Regulators likely to OK Hummer sale to Chinese firm
(chinatrucks.com, Jan.15, 2010)Kevin Wale, the president of General Motors China operations, said yesterday that he's optimistic that Chinese regulators will approve the sale of Hummer to a Chinese company.
China-based Sichuan Tengzhong Heavy Industrial Machinery Co. reached a deal in October with GM to acquire the Hummer brand, part of GM's effort to get rid of four U.S. brands. It requires government approvals.
"I'm optimistic that it's going to happen," Wale told reporters on the sidelines of the Automotive News World Congress in Detroit. "Tengzhong is not an established manufacturer and that's an issue that needs to be addressed with the Chinese regulators."
Efforts to sell off Saab and Saturn haven't worked, though GM seems still willing to entertain conversations about selling Saab. Pontiac is being closed outright.
The issue for Hummer's would-be buyer is that Chinese rules prohibit inexperienced companies from entering key industries, such as the auto industry, without approval. "They have to get approval," Wale said.
Wale said they met with local government officials last week and found them supportive.
Last week, GM CEO and Chairman Ed Whitacre indicated that the Hummer deal faces a Jan. 31 deadline to close. "As far as we know, it's proceeding like it should proceed," he said.
Wale spoke at the Automotive News World Congress in Detroit about the amazing growth GM has seen in China. GM sold more than 1.8 million vehicles last year in China, a 67% increase over the prior year. For comparison, the China automotive market grew by 50% last year.
While GM, overall, hasn't been profitable in years, GM's China operations make money. "Our profitability is solid," Wale said.
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