2007 Chevrolet Tahoe: Opting for Protection
The deal between GM and Tengzhong over Hummer seems to be moving along, but every time someone talks about the transaction, you also get a press story about government approvals, or the lack thereof.
Just today, China Daily had this:
China’s Ministry of Commerce said Tuesday it has not received an application from Sichuan Tengzhong Heavy Industrial Machinery Co over their Hummer deal.
Ministry spokesman Yao Jian made the remarks at a press conference responding to media reports.
The MOC has had to respond to this same question several times now. They’re probably getting rather frustrated. On the other hand, I originally assumed that MOC was the main approval authority on a deal like this as well. My earlier post(s) on this topic said as much, I believe.
Wrong. Wrong. Wrong.
Here’s a hint from the same China Daily article, although it doesn’t exactly clear up the issue:
As far as he knew, Yao said, an application from Sichuan was submitted to “another” central government department, but not the Ministry of Commerce.
Sources with the National Development and Reform Commission (NDRC) told Xinhua on Aug 24 it was beyond their job scope to ratify Tengzhong’s Hummer deal as the application said Tengzhong only planned to purchase Hummer’s brand instead of assets or shares.
It should belong to service trade and thus was beyond the NDRC’s job scope, the sources said.
The NDRC had replied to the Sichuan Development and Reform Commission about Tengzhong’s Hummer deal, the sources said.
OK. From my (updated) understanding, the NDRC would be the primary authority in charge of a “normal” sort of outward investment deal. A few possibilities based on the amount of money involved: 1) approval from NDRC; approval from NDRC with notification to State Council; or 3) approval from provincial level NDRC.
So the guy from MOC was saying, “Hey, don’t look at us. We’re not in charge of that.” Sounds right. He also pointed to another “central government department,” but that doesn’t tell us much. The article I read was in English (a Chinese version would probably have told me at least if the department in question was an “Agency” like the MOC or a department directly under the State Council – different terms in Chinese).
Since NDRC told Xinhua that they were not responsible based on the type of deal, I’m thinking it was indeed the NDRC that Tengzhong first talked to (apparently provincial level, which then consulted with the State-level NDRC). Apparently NDRC, if you will pardon the American football reference, has punted.
Moreover, from what I understand, Tengzhong is neither a listed company nor a State-owned Enterprise, so I’m thinking neither CSRC (securities regulator) nor SASAC (State-owned enterprises and assets) would be in the picture. So how to approach this deal?
Here’s the problem. I haven’t heard specifics on this deal so far. All I get so far is that Tengzhong wants to buy the “brand” of Hummer, which may or may not include additional IP. I’m thinking designs or patents, and one would think some kind of know-how/trade secrets. Apparently facilities and equipment are not part of the deal.
So this is not your classic acquisition. If GM is transferring Hummer’s global IP portfolio to Tengzhong, though, then it is more than just your typical China-IP assignment to a Chinese manufacturer.
What do we call something like this with respect to Chinese outward investment regulation? I have no freakin’ idea.
Somewhere along the line, Tengzhong is going to have to pay GM for this IP. In order to get that money offshore, they will need the approval of the foreign exchange authorities (i.e. SAFE). Before SAFE approves the forex, I would assume that they will require Tengzhong to obtain approval from the appropriate government authority.
If no one from the government wants to take responsibility for this deal, then this could be interesting. I can’t wait to see what will happen next. Either way, don’t worry about the confusing press accounts. No one seems to know what’s going on.
By the way, this is all quite murky, and the above is idle speculation on my part. If anyone has additional information on who might be in charge, feel free to comment or drop me an email. Inquiring minds wish to know.
UPDATE: Apparently a formal agreement was signed last Friday in Detroit, pending US and China government approvals.
Strangely, according to some accounts, the deal would include several thousand GM employees, who would remain in the US, but not core Hummer technology, which might only be licensed from GM. Vehicle assembly would remain in the US for the time being.
Bizarre.
Tags: China Business & Economy, China Law
This entry was posted
on Tuesday, November 17th, 2009 at 10:24 pm and is filed under China Business & Economy, China Law.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
DETROIT — General Motors Co. today started production of the 2010 Hummer H3 SUV and H3T pickup for the United States at Shreveport, La.
Production comes as some dealerships are out of the best-selling vehicle in Hummer's small lineup.
Inventory “is very low,” said Hummer spokesman Nick Richards.
As of Nov. 1, Hummer had 1,138 vehicles on the ground in the United States, according to the Automotive News Data Center.
“We're hungry for Hummer product,” said John Sutliff, president of Sutliff Cadillac, Hummer and Saab in Mechanicsburg, Pa. He has two 2009 H3s, six H3Ts and no H2 SUVs or 2010 models. Sutliff said his inventory constitutes less than a 30-day supply.
Hummer's Richards said the 2010 H3s should start arriving at dealerships by early December.
The holdup on production “wasn't our decision,” he said. “It was based on everything going on around” GM's sale of Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery Co.
“If the deal didn't happen, the company didn't want to be stuck with 2010 model year vehicles,” Richards said.
Through October, Hummer's sales are down 64 percent to 8,500 vehicles.
GM built 480 2010 H3 and H3T vehicles in September and October for Mexico and Canada, Richards said.
The 2010 H3 and H3T have some new features. The Alpha V-8 versions of both now offer E-85 flex-fuel capability. There are also three new colors: red rock metallic, silver stone metallic and canyon metallic.
The H3 starts at $34,170. The H3T gets a $165 price increase from the 2008 model to $31,695. The H3T Alpha starts at $36,460, down $335 from the 2008 model. All prices include shipping.
nba jersey,
discount nba jerseys
The Chevrolet Tahoe has been configured by Chevrolet keeping safety factors in mind. The vehicle is designed in such a manner to provide safety and to perform well even at the worst stage of a crash. The Chevrolet comes in three elegant models which are named as LT, LS, and LTZ.
The 2007 Chevrolet Tahoe, which falls under the category of full size sport efficacy vehicles, is one among the creations of the General Motors. The internal layout of the automobile is symmetrical and appealing. This model of Chevrolet is far better than those which were designed earlier. Some of the features like the tough plastic framing controls are replaced by unified and modern construction to get the European touch. Premium touch surface along with redefined style are the attractive factors of the interiors. The vehicles gives an all round protection from winds and the hubbub from outside, has offered comfort traveling, and rattle free experience for its passengers. As per the company's policy, the addition of some exclusive features well explains the efforts invested for safety measures while accidents. The ABS brakes, known as the anti-lock brake systems are designed to maintain steering control. This system aids in wheel lock when the vehicle travels in slick surfaces. The additional feature Electronic Stability Control System also provides balance in these surfaces. When the control system senses zero response from the steering input, then it implements brake pressure and engine torque to bring back the stability. Some of the safety features which are included are the latch system, daylight running lamps, side impact and head-curtain side bags, Onstar system, lower anchors, and front air bags.
Some of the elite features include luggage rack with center rails, bumpers, heated mirrors, halogen fog lamps, black door handles, power doors, cargo mats, aluminum wheels, a cruise control, tilt wheel steering column, climate controls, remote keyless entry, an electric defogger, sun proof, theft-deterrent system, temperature control sun visors and tilt wheel steering column among many others. One thing which has to be taken in to consideration is the maintenance of the Chevrolet Tahoe. To perform well and for its longevity, the Chevrolet Tahoe has to been maintained fighting fit. The maintenance as such will be the replacement of the worn out parts. If this is not done periodically, then the Chevrolet Tahoe will prove to be dangerous for its passengers and drivers. Good and quality car parts are available at Auto Parts Discount store. It is one among the leading online stores, wherein customers can get high quality parts for reasonable prices.
