Shed no tears over General Motors'
General Motors disclosed on Wednesday that it will sell its 20.1% position in Fuji Industries in two segments. Toyota
While losing 50% on an investment in just five years is never something to be celebrated, it seems unlikely that General Motors' interest in Fuji would ever have been particularly productive. The major product of GM's collaboration with Subaru was the Saab 9-2X, which never became a huge seller. General Motors delivered only 96 of the cars in September, down 69.6% from the 316 it delivered in September 2004.
And let's face it: When first- and second-quarter losses come in at $1.1 billion and $286 million, respectively, it's time to consider selling some unproductive investments. It would be nice to think that GM will plow the proceeds from the equity sale into developing vehicles that are more attractive to consumers, but unfortunately, it may have to use the cash to quell a more immediate problem. The automaker's main supplier, Delphi
Granted, GM's sale may aid its competitor Toyota by giving it access to Fuji's superior battery technology, which in turn could help Toyota strengthen its hold on the hybrid segment. But GM doesn't even compete in that market, so it can't be that concerned.
In the end, General Motors' unloading of its Fuji stake is a positive for the company. GM seems to understand that although grand global alliances are fine when times are good, what it needs right now is a serious retrenchment.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.