The Truth About Cars » Licensing http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 22 Oct 2014 12:15:21 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Licensing http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Our Daily Saab: Hold On And Believe http://www.thetruthaboutcars.com/2011/11/our-daily-saab-hold-on-and-believe/ http://www.thetruthaboutcars.com/2011/11/our-daily-saab-hold-on-and-believe/#comments Tue, 22 Nov 2011 16:23:45 +0000 http://www.thetruthaboutcars.com/?p=419599 The last attempt at saving Saab failed when GM said it would not supply or license technology to Saab if it were 100% owned by PangDa and Youngman, scuttling the Chinese firms’ bid for outright control of the company. Now the two firms have sent a revised proposal to The General in hopes that they […]

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The last attempt at saving Saab failed when GM said it would not supply or license technology to Saab if it were 100% owned by PangDa and Youngman, scuttling the Chinese firms’ bid for outright control of the company. Now the two firms have sent a revised proposal to The General in hopes that they can provide safeguards for intellectual property, allowing them to purchase Saab without losing the link to GM. After all, both the 9-3 and 9-5 rely on GM technology and parts, while the 9-4X is wholly supplied by GM. Rachel Pang of PangDa tells TTELA.se

We have not discussed any changes with regard to ownership structure. We are concentrated on the GM issue… It’s about more commercial terms.  We want to meet them and have asked for a meeting. First we must give them time to review our proposal. We are waiting for GM’s response and then we will of course respect it.

Of course, our understanding is that “the GM issue” is the same as the ownership structure issue… and keep in mind, PangDa and Youngman are looking for a meeting, not an agreement from GM. Which means this could drag on a while… and wouldn’t you know it, it’s time for Saab to pay salaries again.

Victor Muller, who TTELA says “has increasingly fallen into the background” of negotiations, agrees that it could be a while, noting

GM will first need to digest the information gained from Saab. It is up to Youngman and Pang Da which they want to conduct the negotiations with GM

And while PangDa/Youngman are waiting to hear back from the RenCen, they’ve got to keep the cash flowing. Apparently Youngman injected some $3m into Saab this week, and PangDa could help out with wages, which must be paid at the end of this week. Which raises an interesting question: why are PangDa and Youngman continuing to inject cash into a company they may never be able to own? Surely not because GM has sent promising signals, as its last message was

We have not changed our point of view. We are not negotiating with the Chinese since our contracts are with Saab

When asked about this puzzling state of affairs, Rachel Pang gave an answer that definitely gains something in  the Google Translation

TT: Why do you continue to invest in Saab when you do not know if you can buy the company?

– A good question. I do not know what I should be on it at the moment, says Rachel Pang. (Original: En bra fråga. Jag vet inte vad jag ska vara på den i nuläget, säger Rachel Pang.)

I’m sure Ms Pang’s answer must have been more reasonable than this appears, but then, every time I dig back into the Saab story, I tend to not know what I should be on at that moment. A stiff drink? Painkillers? Some kind of exotic hallucinogen, synthesized from the pancreas of Amazonian salamanders? What could possibly make me understand the point of all this burning capital? At this point, I’m almost considering tucking into the barbiturate overdose-in-applesauce that Guy Lofalk is keeping warm for Saab.  This story is a killer.

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How The Hummer H1 Went To China (Without A License) http://www.thetruthaboutcars.com/2011/05/how-the-hummer-h1-went-to-china-without-a-license/ http://www.thetruthaboutcars.com/2011/05/how-the-hummer-h1-went-to-china-without-a-license/#comments Sat, 14 May 2011 18:50:55 +0000 http://www.thetruthaboutcars.com/?p=394939 Editor’s note: Car News China has some pictures of the Dongfeng EQ250 in police livery, accompanied by the nearly-unbelievable tale of the HMMWV’s Sinification, which we have excerpted here. Do surf over and check out one of the better Chinese car blogs out there. AM General tried to sell the HMMWV to the People’s Liberation […]

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Editor’s note: Car News China has some pictures of the Dongfeng EQ250 in police livery, accompanied by the nearly-unbelievable tale of the HMMWV’s Sinification, which we have excerpted here. Do surf over and check out one of the better Chinese car blogs out there.

AM General tried to sell the HMMWV to the People’s Liberation Army (PLA) in the late 1980′s.

The PLA however had no interest in the vehicle by that time, they thought it too big and heavy. AM General left one HMMWV in China, hoping the Chinese would change their mind. They did after the first Gulf War in 1991 when the HMMWV was on every TV screen in the world, seen as a winning vehicle that could cross every desert.

The HMMWV that was rotting away somewhere in China was cleaned up and taken apart to the last bit. In the mid ’90′s, Chinese oil companies bought several civilian HMMWV’s, officially for oil exploration but the vehicles actually ended up in PLA’s laboratories and were taken apart as well.

The PLA now wanted a HMMWV, and in the early 2000′s, two Chinese companies bid for the order. Each made its own HMMWV prototype based on knowledge gained by reverse engineering the American HMMWV’s. One company was Dongfeng, the other one the Shenyang Aircraft Corporation (SAC). Dongfeng won the order and the EQ2050 was born. I’ll get back on SAC’s prototype in a later article.

Now things get a bit murky. Dongfeng had to deliver, but it didn’t have parts to mass produce. AM General had plenty. So Dongfeng bought the parts from AM General and started production at around 2004. The first 100 or so EQ2050 were made with the American parts. In the meantime, Dongfeng set up their own parts operation and soon it was able to make the EQ2050 without American parts, and so it still does.

Except for one vital thing: the engine. It is a Cummins diesel made by Dongfeng in China under license from Cummins USA. Dongfeng also imports a GM V8 diesel, but that engine is only used in the civilian version of the Dongfeng EQ2050 which nobody can buy. I’ll get back to that in a moment.

Some other reports say that AM General licensed the HMMWV’s design to Dongfeng. This is not true. AM General was happy to sell parts to Dongfeng, the very company that copied their own car. Its all bout the money indeed. The only thing licensed is the engine, licensed by Cummins.

Back now to the civilian version. There is an arms embargo against China since 1989 when a student party on Tiananmen Square got messy. The US takes part in this embargo. That means US companies are not allowed to sell military goods to China. This is not only about finished military goods, like a tank, but also for everything that can be used to make a tank, like the gun, the armor – or the engine.

This was a problem for both AM General and Cummins. The HMMWV was clearly a military vehicle and so was the Dongfeng EQ2050. There is however an exception in the embargo. When something can be used both in a military and civilian way, it can be sold to China. Let’s say binoculars. They can be used by the army but also by civilians spotting birds. These goods are called ‘dual use goods’.

The American companies and Dongfeng talked things trough and arrived at a simple answer: Dongfeng was to make a civilian version of the EQ2050, right next the the military version. Dongfeng promised to do so, and the Americans started selling parts and engines, approved by the American government. Dongfeng showed a civilian EQ2050 on several autoshows but nobody can actually buy it and nobody ever will.

Today it doesn’t really matter anymore anyway, Dongfeng can make the parts from AM General by itself and the Cummins engines are now also used in very civilian trucks. But it was a nice trick – most likely with the full knowledge of all involved. Plausible deniability is everything!

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