  the Chinese car makers SAIC and Dongfeng have plans to acquire the Big 3:

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.

All the Shock Doctrine fanatics cheering to drive the the Big 3 into bankruptcy "restructuring" (like Mitt Romney, who can kiss future hopes of electoral victory in Michigan goodbye), whereby they stiff all their creditors and stockholders and tear up their union contracts, might want to think about the implications of this.  

Of course the same legislators clamouring for bankruptcy could block the sale.  But in doing so, and at the same time refusing a bridge loan, they are basically legislating the destruction of the Big 3 by refusing to let the "free market" they love to bang on about have its way and pay the company's legitimate debts. Or were all those insufferable lectures about "personal responsibility" when the bankruptcy bill was going through just so much claptrap?

Because selling the company would be far preferable to the Big 3 and those who are dependent on them than Chapter 7.  But long-term it would not be without peril for the US.  As ThingsComeUndone notes in the comments:

With no big three making cars what to stop Toyota and Honda from moving the plants to Mexico where costs are really low. Its only the threat of being shut out of the American market that keeps the Japanese building cars here.  If we no longer have cars made in America by American companies we will have no choice but to buy their cars no matter where they are made.

I know long-term thinking isn't his forte.  But as Richard Shelby is salivating at the prospect of yet another BMW SUV plant in his right-to-work state, it might be something for him to consider.