Hummer Sale in Doubt???

The Phantom, who has provided lots of good rumors, facts, half-truths, innuendos, and inside information at GM on the Hummer brand, called this morning to tell me that something is "up with the Hummer deal with the Chinese". Longtime readers of this blog are aware that The Phantom announced here that Hummer was up for a possible sale two days before GM made the announcement last June, and was the first to announce during the summer Olympics last August in this blog that Tengzhong was talking with GM officials last August about a purchase. The Phantom also said it looks like a sure thing that the Chinese government will nix the sale of Hummer. If Tengzhong was larger, or if the Hummer brand was going to create more jobs in China, the government response might have been different.

Although The Phantom would not elaborate much, apparently another player or players are eyeing their options. One US player has the cash and is displeased with the announcement that the H3 plant would be closed in 2012 in Shreveport, and upset with the possible Chinese government funding of a plant near Deyang City or Chengdu, China. Several sources including the BBC and Chinese radio are reporting that the Chinese government will at a minimum delay the sale, if not totally block it.

The Phantom said executives at GM (or should he have said the US Government's control at GM now) are unhappy at the fact the Chinese are dragging their feet on signing long term contracts with GM, for the manufacturer of Hummers in the US. "This is not a sale or deal yet - it is a memorandum of understanding, which leaves lots of wiggle room!" He emphasized there are still two other SERIOUS players interested in the Hummer Brand, and the Tengzhong deal at a reported $80 million for Hummer, makes it within reach of several new players that have suddenly appeared. In another announcement, Beijing West will acquire GM parts supplier Delphi's non core assets and possibly move some suspension, brake, and other part manufacturing to China.


With all the new and sudden pressure, especially with the Chinese government against the sale according to foreign press reports, Tengzhong says it will sign a contract with GM on the Hummer sale on June 28th. Any contract with Tengzhong still must be approved by the Chinese government after it is signed.
The sudden announcement of its intent to sign a contract with GM has the Chinese government and the other players scrambling to put up or shut up!!