Filed under: SUVs, China, Government/Legal, HUMMER, Earnings/Financials
2008 Hummer H2 - Click above for high-res gallery
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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26-06-2009, 10:10 PM
