Hummer offered to China

[vector7]

Nice move....there's a potential military upgrade.
The PLA has been trying to successfully copy it for a while.
The Yuan seems to buy a lot these days.

Hummer Finds a Buyer in Chinese Machinery Company


US Military Hummer prototype

By: Keith Bradsher and Nick Bunkley, The New York Times | 02 Jun 2009 | 12:26 PM ET

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 -0.14 (-18.67%) ], 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.

Under the preliminary agreement announced on Tuesday, GM will initially continue to manufacture Hummers under contract for Sichuan Tengzhong, which will then market them around the world. G.M. will continue making the H3 and H3T models in Shreveport, La., through the end of next year, for example.

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.

Copies of the Hummer by Chinese automakers draw crowds at auto shows, although they are labeled as concept vehicles and are not for sale.

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.”

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.

[vector7]

Chinese Company Said to Be Buyer of Hummer


Rick Wilking/Reuters
A Hummer being serviced at a dealership in Denver. The Sichuan Tengzhong Heavy Industrial Machinery Company, based in Chengdu,has reached a preliminary deal to buy the Hummer unit from General Motors.

By KEITH BRADSHER and NICK BUNKLEY
Published: June 2, 2009

GUANGZHOU, China — 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 G.M., 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 effort 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.

G.M., in a blog posting, said it had seen the report regarding a Hummer buyer but could not comment on speculation.

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.

Ray Young, G.M.’s chief financial officer, said Tuesday that the prospective Hummer buyer had asked G.M. not to disclose their identity until the deal was concluded. “It was their preference, and we respected that preference,” Mr. Young told analysts and reporters on a conference call.

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.

“Over all, 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 Gov. 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.

Under the preliminary agreement announced on Tuesday, GM will initially continue to manufacture Hummers under contract for Sichuan Tengzhong, which will then market them around the world. G.M. will continue making the H3 and H3T models in Shreveport, La., through the end of next year, for example.

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.

Copies of the Hummer by Chinese automakers draw crowds at auto shows, although they are labeled as concept vehicles and are not for sale.

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.”

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.

In the telephone conference call, Mr. Young said G.M. had been approached by 16 parties who were interested in bidding on its Saturn division. The group includes financial investors and companies that are interested in distributing Saturn vehicles.

He said G.M. had not set a date when it would winnow down the group to a handful of finalists, or when it hoped to announce a sale. One complication is devising the right operating plan for an independent Saturn, he said.

G.M. said it would work with the bidders to come up with the right idea.

He said G.M. was using advisers and that prospective bidders also had retained advisors, but would not be more specific.

Keith Bradsher reported from Guangzhou, China, and Nick Bunkley reported from Detroit. Micheline Maynard contributed reporting from New York.

[vector7]

Here's a previous article about 6 months ago where another Chinese company was trying to purchase Hummer that eventually fell through.

Now they have positioned a more obscure company that looks like a US equivalent to CATERPILLAR to successfully do the bidding.

They've capitalized on our current financial weakness.

Although some are saying it's only for the civilian models, that's the cover.

Out of all the passenger SUV's they could get for civilian use they want to purchase a company with ties to military vehicle technology they've been trying to copy for more than 6 years.

I bet the PLA can get their hands on much of what they are looking for. History has proven Chinese relationships infiltrate and purchase a lot more than reported.


GM Hummer Division to be Sold to Chinese Defense Contractor?

• Dongfeng
• GM
• Hummer
• Private Equity

GM is talks with a Chinese firm to sell off its Humvee division with financing from a private equity firm.

A Chinese company is said to be in advanced talks with General motors over the $100million (£69.4million) takeover of Hummer - the fuel-thirsty, four-wheel-drive vehicle modelled on the US military's Humvee.

News of the unnamed bidder's interest came days after it emerged that another big Western carmaker, Volvo, may be sold to the Chinese.

Ford is in talks to sell Volvo to Chinese tycoon Li Shufu's Geely carmaking business. insiders say a private-equity firm is also involved in the proposed Hummer deal but would not reveal its identity.

The buyer is likely Dongfeng Motor Company, a Chinese defense contractor.
Like car companies globally, Dongefeng is faced with slowing sales, and in the commercial vehicles sector where Dongfeng is concentrated, the story is even worse.

However, its overall vehicle sales fell 19 percent in January to 72,483 units, as sales of commercial vehicles slumped about 60 percent to fewer than 10,000 units, the source added.

Industry analysts blamed Dongfeng's weak commercial vehicle sales, mostly medium to heavy duty trucks, on a slowing economy as well as stricter emission standards imposed in July last year.

Why, then is any Chinese car company in talks to take over Hummer?
Why is DongFeng likely the buyer?
Because of the Dongeng EQ 2050, which looks like this:



That's right, Dongfeng makes Hummer knock offs. And who's buying these knockoffs?
The People's Liberation Army, aka. the Chinese military.

According to Sinodefence.com, the chassis and several parts of the engine come from GM, would the PLA want to rely on foreign companies to supply its potentially main vehicle?

Probably not. Im not sure how realiable this information is, seeing as the US and Europe (and most of the capitalist world) has a ban on exporting weapons technology to China for use within weapon systems.

The Dongfeng humvee has a V8 AMG Diesel engine, with 200BHP and a price tag of 250k RMB I’m sure the PLA boys will have a great time playing with this bad boy. The body has only basic protection from small arms fire but looks like it could be upgraded, as could the whole body, to carry missiles, or gun mounts etc. Check out the pictures in the more info section.

Anyway, there are two companies in China that are producing Humvee copies, and both are undergoing road testing with the PLA.

That's right, GM is likely selling its Humvee division complete with the machines needed to produce the engines and chassis to a company that wants to supply the Chinese military with the model. (And it's not just the Chinese military buying them, Dongfeng has been selling military vehicles to the Sudanese government, where they are used in Darfur.)
Did they seriously think that no one would notice?

As easy as it is to scream and yell at GM management about this, the truth is that when a company goes bankrupt they sell assets to people who will buy them. And if that's a Chinese automaker that may or may not be acting as a front for the PLA in order to subvert laws prohibiting the export of military material to China, so be it. That's the way things work when you put making money over the national interest.

And at least in part, blame for this falls on the Congress for keeping Detroit hanging buy a string. And, GM seems to be aware that threatening to go into bankruptcy can compel action.

While filing for bankruptcy may be the best way for GM to cut costs and revitalize, if the company chooses that option it may include politically unpalatable moves to sell off assets and cut more jobs.

Both are unfolding right now.

The UAW just walked out of talks where the company took a hard position on retiree health care. Remember that many, if not most UAW retirees are veterans, so if they lose coverage they're going to be going to the VA to get medical treatment.

And, it's only a matter of time before the buyer of Humvee is revealed.

Imagine the public response when we all learn that while Wall Street can't find money to loan to GM to keep the company afloat, they can find funds to ship off dual-use manufacturing assets to China. Where they will likely be used to modernize the Chinese military at a time when stoking nationalism is a powerful way for the CCP to redirect anger generated by the economic collapse unraveling in that country at the United States. Not to mention that ramped up military production puts people to work.

We live in a dangerous world, and in these hard times, our government needs to take steps to ensure that the means to cause us harm do not fall into the hands of nations who bear us ill will.

The easiest means to this end is nationalization, complete with a dedicated fund to take public possession of technology, manufacturing assets, and the firms owning them that may be of military use to hostile states. And in the case of the auto industry, the most feasible means to accomplish this is the outright nationalization of the US auto industry.

------------------------------------------------------------------------

Here are a few more photos to show the PLA has been obsessed with getting this reverse engineered for quite a while:


Photos of Chinese copy of the Hummer

This image has been resized. Click this bar to view the full image. The original image is sized 1024x768.

hummers in tibet

This image has been resized. Click this bar to view the full image. The original image is sized 1280x960.

hummers as cargo transports

This image has been resized. Click this bar to view the full image. The original image is sized 1024x768.

hummers fitted with SAM systems

[American Patriot]

Good grief.

[vector7]

Tuesday, November 11, 2008
Interesting things to consider

I know I'm due to post something on the Zhuhai airshow and I will get to that this weekend along with some new 054A photos and other photos. But I read an interesting article by Pat Buchanan today and I thought I'd comment on it. For those who don't know, Pat Buchanan is a prominent conservative (the old-time fiscal conservative rather than social conservative of today). You can find the article here.

Basically, he raises some interesting points about the rise of China and fall of USA. If we really think about it, the biggest gap separating USA and China is the manufacturing capability and the technology gap.

Even after years of improvement, US still leads China by decades in certain areas. I think what he stressed there that's important is that China has really been moving up the value chain in manufacturing. At the same time, US manufacturing industry has been on a steady decline and the service industry is by far the largest one now.

When we shift the focus to the military side, it's clear that civilian technology/manufacturing trends are also present there. We see a vibrant shipbuilding industry in China, compared to a non-existent shipbuilding industry in America.

So even though there is a technological gap between the latest PLAN and USN ships, the production is a different story. China is building many new naval ships on time and on budget, whereas USN is plagued with cost overruns. It all comes down to the fact that China has the manufacturing capacity here, whereas US does not.

Automaking is an industry that is the foundation of manufacturing. US became the manufacturing center of the world due to its car making prowess.

The entire concept of assembly line and mass production was started by Ford.

Make no mistake, even with the big 3 in trouble, US will still be the largest card producer in the world due to the fact that all foreign automakers are building their cars in America now. Well things have certainly changed now.

At the same time, you see that China is still having trouble breaking into European/North American market due to the safety and emission requirements in these markets.

However, you are finally seeing different private and public automakers in China really expanding their operations and mass producing cars. So, there is a technological gap, but the manufacturing gap is almost irrelevant here. Both countries have the manufacturing capability to produce the trucks, vehicles and tanks needed for combat operation.

If we shift our focus to aerospace, it's a totally different story. In this area, US has a huge technological edge in material science, engine technology, stealth, aerodynamics and sensor. However, US has retained its manufacturing capability here, whereas China has a very low-end aerospace industry.

As a result, we see that China has to rely on Russia for engines until WS-10A can be ramped up. We see that China has to cooperate with the Russians and Europeans on advanced helicopter designs.

We also see that China has to cooperate with Ukrainians and copy IL-76 in order to get its own military transport. Even after it successfully develops an aircraft, it cannot produce them at the same rate as Boeing or Airbus or Sukhoi. Just look at how much trouble SAC is having in just produce 10+ J-11Bs. At the same time, we see that it simply does not have the work force, technology and expertise to mass produce larger aircraft like Y-8, MA-60 or ARJ-21. I don't really call producing 30 ARJ-21s a year mass production.

However, you see that China is really attempting to catch up in this area the same way it has in shipbuilding and automaking.

It is getting an assembly plant for Airbus 320 in Tianjin on top of the assembly plant for ERJ-45 and also trying to develop its own airliner. At the same time, it has ready become a major supplier for both Airbus and Boeing. And in the recent Zhuhai airshow, we heard news that China is buying a Western aviation firm.

It's been a general Chinese practice to start by producing the simpler parts and then slowly move up the value chain while advancing technologically. Eventually, it will be able to first copy and then eventually design its own machinery. It has already happened in shipbuilding and automaking.

I think it will also get there in a decade in aerospace. There really isn't much Western companies can do here. China has managed to capitalize on the competition between advanced Western companies for the Chinese market by getting them to transfer technology in certain cases, do joint venture in other cases and source parts in other cases.

Unless everyone refuses to sell to China, a nation that is devoting this much resources to advance technologically will succeed. And you can also see this happening in other major industries like nuclear power plant, renewable energy and space technology (to a less degree). And I think the best point that Pat made is this one.

With her immense trade surpluses, China's reserves have surged from $200 billion in 2002 to $2 trillion. Awash in dollars, Beijing now waits patiently, writes McMillion, to cherry-pick the crown jewels of America's industrial empire—"patents, talents, natural resources, brands"—at fire-sale prices in the global crash.

It's scary that he is mentioning this, because that's exactly what I read China is trying to do in the recent years. It has already bought out Western companies in automaking, CNC machinery for their technology rather than their business value. It's a luxury that most Western countries don't have.

With a huge account deficit in most G-7 countries, they really don't have the money or the public support to rescue every company that has advanced civilian technology.

Remember, China is trying to improve its overall technological and manufacturing prowess. Military industry will only be helped by advancement in civilian areas as clearly shown in shipbuilding. And now automaking

[Malsua]

Eh, let 'em have that thing. It's a light duty people mover pushed into "light armor" and it doesn't do it so well. Gee, whodathunkit. Up-armored the thing is heavy, slow and prone to break axles, blow tires and roll over killing the troops.

Either give them armor or keep them out of the way, this half assed crap is from Rumsfeld.

[American Patriot]

Eh, let 'em have that thing. It's a light duty people mover pushed into "light armor" and it doesn't do it so well. Gee, whodathunkit. Up-armored the thing is heavy, slow and prone to break axles, blow tires and roll over killing the troops.

Either give them armor or keep them out of the way, this half assed crap is from Rumsfeld.

No, come on mal. This half assed piece of crap is from LIBERALS who whined when the vehicles weren't good enough to stop IEDs.

The Humvees were in service while *I* was in the service...

[MagnetMan]

One of the guys at my work wondered aloud how they could be doing this and still be ITAR compliant. I think he may have been refering to the suppliers more than GM.

It's not really a stretch to imagine that there are common component between the civilian and military versions.

[Backstop]

Regardless the modifications, I would never drive around in a vehicle that said "HUMMER" on the rear bumper...

And yes, I've driven the original mil version.

[samizdat]

What a hum job. Just goes to show the Chinese have no interest in stopping the great threat to mankind- global warming. Maybe GM should thrown in Pontiac as well.

[American Patriot]

Regardless the modifications, I would never drive around in a vehicle that said "HUMMER" on the rear bumper...

And yes, I've driven the original mil version.

I have driven the original military version....

and I put "Got" in front of the word "Hummer" with a "?"

lol

(In Egypt I drove a jeep with a cardboard sign on it that said "Gas, Grass or Ass... nobody rides for free....")

LOL

[American Patriot]

Reports question Chinese Hummer acquisition
AP via Yahoo! News ^ | June 5, 2009 | Elaine Kurtenbach, AP Business Writer



SHANGHAI (AP) -- General Motors Corp.'s planned sale of its Hummer brand to a little-known Chinese truck maker could be blocked by regulators who have not approved the deal and are questioning its wisdom.


Sichuan Tengzhong Heavy Industrial Machinery Co. and GM have given no financial details about the planned purchase of the American maker of gas-guzzling, military-style SUVs.


However, any such deal would require Chinese Commerce Ministry approval at the provincial level at least.


Reports in the Shanghai Securities News and other state-run newspapers Friday said Sichuan Tengzhong had not yet obtained such an approval. They also raised questions over whether the deal will be allowed to go through, with one report likening Tengzhong's plan to acquire Hummer to a "snake trying to swallow an elephant."


(Excerpt) Read more at finance.yahoo.com ...

[vector7]

AP Source: GM nearing completion of Hummer sale

TOM KRISHER | Posted: Friday, October 9, 2009 5:40 am

General Motors Co. is poised to sign a deal to sell its Hummer brand to a Chinese heavy equipment manufacturer as early as Thursday afternoon, a person briefed on the deal said.

Representatives of Sichuan Tengzhong Heavy Industrial Machinery Corp. have been in the U.S. for the past nine days working on final details with GM, and both sides hope to sign a definitive sales agreement on Thursday or Friday, said the person, who asked not to be identified because the deal is not final.

The purchase price was not known, but GM said in its bankruptcy filing that Hummer might bring $500 million or more.

Hummer, whose smallest model gets 16 miles per gallon in combined city and highway driving, sold well until the middle part of this decade when fuel prices began to rise. Through September, GM has sold only 8,193 Hummers in the U.S. this year, down 64 percent from the same period last year. In September, only 426 Hummers were sold nationwide, according to Autodata Corp.

GM, which spent 40 days in bankruptcy protection during the summer and has received about $50 billion in U.S. government aid, plans to sell its Hummer and Saab brands and scrap Pontiac and Saturn as it tries to streamline its operations. The company wants to focus on four core brands: Chevrolet, Cadillac, Buick and GMC.

Once the deal is signed, it still must be approved by the U.S. and Chinese governments, and Chinese regulators initially expressed reservations about Tengzhong's ability to run such an enterprise.

GM already has seen one similar deal blow up at the last minute. Last week, auto dealership magnate Roger Penske's bid to buy the Saturn brand fell apart just before the deal was finalized when a contract to make vehicles was rejected by the Renault board.

Hummer spokesman Nick Richards in Detroit would not comment on the timing of the deal.

In June, Sichuan Tengzhong announced that it had a tentative agreement with GM to buy the brand, which features large off-road vehicles that initially were developed for military use.

The consumer version of the Hummmer H3 and H3T pickup are assembled at the GM plant in Shreveport, La., which is slated for closure no later than June 2012. The larger H2 was made under contract with South Bend, Ind.-based AM General LLC, which also makes military versions of the vehicles. The workhorse military vehicles used in Iraq and Afghanistan are not a part of the deal.

The deal with Sichuan Tengzhong has long been expected. The Michigan Economic Development Authority in September approved a $20.6 million state tax credit over 10 years for Hummer to build a headquarters in the Detroit area.

The tax credit is contingent on Sichuan Tengzhong closing the deal for Hummer with GM, although a memo to the economic development authority said all definitive documents for the sale have been signed by the companies.

The headquarters would house global design, engineering, product planning, purchasing, sales, service, marketing and financing, Richards said. The company plans to invest $9.4 million over five years, he said.

The memo says the Hummer headquarters also would create another 641 jobs with other companies and generate $36.6 million in additional revenue for the state through 2019, excluding the tax break costs.

The company will decide on the headquarters' location by Oct. 31, the memo says.

Sichuan Tengzhong is a little-known Chinese truck and industrial equipment maker.

The company's CEO, Yang Yi, has said it will maintain Hummer's headquarters and operations in the U.S., while investing in research and development of more fuel-efficient vehicles.

Tengzhong is likely benefiting from heavy stimulus spending on construction projects in China and from rebuilding after last year's earthquake in Sichuan, given the company's specialization in construction equipment and heavy trucks.

Tengzhong earlier said it broke ground on a 3.5 billion yuan ($500 million) factory to make oil field equipment.

[vector7]

Hummer Become Chummer (Chinese Hummer) Amid Concerns Over Access to Military Technology

June 21st, 2009 • Richard Cochrane


Military affairs specialists say General Motors’ plans to sell its Hummer vehicle division to China raises new concerns about the transfer of valuable military vehicle technology.

The Hummer is the civilian version of the front-line U.S. military vehicle widely used since the 1990s and the replacement to the World War II era Jeep.

Richard Fisher, of the International Assessment and Strategy Center, says “Multiple versions of the Hummer are produced by two Chinese companies already, and AM General already sells parts to one of them,” Fisher said.

“The PLA already buys their Hummers for PLA Airborne units and for police units across China. All that’s left is for Congress to appropriate monies to give uparmored Humvees to the PLA and order the U.S. Army to buy Chinese-made Hummers.”

Calls flooded the Pentagon, Capital Hill and AM General following reports of the sale to China.

Steve Clawson, a spokesman for South Bend, Indiana-based AM General, said the military and civilian programs are separate.

“GM’s proposed sale of the civilian Hummer brand would have no impact on the military Humvee program,” he said.

The Wall Street Journal identified the Chinese buyer, Sichuan Tengzhong Heavy Industrial Machinery, as a major company in China that is seeking to break into the U.S. market with the Hummer purchase.

The deal may be blocked by U.S. regulators, the Journal noted, noting that Sichuan is the location where China’s military vehicles are built, raising concerns that the Hummer will boost the PLA.

China’s state-run industries do not distinguish between civilian and military manufacturing. Often factories that make refrigerators also make missiles and other weaponry.

[Ryan Ruck]

Hummer Faces Shutdown After Chinese Sale Collapses

Hummer sale collapses; GM brand, scorned by greens but loved by loyal fans, facing shutdown

February 24, 2010

Hummer, the off-road vehicle that once symbolized America's love for hulking Sports Utility Vehicles, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed.

Sichuan Tengzhong Heavy Industrial Machines Co. said Wednesday it pulled out of the deal to buy the company from General Motors Co. Tengzhong failed to get clearance from Chinese regulators within the proposed timeframe for the sale, the Chinese manufacturer said.

GM said it will continue to honor existing Hummer warranties.

"We are disappointed that the deal with Tengzhong could not be completed," said John Smith, GM vice president of corporate planning and alliances. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner."

GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.

As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a Feb. 28 deadline. That plan, along with other options, was unsuccessful, according to a person close to the situation. The person declined to be identified in order to speak more freely.

"There's no way forward with that," this person said. "We're out of time."

Tengzhong, in a statement, said it was disappointed that it could not pursue the opportunity to build attractive, greener vehicles for sale in China and other new markets as well as Hummer's traditional bases.

"Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price," it said, thanking GM, Hummer and its executives, and "the 3,000 people who produce and support Hummer."

GM spokesman Nick Richards said the automaker would still hear last-minute bids for the brand.

"In the early phases of the wind-down, we'll entertain offers and determine their viability, but that will have to happen in pretty short order," he said.

Hummer, which traces its origins to the Humvee military vehicle built by AM General LLC in South Bend, Indiana, acquired a devoted following among SUV lovers who were drawn to the off-road ready vehicles. But they drew scorn from environmentalists and sales never recovered after gasoline prices spiked above $4 a gallon in the summer of 2008.

Sales peaked at 71,524 in 2006. But in December 2009, only 325 Hummers were sold, down 85 percent from the previous year, according to Autodata Corp.

Sticker prices start at more than $42,500 and run to about $63,000, according to data posted at the Hummer.com Web site. The H3, the most fuel-efficient vehicle in Hummer's lineup, averages about 16 mpg. The vehicles are built at GM's factory in Shreveport, La.

Under the initial agreement to sell Hummer, Tengzhong would have received an 80 percent stake, while Hong Kong investor Suolang Duoji, who indirectly owns a big stake in Tengzhong, would have gotten 20 percent. The investors would also have owned Hummer's nationwide dealer network.

Financial terms of the sale were not disclosed, although a person briefed on the deal at the time said the sale price was around $150 million. GM's bankruptcy filing last summer said that the brand could bring in $500 million or more.

Beijing had been cool to the acquisition. Tengzhong lacks a government permit to manufacture cars, and the Chinese government has been seeking to streamline and slow investment in the fast-growing auto industry rather than to attract newcomers.

Richards said the collapse of the sale does not change earlier plans to close the Shreveport facility by 2012. The plant also builds the Chevy Colorado and GMC Canyon and is currently operating on a single 10-hour shift, he said. Hummer production was idled in January.

The plant once employed about 3,000 people, but that payroll has been reduced to about 950.

Plant worker Alex Santana, a 17-year veteran of the Shreveport operation, said the end of Hummer "is going to hurt a lot of people."

"There's a lot of jobs going down the drain," he said.

Doug Ebey, president of the United Auto Workers Local 2166 and a 28-year worker at the plant, said the proposed Hummer deal "was a little glimmer of hope we had."

"It's going to be tough for the city of Shreveport," Ebey said. "I wish there was more of a public outcry. This place will be missed once it eventually closes. It provides good-paying, union jobs."

Hummer is the second brand after Saturn that GM has failed to sell as part of its restructuring. GM sold Swedish brand Saab to Dutch carmaker Spyker Cars NV earlier this year. Pontiac is being discontinued.

GM is focusing its efforts on its four remaining brands: Chevrolet, GMC, Cadillac and Buick.

I guess the Chinese got the technology and information they needed…

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They've already successfully copied it, plus who needs hummer when you can have GM and Detroit?