Sunday, June 28, 2009

A Dying Deal

There is now a strong possibility the Chinese firm Sichuan Tengzhong Heavy Industrial Machinery Corp won't be able to acquire Hummer from General Motors.

That's because the Chinese government will probably veto the rumoured $100 million sale, as it goes against Bejing's environmental goals, and the National Development and Reform Commission will say Tengzhong does not have the expertise to run an international brand like Hummer.

While Tengzhong is a private company and is not subjected to as many regulations as state-run fims, the government can still block the sale of Han Ma, or "Bold Horse" in Chinese.

This comes after much controversy over the sale, particularly from critics and ordinary folk pointing out the reasons above mentioned.

And with news like this leaking out before the formal announcement makes it pretty much certain the deal will die.

No senior official would touch this with a 10-foot pole, even if graft was involved.

So if the deal does fall through, China will win brownie points with environmentalists, while its wealthy will complain about having to pay more taxes to import and buy these giant gas guzzlers.

While the country still has overwhelming environmental problems, at least it is trying to decrease its acquisitions in that department.

1 comment:

ks said...

this deal has not been a good idea. hummer is a military vehicle . it consumes too much gas to be suitable for civilian use. it is a chinese pride only. in my humble opinion this project should be scrapped.