Identifier
Created
Classification
Origin
07TASHKENT1760
2007-10-11 10:07:00
CONFIDENTIAL
Embassy Tashkent
Cable title:
GM VENTURES INTO UZBEK ECONOMY
how-toVZCZCXRO6805 PP RUEHDBU DE RUEHNT #1760 2841007 ZNY CCCCC ZZH P 111007Z OCT 07 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC PRIORITY 8588 INFO RUEHAH/AMEMBASSY ASHGABAT 3341 RUEHTA/AMEMBASSY ASTANA 9542 RUEHEK/AMEMBASSY BISHKEK 3957 RUEHDBU/AMEMBASSY DUSHANBE 3820 RUEHBUL/AMEMBASSY KABUL 1926 RUEHUL/AMEMBASSY SEOUL 0198 RUCPDOC/DEPT OF COMMERCE WASHDC
C O N F I D E N T I A L TASHKENT 001760
SIPDIS
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: DECL: 10/11/2017
TAGS: ECON EINV EIND ELTN SK UZ
SUBJECT: GM VENTURES INTO UZBEK ECONOMY
REF: TASHKENT 1662 (NOTAL)
Classified By: CLASSIFIED BY ECON OFF B. OLSEN FOR REASONS 1.4 (B, D).
C O N F I D E N T I A L TASHKENT 001760
SIPDIS
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: DECL: 10/11/2017
TAGS: ECON EINV EIND ELTN SK UZ
SUBJECT: GM VENTURES INTO UZBEK ECONOMY
REF: TASHKENT 1662 (NOTAL)
Classified By: CLASSIFIED BY ECON OFF B. OLSEN FOR REASONS 1.4 (B, D).
1. (U) On October 8 GM-DAT, a Korean-based GM subsidiary,
signed a joint venture with UzDaewoo, receiving 25 percent
plus one share of the company, with the possibility of
increasing its share to 40 percent. As noted reftel, this
deal brings the Chevrolet brand to Uzbekistan, with an eye to
the Central Asian and Russian markets. At a meeting in
September, GM-DAT told emboffs it was seeking a 40 percent
stake in the company. GM-DAT is exchanging its technological
and marketing expertise for the 25 percent share, not buying
it. (Note: Talks with Hyundai broke down because Hyundai
wanted a majority stake. End note.)
2. (C) Comment: This is the first joint venture in over two
years between a large multinational U.S. enterprise and an
Uzbek entity. As such, the government, namely President
Karimov, is very proud of its accomplishment and has
decorated Tashkent with GM banners and celebrated with
fireworks at a large gala, attended by the Ambassador.
Emboff spoke with UzDaewoo contacts who expressed resentment
towards GM-DAT, saying that GM-DAT outwitted UzDaewoo and cut
it off from the Russian market. This resentment is patriotic
emotion and not based on factual reality. Given the poor
management and antiquated technology of UzDaewoo, its Russian
market access is quite limited and would precipitously
decrease without GM-DAT's technology. However, this hint of
UzDaewoo resentment could be indicative of future problems in
the joint venture, especially if the Uzbek side becomes too
greedy. A senior GM official told Ambassador, following the
Oct. 8 signing ceremony, that GM will "definitely follow-up"
with the Embassy, implying that he does not anticipate smooth
sailing ahead.
NORLAND
SIPDIS
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: DECL: 10/11/2017
TAGS: ECON EINV EIND ELTN SK UZ
SUBJECT: GM VENTURES INTO UZBEK ECONOMY
REF: TASHKENT 1662 (NOTAL)
Classified By: CLASSIFIED BY ECON OFF B. OLSEN FOR REASONS 1.4 (B, D).
1. (U) On October 8 GM-DAT, a Korean-based GM subsidiary,
signed a joint venture with UzDaewoo, receiving 25 percent
plus one share of the company, with the possibility of
increasing its share to 40 percent. As noted reftel, this
deal brings the Chevrolet brand to Uzbekistan, with an eye to
the Central Asian and Russian markets. At a meeting in
September, GM-DAT told emboffs it was seeking a 40 percent
stake in the company. GM-DAT is exchanging its technological
and marketing expertise for the 25 percent share, not buying
it. (Note: Talks with Hyundai broke down because Hyundai
wanted a majority stake. End note.)
2. (C) Comment: This is the first joint venture in over two
years between a large multinational U.S. enterprise and an
Uzbek entity. As such, the government, namely President
Karimov, is very proud of its accomplishment and has
decorated Tashkent with GM banners and celebrated with
fireworks at a large gala, attended by the Ambassador.
Emboff spoke with UzDaewoo contacts who expressed resentment
towards GM-DAT, saying that GM-DAT outwitted UzDaewoo and cut
it off from the Russian market. This resentment is patriotic
emotion and not based on factual reality. Given the poor
management and antiquated technology of UzDaewoo, its Russian
market access is quite limited and would precipitously
decrease without GM-DAT's technology. However, this hint of
UzDaewoo resentment could be indicative of future problems in
the joint venture, especially if the Uzbek side becomes too
greedy. A senior GM official told Ambassador, following the
Oct. 8 signing ceremony, that GM will "definitely follow-up"
with the Embassy, implying that he does not anticipate smooth
sailing ahead.
NORLAND