Hummer Deal Not Final In China
Rumors that the Hummer brand has been sold are premature as evidenced by an all important step which has yet to be made – approval from Chinese regulators who could still nix the deal.
Tengzhong Steps Forward
Though GM has announced that Sichuan Tengzhong Heavy Industrial Machinery Co. (Tengzhong) is the intended purchaser of the Hummer brand, its production facilities and related intellectual properties, the buyer still has to jump through some hurdles back home. Namely, Tengzhong needs to get the approval of Chinese regulators, which isn’t a given considering that Tengzhong has no experience running a car company.
Tengzhong expects to rely heavily on General Motors and its American operation to keep Hummer going, at least through 2012. By then, Tengzhong may be able to shift some Hummer production to China, although making a complete shift doesn’t appear likely. Tengzhong is buying 80% of Hummer, with local business baron, Li Yan purchasing the remaining shares.
Sodium Sulphate Magnate
According to The Wall Street Journal, “The 46-year-old is chairman (Li Yan) of the Sichuan-based company, which he founded and successfully listed on the Hong Kong Stock Exchange in June. Lumena is one of the world’s biggest producers of sodium sulphate, a key raw material used in detergents, glass and pharmaceutical products.
The Hummer deal comes one week after GM’s bid to sell Saturn to the Penske Auto Group collapsed. That failure means that Saturn will be phased out, probably before the year ends.
GM is also finalizing deals to sell Opel to a group led by Magna International as well as to sell Saab to a group led by Koenigsegg, a Swedish super car manufacturer. Both those deals should conclude sometime in the fourth quarter.
Once Hummer is out of the way, GM will be supporting four brands with a presence in the US market – GMC, Buick, Chevrolet and Cadillac. The company still owns Holden of Australia and GM Daewoo in Korea, plus a number of smaller operations and businesses scattered around the world.
Tengzhong Construction, Engineering
For its part, Tengzhong is recognized as one of China’s largest privately owned engineering companies. However, because China is a communist country blending in capitalistic initiatives, Tengzhong still has to complete certain procedures in its homeland before the deal is final. If all goes according to plan, then Hummer will be sold to Tengzhong at a cost of approximately $150 million.
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