China's Haier bids $1.28 bln for Maytag

[leftchick]

http://news.yahoo.com/s/nm/20050621/bs_nm/manufacturing_maytag_dc

SHANGHAI (Reuters) - Haier Group, the top Chinese appliance maker, and private equity giants Bain Capital and Blackstone Group have bid $1.28 billion for Maytag Corp., the No. 4 U.S. appliance maker, topping an offer from U.S. private equity firm Ripplewood Holdings LLC.


Haier's global ambitions would be boosted by adding Maytag, which also makes Hoover vacuums and Amana and Jenn-Air appliances. Maytag (NYSE:MYG - news) has fallen on tough times amid rising raw material costs and competition from lower-cost makers.

Maytag shares rose 5.4 percent on Tuesday on the New York Stock Exchange.

"Haier would get an instant credible product line," said Longbow Research analyst David MacGregor. "Longer term that could make them a competitive force to be reckoned with."

"We continue to support the Ripplewood transaction," Howard Clark, Maytag's lead director, said in a statement. "However, we also believe that it is incumbent on us to pursue this possibility of achieving a higher price for our stockholders."

[JDPriestly]

1. Maytags were manufactured in Newton, Iowa

People from Newton and the surrounding areas are not like people from anywhere else. They are conscientious, careful -- really great, smart people. I've had my Maytag washer for 20 years now -- raised two children on it -- and it's still going strong with only two small repairs. But, the Maytag that made my washer no longer exists. Outsourcing has destroyed it. Remember the Maytag repairman who had nothing to do? I'll bet no one would believe that ad today. The global economy has lowered the quality of the goods we buy and many of the services we get. Global economy -- global economic destruction -- another sad sign of our times and the conservative trend.

[Bluzmann57]

4. Screw Maytag

Yeah I know all about the Newton, Iowa connection and even the Amana connection, but they shut down a huge plant in Galesburg, IL (about 50 miles from here) which put around 1600 people out of work. These were good Union jobs which have now been outsourced to Mexico. To make matters worse, the plant can be seen by simply standing at the bridge in Brownsville, Texas. It's almost like they are taunting American workers. A local TV station actually went to Matamoros and did a report on the Maytag plant down there. Apparently, they treat the emplyees like crap and the employees don't make enough to buy any Maytag appliances. I will never ever buy any Maytag product.

[Chicago Democrat]

14. Really? I thought they were made in America, that's why I bought mine..

:(


ugh

[Chicago Democrat]

15. Mine is broken right now, Maytag repairman coming tommorrow..

:(

[justinsb]

2. It doesn't matter

China is buying the majority of the debt (bonds) being sold to cover the defeceit. That means for many many years 1/4 or so of the US federal budget will be handed directly over to China for the forseeable future. It also means that the US can't do anything to upset China because the Chinese could call in those bonds and plunge the US into a severe depression with a phone call. Maytag is just one company. There are much larger problems.

[SlipperySlope]

5. Not quite...

Close, but two corrections and a general observation.

1: China does not buy the "majority" (over 50%) of US bonds, but it does buy a substantial number. It currently is the #2 government holder with about 12% of the total.

2: China can't "call" the bonds and force repayment, as the bonds are all for a fixed number of years. China could stop purchasing Bonds, or alternatively, signal their intent to sell these bonds in large quantities.

However, China is currently sitting on $230B of US debt. China would have to consider the damage that would be done to their banking system by anything they do that triggers a sudden devaluation of the dollar.

[NewJeffCT]

12. that would be how China goes...

They would stop buying our bonds.

alternatively, their currency is currently tied to the dollar, which gives them incentive to not let the dollar go too low. If they decide to either switch their currency to be tied to the Euro, or to let their yuan float on the open market, they would no longer have an incentive to buy the dollar... and the dollar would plunge.

Of course, if our economy went into recession (or worse), then China & Japan would both be significantly hurt, as we're still their #1 consumer market.

[SlipperySlope]

16. They already stopped (or slowed down)...

China more or less stopped buying our bonds from November to March and it didn't trigger an immediate disaster. Other countries remain more than willing (for now) to step up to keep the dollar up, and they all have their own reasons for doing so.

It remains to be seen what will happen when the Yuan floats. Certainly the Yuan will appeciate 40%+ relative to the dollar, but that doesn't tell us what the dollar will do relative to other currencies.

Either way China will need act if the Yuan rises too far relative to the dollar because they can't afford to see the dollar fall. They need their exports to remain affordable to the US consumer to continue their economic growth (and unemployment goals).

The world economy of today really is without historical precedent. All the leading currencies are fiat based, and hold each other in reserve. There is no "safe harbor" that the world can retreat to. From an intellectual point, it will be very interesting to see how and when the situation releases the internal tension that has built up. From a personal point, I hope the shit doesn't land here.

[olddad56]

13. well, I think we will be paying China back in seriously inflated money.

[SlipperySlope]

3. Inevitable

The reverse side of all the Chinese goods flowing into this country are all the US Dollars flowing out. It is only natural for those Dollars to be sent home by the Chinese in search of something of value. In this case, the "something" are U.S. companies.

Reminds me of Japan in the 1980's.

[Javaman]

6. That means maytag will be offered at china mart anyday now

[DuaneBidoux]

7. Maytag Stock Up on Second Possible Offer (Chinese)

DES MOINES, Iowa (AP) - Shares of Maytag Corp. rose Tuesday after the appliance maker said it will review a $1.28 billion buyout offer from two private equity firms and a rival Chinese manufacturer, a month after Maytag agreed to be acquired by an investor group that wants to take the company private.

<http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:MYG&Feed=AP&Date=20050621&ID=4905450>

What does a huge and endless trade deficit do? After a while it gives foreign companies (in this case a Chinese company) the cash they need to possibly buy all your companies out. Then they can treat your workers just the way they treat their own.

[Bluebear]

8. We are so screwed. n/t

[leftchick]

9. indeed...

It is the turn of the 19th century America all over again.
Welcome to "The Jungle".

:(

[LiberallyInclined]

10. However-

when things get really ugly, we can turn around and nationalize all those bought up industries...unless the factories have been packed up and shipped out of the country.

we ARE screwed...

[BiggJawn]

11. Jackie Chan to replace Hardy Rawls on TV.

Jessie White will be spin-cycling in his grave.....

[RamboLiberal]

17. BTW the Chinese are also bidding for Unocal

So are we now mercenaries for the Chinese?

China National Offshore Oil Corp. (CNOOC) has agreed to launch the biggest ever takeover offer by a Chinese group with a 19 billion dollar bid for US oil major Unocal, according to a report.

The decision to trump a rival bid for Unocal by ChevronTexaco was reached by CNOOC directors in a tense six-hour board meeting held in Beijing on Wednesday, The Financial Times said in its online edition.

It quoted people close to the situation as saying CNOOC had decided to bid about 67 dollars a share for Unocal and would offer to take on 1.6 billion dollars of the US energy group's debt.

At that level, the offer would value Unocal at 19.8 billion dollars, the newspaper said.

http://news.yahoo.com/news?tmpl=story&u=/afp/20050622/ts_afp/uschinaoilcompany_050622215104

[Niccolo_Macchiavelli]

18. konfuzius says

gotta buy as long the dollar is worth something.

Seems those commies are teaching the capitalists a lesson.

Proles have no say in big biz and big politics, just work, procreate and stfu