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

It looks like General Motors‘ deal to sell its Hummer brand to China’s Sichuan Tengzhong Heavy Industrial Machinery is on shaky ground. According to Reuters, the likelihood that the Chinese government will give its approval to Tengzhong has been waning in recent weeks, leading the would-be purchasers to consider making the acquisition using an offshore investment vehicle to skirt the need for Chinese regulatory approval. GM and Tengzhong had originally set a January 31st deadline to complete the sale, later extending that time frame to February 28th.

The Chinese National Development and Reform Commission and the Ministry of Commerce are thought to have taken issue with the idea of such an environmentally unfriendly automaker coming under Chinese ownership. Further, Tengzhong has never actually made a passenger vehicle, and China already has over 100 companies producing automobiles and the government has gone on record saying it would like to reduce that number. Stay tuned.

[Source: Reuters]

Hummer deal with China’s Tengzhong looking shaky originally appeared on Autoblog on Tue, 23 Feb 2010 13:26:00 EST. Please see our terms for use of feeds.

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Hummer deal with China’s Tengzhong looking shaky

Filed under: SUV, Government/Legal, GM, Hummer, Off-Road

General Motors has reached an agreement to offload Hummer onto China’s Sichuan Tengzhong Heavy Industrial Machinery, with Tengzhong taking an 80 percent stake and a private investor consuming the rest.

Details on the deal (available in the press release after the jump) include Hummer contacting vehicle manufacturing from GM, with the General’s Shrevport and Mishawaka plants continuing to produce vehicles through June of 2011, with a possible extension until 2012. A recent report says the sale will net GM around $150 million, although the transaction still has to be approved by both U.S. and Chinese regulatory agencies, which could come later this year or in early 2010.

Tengzhong, which only produces commercial trucks and industrial equipment, has never entered into consumer vehicles before, but according to Yang Yi, chief executive officer of Tengzhong. “We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations.”

[Source: GM | Photo by Scott Olson/Getty]

Continue reading BREAKING: GM officially sells Hummer to China’s Sichuan Tengzhong

BREAKING: GM officially sells Hummer to China’s Sichuan Tengzhong originally appeared on Autoblog on Fri, 09 Oct 2009 13:13:00 EST. Please see our terms for use of feeds.

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BREAKING: GM officially sells Hummer to China’s Sichuan Tengzhong

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