Several people have indicated the Current Accounts Ballance of
Payments [trade] deficit was meaningless.
Among other problems, accumulation of U.S. dollars allows the
purchase of U.S. companies, and the transfer of U.S. jobs. See
Reuters article below for details of how the jobs at Maytag were
traded for cheap imports. Another example is the sale by IBM of
their line of personal computers.
The problem is not with the Chinese, they are just good business
men and take an opportunity when it is available. The problem
is with the people who made the opportunity available.
How much tax revenues will be lost to the U.S. and how much of a
hit will the taxpayer take through the PBGC on the pensions?
========== Reuters article follows ======Haier, equity firms bid for Maytag
By Doug Young 36 minutes ago
SHANGHAI (Reuters) - Top Chinese appliance maker Haier and
private equity giants Bain and Blackstone have bid $1.28 billion
for Maytag Corp., trumping Ripplewood's offer for the ailing U.S.
Haier's global ambitions would be boosted with the addition of
Maytag, the maker of washing machines and Hoover vacuums that has
fallen on tough times amid rising costs and competition from
Maytag said in a statement released late on Monday in New York
that it had received a preliminary bid of $16 a share from a
consortium comprising Haier Group, Bain Capital and The
That would be about 14 percent higher than a $14 per share offer
by U.S. buyout firm Ripplewood Holdings LLC., part of a
consortium whose members include Goldman Sach's GS Capital
Partners and the J. Rothschild Group.
Under the Haier proposal, due diligence is expected to take six
to eight weeks to complete, Maytag said in its statement. The
group would look to Merrill Lynch to provide debt financing, it
"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
No official counter offer had been submitted yet, a source
familiar with the matter told Reuters. Bain and Blackstone
declined comment. Haier has said it was interested in Maytag, but
a spokeswoman would not comment further on Tuesday.
"Chinese companies don't have brand equity outside of China," a
Tokyo-based analyst said.
"To build that themselves, in the same way the Toyotas of the
world do it, is pretty hard. It's the intangible assets they're
THE LONG HAUL
Their competing bid would also mark the first major attempt at an
international acquisition by Haier Group, a state conglomerate
that controls Shanghai-listed Qingdao Haier Refrigerator Co. Ltd.
and Hong Kong-listed Haier Electronics Group Co. Ltd.
Haier Electronics had climbed 2.6 percent to HK$0.198 by 0611
GMT, vastly outperforming the market's 0.21 percent dip.
Haier is probably willing to pay a premium for Maytag because it
could keep the company over the longer term for its brand, while
Ripplewood would be more likely to sell in the long run, the
Tokyo-based analyst said.
The consortium, whose Haier component came from Haier America
Trading LLC, had expressed its interest in the run-up to a
deadline last Friday for competing offers.
Maytag shares closed up 7 cents at $15.23 in Monday trading in
New York. Its shares are up about 5 percent since word first
emerged last week that Haier and others were considering rival
bids for the company.
Haier is a well-known name in China, commanding 26 percent of the
domestic refrigerator market and 17 percent of the air
conditioning market at the end of 2003.
It is also one of the nation's few brands to make headway in
foreign markets, cornering nearly half the U.S. compact
refrigerator market and more than half that for wine coolers.
Haier's foray would follow similar moves by some of China's
biggest firms as they look beyond their domestic strongholds.
Generally, Chinese companies have picked up struggling businesses
in mature industries, hoping to use their growing prowess as
low-cost manufacturers to turn those assets around.
Earlier this year, Lenovo Group Ltd. purchased the PC-making unit
of IBM for $1.25 billion. It later brought in private equity
firms Texas Pacific Group, General Atlantic LLC and Newbridge
Capital LLC, which contributed $350 million as part of the deal.
TCL Corp. has also been active, buying the cellphone-making
assets of France's Alcatel S.A. and the TV-making assets of
But the Chinese move abroad has also included some stumbles, such
as an aborted takeover of struggling British carmaker MG Rover by
top car maker Shanghai Automotive Industry Corp.
Oil company CNOOC Ltd. has expressed possible interest in U.S.
oil company Unocal Corp., and China's Minmetals Corp. has
expressed interest in Canadian mining firm Noranda Inc.
(Additional reporting by Godwin Chellam in Shanghai, Chawadee
Nualkhair in Tokyo and Michael Flaherty in New York)