Hummer Delayed Again

Bertel Schmitt
by Bertel Schmitt

China’s Tengzhong is a little-known machinery maker in southwest China’s Sichuan province. They have been buying GM’s Hummer for what, more than half a year now? Today they said that they and GM have agreed not to rush it and to push back the deadline for the closing from January 31 to the end of February. Delaying it was a prudent move, because there still is no approval from Chinese regulators. If they don’t have approval now, then they probably won’t have it by end of February either. Due to the Chinese Lunar New Year festivities, most of China will be closed for most of February, and the really important regulators will not be back from Spring vacation before March.

Reuters talked to Suo Lang, chairman of Chinese chemical maker Lumena Resources Corp and shareholder in Tengzhong. He’s widely regarded as the man behind the deal.

He confirmed to Reuters that the rumored price tag of $150m is correct. And he thinks he got a deal. Hummer is “the king of off-road vehicles. It’s especially suitable for China, where natural disasters happen often.”

As for the timeline, Suo Lang seems to be more in tune with Chinese customs: “We hope the deal can be concluded this spring. But it all depends on the government. They have a lot to consider, such as environmental and other issues.” End of February? Did we say which February?

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Contrarian Contrarian on Feb 01, 2010

    Well, since we are all getting used to the centrally-planned economy here in the USA, this actually sounds very familiar. Sounds like their M&A Czar is on holiday for most of February?

  • Dancote Dancote on Feb 01, 2010

    Ya gotta hate "delayed Hummers"

  • Lokki Lokki on Feb 01, 2010

    Negotiations for someone to produce Hummers for you should be entered into carefully, with one eye out for the laws involved, and the other focused on the fact that a bad decision can be expensive and painful.

  • Stuki Stuki on Feb 01, 2010

    What are they getting for the $150million? I'm assuming it's not everything that goes into all Hummers. Hope this one goes through. Along with Tata buying LR, it should be interesting to see what kind of off/poor road vehicles get built by people who may actually need to drive on non paved roads from time to time.

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