Jun 16, 2008

GM to sell Hummer to Chinese Co?

Edmunds.com speculates:

SHANGHAI, China — General Motors could sell its troubled
Hummer brand
to a Chinese automaker, according to Fritz Henderson, president
and chief operating officer.

“If any Chinese companies are interested in buying Hummer, it will be certainly an option for us to look at. We need to be open to all ideas,” said Henderson, who was making his first trip to China since he took up his new post in March.

Henderson also emphasized that China will continue to be a major factor in GM’s bid to return to profitability. A continuing interest in the Chinese market, as well as other emerging markets such as Russia and Latin America, is a top priority for GM, which is struggling with slumping sales in North America, especially of big trucks and SUVs.

With gas prices in the U.S. now averaging more than $4 a gallon, customers have shunned GM’s full-size pickups and utility vehicles and shifted to fuel-efficient compact cars.

Over the past three years, GM has reported losses totaling more than $50 billion, and most auto industry analysts do not expect the automaker to return to profitability this year.

Who in China is most likely to take on Hummer? We know that Hummer and Changfeng have a potential deal on the table to supply chassis to Hummer, but does Changfeng have the cash on tap to buy up Hummer? Who else in China would be willing to buy into Hummer? We could add to the speculation, and say that US Government may not be willing for a Chinese company to engage in a NAC MG style ‘lift and shift’ operation to take technology and entire factories back to the PRC without some sort of guarantee for US workers. On the other hand, the low Dollar, and the high Yuan have seen an increase of direct Chinese investment in the USA.

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