Filed under: SUV, China, Government/Legal, GM, Hummer

Last week, it was reported that General Motors had signed a definitive agreement to sell Hummer to Chinese machinery manufacturer Tengzhong. The Chinese company and its partner in the deal, Lumena Resources Corp., would pay $150 million and receive Hummer and its intellectual property, ownership of U.S. franchise agreements, and manufacturing, business, and component assistance during a four- or five-year transition period.

The questions being raised now concern what is happening on the other side of the Pacific. The Chinese Commerce Ministry reportedly hasn’t received Tengzhong’s application to officially bring Hummer home, which has led observers to wonder if there will be a holdup or reversal of the deal. According to a Hummer representative, however, Tengzhong had to finalize the deal with GM before it could present it for approval to the Chinese authorities:

The closing of the transaction is subject to customary closing conditions and regulatory approvals and/or review by agencies in China and the U.S. Tengzhong has started communicating with the relevant regulatory bodies and will continue to support the application process in accordance with the requirements. Formal engagement was only able to begin with the signing of the definitive agreement.

If all goes well, Tengzhong hopes to have the deal closed by early 2010.

[Source: Automotive News, sub. req'd.]

Recork the Champagne? China says Hummer paperwork not submitted yet originally appeared on Autoblog on Mon, 12 Oct 2009 16:29:00 EST. Please see our terms for use of feeds.

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Recork the Champagne? China says Hummer paperwork not submitted yet

Filed under: SUV, Government/Legal, Hummer, Earnings/Financials

Not so many years ago, Hummer appeared to be one of General Motors’ most potentially lucrative brands. Now, the fallen brand looks poised to fall into the hands of the Chinese very soon. Bloomberg is reporting that a deal to sell Hummer could be finalized in the coming days as Sichuan Tengzhong Heavy Industrial Machinery Co. hammers out a purchase price. During its bankruptcy proceedings, GM estimated the Hummer brand to be worth $500 million, but last week’s collapse of the Saturn deal with Roger Penske appears to have made the Detroit automaker ready to accept whatever it can get. The final tab paid by Sichuan Tengzhong could be as low as $150 million.

The Chinese government has thus far been reluctant to approve Sichuan Tengzhong’s move for Hummer, in part because of the brand’s image as a gas guzzler. The hope is that once a purchase agreement is complete, the regulators will allow it to move forward. For its part, GM likely just wants the deal done and some extra cash in its coffers so it can move on with its streamlining efforts plans.

[Source: Bloomberg]

REPORT: GM close to offloading Hummer for as little as $150 million originally appeared on Autoblog on Fri, 09 Oct 2009 10:30:00 EST. Please see our terms for use of feeds.

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REPORT: GM close to offloading Hummer for as little as $150 million

Filed under: SUV, Truck, China, Government/Legal, Hummer, Earnings/Financials

China’s Sichuan Tengzhong Heavy Industrial Machinery, the company that recently surfaced as the top bidder for Hummer, is about to start talks with Chinese regulators to secure the deal. While General Motors has a tentative agreement with Tengzhong, the two companies have yet to receive the state’s blessing, which is necessary for the sale to go through.

Tengzhong, GM and Hummer have been working on a proposal to present to the National Development and Reform Commission, despite speculation that the deal will be blocked by those Chinese officials. Tengzhong reportedly remains optimistic, saying they haven’t heard anything from the authorities and don’t expect to until their proposal is actually submitted.

Speculation that the deal was in jeopardy began when a China National Radio station reported that government regulators would block the deal based on environmental concerns about Hummer vehicles and the fact that Tengzhong doesn’t have much experience as an automaker. Tengzhong is better known as a manufacturer of special-use vehicles, structural components for highways and bridges, construction machinery and energy equipment, so some have suggested this is little more than a publicity stunt for the company, but it certainly sounds like they are serious about the deal now.

[Sources: Reuters, Wall Street Journal]

Hummer buyer to start talks with Chinese gov’t to win sale? originally appeared on Autoblog on Mon, 29 Jun 2009 10:58:00 EST. Please see our terms for use of feeds.

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Hummer buyer to start talks with Chinese gov’t to win sale?

Filed under: SUV, China, Government/Legal, Hummer, Earnings/Financials

General Motors’ pending deal to offload its unwanted HUMMER brand may have hit a major snag. Although no official word has come from the Ministry of Commerce or the National Development and Reform Commission, state-run radio organizations are reporting that the Chinese government will indeed block the sale of HUMMER from GM to Sichuan Tengzhong Heavy Industrial Machinery Co. It’s impossible to know exactly how this whole mess will play out, but these reports clearly jive with the general sentiments we’ve been hearing since the deal was first announced.

According to Chinese radio reports (via the BBC), there are two main objections to the HUMMER deal. First, the brand’s environmental credentials don’t match up with the direction the Chinese government wants its automakers to head. Second, there are questions as to whether Tengzhong has the expertise to properly manage a large automaker as it’s business dealings so far have all been in the construction equipment segment.

Not so fast, says Tengzhong. In a newly-released statement regarding these latest reports, the company had this to say:

Some people may have views and speculation, but the Chinese government has a process that we respect… The view expressed on China National Radio’s website did not quote or source anyone at NDRC. We do not yet have a definitive agreement, but are developing our proposals with GM and Hummer and we will continue to engage with the appropriate authorities in an appropriate manner.

At this point, it seems equally as possible that a decision could either come down in short order or come only after a long series of protracted negotiations. Stay tuned. Thanks for the tip, Dave S!

[Source: BBC]

REPORT: China to block HUMMER sale to Tengzhong originally appeared on Autoblog on Fri, 26 Jun 2009 14:57:00 EST. Please see our terms for use of feeds.

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REPORT: China to block HUMMER sale to Tengzhong

Filed under: SUV, China, Government/Legal, Hummer

As Chinese media outlets continue to voice derision over GM’s agreement to sell its unwanted HUMMER division to Sichuan Tengzhong Heavy Industrial Machinery Co., there are real questions as to whether or not the Chinese government will even approve of the purchase.

State-run media outlet Xinhua News Agency has suggested that Tengzhong’s interest in HUMMER may be little more than a publicity stunt, saying, “It couldn’t achieve this result (of raising its profile) even if it spent $100 million on advertising.” Commenting on Tengzhong’s deal to purchase HUMMER, China’s Minister of Commerce Chen Deming said:

We hope Chinese companies learn more about international market rules and development trends in their industries and make prudent investments.

While none of that sounds particularly promising, it doesn’t necessarily mean the deal won’t be approved, and HUMMER CEO Jim Taylor is reportedly moving forward with the automaker’s future plans as it looks for a new location outside GM’s corporate headquarters in the Renaissance Center to call home. According to the Nashville Business Journal, HUMMER could stay in the Detroit area or possibly join Nissan by taking root in Tennessee.

[Sources: Autocar, Nashville Business Journal]

Critics from China berate proposed HUMMER sale, rekindled automaker could be based in Nashville originally appeared on Autoblog on Thu, 25 Jun 2009 10:26:00 EST. Please see our terms for use of feeds.

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Critics from China berate proposed HUMMER sale, rekindled automaker could be based in Nashville