General Motors May Sell ACDelco Parts Business

General Motors is ‘exploring a potential sale’ of its ACDelco aftermarket parts business. In a press release published October 22, the automotive giant stated that a possible sale of ACDelco, along with the potential sale of its Hummer brand and the company’s technical and manufacturing centre in Strasbourg, France, were part of a wider range of initiatives aimed at bolstering GM’s financial liquidity by approximately US$15 billion by the end of 2009. It is thought that the sale of ACDelco alone could be worth as much as $4 billion to the company.

The Michigan, USA headquartered business division employs about 600 people worldwide and produces maintenance and repair parts such as batteries, oil filters and windshield wipers, for both GM and non-GM vehicles. These products are sold in more than 100 countries.

The need to raise cash, reports Bloomberg, results from the $69.8 billion in losses General Motors has experienced since the end of 2004, and an 18 per cent decline in US sales of its cars and light trucks this year through to September. According to Bloomberg, people familiar with GM discussions also say the company is negotiating a merger or partnership with Chrysler.

Analyst commentary indicates that ACDelco may attract a private-equity buyer, as the replacement parts business can still generate sales even at a time when new-vehicle sales are falling. GM has retained Merrill Lynch to assist in its various current financial initiatives.