GM not to talk with China regulators on Hummer

Shanghai, June 30 (Gasgoo.com) Tengzhong will begin talking with Chinese regulators this week to seek approval for its acquisition of General Motors' Hummer brand by September, but GM will not participate in the talks with China's government over this deal, the Oriental Morning Post reported today.

A spokesman from GM China told reporters that Tengzhong's acquisition of Hummer needs the regulatory approval and it is the business of the Chinese buyer to talk with its government's regulators for the approval of the Hummer deal, so GM will not get involved in the talks. The Hummer deal is still under discussion.

Sichuan Tengzhong Heavy Industrial Machinery, a little-known Chinese machinery maker, raised eyebrows in early June when it unveiled a tentative plan to take over Hummer from GM. Doubts about whether the deal would get Beijing's approval have been swirling as many believe Tengzhong lacks the experience and expertise in auto-making.

The gas-guzzling nature of the U.S. sport utility vehicle was also cited by state media as reasons for expected opposition from the National Development and Reform Commission (NDRC), the country's top economic planner, which has urged carmakers to develop eco-friendly, fuel-efficient vehicles.

The Ministry of Commerce, which also scrutinizes all major cross-boarder investment deals by Chinese companies, has sounded a more positive note, saying Tengzhong's move was normal for a company seeking to take advantage of the global downturn.

A Tengzhong representative said the company had been cooperating with Chinese regulators so as to get the approvals done, but refused to disclose more information about the approving process. 

A foreign trade official of Sichuan province said he hadn't heard of any progress regarding the commerce ministry's approval of Tengzhong's acquisition plan.

However, an industry insider said the regulatory approval process is unlikely to start until Tengzhong and GM have finalized the details of their Hummer deal.