It looks like General Motors' deal to sell its Hummer brand to China's Sichuan Tengzhong Heavy Industrial Machinery is on shaky ground. According to Reuters, the likelihood that the Chinese government will give its approval to Tengzhong has been waning in recent weeks, leading the would-be purchasers to consider making the acquisition using an offshore investment vehicle to skirt the need for Chinese regulatory approval. GM and Tengzhong had originally set a January 31st deadline to complete the
Cedric Glover, the mayor of Shreveport, Louisiana, went to Washington, D.C. to plead his case for the sale of Hummer to Tengzhong. The only thing is, we're not sure why he went. To be more precise, we do know that he wants to protect jobs at GM's Shreveport plant that builds Hummers. The plant has about 800 workers who build some of The General's pickup trucks and Hummer models, and the loss of The Big H would undoubtedly put people out of work.
Slowly clearing one obstacle after another, Tengzhong is closer to sealing the deal to buy Hummer from General Motors. Chinese reports have come almost completely around, from the nearly certain "No" of a few months ago to "the Chinese government has little to lose giving the green light."
Chinese National Radio recently reported that Tengzhong wouldn't be allowed to purchase Hummer due to environmental concerns. The company released a statement after that news broke saying that while there was no "definitive agreement," the CNR report wasn't based on facts from the government regulatory body in question, and Tengzhong is still working on the deal.
China's Sichuan Tengzhong Heavy Industrial Machinery, the company that recently surfaced as the top bidder for Hummer, is about to start talks with Chinese regulators to secure the deal. While General Motors has a tentative agreement with Tengzhong, the two companies have yet to receive the state's blessing, which is necessary for the sale to go through.
General Motors' potential sale of Hummer to Tengzhong is probably good news for those interested in seeing the company return to independent and profitable status as quickly as possible. The move should see enable GM to shed the negative political and social association of the star-crossed SUV brand and get some money in return. There is actually a better option, says The New York Times' Ethicist.
GM's potential sale of HUMMER to Tengzhong is probably good news for those interested in seeing the company return to independent and profitable status as quickly as possible (and also Rush Limbaugh). GM can shed the negative political association of the land monsters and get some money in return. There is actually a better option, says the New York Times' Ethicist.
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