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Enterprises can realize the optimal allocation of assets through asset reorganization, and finally achieve the purpose of expanding production scale and improving enterprise competitiveness. The ways of asset reorganization can be divided into five forms: merger, acquisition and dissolution, separation and abandonment, among which merger and acquisition are collectively referred to as M&A. For a long time, western enterprises have been keen on asset reorganization, or mergers and acquisitions, or analysis, or abandonment, in order to optimize resource allocation and enhance competitiveness. Especially since the 1990s, facing the gradually integrated world market, western enterprises and financial circles have set off a wave of mergers and acquisitions to achieve the strategic purpose of occupying the market, diversifying operations and acquiring high technology.
M&A or spin-off, there is no absolute standard, which is better or worse, depends on the strategic objectives and market conditions of the enterprise. Through the analysis of the assets reorganization case of General Motors, we hope to get some useful enlightenment from it.
First, a case study of assets reorganization of General Motors Corporation
General Motors is the largest company in the United States, ranking first in the Fortune 500 and far ahead of other companies. During the period of 1995, its sales reached168 billion US dollars and its profit reached 6.9 billion US dollars, setting a record for GM and other American companies. Figuratively speaking, by the end of 1995, GM 1995 had produced 8.6 million cars and trucks. If they are one after another, they will form a 25,000-mile-long car queue, which can circle the earth.
These sales and profit achievements have never been achieved by GM in the past, and it is likely that GM will not be able to achieve such success again in the future. At present, the largest enterprise in the United States is quietly, gradually and carefully splitting itself into four parts. More than AT&T, another big company.
EDS, which is engaged in computer business, Hughes electronic-ics, which is engaged in satellite and defense system business, and Deiphi, which specializes in producing various auto parts, will be separated from General Motors one after another. There are many reasons for the division of GM.
From the glorious period of GM50-60' s, GM invested more and produced less. Its index to measure the efficiency of capital utilization-return on assets has been declining all the way. From 17% of 1965 to negative number in recent years, to 3.2% of 1995. In the past 35 years, the share price of GM has only increased by 16 1%, while the share price of the top 500 companies with S&P credit rating has increased by 900%. Among the 1 13 companies that have been listed in the "Fortune 500" every year since 1954, GM's performance is mediocre and its return to shareholders is the lowest.
At times, GM seems overwhelmed by its size. Economies of scale have always been the basic law of the automobile industry. GM 1995 sold 365,438+million buses in the United States, but it lost money.
Every healthy part of the transgene looks stronger than the swollen whole. General Motors' Electronic Data System (EDS) has been applied to commercial retail. HughesElectronics, which is engaged in health and defense systems, is also in the leading position in the industry. The same is true of the Delphi subsidiary of GM, which focuses on the production of auto parts. If GM is divided into four parts, its share price will be 1.5 times of the previous one, and the market value of GM will increase by 45% compared with the current one. The risk is that returning to the business strategy centered on automobile manufacturing may make it fall behind forever. General Motors will fall into the quagmire of the slow-growing automobile industry, lacking the fast-growing high-tech factors to help it survive the inevitable cyclical recession. Although this problem plagues all industries, it is even more cruel to the automobile manufacturing industry.
At this point, the initial stage of the spin-off has passed, and GM is in the final stage of separating EDS. EDS was founded by ross perrault and was acquired by General Motors for $2.5 billion in 1984. EDS brings high-tech thinking to GM and develops an independent and unified computer system for GM. But after the acquisition, not only Perot himself and the board of directors have contradictions, but also the two cultures are full of contradictions throughout the company, and there has never been a good integration. However, EDS has made remarkable achievements in foreign business. It has developed complex information systems for Rolls-Royce, Xe-rox and the tax bureau. The sales of EDS 1995 is 124 million USD and the profit is 939 million USD.
The spin-off plan is that GM will transfer its EDS shares to an independent GM pension fund. The benefit for GM shareholders is that EDS will pay GM $500 million in exchange for freedom. Moreover, EDS has to bear the heavy burden brought by GM: EDS must perform its duties and pay the pensions of hundreds of thousands of retired employees now and in the future.
1985 GM acquired Hughes for $5.2 billion. GM hopes that advanced electronic technology will help it make better and safer cars. But the result is not satisfactory. Hughes did develop some automobile equipment, but on the whole, the benefits of technological transformation are minimal. "Tying GM and Hughes together has no synergy and no economic value."
Like EDS, Hughes' foreign business has also achieved good results. The turnover of 1995 is14.7 billion dollars, and the profit is 1 1 billion dollars. It mainly comes from the sales of communication satellites to China, Japan and other countries, and also makes intercontinental missiles and other weapons for the Pentagon. General Motors has sold 96 million shares of Hughes' non-common stock to the public. According to the stock price of $60 per share in the latest transaction, 76% of GM's shares in Hughes are worth $654.38+09 billion, equivalent to half of GM's current market value.
The third part is Delphi Company, which produces brakes, lights, transmissions and hundreds of other auto parts. Delphi 1995 has a turnover of $26.4 billion, of which a quarter comes from its business with other competitors such as Ford, Honda, Toyota and General Motors. After separating from GM, Delphi will sell more auto parts to these customers. Ford and other companies may prefer to buy from suppliers of their biggest competitors. It is estimated that after independence, Delphi's market value is about 6 billion dollars.
GM is willing to lose Delphi for another reason. Delphi's products are expensive. If Delphi is separated from GM, GM will be free to buy the parts it needs from all over the world. Unloading the burden of purchasing Delphi expensive parts can reduce the cost; The retirement and pension funds of a large number of retired workers are also separated.
The question is: Should Hughes, Delphi and EDS be separated from GM? Then the basic core of GM should be to design vehicles and trucks, manufacture their power components and frames, assemble them with parts provided by suppliers, and then sell these cars all over the world.
Supporters of the strategy of returning to basic industries believe that the rapid growth of sales in overseas markets on the basis of the continuous improvement of their own labor productivity proves that devoting themselves to automobile production is the most reliable way to make GM prosper and repay shareholders. Chairman Smale even thinks that "the only way to increase shareholders' rights and interests is to do better what God has given us-to make better cars. "
Is that really the case? Automobile industry is a mature, capital-intensive and highly cyclical industry, which has long been restricted by traffic congestion around the world and the competition is fierce. GM's competitors in France, Italy, South Korea and Japan are supported and protected by domestic industrial policies. More importantly, the demand for automobiles in North America, the main market where GM has occupied 33% of the market, has grown very little in the past decade, and it is difficult to improve. Everyone with a driver's license already owns more than one car. The American market tends to be saturated, while Europe is not much better. In the short term, the automobile industry is a sinister and tense industry.
No one doubts the need for GM to insist on increasing car production, which makes people think that Delphi should be split up. The problem is that GM is now fully engaged in the automobile industry with a rather bleak development prospect, unlike AT&T, which is committed to the hot communication business in the world. Why not try to seize the emerging high-tech industries? It's not too late to pull EDS back, and Hughes should keep it under control.
Any big enterprise should have higher goals, not just serving shareholders. "A company is a dignified and energetic enterprise," said Director Smale. "It's not just a collection of assets. The responsibility of management is to make the enterprise full of vitality forever, which is also the responsibility to shareholders. " Therefore, the opportunity for GM to be energetic forever lies in products, besides engines and transmissions, computers and satellites.
Second, the General Motors asset restructuring case gives us inspiration
1, to avoid falling into the misunderstanding of "mean" and "enliven", big does not necessarily mean good. Since the 15th National Congress of the Communist Party of China, it has become people's consciousness to invigorate state-owned enterprises through capital management, and "asset reorganization" has increasingly become the focus of discussion among people from all walks of life. All kinds of enterprises at all levels are actively discussing the major issues of asset reorganization, revitalizing existing assets and maintaining and increasing the value of state-owned assets.
At present, in the wave of enterprise capital management and asset reorganization, there seems to be a misunderstanding, that is, capital management must be merged, and mergers and acquisitions must be made in a hurry, mistakenly thinking that once merged or acquired, enterprises can be invigorated. When people set up enterprise groups, they mistakenly think that "big" equals "good". That's not true. Whether an enterprise adopts M&A, splits or abandons depends on the actual situation of the enterprise and the market and the development strategy of the enterprise. M&A is not everything. The reason why GM went against the trend and chose to split is because GM will be more dynamic after splitting.
2.M&A is not only to expand the scale, but to pay attention to structural adjustment. Especially for some sunset industries, such as steel, textile, automobile and other industries, besides achieving economies of scale through mergers and acquisitions, we should also consider completing internal structural adjustment through mergers and acquisitions in order to obtain high technology and bring new impetus to the future development of enterprises. Rather than simply expanding the scale or building a product chain. Market-oriented, specific target, concrete analysis, the way to invigorate state-owned enterprises is to merge if they change, and dismantle if they change.
3, M&A demonstration and feasibility study should fully consider the business situation after the completion of enterprise mergers and acquisitions, taking into account the integration of different corporate cultures, especially in cross-border mergers and acquisitions, the implementation of international operations, we should pay more attention to this issue. In the operation of an enterprise, 1+ 1 is not necessarily equal to 2. If the two companies can't merge well after the merger, they may not achieve the expected results.