GM Drives Hummer to China

A week or so ago I wrote a post about a Chinese group buying a piece of the NBA’s Cleveland Cavaliers. At that time I said it was in Yogi Berra’s immortal words, deja vu all over again. A country and its citizens hit the big time exporting cheap products all over the world and they go on a spending spree. The Chinese seem to be following in the Japanese footprints.

The news yesterday via the New York Times is that a firm from China is buying the dog, ahem Hummer, brand from GM.

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 with knowledge of 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.

The New York Times said it attempted to call the buyer but the offices were closed so they weren’t able to get any comments about why in the world a company in China wants to build Hummers. I’m stumped. Most people I know that lost temporary control of their senses and bought one of these things sold it within a year. The novelty wore off pretty quickly. Heck, even rich people that buy things just to buy them no longer covet Hummers.

What little market might still remain in the U.S. for these things is going to get flattened over the next few years by “green” regulation. They say they are going to keep building them in this country, so does that mean that they see China as an export market? It might be a novelty item — again for the newly rich — but somehow guiding a Hummer around the choked streets of Peking doesn’t sound like a walk in the park. And what about all of the talk we hear about China leading the way in electric automobiles. Is it possible to build a big enough battery to power a Hummer? Who would really want an electric Hummer?

In that prior post I said that we do a pretty good job of selling pigs in a poke to nouveau riche foreign buyers. We were able to foist some pretty expensive real estate and golf courses onto the Japanese for ridiculous prices. It looks like we might not have lost our touch.

Comments

[Dyslexic:]

You retards. Its one of the more profitable arms of GM. Love how you speak of opinion rather than fact. People buy these. They make money because people do. Majority wins. Minority complains about them claiming them to be oh so horrible. I have friends who love them. If your poor you drive economic vehicles. If your poor, you cant buy them. Good luck with those cars.

Jun 03 10:45 AM

[Sober Realist:]

Tom,
I thought the very same thing that you state in your article. Will they even be able to reach the gas peddle? This article states the irony of it all:

"For the first four months of this year, Hummer sales were down 67 per cent. But the Chinese apparently feel sales will rebound in a global recovery. Certainly, their own mine and factory owners don't seem to be paying attention. For these people, no replica of a European castle would be complete without a Hummer parked outside, Prof. Jiang said."
www.theglobeandmail.co.../
agmetalminer.com/2009/.../

Jun 03 10:59 AM

[bobbobwhite:]

I can see the Chinese owner's manual now....."get ladder, climb into car. sit in seat, put seat all way forward, put key in hole, drive down road" , and like that. Ever wondered why Chinese manuals(assembly, user, owner) are never passed by a native english speaker for spelling and grammar check before printing and distribution? Been that dumb way for 50 years. Get a clue!

Oh, and I do not think this Hummer buy will ever work out. It will die from a slow Chinese torture unknown to the western world. Count on it.

Jun 03 11:13 AM

[shure46:]

and now we have the absolute demise of the environment , the Chinese will make the hummer cheaper , sales will boom , and a billion Chinese will be driving 6mpg Hummers instead of bicycles ...Oil will be $300 a barrel by 2012 ... easy ...... and now you know why we are doomed , and humans will NEVER save this planet ..... we are too selfish and stupid ....... Hummers should be banned except for military use ........ This planet will be an oven in 25 years ...... I guarantee it ..... I don't need scientific proof 6.5 Billion people are affecting this planet ..... That should be obvious to anyone with a brain ....... and wait until the population hits 10 Billion - you ain't seen nothin' yet !!!!!! ...... So now GM builds hybrids , and China builds Hummers ...... There's a frickin' retarded scenario for ya ..... A Hummer will soon be cheaper than a Toyota Corrolla !!!!!! Oh Boy !!!

Jun 03 11:50 AM

[User 387439:]

Well, "It is . . . what it is!" Hummer hasn't been all that mush a money maker for GM. I have to agree, it is a little disconserting to think their will be cheap Chinese Hummers. They might buy more scrap tin cans and steel from our rusting bridges and drive iron prices up here for restored economy and profit! Let's look at the bright side. I hope

Jun 03 12:06 PM

[HaavBline:]

If making silly remarks help repair injured American pride, please continue.

Seriously, this is clearly a rather naive gamble from the Chinese buyer, an obscure medium size company with no consumer products exposure, no automobile experience.

My guess is this will turn out a lot worse than Lenovo's purchase of the IBM PC division, which is now busy repairing the damage to their core business.

The Chinese goverment may yet refuse to approve the deal. But then again, since the price tag is sidely expected to be quite modest (less than $500M), the Chinese goverment may decide to make it a good will gesture to the desperate American icon, GM. After all, they love the Buick brand and have already saved that brand with a ho-hum image.

Jun 03 12:16 PM

[Woz2000:]

So much racist overtones and ignorant fools. I would have expected better. The Chinese may not be able to do anything with it, but who are the ones making the fire sale? And who are the ones making a gamble on the cheap?

Jun 03 12:26 PM

[303820:]

GM didn't drive the hummer to china...the previews administration and its oil friends did... gouging of the American people with their $4.59gl gas and destroying the PROFITABLE SUVs market!

Jun 03 12:58 PM

[303820:]

HUMMER WAS A HIGHLY PROFITABLE BRAND FOR GM...UNTIL THE HIGH GASOLINE PRICES KILLED IT!


On Jun 03 12:06 PM User 387439 wrote:

> Well, "It is . . . what it is!" Hummer hasn't been all that mush
> a money maker for GM. I have to agree, it is a little disconserting
> to think their will be cheap Chinese Hummers. They might buy more
> scrap tin cans and steel from our rusting bridges and drive iron
> prices up here for restored economy and profit! Let's look at the
> bright side. I hope

Jun 03 01:02 PM

[tunaman4u2:]

I look at it this way... we are now importing another thing vs exporting a product for a profit...
Selling Hummer doesn't make GM more profitable in the long term... but then again they weren't go to sell many either so its really just a wash.
Expecting GM to come even close to its previous self is ridiculous with so many brands lost.

Jun 03 01:22 PM

[BigBadBoy:]

This is why the Chinese bought the Hummer brand. GM just ran out of time.

www.popularmechanics.c...



On Jun 03 01:02 PM 303820 wrote:

> HUMMER WAS A HIGHLY PROFITABLE BRAND FOR GM...UNTIL THE HIGH GASOLINE
> PRICES KILLED IT!

Jun 03 01:31 PM

[Just Say Whoa!:]

>HUMMER WAS A HIGHLY PROFITABLE BRAND FOR GM...UNTIL THE HIGH GASOLINE PRICES KILLED IT!

Actually, the EV1 was a VERY popular car--until GM/Republicans/Bush Administration/Enron killed it and opened a Hummer plant.

Essentially, by crushing the EV1, GM crushed itself.
www.ev1.org/

Jun 03 02:07 PM

[Living4Divi...:]

Beijing is concerned that inflation will erode the dollar’s value in the long run as America amasses record debt. While China still seems committed to the dollar peg, China is diversifying its foreign exchange reserves by using it's surplus dollars to purchase real assets that are inflation resistant such as commodities and capital investments. Instead of buying Treasuries, China is:
a) Using surplus dollars to purchase and stockpile commodities, such as iron ore, crude oil and grain. .. AND...
b) encouraging private Chinese companies to use dollars to make investments like the purchase of Hummer and NBA’s Cleveland Cavaliers.

Jun 03 09:35 PM

[Jeremy Suen:]

LOL. You are right that humans are selfish, but I'm not sure if they are all stupid as you say.


On Jun 03 11:50 AM shure46 wrote:

> and now we have the absolute demise of the environment , the Chinese
> will make the hummer cheaper , sales will boom , and a billion Chinese
> will be driving 6mpg Hummers instead of bicycles ...Oil will be $300
> a barrel by 2012 ... easy ...... and now you know why we are doomed
> , and humans will NEVER save this planet ..... we are too selfish
> and stupid ....... Hummers should be banned except for military use
> ........ This planet will be an oven in 25 years ...... I guarantee
> it ..... I don't need scientific proof 6.5 Billion people are affecting
> this planet ..... That should be obvious to anyone with a brain .......
> and wait until the population hits 10 Billion - you ain't seen nothin'
> yet !!!!!! ...... So now GM builds hybrids , and China builds Hummers
> ...... There's a frickin' retarded scenario for ya ..... A Hummer
> will soon be cheaper than a Toyota Corrolla !!!!!! Oh Boy !!!

Jun 03 11:13 PM

[Jeremy Suen:]

Interesting. Nice find! And don't forget the new generation HX! I always thought the machinery company will use the H2 in the construction industry, which is thriving in China, Africa, Southeast Asia, South America, the Middle East, South Asia etc.


On Jun 03 01:31 PM BigBadBoy wrote:

> This is why the Chinese bought the Hummer brand. GM just ran out
> of time.
>
> www.popularmechanics.c...
>
>

Jun 03 11:21 PM

[Traveler 1:]

This is a positive step for GM to sell off this dinosaur. Those that pornounce the value of the monster that gets under 10MPG and that will continue to own one and others who baught the American mussle cars this year when gas got down to $150 a gal. will again be whining when oil again is up over $100/ barrel within 1yr. I also agree with Shure46 comments.

Jun 04 09:47 AM

[Chancer:]

The Hummer is vey popular among the "new rich" in China.

The Chinese company wants to get into the auto business. Starting with an existing brand is probably much better than starting from scratch. They can duplicate the existing manufacturing process in China very quickly. Making Hummers as a limited production vehicle may be a profitable business.

Auto manufacturing is changing from all big companies to a few big companies (Toyota, Honda, Nissan, Ford) and a lot of small innovative companies.

The Governator thinks the Chinese will get 30-40 or even 100 mpg from the Hummer (where GM could not).

Jun 04 02:19 PM

[shure46:]

30 years ago the Chinese had little experience manufacturing all the things they are now kicking our asses with ...... YOU are naive , not me ......... The Chinese would love to take our " unprofitable Hummer " , and turn it into a money-maker , a military vehicle , another propoganda tool , and there are a lot of wealthy Chinese that will drive them as a status symbol to say " F-U American idiots , look what we did " ...... however , yes , I agree , most likely the Chinese will improve gas mileage ..... nevertheless , the Hummer is now a Chinese status symbol , just like it was a status symbol here ...... They WILL produce it , and we will watch ........personally , it made me puke to see soccer moms driving around town in a damn Hummer .... a 6mpg military vehicle , just so you can look cool , while the Earth cooks ....... arrogant excessive selfishness at it's worst IMHO ........ and if you are one of those that thinks global warming is a hoax ???? Come back here in 15 years and tell me what you think when 50% of the world's polar caps are melted ...... I'll be here waiting


On Jun 03 12:16 PM HaavBline wrote:

> If making silly remarks help repair injured American pride, please
> continue.
>
> Seriously, this is clearly a rather naive gamble from the Chinese
> buyer, an obscure medium size company with no consumer products exposure,
> no automobile experience.
>
> My guess is this will turn out a lot worse than Lenovo's purchase
> of the IBM PC division, which is now busy repairing the damage to
> their core business.
>
> The Chinese goverment may yet refuse to approve the deal. But then
> again, since the price tag is sidely expected to be quite modest
> (less than $500M), the Chinese goverment may decide to make it a
> good will gesture to the desperate American icon, GM. After all,
> they love the Buick brand and have already saved that brand with
> a ho-hum image.

Jun 05 09:56 AM

[shure46:]

I KNOW WHY owners manuals are never written by a native English speaker ...... because everything is made in China , including the owner's manuals !!!!!


On Jun 03 11:13 AM bobbobwhite wrote:

> I can see the Chinese owner's manual now....."get ladder, climb into
> car. sit in seat, put seat all way forward, put key in hole, drive
> down road" , and like that. Ever wondered why Chinese manuals(assembly,
> user, owner) are never passed by a native english speaker for spelling
> and grammar check before printing and distribution? Been that dumb
> way for 50 years. Get a clue!
>
> Oh, and I do not think this Hummer buy will ever work out. It will
> die from a slow Chinese torture unknown to the western world. Count
> on it.

Jun 05 10:01 AM

[shure46:]

That is true , but all vehicles under 10 , even 15 mpg need to cease and desist , unless you REALLY need one ...... sorry , but that's the world we live in now ...... If you really need to drive a huge SUV or a Hummer - fine , but too many times I see a single person constantly driving these gas guzzling monsters just to look cool ...... sorry but that's just wrong , and everyone will know why in about 15 -20 years ....... I do not like overkill and FORCING people to drive hybrids , but we should all just drive as efficient a vehicle as we can ....... I am a construction contractor , I drive an F-150 small V-8 , I need a full size truck , and I wanted a big V-8 for the muscle , but decided for economics and environment to get a small V-8 ...... not much better , but at least I tried to save fuel , and I do not drive a guzzler just to be cool .....although I could easily .....we all just need to try a little better , and then maybe the government won't end up forcing us all to drive matchboxes with batteries


On Jun 03 12:58 PM 303820 wrote:

> GM didn't drive the hummer to china...the previews administration
> and its oil friends did... gouging of the American people with their
> $4.59gl gas and destroying the PROFITABLE SUVs market!

Jun 05 10:16 AM