Hummer Will Test China’s Green Credentials

By ANDREW PEAPLE
A step closer to signing a deal for Hummer, Sichuan Tengzhong now faces a final hurdle — China’s regulators.
The chief executive of the little-known Chinese company is in Detroit to seal a $150 million purchase of Hummer from General Motors.
Bloomberg News
A deal could be signed as early as Friday. Still, sealing approval from Beijing might prove difficult.
The gas-guzzling Hummer doesn’t exactly fit with China’s newfound focus on energy efficiency, something that’s had Beijing offering subsidies to automakers building greener cars. A green light to the Hummer deal will fly in the face of such progressive policy trends, especially since Tengzhong’s longer term aim seems to be to sell the Hummer in China.
Efforts by Hummer’s technicians to come up with more fuel-efficient models, will be crucial to overcoming this. Certainly Hummer is hoping that it will retain access to GM’s fuel efficiency technology even after they split.
The deal fits some patterns the government’s trying to encourage, such as giving Chinese companies greater access to technology.
Whether that will be enough to convince the Chinese authorities of the viability of Tengzhong’s acquisition plans remains to be seen.
The company certainly seems to think it will. The environmental misfit adds a final uncertainty to a deal that’s always been out of left field.
Write to Andrew Peaple at andrew.peaple@dowjones.com

Source:
http://cquestor.blogspot.com/2009/10/hummer-will-test-chinas-green.html