Hummer CEO confident in getting Chinese gov't approval
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After finalizing the agreement about the sale of Hummer, James Taylor, the Chief Executive Officer of General Motor's legend brand Hummer, showed his strong confidence that the deal will be approved by the Chinese government despite a large amount of doubt coming from China.
In an exclusive interview with Xinhua, when asked whether GM and Tengzhong coming to an final agreement means that he has much confidence to get approval from Chinese government, Mr. Taylor's answer was "exactly."
"I think when Chinese government sees the business plan we have, and sees the opportunity of the next generation of Hummer products, it will be very supportive of this," added Taylor.
Just several hours before this interview, GM and Tengzhong announced that the two companies have entered into a definitive agreement that will allow Tengzhong to acquire GM's premium all- terrain HUMMER brand.
However, the agreement does not mean that Tengzhong has managed to acquire the legend brand as the transaction is subject to customary closing conditions and regulatory approvals or review by government agencies in the U.S. and China.
On June 2 GM and Tengzhong signed the initial agreement on purchase of Hummer, but this deal raised much doubt in China for Hummer vehicles have too high energy consumption. Many analysts indicated that Chinese Commerce Department should not say ok to this deal because it is against the industrial policies.
Tengzhong, an unknown private enterprise in Sichuan province, is oppugned that it is not strong enough to buy so famous a brand.
However, Tengzhong and GM ignored those criticisms and finalized the agreement.
Under the terms of the agreement, Tengzhong will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The Chinese company will also assume the existing dealer agreements relating to HUMMER's dealership network.
Financial terms of the agreement were not disclosed. Some reports said the price of this purchase is about 150 million dollars, but it was not confirmed by Taylor."After we get approved by Chinese and U.S. governments, we will disclose and publish the information," said Taylor.
According to the agreement, Hummer would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T and AM General' s Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one year extension until June 2012. As to what will happen to new Hummer after June 2012, Mr. Taylor told Xinhua that the two companies will consider the sales of China and U.S. markets before deciding the next step. That is to extend agreement of contracting vehicle manufacturing, key components and business services from GM, or build a plant in China to manufacture and assemble Hummer products, or some else plan.
