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
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before