DETROIT -- General Motors Co. has a Chinese suitor for the steering business it bought back from Delphi Corp. this autumn as Delphi emerged from bankruptcy.
Yubei (Xinxiang) Power Steering System Co., Ltd. is negotiating to buy the former Delphi Steering, now known as Nexteer Automotive, from GM, Nexteer sources told Automotive News.
Nexteer CEO Robert Remenar, 54, visited Yubei in China last month, the sources said. Yubei executives toured Nexteer’s sprawling Saginaw, Mich., manufacturing complex last August, the sources confirmed.
Nexteer and GM spokespeople declined to comment. Representatives at Yubei in China could not be reached by phone or e-mails.
Nexteer is a global leader in electric and hydraulic power steering. Yubei primarily services the Chinese market with hydraulic steering modules.
Nexteer, which operates as a stand-alone company from GM, expects to post 2009 sales of about $1.6 billion, down from about $2.1 billion in 2008, according to Nexteer internal documents obtained by Automotive News.
The company has aggressive growth plans, however. Even without a new investor, the company expects sales to jump to $1.8 billion in 2010 and to $2.5 billion in 2013, the documents show.
Electric power steering is Nexteer’s fastest-growing product, the documents show. It is technology that is more sophisticated than hydraulic power steering and, because of its lower weight, results in better fuel economy.
Yubei is a Nexteer supplier and customer in China. The company posted sales of more than $125 million last year, another Nexteer source said.
Though relatively small today, the Chinese company has hydraulic power steering technology with wide applications in emerging markets. Yubei is part of China Aviation Industry Corp., a state-owned consortium with aviation and automotive interests.
Back to GM
Nexteer has 15 plants worldwide. It has 6,200 employees, including 2,900 at its headquarters and technical center in Saginaw.
Delphi tried to sell the steering business before it left bankruptcy in October but couldn’t. GM, which owned Delphi before its 1999 spin-off, bought back the steering business, plus four other U.S. Delphi plants with UAW hourly workers, in order to smooth the way for Delphi’s exit from bankruptcy.
But GM made clear that its plan was to divest the steering business as quickly as possible.
Nexteer has returned to positive cash flow and is operating profitability in the fourth quarter after a horrendous start to the year, a source said.
Through September, the company had negative cash flow of $175 million, the internal documents show. About $116 million of the negative cash flow was for operations, while $59 million was for restructuring.