GM sells steering unit to Chinese firm

DETROIT (Reuters) - General Motors Co GM.UL said on Wednesday it has agreed to sell its Nexteer Automotive unit to a group backed by the Beijing government to focus on its core car-making business.

GM said it reached a definite agreement to sell the maker of steering systems to Pacific Century Motors, a joint venture between Chinese auto parts supplier Tempo Group and the financing and investing arm of the Beijing municipal government.

Financial terms of the deal were not disclosed. GM aims to close the deal by the end of the year, pending regulatory approvals.

The U.S. automaker had been looking to sell Nexteer after it bought the business in October from Delphi, its former parts subsidiary, under a deal to support Delphi's reorganization in bankruptcy.

Nexteer, based in Saginaw, Michigan, has about 6,200 employees and 22 manufacturing facilities in North and South America, Europe and Asia. Its global revenues topped $2 billion in 2008.

"The sale of Nexteer supports our objective to focus on our core auto business and is the final step in our efforts to position Nexteer as an independent supplier," said Steve Girsky, GM vice chairman in charge of corporate strategy.

Zhao Guangyi, chairman of Pacific Century Motors, said the deal would provide Nexteer with new growth opportunities and greater access to the Chinese auto market, now the world's largest.

Nexteer Automotive's customers include GM, Fiat SpA (FIA.MI), Ford Motor Co (F.N), Toyota Motor Corp (7203.T), Chrysler Group LLC, PSA Peugeot Citroen, as well as automakers in India, China and South America. Sales to GM account for almost half of its sales.

The new Chinese owner said it would honor the terms of Nexteer's recently negotiated five-year labor agreement with the United Auto Workers union. The agreement includes adding new jobs in Saginaw.

Robert Remenar will remain president of Nexteer.

Investment bank Moelis & Company acted as financial adviser to Pacific Century Motors.

(Reporting by Soyoung Kim, additional reporting by David Bailey; Editing by Steve Orlofsky, Gary Hill)