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The sale of the Hummer brand to a widely unknown maker of cement mixers and bridge pontoons, located in China’s wild west of Chengdu, left many questions open.
Like, how much did they pay?
“Sichuan Tengzhong Heavy Industrial Machinery Co, a machinery company based in western China, will spend 550 million yuan ($80.5 million) to buy the Hummer brand,” reports Gasgoo. According to GM’s bankruptcy files, Hummer’s value was around $500 million.
And will they really, seriously continue making Hummers in Shreveport, Louisiana?
Tengzhong will “invest another 450 million yuan ($66 million) to set up a new Hummer production line in Chengdu,” says Gasgoo. Take that as a no.
20 Comments on “Hummer to China. Any Questions?...”
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“Honey, I found someone to buy the pig! They thought it was a silk purse!”
i have a feeling the Chinese unknowns are buying Hummer at a relatively cheap price (relative as i wouldn’t pay 1$ for it) just to get a pied-a-terre in the US. possibly to build cement mixers and sell them for peanuts in the local and regional market. and build a line in China to build H2’s but i doubt they will be successful as it’s too big for most Chinese roads.
I think the Chinese are long term thinkers.
This gives them a toe in the water for minimal investment, a known brand name and some dealers with experience. I really believe 10 yrs from now they are going to be a significant presence in the NA commercial and passenger markets.
To a NA MBA-type this probably looks like a bad deal based on how much money it can make in the next 18 months. Their view is much longer.
yes that is the thing
GM/Ford/Chrysler are thinking very short term… “let me survive until middle 2010 when we pray the economy has turned around”
in 10 years China will be very very very significant playing in both passenger cars and commercials
you think Hyundai and Kia has a quick rise… the Chinese are waiting until the dust has settled to see who has survived carmageddon/carpocalyse and then they will strike like the proverbial crouching tiger
it’ll be full circle – selling westerners chinese cars using chinese credit
Ronman:
Too big for most Chinese roads? When was the last time you were in China?
When the Chinese build, they build big. This is what I see when I look out of the window (Courtesy Google Maps)
81 M$? Wow. The B&B should have pooled our penny jars and out bid them. Is there “no backs” in the bill of sale?
with the plants, comes the tooling, the technology, the quality (relative) production methods, world-class powertrains & chassis. Regardless of what one things of the Hummers, the GM V8’s, transmissions, etc. that underpin their large SUV’s are proven to be at the top of their class. The chassis is well regarded, also. A Chinese company bought all of this for $80 million. If used wisely, that could indeed be an incredible investment. Maybe they’ll transfer tooling, technology, production methods, etc. and make stout commercial and/or military vehicles in Chengdu with proven mechanicals. I doubt this was simply so they could try and sell H2’s in China.
jerseydevil :
It’s a bit foolish to simply assume the Chinese are being stupid here.
Sichuan Tengzhong Heavy Industrial Machinery got themselves a heck of a bargain.
I bet they’ll make a go of it, where GM and the UAW has failed.
They frickin’ stole it. $80 million, and now, “Sichuan Tengzhong Heavy Industrial Machinery Co” owns a household name. They can change the name of their company to “Hummer.”
Seriously, what’s an advertising campaign cost? For $80 million, they could close everything and still be “Hummer.” Let’s be honest guys, how much would you pay for the rights to OWN the word for (wink-wink, nudge nudge) … Know what I mean?
(apologies to Eric Idle).
I’m serious by the way. They stole it.
by the same token no-one wanted the Viper line for $10 mil.? anyone? anyone? bueller?
one of the fastest cars around the ‘ring?
This is a toe in the water for the PLA and the government. It would not be the first time a shell company was used to get into an industry. The Chinese government knows how sensitive auto manufacturing is and previous attempts to get into foreign car markets were rebuffed. Locally designed and built cars failed crash tests, were slammed by critics, and had funny names.
10 years from now a third of cars on the US road will be Chinese built. No doubt in my mind. The lower costs and lack of regulations coupled with virtually no union or worker representation will complete this.
In the end a car can be built cheaply, just not in the democrat controlled regions and not for much longer in the rest of the country.
As many said above: the Chinese think long-term.
“Why would anyone want this junk?” – yes this is exactly the kind of attitude they want you to have. :)
Oh yes, I can definitely see North Americans wanting to drive a car built with slave labor.
Then again, they gleefully bargain shop for similar items ($29 quilts, $19 jeans, pretty much anything from China-mart, etc), so perhaps I’m simply being too naive.
Don’t auto factories usually cost billions to build and tool for making a new model? How can this company build and tool a plant for $80 million?
BS what exactly did they get for their $80 mil. I know they got the HUMMER trademarked name and I guess dealer franchises will be theirs but did they get anything other then that. Any production lines, tooling for the H2 or H3, rights to use of GM drivetrains, any IP at all?
For what they paid or are going to pay they got a great deal even if it was only for the name, but did they get anything else to sweeten the deal.
The firesale is at the brand end not on the showrooms. I wonder what they will take for Pontiac considering they are just tossing that one in the trash.
Question is , what do they get?
Chassis, power train and most other components come from GM plants or suppliers. Very few proprietary components other then body and trim.
They are ASSEMBLY plants that manufacture little or nothing.
That price is about what old GM lost in 1 day.
Whether they got a bargain or not, I’m interested in how desperate GM was to sell a brand they supposedly valued at $500 million for only $80 million – an 84% discount off a fictional value.
“Selling price” is when you reach equilibrium between a willing buyer and a willing seller. Those of you who think Hummer was a steal at $80 million should have bid higher.
I’m guessing there weren’t many suitors; hence, the true value of Hummer is $80 million.
One wonders about the alleged value of the rest of the company’s assets.
Hummer is known as an upscale American luxury name in China, not unlike Coach bags or whatever.
Maybe they’ll transfer tooling, technology, production methods, etc. and make stout commercial and/or military vehicles in Chengdu with proven mechanicals. I doubt this was simply so they could try and sell H2’s in China.
There are very few real industrial secrets. The chinese already make decent H1’s.
I think Hippo is correct there isn’t much in Hummer factories, but the brand is worth something and probably what they were mainly going for along with a bit of tech/marketing expertise here and there. (and the cars themselves of course).