TOKYO - General Motors and Fuji Heavy Industries Ltd. already have identified 30 possible areas of cooperation, including sharing a factory and rebadging a car built by Fuji for sale as a GM model.
GM announced Friday, Dec. 10, that it will buy a 20 percent stake in the maker of Subaru cars for $1.4 billion, thus becoming Fuji's largest shareholder.
Under the agreement, which takes effect March 9, 2000, the two companies are exploring 'a long list of potential synergies,' GM President Rick Wagoner said at a news conference here.
Other possibilities include selling GM cars in Japan through Fuji's sales network, or using GM's distribution networks in North America and Europe to sell Subarus. Fuji also could use GM's larger vehicle platforms to extend the Subaru lineup.
'I don't rule anything out,' Wagoner said.
Project teams already are examining the possibilities. The two companies also soon will begin personnel exchanges at the middle-management level, Wagoner said.
However, the agreement does not give GM any management control of Fuji.
Fuji President and CEO Takeshi Tanaka said that in choosing GM as a partner, after talking to several other foreign carmakers, 'We wanted to secure for ourselves definitely independence of our management, because we were not seeking a bailout.'
On the other hand, GM's stake should preclude any potential hostile bids for Fuji.
'GM is a sponsor for Fuji Heavy,' Tanaka said.
Among other concerns, 'We were looking for a partner who could fund our investment needs (and) who evaluated our technology highly,' he added.
Said Wagoner: 'It's nice to ally with people who are strong and in good shape and growing.'
BOTH SIDES GAIN
In technology, GM will benefit from Fuji's strengths in all-wheel drive and continuously variable transmissions, while Fuji will benefit from GM's research into alternative powerplants and other environmental issues.
The alliance will focus initially on the design and manufacture of small and mid-sized sport-utilities and crossover vehicles, GM said in a statement.
For Fuji, one immediate benefit could be lower parts costs for its minivehicles - cars and trucks with engines smaller than 660cc. Fuji has about 10 percent of that market in Japan, compared with market leader Suzuki Motor Corp.'s approximately 30 percent.
Because GM already owns 10 percent of Suzuki, the GM-Fuji deal makes the two Japanese carmakers 'relatives,' said Suzuki President Osamu Suzuki.
As a result, 'We'd like to share parts as soon as possible,' he said.
Agreed Fuji's Tanaka: 'There should be some economies of scale.'
In addition, Fuji and Suzuki have agreed to buy roughly a 1 percent stake in each other to cement their ties.
Wagoner said GM would count Fuji's market share toward its target of attaining 10 percent of the Asia-Pacific market in 2004. GM currently includes sales by truckmaker Isuzu Motors Ltd., in which GM has a stake of 49 percent, in its share, but not those of Suzuki.
GM claims 4 percent of the Asia-Pacific market. Fuji, which produced 555,000 vehicles in the fiscal year ended March 31, 1999, holds about a 2.3 percent share of that market.