Hummer Puts China’s Tengzhong On the Map, Almost

As Sichuan Tengzhong Heavy Industrial Machinery Co. is set to buy Hummer, a General Motors unit that filed for bankruptcy recently, several perspectives have emerged about the gas-guzzling behemoth and the little known machinery company buying it. From Reuters:

Even in the southwest Chinese home base of Sichuan Tengzhong Heavy Industrial Machinery, residents are more familiar with the gas-guzzling Hummer brand that it is looking to buy from bankrupt General Motors (GMGMQ.PK) than with the heavy machinery maker itself.

“I think Hummer is a famous brand,” said Zhang Youyi, an engineer who wasn’t initially sure if Tengzhong was even located in Chengdu, the capital of Sichuan, a farming and industrial powerhouse.

“It would be good news for Chengdu,” said Zhang, referring to recent tragedies that have struck the province — from a mystery bus fire that killed 27, a landslide that buried over 80 people and last year’s earthquake that killed more than 80,000.

The Mail and Guardian offers criticism from Chinese analysts on Tengzhong as a company:

“Tengzhong is just a privately owned company that has no experience in the car industry and Hummer is a niche brand that suits a small group of people,” said Zhu Junyi, an auto analyst with Shanghai Information Centre, a think tank.

Even China’s state-owned media have been quick to point out that Tengzhong, based in south-west China’s Sichuan province, specialises in making machinery to build roads and bridges, as well as equipment for the energy industry.

Tengzhong “has no experience in producing passenger vehicles, adding difficulties for the company to manage the brand,” Xinhua news agency quoted Zuo Xiaolei, an economist with China Galaxy Securities, as saying.

The headline of a recent commentary printed in the English-language Global Times said “China’s Hummer fever should come to a stop.”

Xujun Eberlein, a writer from China living in the states, also wrote about the Chinese people’s reaction to Hummer on her blog:

Yesterday, my sister Maple sent me an email from Shanghai,saying the news that a Sichuan private enterprise is purchasing Hummer sparked a huge reaction in China, even students in her art class kept commenting on it. “‘America is finished,’said one. ‘That [Sichuan] enterprise surely will produce a Hummer brand steam roller,’ said another. et cetera. I don’t know what Hummer’s status is in the mind of Americans; in China it represents the life style of the highest-level bourgeoisie. It seems that, to car lovers, owning a Hummer is like owning the entire world.”

Reactions on the internet are varied. Here are a few views:

From cd.qq.com: For a long time, China’s automobile industry has been under constraints of Western countries’ big brands. Now Tengzgong dares to acquire a big brand, no matter what the result, it shows private enterprises is leading the revitalization of Chinese automobile industry.

Sina.com reruns a Chinanews.com report that says the registered capital of Tengzhong is only 300 million RMB (about US$ 44 million), and some people suspect this whole thing is hype.

A skeptical report from xinhua.net raises the question whether this is a two-man show played by Tengzhong and Hummer.

Randy Cohen from the New York Times also writes about not saving the Hummer, but killing it:

Last Tuesday, one day after General Motors filed for bankruptcy, the automaker announced the sale of its Hummer line to Sichuan Tengzhong Heavy Industrial Machinery Company in China. Instead of selling this massive, ecologically destructive gas guzzler, should G.M. have it sent to the scrap heap? Or do the financial needs of the corporation and the prudent use of taxpayer money — thanks to the G.M. bailout, the American public owns 60 percent of the company — trump other considerations?

Determining what products are too hazardous to market — fen-phen? bite-sized toys? Stinger missiles? — should be a matter of public policy, not a series of moral conundrums posed to individual companies. Nor is it the place of government to micromanage a company’s lawful operations. But it is appropriate for public officials to promote the general welfare; that’s the rationale for the G.M. bailout. The collapse of G.M. provides an opportunity to reconsider transportation policy, including from a moral perspective, an analysis that urges not merely discontinuing the Hummer but significantly reducing our reliance on the private car.

Most disconcerting, cars kill. If you introduced a transportation system by announcing: it’ll kill only 40,000 people a year, it would be unlikely to gain widespread popularity. And that’s just accidents. Cars also kill in slow motion — by polluting the air and thus contributing to respiratory disease and global warming. (Auto emissions also degrade the facades of buildings and bridges, via acid rain and other chemical reactions, at enormous public expense.)

June 9, 2009 1:42 AM
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