When we last left GM, they were pursuing buyers for Hummer and Saturn (see “GM in talks to seel Hummer to China “” the second mistake by those clueless new owners?“). So of course, the smaller-car brand dies, but the 7,000-pound gas guzzlers live. WashPost reports:
General Motors has reached an agreement to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery….
It recently announced that it would wind down the Saturn brand.
The price for Hummer was not disclosed, but according to sources familiar with the negotiations, it was $150 million, far less than the $500 million price once envisioned.
Seriously, $150 million? As I wrote back in June:
Less than $500 million? That’s a rounding error in the cash giveaways to the auto industry these days. Why couldn’t we just swallow that cost to forever remove from the planet this unsustainable blight? Who are these clueless new owners of GM anyway? Oh. Never mind!
But WashPost buried the lede:
Tengzhong’s quest to acquire Hummer has been seen by many as a test of China’s commitment to reining in emissions of greenhouse gases. Some observers expect China’s regulators to bar the acquisition.
The Hummer sale story isn’t really news — but if Chinese regulators actually stopped the acquisition, that would be quite a story, though perhaps not an utter shocker (see “China begins transition to a clean-energy economy“).
I wrote back in June:
The big execs at GM always viewed Saturn as a skunk works, as an effort to show that the “GM way” doesn’t work, so they did everything possible to kill it…. When I wanted to buy an American car in the mid-1990s, I settled on a Saturn, which was a terrific car for me for 10 years. Had GM not abandoned at the start of the Bush administration the hybrid vehicle development program the Clinton administration started with them in the early 1990s, Saturn might well have had a good hybrid by the time I was looking for a new car. But they didn’t. And so I bought a Toyota Prius….
As for Hummer, I suppose you could argue that if China plans to build obscenely big gas guzzlers, they could do so on their own with or without Hummer. And you can certainly argue that once peak oil kicks in big-time over the next 5 to 10 years, and oil prices shoot over $5 a gallon, nobody is going to be terribly interested in Hummers, which suggests GM/Obama/you-and-I are smart [not dumb?] to get some money for it.
Perhaps, but as one of the owners of GM, I’d very much like to know what this “less than $500 million” price was. If it was a lot less, then this sale is unjustifiable on any grounds.
I think the whole brand should have been shuttered. And if the Chinese wanted to spend many billions of dollars building their own production capacity for gas guzzlers, let them. But that’s no reason for us to act as Dr. Kevorkian in this unsustainably suicidal behavior. My buyer’s remorse grows!
What do you think?
This sale is unjustifiable at $150 million. Let’s hope the Chinese government is smarter than ours.
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