Chinese Machine Maker's Hummer Buy Raises Eyebrows
08 June 2009
A little-known player in China's heavy machinery industry emerged from nowhere to agree to buy General Motor's Hummer brand, raising eyebrows among peers who question whether it can turn around the U.S. auto maker.
The tentative deal with privately-held Sichuan Tengzhong Heavy Industrial Machinery Co, announced on Tuesday, just one day after GM's bankruptcy filing, surprised Chinese industry executives and analysts.
"Who is Tengzhong? Why does it want to buy Hummer? What are they going to do with it?" asked a senior executive with Hunan Changfeng Motor Co, a sport utility vehicle specialist based in Hunan province, next to Tengzhong's home turf in Sichuan province.
Changfeng, which makes low- and mid-range SUVs, expressed initial interest in Hummer last year but did not follow through after a tour of its U.S. plant.
"We want to tap the higher-end segment and we thought Hummer could be an opportunity. We were impressed with the plants and the facilities, but we didn't think we could keep it up and running and -- most of all -- turn it around," said the Changfeng executive, who asked not to be identified because of the sensitive nature of the comments.
Tengzhong, formed in 2005 through several mergers, makes special-use vehicles such as dump trucks and fuel tankers, as well as construction machinery, energy equipment, and structural components for highways and bridges.
It has 4,800 employees, according to its website, about the same as Changfeng. The site does not disclose any financial data.
Source : internet
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