A Chinese automaker kicking the tires at Fiat Chrysler Automobiles and its most profitable asset, Jeep, is raising alarms and could run into strong opposition from the U.S. government.
China’s Great Wall Motor Company on Monday said it was interested in buying Jeep from Fiat Chrysler. It’s not yet clear whether Great Wall has already submitted a bid for Fiat Chrysler’s Jeep or whether one is being prepared. Fiat Chrysler said on Monday that it had “not been approached by Great Wall in connection with the Jeep brand or any other matter relating to its business.”
Any attempt to sell Jeep to the Chinese could be scuttled by the Trump administration. Critics of Chinese economic ambitions in the U.S. are already saying the deal should be blocked.
“It cannot possibly be in America’s interest for China’s Communist government and companies associated with it to win a larger footprint in the U.S. economy,” said Alan Tonelson, an economist and founder of the Reality Chek blog.
“I think the United States should look long and hard before allowing such a deal to go forward as I think Chinese style state guided and state run capitalism does not necessary mesh well with U.S. free market capitalism,” said Clyde Prestowitz, president of the Economic Strategy Institute.
One concern is that the deal could be used to capture U.S. technology.
“I cannot imagine this making it past CIFIUS. It would probably be be stopped on the grounds that it would transfer important U.S. technology into Chinese hands,” said a Washington D.C. trade lawyer who has successfully overseen deals approved by the committee.
Atkinson was not sure CIFIUS would block the deal.
“Given that this does not appear to involve national security, it’s not clear what legal tool the Trump administration could use to block it, other than public pressure,” he said.
It is likely that Great Wall would have to turn to the Chinese government or the banks it controls for funding. On its own, Great Wall is far to0 small to fund the acquisition. But any explicit role by the Chinese government in the acquisition could ring alarm bells on Capitol Hill.
Fiat Chrysler’s attempt to find a buyer for itself has mostly ended in dead-ends. The company was rebuffed when it reached out to General Motors in 2015. Volkswagen has also shown no interest, particularly after its recent emissions scandals.
(First reported by Breitbart News) http://www.breitbart.com/big-government/2017/08/22/chinese-automakers-bid-for-jeep-raises-national-security-concerns/ (August 22, 2017)
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