Business Maverick

Chinese to grab slice of GM with Hummer buyout

By Branko Brkic 9 October 2009

The maker of Cadillac and Chevrolet is near an agreement to sell its Hummer SUV business to China's Sichuan Tengzhong Heavy Industrial Machinery Co. for a measly $150-million. That is is considerably below the $500 million that GM estimated in its bankruptcy filings.

Battered by fallout from the global market crash, and the unwieldy size of its global networks, General Motors is looking to sell brands to keep it afloat after emerging from bankruptcy. The fact that a Chinese buyer is first in line for the Hummer prize speaks volumes for China now being the engine of world growth; compared with the developed economies of the US, Japan and Europe, it handled the worst financial crisis since the Great Depression with enviable ease.

It comes as no surprise that GM sold a record number of cars in China last month, and that sales for the first nine months of the year rose 55%, to 1.3-million vehicles. Earlier in 2009, China overtook the US as the world’s biggest car market, making it a battleground for vehicle manufacturers who have watched demand in primary European and US markets plunge. GM’s market share is 13% in China, with Volkswagen in top spot, and, together with its Chinese partners sold a total of 181,148 vehicles in September. First-time buyers in China’s smaller cities were the driving force behind this surge in sales, and China has also helped car sales by cutting taxes and subsidising drivers to shift to greener, more fuel-efficient cars..

In another sign of the desperate straits that GM has found itself in, the man who headed up Cadillac’s revival as a luxury brand is leaving the company. GM said in a statement that it is taking aggressive actions and moving quickly to transform its culture into one that is truly customer focused. The parting of ways with Mark R. LaNeve, most recently GM’s vice president of sales in the US, shows just how aggressive GM thinks it needs to be. Tough times indeed.

Read more: The Wall Street Journal, Guardian, The New York Times


In other news...

South Africa is in a very real battle. A political fight where terms such as truth and democracy can seem more of a suggestion as opposed to a necessity.

On one side of the battle are those openly willing to undermine the sovereignty of a democratic society, completely disregarding the weight and power of the oaths declared when they took office. If their mission was to decrease society’s trust in government - mission accomplished.

And on the other side are those who believe in the ethos of a country whose constitution was once declared the most progressive in the world. The hope that truth, justice and accountability in politics, business and society is not simply fairy tale dust sprinkled in great electoral speeches; but rather a cause that needs to be intentionally acted upon every day.

However, it would be an offensive oversight not to acknowledge that right there on the front lines, alongside whistleblowers and civil society, stand the journalists. Armed with only their determination to inform society and defend the truth, caught in the crossfire of shots fired from both sides.

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