2 Big U.s. Carmakers Turn To Local Banks For Thai Factories

[churchill]

BANGKOK — The two largest American carmakers are turning to local banks in Asia to pay for their expansion in the region, a departure from previous years that allows them to tap the deep pool of savings in the region.

One of them, General Motors, announced last month that it had secured 13.5 billion baht, or $410 million, in loans from Thai banks to build three new factories, a plan for growth that is in sharp contrast with the company’s defensive posture in the United States. G.M. is now also looking for local financing in Indonesia, where it hopes to revamp a minivan facility.

Next month, the second company, Ford, is planning to announce construction of a facility worth 19.8 billion baht in Thailand, using funding from local banks, government officials said. The factory will produce compact cars and add to the factories that Ford already owns in Thailand with Mazda, which have an annual production capacity of 275,000 vehicles.

Thai officials say the deals may herald a shift in financing strategies for some large foreign companies here and present a new opportunity for local banks to grab business that was once the domain of larger multinational institutions.

“Multinational companies right now are changing their policies and sourcing their funding from local banks,” said Ajarin Pattanapanchai, the deputy secretary general of Thailand’s Board of Investment. “Thailand’s monetary system and the banking system are still quite strong. We have cash to fund big projects

continued ... http://www.nytimes.com/2010/02/27/business...27thaiauto.html

[churchill]

I wonder how many copies of documents etc they needed !

and how can Bangkok Bank be happy with GM's Bank Statement ?

[neverdie]

^terrible.

[nakachalet]

it is more than the financial statement alone that finalized the deal....

it is the new employment numbers that the deal will hope to create in conjuction with moving thailand toward more diversification in industrialization....

a concering question would be the industry waste.... and it will be interesting to see how the govt is going to deal with the problem....

and how closely and keenly the greenpeace is going to watch and react to this development.

[Carmine6]

I wonder how many copies of documents etc they needed !

and how can Bangkok Bank be happy with GM's Bank Statement ?

With the US government owning the majority of GM and the UAW owning most of the rest, there's a lot of backstop. For the next 3 years at least, I think there's zero chance of GM defaulting on loans from a foreign lender. It would be too huge a headline in Washington DC. There also must be some local political backstop for a large manufacturing facility that will make the numbers work.

[churchill]

I wonder how many copies of documents etc they needed !

and how can Bangkok Bank be happy with GM's Bank Statement ?

With the US government owning the majority of GM and the UAW owning most of the rest, there's a lot of backstop. For the next 3 years at least, I think there's zero chance of GM defaulting on loans from a foreign lender. It would be too huge a headline in Washington DC. There also must be some local political backstop for a large manufacturing facility that will make the numbers work.

I was being just slightly sarcastic

[MJP]

Yes, something I've noticed about this region is it doesn't understand externalized cost. Mai pen rai . . . is likely to cost them both financially and environmentally in the not too distant future . . . but hel_l, who cares . . . we made a bunch of pick-ups cheaper than Detroit!

it is more than the financial statement alone that finalized the deal....

it is the new employment numbers that the deal will hope to create in conjuction with moving thailand toward more diversification in industrialization....

a concering question would be the industry waste.... and it will be interesting to see how the govt is going to deal with the problem....

and how closely and keenly the greenpeace is going to watch and react to this development.

[jay1980]

Any idea what area they will set up the factories?

Out south east of BKK down the Bangna-Trad road where the Toyota factories are or another place?

Could be good place to set up a business catering to the employees.