The Financial Times writes that Russian billionaire Oleg Deripaska has bought just under 5% of GM (NYSE: GM). He owns Russia's biggest aluminum maker. The stake appears to have been bought late last year and is now worth $900 million.
Deripaska also controls Russian vehicle maker Gaz and has a large stake in Canadian car parts company Magna (NYSE: MGA).
After being up almost 25% this year, GM's stock is now only 9% on the plus side. Sales of the company's cars are falling sharply compared to last year. Investors in the largest car-marker are worried about ongoing negotiations with the UAW.
GM may have to put up $30 billion to move its health and pension liabilities to a fund run by the UAW. This fund, with contributions by Ford (NYSE: F) and Chrysler, would pay future health care costs for UAW members. But, it is hard to see where the Big Three will get the money to fund the project.
It would be tempting to think that GM's money might come from Russia.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-08-2007 @ 7:36AM
ohm1234567@aol.com said...
this idiot needs to learn the difference between million and billion. there is no way a 5% stake in GM is worth $900 BILLION. this is the danger of proofing by only using a spell check.
8-08-2007 @ 7:59AM
piceus said...
Yes, the Russians are coming!! The USSR , like Arnold Schwarnezeggar says "I'll be back." Check out the movement of Google and other Soviet Union-like capitalist ventures like this GM purchase. The USA is indeed up for sale to the highest bidder. So too is our future - at least it seems that way but history is "screaming" in our ears. The question is: do we have time to "listen"?
8-08-2007 @ 9:03AM
William Martin said...
I agree with #1 comment but I still think the UAW was a contributing factor in the demise of the Big 3 over the years. I have made it just fine with a lot less benefits for many years. There is no doubt in my mind that if more concessions were made by the UAW and better gas mileage automobiles were built everything would get better for all concerned.
8-08-2007 @ 12:14PM
van said...
Don't miss the "boat" on G.M. stock by years end. The 2007 contract that is being negotiated will give GM, Ford, Chrysler the flexibility to make huge gains in their market shares "over" the foreign models. It will be concentrate on quality, hours of labor to build the product and R&D.....Watch Goldman & Sachs on this stock with G.M. also!
8-08-2007 @ 7:58PM
KHausOhio said...
Perhaps you should get some glasses. It says $900 MILLION in the article.
8-10-2007 @ 7:00PM
FJW said...
IT SEEMS THAT WE HAVE A PROBLEM WITH NUMBERS. BASED UPON TODAYS FIGURES FOR GM. OUTSTANDING SHARES ARE 565,870,000 MILLION. THE CLOSING TODAYS PRICE IS $33.85 PER SHARE. IF WE MULTIPLY TOTAL SHARES BY THE CLOSING PRICE WE HAVE 19,125,250,OOO BILLION. NOW THE ARTICLE SAYS A 5% PURCHASE. MULTIPLY THIS TOTAL NUMBER BY 5% AND WE HAVE $956,262,500 MILLION. SO I GUESS THE BIG ERROR IS BILLION IN PLACE OF MILLION. ifmwbpr2634@aol.com