Toyota buys into Subaru as GM drops its share - 10/05/05

GM is Selling its State in Subaru


For now Toyota is buying 8.7% of the Fuji Heavy Industries stock owned by General Motors. GM also announced plans to liquidate the remaining 11.7% of Fuji tht it owns.

I find this interesting for a couple of reasons. First, GM had been bringing Subaru closer into the fold in recent years, with Subaru building cars for GM's Saab unit. Secondly, it appears that GM's total investment in Subaru will bring in well less than $1 Billion -- at best 1/4 of what it takes to develop a new car line. GM's annual healthcare costs in the U.S. alone are $6 Billion. Bottom Line: is GM selling out its future for current cash flow?

Toyota buys into Subaru as GM drops its share - 10/05/05