General Motors 2010 Annual Report Download - page 38

GENERAL MOTORS COMPANY AND SUBSIDIARIES
UST Escrow Funds
Proceeds of the DIP Facility of $16.4 billion were deposited in escrow. We used our escrow account to acquire all Class A
Membership Interests in DIP HOLDCO LLP, subsequently named Delphi Automotive LLP (New Delphi), in the amount of
$1.7 billion and acquire Nexteer and four domestic facilities and make other related payments in the amount of $1.0 billion. We
released from escrow $2.4 billion in connection with two quarterly payments on the UST Loans and Canadian Loan and another $4.7
billion was released upon the repayment of the UST Loans. The remaining funds in the amount of $6.6 billion that were held in
escrow became unrestricted and the availability of those funds was no longer subject to the conditions set forth in the UST Credit
Agreement.
Repayment of German Revolving Bridge Facility
In May 2009 Old GM entered into a revolving bridge facility with the German federal government and certain German states
(German Facility) with a total commitment of up to Euro 1.5 billion (equivalent to $2.1 billion when entered into) and maturing
November 30, 2009. The German Facility was necessary in order to provide sufficient capital to operate Opel/Vauxhall. On
November 24, 2009, the debt was paid in full and extinguished.
Focus on Chinese Market
Our Chinese operations, which we established beginning in 1997, are composed of the following joint ventures: SGM, SGMW,
FAW-GM, Pan Asia Technical Automotive Center Co., Ltd. (PATAC), Shanghai OnStar Telematics Co. Ltd. (Shanghai OnStar) and
Shanghai Chengxin Used Car Operation and Management Co., Ltd. (Used Car JV), collectively referred to as China JVs. We view the
Chinese market, the fastest growing global market by volume of vehicles sold, as important to our global growth strategy and are
employing a multi-brand strategy, led by our Buick division, which we believe is a strong brand in China. In the coming years, we
plan to increasingly leverage our global architectures to increase the number of nameplates under the Chevrolet brand in China. Sales
and income of the joint ventures are not consolidated into our financial statements; rather, our proportionate share of the earnings of
each joint venture is reflected as Equity income, net of tax.
SGM is a joint venture established by Shanghai Automotive Industry Corporation (SAIC) (51%) and us (49%) in 1997. SGM has
interests in three other joint ventures in China — Shanghai GM (Shenyang) Norsom Motor Co., Ltd (SGM Norsom), Shanghai GM
Dong Yue Motors Co., Ltd (SGM DY) and Shanghai GM Dong Yue Powertrain (SGM DYPT). These three joint ventures are jointly
held by SGM (50%), SAIC (25%) and us (25%). The four joint ventures (SGM Group) are engaged in the production, import, and sale
of a comprehensive range of products under the brands of Buick, Chevrolet, and Cadillac.
SGMW, of which we own 44%, SAIC owns 50.1% and certain Liuzhou investors own 5.9%, produces mini-commercial vehicles
and passenger cars utilizing local architectures under the Wuling and Chevrolet brands. In 2010 we entered into an equity transfer
agreement to purchase an additional 10% interest in SGMW from Liuzhou Wuling Motors Co., Ltd. and Liuzhou Mini Vehicles
Factory, (together the Wuling Group) for $52 million in cash plus an agreement to provide technical services to the Wuling Group
through 2013. Upon receiving regulatory approval in China, the transaction closed in November of 2010 increasing our ownership
from 34% to 44% of the outstanding stock of SGMW. FAW-GM, of which we own 50% and China FAW Group Corporation (FAW)
owns 50%, produces light commercial vehicles under the Jiefang brand and medium vans under the FAW brand. Our joint venture
agreements allow for significant rights as a member as well as the contractual right to report SGMW and FAW-GM joint venture
vehicle sales and production volume in China. SAIC, one of our joint venture partners, currently produces vehicles under its own
brands for sale in the Chinese market. At present vehicles that SAIC produces primarily serve markets that are different from markets
served by our joint ventures.
PATAC is our China-based engineering and technical joint venture with SAIC. Shanghai OnStar is our joint venture with SAIC that
provides Chinese customers with a wide array of vehicle safety and information services. Used Car JV is our joint venture with SAIC
that will cooperate with current distributors of SGM products in the establishment of dedicated used car sales and service facilities
across China.
36 General Motors Company 2010 Annual Report