The government of the Peopleís Republic of China must okay any overseas acquisition worth $100M or more. It can't wait to get cracking on Hummer.
Beijing isnít going to approve the deal because it wants gas-guzzling H3s clogging up the streets of its cities and spewing pollution into the atmosphere. The country already faces massive environmental challenges. The Hummer deal offers China priceless PR connected to the saving of an American icon and, more importantly, 3,000 U.S. jobs.
The buyer promises to keep U.S. management and Hummerís more than 150 dealerships intact. Thatís a sharp contrast to the dealer bloodbath triggered by the Chapter 11 filings of General Motors and Chrysler that have hammered small town USA.
Icing on the cake: Sichuan Tengzhong plans to shift additional production of the H3 from a plant in South Africa to Shreveport, La. When was the last time you heard of a company moving production from a low-cost place like South Africa to the U.S.?
After wiping out American industry after industry with a deluge of cheap goods, China can now boast of rescuing high-paying manufacturing jobs in the U.S. Perhaps, Sichuan Tengzhong will add to the fun by building factories in the U.S. to produce its line of heavy machinery and construction gear. Watch out, Caterpillar.
The U.S. Treasury has counted on China to fund our deficit for quite some time. Corporate America now looks for the same.