FCA to sell to Chinese company?

VRYALT3R3D said:

I don't see how the US government would approve the purchase of Chrysler by a state owned Chinese company. Especially under the Trump administration.

Click to expand...

I was thinking the same thing... China is doing massive amounts of business due to mutual capitalist interest, but they are considered a top national security threat. It would be foolish to let them gain more financial leverage in our economy. Most of our foreign debt is to China... why risk our economy more than we already have.

The deal would definitely face regulatory entanglements.

They really only care about the Jeep brand. Jeep and SUVs in general are hugely popular in China, even more so than here.

MarcSpaz said:

I was thinking the same thing... China is doing massive amounts of business due to mutual capitalist interest, but they are considered a top national security threat. It would be foolish to let them gain more financial leverage in our economy. Most of our foreign debt is to China... why risk our economy more than we already have.

Click to expand...

The Chinese already own a lot of key automotive suppliers. Visteon sold it's entire interior trim operations to a Chinese company. Johnson Controls sold their interior operations to a Chinese company too. There is another supplier that sold their entire operations to the Chinese. The name of the company is just escaping me at the moment.

BTW, Japan holds almost as much U.S. debt as China does. Also technically the government debt never has to be paid back.

How do you say Hellcat in Chinese? There's gotta be a Chinese food joke in there somewhere.

The government will never allow it to happen. Everybody knows the reason the F-22 program was cancelled was because they plan to replace it with a winged and flight ready version of the Demon (hence why they just trademarked the "Angel" moniker).


Sent from my iPhone using svtperformance.com

VRYALT3R3D said:

BTW, Japan holds almost as much U.S. debt as China does. Also technically the government debt never has to be paid back.

Click to expand...

Could you elaborate on this?

I was gonna say, per the US Constitution, our debt is the very first thing we are legally obligated to pay... But that's a discussion for another day.

Strip away everything but Jeep and Ram and you have very profitable brands. Don't waste your time losing money/eking out a tiny profit on a half your lineup just to be a full-line manufacturer.

You sacrifice scale as a stand-alone operation, but bolted onto a larger outfit could be a potentially appealing business for the right buyer.

Snagged said:

Could you elaborate on this?

Click to expand...

The Chinese don't hold near as much of our debt as most people think.

Agreed. Jeep brand is worth $120 billion. They sold 1.6 millio, vehicles in 2016, up 22% from the year before, and Jeep is on track to sell over 2 million units this year.

Jeep and Ram are carrying FCA, from my limited point of view.

Snagged said:

Could you elaborate on this?

Click to expand...

Sure.

The US government technically doesn't have an obligation to pay off its debt. The government technically "lives forever," so it doesn't have to repay the debt in full or even at all. The US government repays maturing bonds by issuing and selling new bonds. Furthermore, if no one in the future buys that debt, the central bank will. If foreign countries don't buy the debt either, the dollar depreciates. To that end, the government still doesn't have an obligation to repay its debt. That being said, discretionary fiscal policy i.e. inflationary bias increases due to high debt. Although there may be higher taxes to be remitted, the principle still doesn't have to be repaid and only the current interest does. When there is an increase in inflation, the debtors gain. So the federal reserve has some aversion to inflation and inflationary bias depends on that. The costs of government debt depends on the GDP-Debt ratio. If the debt is growing at the same rate as GDP, the tax rate shouldn't be raised(although it tends to be.)

FortLewisCobra said:

The Chinese don't hold near as much of our debt as most people think.
View attachment 760185

Click to expand...

Correct.

http://ticdata.treasury.gov/Publish/mfh.txt