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, Truck, Etc., GM, Hummer, Earnings/Financials

General Motors’ potential sale of Hummer to Tengzhong is probably good news for those interested in seeing the company return to independent and profitable status as quickly as possible. The move should see enable GM to shed the negative political and social association of the star-crossed SUV brand and get some money in return. There is actually a better option, says The New York Times’ Ethicist.

The Ethicist frames the issue as figuring out which is more important: GM’s employees and shareholders (i.e., the American public) or the environment. Hummer vehicles are too heavy and use too much gas and, the Ethicist says, hazardous products should be regulated by the government. Now that the government basically owns Hummer, there is “an opportunity to reconsider transportation policy, including from a moral perspective. Such an analysis urges not merely discontinuing the Hummer but also significantly reducing our reliance on the private car.” Here’s more:

Shutting down Hummer could even turn out to be cost-effective. The sale price, perhaps as much as $500 million, may well be dwarfed by the long-term costs – in environmental damage, in public health – to us taxpayers, G.M.’s majority owners, of keeping those three tons of steel on the road. [...] The restructuring of G.M. gives us a chance to avert the fate of being laid low by our own automobiles, the grand manifestation of America’s industrial might. The first thing we do, let’s kill all the Hummers.

So, what’s the right thing to do here?

View Poll

[Source: The Ethicist]

Is selling Hummer the morally correct thing to do? [w/POLL] originally appeared on Autoblog on Tue, 09 Jun 2009 14:57:00 EST. Please see our terms for use of feeds.

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Is selling Hummer the morally correct thing to do? [w/POLL]