After a lot of to and fro, GM today officially gave up on the Hummer deal. Reuters reports that “General Motors Co will wind down its Hummer SUV line after failing to complete a deal to sell the brand to China’s Sichuan Tengzhong Heavy Industrial Machinery Co.”
“We are disappointed that the deal with Tengzhong could not be completed,” John Smith, GM’s outgoing vice president of corporate planning and alliances, said in a statement. This is the last in a row of failed deals Smith misengineered.
Shanghai Daily says that “Wang Chao, an assistant commerce minister, reiterated at a briefing yesterday that the ministry had yet to receive an application, and any reports that the ministry had rejected the bid were untrue.”
The ministry had been on record several times that it had not received a proper application.
Late last year, China’s Commerce Ministry had not received a formal application. Finally, one came in. Beijing bureaucrats could not make heads or tails of what Tengzhong was really trying to buy (or rather, what GM was trying to sell or not to sell.) Tengzhong was ordered to go home and come back with a new application that details what Tengzhong is exactly getting for their money. Ever since, the Ministry had been waiting for something to approve, but nothing was forthcoming.
According to China’s government, there was nothing to approve, and nothing to reject. However, this is widely seen as a face saving move. Chinese government circles were never enthused about an obscure industrial equipment maker trying to buy a money-losing brand that had become the epitome of vehicular excess. China has a very successful joint venture between GM and SAIC. The government may not have wanted to step on those toes. Someone at GM should have listened more closely.