Chinese Government May Ax Hummer Deal

Hummer China’s state-run radio has reported that the country is likely to reject a Chinese company’s bid to buy Hummer from GM because the brand conflicts with the country’s environmental goals.

Tengzhong Heavy Industrial Machinery lacks the expertise to run Hummer or introduce more fuel-efficient versions of the five-ton vehicles, according to China’s National Development and Reform Commission, which is the official government entity likely to quash the deal.

None of this has been confirmed by the government yet, but in an earlier post we talked about some of the obstacles Tengzhong would face in introducing Hummer to China. Tengzhong, for its part, says the deal is on.

A PR firm representing Tengzhong points out that while the state-run radio does not like the deal, that doesn’t mean the NDRC will actually kill it.

The Wall Street Journal reports that the deal is in the ballpark of $500 million, but GM might go lower, especially now that it will shutter its plant in Louisiana, which assembles the H3. Details are scarce on the specific proposal, but Tengzhong has said it wants to keep Hummer’s headquarters, dealerships and manufacturing capacity open and operating in the U.S. The sale would have saved 3,000 jobs here.

The most likely reason for the Chinese government’s reticence is efficiency and conservation. China is adding so many new vehicles to the road so quickly that it has become a mission to emphasize fuel savings. They do so by cutting taxes on cars with smaller engines and offering incentives to companies developing hybrid and electric vehicles. Hummer, of course, is not exactly a poster child for that type of policy.

Report: China Likely to Reject Hummer Acquisition (USA Today)

Comments 

Paul

No one needs Hummer now,really they never did,but buyers "thought" they did and that suckered GM into taking over the company with bold plans of riding the wave of the fad.Shortsided views regarding fuel prices and environmental correctness,GM bulled head on to create H2,H3 and more in a seemingly endless stream of rebodied Chevy truck platforms.In the end,when the world looks at American history,the Hummer will be considered as much a dalliance as tailfins on 50s cars and all those Rocket inspired buzzwords that sold millions of albatrosses to buyers of the 50s and 60s.

Nic

I would hope the Chinese know a bad decision when they see one!!

Juan Carlos

short of them selling left and right, the hummer will make no difference in climate issues.

UK Diesel Driver

Juan Carlos is kind if right. Unless people buy loads of Hummers they are a mere drop in the ocean. It is much more important to make the Chevy platform that it is based on more efficient. V8 engines sound phenomenal. But who really needs their power?

My engine is smaller than 2l in a 18' car weighing 1.5 metric tonnes. 0-62mph in 10.8s. Not blisteringly quick, no, but more than adequate. I can still overtake...

Problem is that no one is willing to buy a car with less power if petrol is as cheap as it is in the USA. I would not be either, if I lived in the USA I would probably own a V8...

Juan Carlos

china is such a mess when it comes to the environment that making a few hummers won't be a deal breaker. is more a pr move. hard to tell a local plant (more damage than hummers) to green when down the street they are making hummers.

but where will the hummer plant be?

aaron

as a chinese, i have to say we did not need hummer... what we need is cheaper charge on road and much efficiend engine! this is not only good to my family but yours no matter where are you...

Stu Cozza

No big deal if the Chinese do not want to buy Hummer from GM. I will bet some other company - maybe in one of the Arab countries - will buy it.

As for the posters who ask, "who needs a V-8?", maybe those posters do not, but there are many other people who do need a V-8 powered vehicle; that decision, contrary to the opinions espoused by the media, should not be in the hands of the government.

The Chineese should not try to ban hummer fro GM.

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