By Frank Ahrens
Washington Post Staff Writer
Wednesday, June 3, 2009
With yesterday's announcement that General Motors will sell its Hummer brand to a Chinese heavy-equipment manufacturer, a symbol of fading American excess migrates to a nation eager to pick up the mantle.
China's Sichuan Tengzhong Heavy Industrial Machinery Company has agreed to buy the brand from GM, the two companies said yesterday, for less than $500 million, according to a source familiar with the transaction, well off its peak value of a decade ago.
The 7,000-pound gas guzzlers are rolling out of an environment that became increasingly hostile toward them and into one whose go-go industrialism and lack of regard for the environment -- until very recently -- resembled that found in the United States a century ago.
But the Hummer will not be embraced by everyone in China. The nation has a tiny but budding green movement that already has complained about its middle-class ostentatiousness and growing carbon footprint.
GM entered bankruptcy Monday with the promise of $30 billion in government assistance. As part of its downsizing, GM is trying to sell off brands that no longer fit the company's -- and the White House's -- vision of its future. Hummer is the first to go. Saab has three bidders and 16 parties have expressed interest in Saturn, GM said yesterday.
All vehicles have detractors, but it's hard to imagine another that inspires such vitriol as the Hummer.
"It became sort of a symbol of the liberal left and environmentalists of everything that was horrible about the auto industry," David Cole, chairman of the Center for Automotive Research, said yesterday.
In Northwest Washington, in summer 2007, for instance, a Hummer was vandalized outside of its owner's house. Criminals smashed its windshield, slashed its tires and scratched "FOR THE ENVIRON" into the body.
In Chinese, "Hummer" translates to "tough horse."
Even though a Chinese company will own Hummer, they will be manufactured at a Louisiana plant through at least 2011, temporarily safeguarding about 3,000 jobs, the companies said yesterday.
"The Hummer brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing Hummer to innovate and grow in exciting new ways under the leadership and continuity of its current management team," Tengzhong chief executive Yang Yi said.
Tengzhong is based in the manufacturing city of Chengdu, capital of the south-central province of Sichuan. The company is privately owned, but Beijing has final say on all overseas purchases by Chinese companies.
The company makes bridge components, dump trucks, concrete mixers and parts for the oil industry. It recently expanded its oil drilling product line. It does not make autos or SUVs.
China's brand of trade-based totalitarian capitalism has caused a boom in personal wealth and a rise in status-symbol consumerism. For instance, GM's most successful vehicle in China is the Buick, which is seen by some as a sign of personal prosperity.
In China as in the United States, the Hummer has gained a foothold among celebrities and the newly rich.
In 2007, for instance, a wealthy businessman in Liaoning Province assembled a parade of 38 Hummers for his wedding day.
But the backlash has already begun. A province in eastern China may have witnessed its first road rage incident between a Hummer and a pack of little Mazdas in 2007, National Public Radio reported. Some Chinese cities, famous for their air pollution, are advocating low-emission vehicles.
Even though Hummer will be owned by the Chinese, they will not be the primary customer.
"They'll sell them all over the world. It's really a world vehicle," Cole said. "A lot of them right now go to the Middle East," Cole said, where the Hummer's predecessor was designed to roam and where fuel is plentiful. He named Kuwait and Saudi Arabia as top customers.
AM General, a former AMC Jeep division, began manufacturing the first civilian Hummers in 1992, after the Humvee's star turn in the first Persian Gulf War. GM bought Hummer in 1999, when gas prices were low and sales of big SUVs soared.
North American sales of the Hummer line peaked at 75,939 vehicles in 2006, according to Ward's AutoInfoBank data. Hummer sales never topped 1 percent of the U.S. new-vehicle market.
About 14,000 Hummers were sold from January to May 2008. This year, about 5,000 Hummers have been sold.
Yu Yi Han and staff writers Kendra Marr and Peter Whoriskey contributed to this report.