Last August The Dila View about the potential purchase of Hummer by Tengzhong (a privately held heavy machinery company based in Sichuan province) was that the deal was a boon for China, who would get Hummer’s legacy technology at a bargain-basement price for application in the country-wide infrastructure projects China has on the go.

We said, “Chinese regulators, who must OK the deal before it is ratified, are about as likely to reject it as Americans are likely to spend their money right now.”

We were wrong: Government regulators were more conservative than we thought, on two counts:

First: “Industry experts and sources with knowledge of the situation told Reuters Tengzhong had faced questions in China over how a little-known heavy machinery maker with no international experience could buy and turn around a struggling foreign brand like Hummer,” according to a recent Reuters report.

Second: “Many also said that regulators might balk at letting a Chinese firm acquire a U.S. brand known for making gas-guzzling vehicles at a time when China was emphasizing the development of more environmentally friendly technologies.”

(If you voted in the poll about Hummer’s fate last August, you can see how you did by looking back at the survey results.)

The death of the sale will mean roughly 3000 Hummer employees will be out of work by summer 2010.

© 2009 John Dila

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