China likely to reject Hummer acquisition

[Hurricane]

Report: China likely to reject Hummer acquisition
Report: China likely to reject Hummer acquisition due to energy, business concerns
By Joe Mcdonald, AP Business Writer
On Friday June 26, 2009, 5:29 am EDT

BEIJING (AP) -- China's planning agency is likely to reject a Chinese company's bid to acquire General Motors Corp.'s Hummer unit, in part because its gas-guzzling vehicles conflict with Beijing's conservation goals, state radio reported.

The National Development and Reform Commission is also likely to say Sichuan Tengzhong Heavy Industrial Machinery Corp., a maker of construction machinery, lacks expertise to run Hummer, China National Radio said late Thursday. It cited no source.

Tengzhong said it has yet to reach a definitive agreement with GM, which the company said previously was required to make a formal request for government approval of the deal.

"Some people may have views and speculation but the Chinese government has a process that we respect," said a company statement. "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."

Hummers, which roar along on oversize tires and can weigh up to five tons, are based on U.S. military vehicles that gained fame during the 1991 Gulf War. But sales have been battered by soaring fuel prices.

Tengzhong, based in the southwestern city of Chengdu, emerged as Hummer's surprise buyer this month after GM sought court protection from its creditors. The companies said the sale still required regulatory approval and refused to disclose the price.

Auto industry analysts questioned how Tengzhong, which makes construction vehicles such as cement mixers and tow trucks, could succeed with Hummer, known as "Han Ma," or Bold Horse, in China.

GM said the planned sale would save some 3,000 jobs in the United States. Tengzhong said it would invest in research to create more fuel-efficient Hummers and would keep Hummer's headquarters and manufacturing in the United States.

The Chinese government is trying to promote conservation and use of more fuel-efficient vehicles. It has cut sales taxes on cars with smaller engines and is encouraging automakers to develop electric and other alternative-energy vehicles.

Communist authorities are encouraging companies to expand abroad to diversify the economy but have cautioned against being too hasty or ambitious.

Tengzhong is privately owned, which means it is free of some of the controls on Chinese state-owned companies. But regulators still can block foreign acquisitions.

Full text here: http://finance.yahoo.com/news/Report...867930316.html

[D C]

Not surprising considering we're dealing with a Communist country

[ScottieDogFLA]

Hate to say it's just as well.
Plus if the Chinese had Hummer, they'll find a way to put toxic seat covers or something similar in the vehicles.
Hummer's a turkey. Good luck finding a taker.

[Bokl]

I do not think that you will find many buyers for 9mpg vehicle. Specialy with the price of fuel expected to go up. GM should just kill hummer nobody will buy it.

[TakuZaKyousei]

Originally Posted by Bokl

I do not think that you will find many buyers for 9mpg vehicle. Specialy with the price of fuel expected to go up. GM should just kill hummer nobody will buy it.

14/18 is what the H3 and H3T get.This is one that sells the most, why not talk about that aspect of the brand?

I or on am actually happy about this. I see no need to allow another competitor in this country, and I damn sure don't wanna see an American brand go to the Chinese.

But I agree with you, GM should close Hummer as a brand and move it over to GMC as a Trim. It's profitable and still sells to people who want something in the premium of-road category.

[Flyingbunnys]

take whats profitable sell it under GMC ditch everything else Hummer.

[gmparts]

Another fine example of why government should stay out of private industry!

[civilzues]

Originally Posted by Flyingbunnys

take whats profitable sell it under GMC ditch everything else Hummer.

this is a great idea!

[TakuZaKyousei]

Originally Posted by gmparts

Another fine example of why government should stay out of private industry!

GM expressed a desire to sell Hummer 5 months before the Crisis hit, more than a year before the Taskforce was ever created.

Originally Posted by Flyingbunnys

take whats profitable sell it under GMC ditch everything else Hummer.

Exactly what I was saying

[JeffInDFW]

GM should keep Hummer. All they need to do is kill the H2 which does not sell well. Then release the Wrangler clone they were working on. Then you have the Jeep brand which does not have the negative stigma that Hummer has.

I'd like to know who the idiot was that thought Hummers needed to be sold under their own dealer network. They should have been sold at GMC dealerships from day one, like what Toyota does with Scion.

[gmparts]

Originally Posted by TakuZaKyousei

GM expressed a desire to sell Hummer 5 months before the Crisis hit, more than a year before the Taskforce was ever created.



Exactly what I was saying

I'm refering to the possibility of China nixing the sale, not the taskforce. My point was, if a private enterprise wants to buy Hummer it should be their call, not Chairman Mao

[H3AlphaGuy]

The H2 product cycle is already 7 years old. Yeah they had that "refresh" in 2008, but there's a dire need for a redesign, which GM cancelled a few years back. The redesign could have been a great way to work on clean diesel tech that it now touted by VW / Audi, etc. on TV right now, as well as use innovative materials to keep a stiff frame without all of the weight. As of now Hummer in the US only sells 150+- a month. 85% of all sales are H3 / H3T so the 9MPG argument just doesn't fly as well anymore.

A future inside of GM would rely on possibly a H3 /H3T / H4 lineup in the GMC dealership as mentioned above.

A good way to play this if they want to keep the business open (doubtful) is to use the Hummer dealer network and turn it into a GMC dealer. This would work because in recent years these Hummer Dealers were being awarded Caddilac dealerships in conjunction with them, thus providing an upscale car brand and an upscale truck brand. The rugged / purpose built look would go well, although they would have to remove the HUMMER painted on the aluminum roof and possibly alter the side entrance where the big H is.

Again that's all pie in the sky thinking if a) China says "no, we already have our own Hummer knockoff brand (which they do), we don't need the real thing", b) all of a sudden GM wants to still own / sell the H3 / H3T.

They had other offers on the table, so I'm sure the bondholders would be quite fine with allowing one of those other parties to take the company as well, since the whole point of BadGM is to get as much money back to the bondholders as possible.

Just another wrinkle in the GM restructuring, I'm sure they'll be a few more before it's all done.

[Rumblebuffin]

Man, every time Hummer is mentioned, there is always the "9-10 mpg" CLAIM! This is getting annoying! The Hummer H2 gets that kind of mileage if the driver floors the gas pedal. Based on real-world testing, I've seen mileage claims of 12-14 for the H2 which is pretty darn good considering my mom's old 4Runner got 13 average with only 80 hp! And I DOUBT any Hummers even have a guzzler label by the EPA as well!

Would Raser Technologies still be interested in Hummer?

[Hurricane]

Originally Posted by Bokl

I do not think that you will find many buyers for 9mpg vehicle. Specialy with the price of fuel expected to go up. GM should just kill hummer nobody will buy it.

Incorrect.

[mbukukanyau]

Keep it American, please!!