Going Global

GM has been on the verge of selling their Hummer brand to the Chinese Sichuan Tengzhong Heavy Industrial Machinery company. Thats quite a mouthful. I wonder why Chinese companies have such weird names. But i digress.

But GM's plans of downsizing and rightsizing itself while it shelters itself under a Chapter 11 bankruptcy may suffer a setback because it seems like the Chinese government is about to block the deal.

China has about 100 car manufaturers and the government does not want yet another one entering the market at a time when they are trying to aim for stability and cut competition in order to try and build a global giant capable of taking on the big ones.

Also, it seems the strategy is to focus on building a robust market based on fuel efficient and environmentally friendly vehicles, something a Hummer definitely is not (Hummers on average do a bout 15 miles per gallon, thats around 5 or so km's per litre).

China has also got a lot of stick in recent years about its pollution. And mass producing a brand like Hummer won't exactly help them in cleaning up this aspect of their image.

Hummer is estimated to be worth around $500million. GM is eager to unload its lossmaking units and have cleared the sale of Hummer, being in debt of about $172 Billion. Thats roughly twice the GDP of Sri Lanka.

The Chinese however have not completely overruled the deal. So we might yet see an iconic former US military vehicle being owned and manufactured by one of its key global rivals.

read more here and here.