TOKYO (AP) -- General Motors Corp. said Thursday it is in talks to sell its stake in Isuzu Motors Ltd. as the troubled company jettisons assets to drum up badly needed cash and hang onto its title as world's biggest automaker.þþDisposing of GM's 7.9 percent stake in the Japanese truckmaker would mark the latest retreat for a company besieged by staggering losses, labor problems and mounting competition, especially from archrival Toyota Motor Corp.þþThe move would also highlight GM's rapid pullout from Japan. Earlier this month, Detroit-based GM sold 17 percent of Suzuki Motor Corp. for about $2 billion, leaving it with a 3 percent stake.þþThat followed last year's sale of GM's entire 20 percent stake in Fuji Heavy Industries, the maker of Subaru cars.þþGM once looked at shares in these smaller Japanese competitors as a window to cracking the tough Japanese market. But after making few inroads here and facing dwindling market share at home, the company has more urgent priorities -- like becoming profitable again.þþ''Isuzu is aware that GM is in an important phase of going back into the black in its North American operations and reviewing its investment portfolio, and needs to strengthen its balance sheet and liquidity,'' Isuzu said in a statement announcing that the two sides were examining a stake sale.þþGeneral Motors has shopped the Isuzu stake to three Japanese companies, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank Ltd., and they are still considering the offer, spokesmen from the three companies said.þþGM and Isuzu said in separate releases that no decision has been reached, and there was no word on a possible price.þþGeneral Motors holds about 90 million shares in Isuzu, which makes trucks, buses, sports utility vehicles and engines, with the entire stake valued at about 38 billion yen, or $320 million, according to Isuzu spokesman Naruhito Furuta.þþGM said it was discussing a ''private transaction'' but that the sale is not expected to affect cooperation with Isuzu, in which it first invested in 1971.þþ''Isuzu is a core alliance partner with which GM has many long-term mutually beneficial projects, and the level of activity between the two companies continues to increase,'' GM said.þþIsuzu's shares, mostly flat the past six months, rallied to the news, jumping 2.3 percent to finish at 436 yen ($3.73).þþGeneral Motors has seen its U.S. market share shrink, largely due to Asian competition, and has outlined a plan to cut 30,000 jobs and close 12 facilities in North America by 2008. The company lost $10.6 billion in 2005.þþBy contrast, brisk sales at Toyota have put it on pace to surpass GM as the world's No. 1 in the next year or two.þþToyota reported a 34 percent rise in profit for the quarter ended Dec. 31 of 398 billion yen ($3.4 billion) as sales jumped in North America and Asia.þþHighlighting the reversal of fortunes, Toyota bought an 8.7 percent stake in Fuji from GM back in October for $315 million to replace GM as the company's top shareholder. Toyota recently announced plans to produce about 100,000 Camrys at Fuji's plant in Indiana starting the spring of 2007.þþGM has also been trying to sell a 51 percent stake in its financing arm, General Motors Acceptance Corp. That sale could be one way to separate the division's debt rating from GM's own junk rating and raise as much as $15 billion.þþItochu spokesman Masahide Kitagawa said that GM contacted the trading company in mid March about a possible sale of its stake and that Itochu is considering the purchase ''positively.'' He said that nothing has been formally decided.þþMitsubishi spokesman Eiji Hashimoto also said his company was considering a purchase, but that no decision has been made. Mizuho spokesman Misao Yoneyama said the bank is also considering buying a stake.þþMitsubishi already owns a 0.2 percent stake in Isuzu, while Itochu has 0.7 percent and Mizuho has 2.8 percent, according to Isuzu spokesman Naoki Ariizumi. þþ
Source: NY Times
