Why China said ‘No’ to Hummer deal
TEXT OF STORY
Bill Radke: This could be a sad day if you’re a fan of the Hummer SUV. That brand looks dead. General Motors was trying sell Hummer to a Chinese company, but From Shanghai, Marketplace’s Scott Tong tells us regulators in Beijing failed to accept the deal.
Scott Tong: Chinese regulators deny they nixed the Hummer deal. They say the application was incomplete. But some analysts say the deal just didn’t match China’s energy priorities.
Michael Laske runs the China office at AVL, an engine design firm. Sticking a Chinese logo on the biggest guzzler on the planet, well:
Michael Laske: It really wasn’t clear what that does to the image of the Chinese automotive industry.
In any event, the $150 million deal for a Chinese white knight to save Hummer is off. Laske says this shows that Beijing is not a fan of Chinese automakers shopping offshore.
Laske: There is not a policy of encouragement for companies to go out and acquire costly foreign brands, which might not have been very profitable. I think that’s seen as a highly risky type of approach.
But analysts say this won’t hit the brakes on every Chinese outbound deal. Less risky approaches may still get through. One Chinese maker is about to buy Volvo from Ford; another just bought assets from GM’s Saab unit.
In Shanghai, I’m Scott Tong for Marketplace.
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