Globalization at its worst

Rico says it was bad enough when Jaguar and Land-Rover got sold to Tata, but now, according to The New York Times, the unthinkable:

General Motors has reached a preliminary agreement for the sale of its Hummer brand of large sport utility vehicles and pickup trucks to a machinery company in western China with ambitions to become a carmaker. The buyer is the Sichuan Tengzhong Heavy Industrial Machinery Company, based in Chengdu, GM said Tuesday. The price was not disclosed, but industry analysts had estimated that the Hummer division would sell for less than $500 million. The deal, expected to close in the third quarter, would make Tengzhong the first Chinese company to sell vehicles in North America, though Hummer’s operations would remain in the United States.
“The Hummer brand is synonymous with adventure, freedom, and exhilaration, and we plan to continue that heritage by investing in the business, allowing Hummer to innovate and grow in exciting new ways under the leadership and continuity of its current management team,” Yang Yi, the chief executive of Tengzhong, said in a statement released by GM. “We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the US.”
Hummer is one of four brands that GM, which filed for bankruptcy protection Monday, plans to drop. The company also plans to close or sell Saturn and Saab later this year and to eliminate Pontiac in 2010. GM revealed Tuesday that it had sixteen bidders for Saturn and three for Saab.
GM announced the deal early Tuesday in Detroit, but said that the memorandum of understanding would not allow it to reveal the buyer or the price. It confirmed that the buyer was Tengzhong after The New York Times reported on its website that the company was seeking approval for the purchase in China.
The White House welcomed the pending sale of Hummer while quickly pointing out that it had not been involved. The transaction “is good news for the 3,000 Americans who will be able to keep their jobs, the two American plants that will remain open, and the more than 100 Hummer dealers that should be able to stay in business all around the country,” said Bill Burton, a presidential spokesman. “As the president said, the government is not going to get involved in the day-to-day business decisions of GM— and this is an example in which it did not,” he added. “This sale came as a result of a commercial process, and GM reached an agreement that will keep thousands of Americans working in a situation that could have ended instead with a devastating liquidation of this company.”
Tengzhong is a privately owned company, but Tuesday’s deal required preliminary vetting by Beijing officials, who retain the right to veto any effort at an overseas acquisition by a Chinese company and who give special attention to deals of more than $100 million. Tengzhong is known in China for making a wide range of road equipment, from bridge piers to highway construction and maintenance machinery. But even before the Hummer deal, the company had been moving more into heavy-duty trucks, including tow trucks and oil tankers.
“Over all, we’re pretty pleased,” said a Hummer spokesman, Nick Richards. “If you think about the qualities we’d want in a new owner for the brand, this buyer really met all the criteria. They’ve got a proven track record in international business, and they’ve got a long-term vision for the brand. They’ve got the capital to invest in more efficient vehicles, which is what’s necessary to grow the brand.”
If the deal is completed, it would be the first acquisition of a well-known American auto brand by a Chinese company, after many months of speculation about such a deal. Chinese automakers have already purchased the MG and Rover brands, two of the most famous names in British automotive history.
As a Chinese company, Tengzhong could face a challenge in presenting the deal to American Hummer owners. The brand has long sought to emphasize patriotism, stressing that the Hummer H1 was essentially the same vehicle built in the same factory as the Humvee that carries American soldiers into battle in Iraq and elsewhere.
It was Governor Arnold Schwarzenegger of California who persuaded the longtime maker of Humvees, A.M. General in Mishawaka, Indiana, to build a civilian version. As he recounted at a Hummer news conference in 2001, Mr. Schwarzenegger was filming the movie Kindergarten Cop in Oregon in 1990 when he saw a convoy of 50 Humvees drive by and decided that he had to have a civilian model of the same vehicle, which became the Hummer H1.
GM bought the rights to the Hummer brand in 1999 and began making somewhat smaller Hummers. GM initially procured the H1 from A.M. General, but discontinued the model in 2006.

Rico says he wonders how the US military is gonna feel about this...