Hummer Goes to Chinese Machinery Company

Discussion in 'China' started by A.V., Jun 3, 2009.

  1. A.V.

    A.V. New Member

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    General Motors has reached a preliminary agreement for the sale of its Hummer brand of large sport utility vehicles and pickup trucks to a machinery company in western China with ambitions to become a carmaker, a person familiar with the Chinese government approval process said Tuesday.



    The Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., based in Chengdu, concluded the agreement with GM [GMGMQ 0.61 --- UNCH ], said the person, who insisted on anonymity.

    Sichuan Tengzhong is a privately owned company, but Tuesday’s deal required preliminary vetting by Beijing officials, who retain the right to veto any attempt at an overseas acquisition by a Chinese company and who give special attention to deals over $100 million.

    G.M. announced the deal early Tuesday morning in Detroit but said that the memorandum of understanding would not allow it to reveal the buyer or the price. Industry analysts have estimated that the Hummer division would sell for less than $500 million.

    Sichuan Tengzhong is known in China for making a wide range of road equipment, from bridge piers to highway construction and maintenance machinery. But even before the Hummer deal, the company has been moving more into heavy-duty trucks, including tow trucks and oil tankers.



    Sichuan Tengzhong’s offices were closed on Tuesday evening and calls to its headquarters were not answered.

    G.M. said the deal would save about 3,000 jobs in the United States, including those at its 153 domestic dealerships, and that Hummer would remain based in the United States.

    “Overall, we’re pretty pleased,” said a spokesman for Hummer, Nick Richards, without identifying the buyer. “If you think about the qualities we’d want in a new owner for the brand, this buyer really met all the criteria. They’ve got a proven track record in international business, and they’ve got a long-term vision for the brand. They’ve got the capital to invest in more efficient vehicles, which is what’s necessary to grow the brand.”



    If the purchase is completed, it would mark the first acquisition of a well-known American automotive brand by a Chinese company, after many months of speculation about when this might occur. Chinese automakers have already purchased the MG and Rover brands, two of the most famous names in British automotive history.

    As a Chinese company, Sichuan Tengzhong could face a challenge in presenting the deal to American owners of Hummer. The brand has long sought to emphasize patriotism, stressing that the Hummer H1 was essentially the same vehicle built in the same factory as the Humvee that carries American soldiers into battle in Iraq and elsewhere.

    It was Governor Arnold Schwarzenegger of California who persuaded the longtime maker of Humvees, A.M. General in Mishawaka, Ind., to build a civilian version. As he recounted at a Hummer news conference in 2001, Mr. Schwarzenegger was filming the movie “Kindergarten Kop” in Oregon in 1990 when he saw a convoy of 50 Humvees drive by and decided that he had to have a civilian model of the same vehicle, which became the Hummer H1.

    G.M. bought the rights to the Hummer brand in 1999 and began making somewhat smaller Hummers. G.M. initially procured the H1 from A.M. General but discontinued the model in 2006.




    The buyer plans to shift additional production of the H3 from a plant in South Africa to Shreveport, Mr. Richards said.

    Sichuan Tengzhong could bring Hummers to the crowded streets of China’s big cities, although the vehicles would face the 40 percent tax that China imposes on cars, S.U.V.s and minivans with engines over 4 liters.

    G.M. has not set up its own Hummer dealer network in China, but entrepreneurs already import the vehicles and sell them in the biggest cities.




    G.M., which is hoping to shed unwanted assets and emerge from bankruptcy in about two months, said it expected the deal to close in the third quarter. The automaker had planned to close Hummer if a buyer could not be found. It is also trying to sell Saturn and Saab this year and plans to eliminate a fourth brand, Pontiac, in 2010.

    G.M., with 60 percent government ownership, will keep Chevrolet, Cadillac, Buick and GMC.

    “Hummer is a strong brand,” Troy Clarke, the president of G.M. North America, said in a statement: “I’m confident that Hummer will thrive globally under its new ownership. And for G.M., this sale continues to accelerate the reinvention of G.M. into a leaner, more focused, and more cost-competitive automaker.”

    Special Report: The Fall of GM

    Once considered the ultimate muscle car, the Hummer became a symbol of what was wrong with G.M. and the American auto industry — big, bulky and gas-guzzling. Sales of Hummers fell 51 percent last year, the worst drop in the industry, and are down 67 percent so far in 2009.

    Mr. Richards said the buyer planned to continue selling Hummer’s current lineup as it develops “more efficient” vehicles. The brand would eventually sell trucks fueled by diesel, ethanol and other alternative fuels, he said.

    In February, G.M. said it had three bidders for Hummer, which has about 220 dealers globally.

    Hummer’s chief executive, James Taylor, said the sale would allow the company to continue to grow and maximize the brand’s potential.

    This story originally appeared in the The New York Times


    Hummer Buyer: Hummer Finds a Buyer in Chinese Machinery Company - Companies * US * News * Story - CNBC.com
     
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  3. badguy2000

    badguy2000 Respected Member Senior Member

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    USA's motor industry is down with USA itsself...

    CHInese motor industry is replacing its potsition.
     
  4. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    You still havent made anything ground breaking like the Americans, Japanese or Europeans have ever done. These automobile companies have rebuilt nations. The Asian automobile company except Japan have nothing great to offer. So why rant about it?
     
  5. Koji

    Koji New Member

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    Korean automobile makers are world beaters now by the way.

    Also, just a side point, there is a Chinese company called BYD, which recently was endorsed and invested in by Warren Buffett that makes an high quality and more importantly affordable electric car.

    Warren Buffett's Chinese Electric Car Company | Marc Gunther on GreenBiz.com
     
  6. badguy2000

    badguy2000 Respected Member Senior Member

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    I don't think so.

    something new will appears....

    In one decade, Chinese motor enterprise will sweep the world like its textiles, toys, ships and househoold applience did.

    let us wait and see.
     
  7. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Koji,
    Japanese and European cars are far ahead....I am from Chennai and the home town of South east Asia's biggest automobile production places. I still find the Honda better than Hyundai. Warren Buffet is a businessman not an innovator. He invests in whatever makes money for him. I am talking about innovative technologies used in automobile Industry.
     
  8. badguy2000

    badguy2000 Respected Member Senior Member

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    :blum3:
    BYD has the best tech of cells and batteries in the world.
    its tech is not only useful to make electric car,but also to subs and other military purpose:blum3:.
     
  9. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Try doing something like MDI, or Benz or the BMW...then I will see. I dont see anything in those levels.
     
  10. badguy2000

    badguy2000 Respected Member Senior Member

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    well, In the past two decades, Chinese has made impressive progress in auto industry, espeically in the component-making of autos. Now it has world biggest auto-building industry. its auto plant is also eqipped with world most advanced assembling line.

    in fact, many Japanese auto and Europeans auto are using components made in China.

    people like you often ignore it ,because you are rarely interested to get to know where the components of BMW or BENZ are made.
    such ahcivements has fixed a consolidated base for CHinese auto industry's overtaking Japan ,EU and Yankee's.

    In one decade, Chinese auto will rule the world.:blum3:
     
  11. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Badguy,
    Hyundai cars are made in my city. That does not consolidate we have that technology. The parts are outsourced for production in China. They innovate and you make them. It ends there. You havent innovated anything ground breaking in the automobile industry.
     
  12. Koji

    Koji New Member

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    No doubt that European and Japanese car makers are excellent, but keep an open mind.

    The Hyundai Genesis has won awards all over the world over traditional luxury car makers like Lexus, Mercedes, and Benz.

    Also regarding innovation in BYD:

    "This guy is a combination of Thomas Edison and Jack Welch -- something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I’ve never seen anything like it." Berkshire Hathaway
     
  13. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Well I am a business man and I know how to convince my investors. It is an electrical car and Reva in India is a world leadert. But many people think electric car is BS...That is why MDI came with a totally new concept.
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

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    well, guys ,do you really believe that the real tech is grasped by the auto-maker of GM or Hyundai?


    NO. in fact, GM or HYudai is just the last section of the auto industry chain.
    without the support of the whole industry-chain, GM and Hyudai is nothing.

    the real tech-masters are the supplier of key components .

    you can take only one years to build auto assemling plant better than BMW and Benz
    but you have to take decades to build decent auto-industry chain.

    what I tell you is that CHinese now have one of world biggest auto industry chain.

    Furthermore, their auto plant is almost as advanced as that in Japan and USA.:2guns:
     
  15. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Mate I am talking about innovations not making parts. R&D have u ever heard about it. China might be the most advanced production lines but not the most advanced auto industry.
     
  16. Koji

    Koji New Member

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    You sir, are completely misinformed. All the major automobile makers are investing in producing a new line of electric vehicles: from GM to Toyata, BMW to Lexus, VW to Renault.

    I doubt the REVA can be considered a car. The REVA is exempt from most European crash test rules, because its low weight and power registers it in the European "heavy quadricycle" category instead of the "car" category.

    What differentiates REVA from the other makers, including BYD, is that they are trying to push the envelope to make electric cars with the horsepower and comfort that we modern drivers are accustomed to. After looking pictures of the REVA, i would not be caught dead in a REVA.
     
  17. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    i highly doubt this claim badguy maybe in 5-10 years yes but you guys are nowhere close to USA or japan yet.
     
  18. SATISH

    SATISH DFI Technocrat Stars and Ambassadors

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    Koji,
    You are wrong. GM was into hybrid but shredded their model, BMW and Benz are into Hydrogen fuel cell but considering safety they with drew from it. Benz had a prototype with water splitting. They shredded it.
     
  19. badguy2000

    badguy2000 Respected Member Senior Member

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    This year, Chinese auto production will surpass USA and CHina will become the global biggest auto-maker.

    In one decade, it is quite possible that a chinese auto manufacturer will surpass Toyota and become world biggest auto manufacturers too. Chery ,First auto and Shanghai Auto all can be the candidates.
    :blum3:
     
  20. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    when are you going to export most of your cars are only used domestically right now??
     
  21. Koji

    Koji New Member

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    GM under their Chevrolet brand has created the new Volt, which is an electric-hybrid car. If you look at their website, they announce that it is their intention to eventually create a fleet of electric cars.
     

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