GM's Hummer deal with China threatened

Beijing regulators fail to approve deal as deadline draws closer

General Motors' deal to sell its Hummer brand to a Chinese company appeared on the brink of collapse last night, as a deadline approached without approval from regulators in Beijing.

Sichuan Tengzhong Heavy Industrial Machinery Corp, a little manufacturing company that has never before built cars, emerged as the surprise bidder for Hummer after GM went into bankruptcy last summer. But Hummer's reputation for building gas guzzlers conflicts with China's environmental goals and regulators were last night said to have blocked the deal.

Both sides were scrambling to find new ways to complete the deal, including arranging a transaction using an offshore investment company, but it appeared that the sale could now be months away. There was no public comment from the companies involved.

GM, which owns Chevrolet and GMC, has been selling or shutting down many of its less profitable brands, as part of a restructuring effort. It is now majority-owned by the US and Canadian governments, following a bailout last year, and has been accelerating plans to repay taxpayer loans. The collapse of the Hummer sale, coming after GM reversed its decision to sell Vauxhall and Opel in Europe, would further alter its future size and shape.

Tengzhong would still need Chinese approval to make and sell cars in the country, so even an offshore transaction is uncertain, although regulatory sources told Bloomberg they would not block a transaction.

The sale of Hummer to Tengzhong has been plagued with controversy since the beginning, not least because sceptics questioned whether a company better known for bridge parts had the expertise to run a car maker. It said it intended to keep Hummer's executive team in their jobs.

Within weeks of the announcement last June, China's National Development and Reform Commission (NDRC) expressed concern, but GM executives held out hope that its lobbying would succeed. The country has a complicated and fragmented system to regulate overseas investments, and the Ministry of Commerce had sounded a more positive note about the deal. Tengzhong had promised to build a more fuel-efficient Hummer to assuage environmental concerns.

The financial terms of the tentative deal have never been disclosed, but analysts had hoped that Hummer could fetch $100m for GM. An original deadline of the end of January for closing the deal had to be extended by a month as talks with regulators dragged on.

Saab is sold off at last

It has taken more than a year – and endless U-turns and dead-ends – but a deal to save Sweden's Saab was finally closed last night.

General Motors warned last year that it could no longer continue subsidising losses at its Swedish subsidiary, and its rejection of an offer to buy Saab from Holland's Spyker Cars seemed to deal the fate of the business. Yesterday, however, having had a second offer for Saab accepted by GM last month, Spyker finally signed on the dotted line, paying $74m for the company.

The sale safeguards the jobs of more than 3,400 workers in Saab factories and dealerships. The business has now exited the liquidation into which it was placed by GM as it sought to wind down the operation.

Jan Ake Jonsson, Saab's chief executive, will run the company, which Spyker insists can be returned to profit by 2012 – with the help of $1bn in loans and funding from the European Investment Bank and GM itself. Saab sold just 94,000 cars in 2008, and it is thought that figure fell sharply last year.

Start your day with The Independent, sign up for daily news emails
News
Courtney Love has admitted using heroin while pregnant with Frances Bean Cobain, her daughter with Kurt Cobain
people
Sport
Murray celebrates reaching the final
tennis
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness