Following last week’s surprise announcement that Sichuan Tengzhong Heavy Industrial Machinery and GM had reached an agreement, analysts and Chinese media were buzzing with talk that the two companies might have jumped the gun.

Reuters newsagency says the pitfalls range from regulatory to financing issues.

GM said a day after its bankruptcy filing that it did not expect any regulatory scrutiny from the US government on the deal, part of its attempt to restore profits by focusing on four core brands: Buick, GMC, Cadillac and Chevrolet.

According to Reuters many China watchers say that resistance could actually come from China itself, as Beijing pushes for development of more energy-efficient technologies that go contrary to Hummer’s lineup of big SUVs.

As the world’s second-largest energy user, China is trying to encourage its citizens and industry to be more fuel efficient to lower its energy bill and improve its environment.

The Hummer deal may also not get government approval as Beijing is not encouraging its carmakers to make foreign acquisitions, the official Shanghai Securities News reported, citing people with knowledge of the matter.

“Some people may have views and speculation but the Chinese government has a process that we respect,” the Tengzhong official said.

“We have only just signed an MoU (Memorandum of Understanding), but as we develop our proposals with GM and Hummer we will continue to work with the appropriate authorities.”

Some analysts said Chinese leaders may also be reluctant to let a company with no experience running an overseas operation take on such a high profile and risky acquisition.

“Obviously, Tengzhong is not a well-established company, and its business doesn’t fit well with Hummer, so the deal looks tricky,” said Jeffery Wang, Shanghai-based managing director of investment bank Business Development Asia.

“Apart from that, buying Hummer should be a poor business decision in the long run, as … I don’t think Tengzhong has the ability or resources to turn the business around. … I don’t think any banks would be willing to fund the acquisition by a company without a solid background.”

Tengzhong was in advanced talks with banks, a spokeswoman from Tengzhong told Reuters.

“However, as you would appreciate, the funding can’t be finalized prior to a definitive agreement being signed,” she said.

Little is know about Tengzhong, which is based in the Chinese province of Sichuan, other than it makes special-use vehicles, highway and bridge structural components, construction machinery and energy equipment.

Tengzhong was formed in 2005 through a series of mergers and, according to its Web site, has 4800 employees.

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Specializing in heavy industrial and construction machinery, Tengzhong is based in the Schuan province and should have the deal wrapped up by the third quarter of this year.

Although the exact details and amount of money changing hands with regards to the deal are still secret, Credit Suisse is representing Tengzhong whilst America’s Citi bank is acting as financial advisor to GM.

Hummer’s 150 US dealers are expected to survive, yet with its unbundling from the GM stable, new manufacturing facilities will be needed, with the Shreveport, Louisiana plant (responsible for H3 and H3T) still on contact until the end of next year.

GM’s South African manufacturing facility in Port Elizabeth, which built right-hand drive H3s, is in the process of shutting down Hummer production.

AM General’s Mishawaka plant, located in Indiana, faces an uncertain future as it produces the oversized H2 Hummer derivative.

Although US workers will be glad the brand’s core management and dealership network remains, Oriental analysts are at a loss trying to understand the value of the deal. Tengzhong has no experience in the car industry and Hummer is a poisoned chalice of sorts in a world turning away from brash, inefficient, SUV vehicles.

One of the deal sweeteners is a long-term GM supplier agreement for Tengzhong, which could perhaps offset a loss-making Hummer purchase against high revenue supply contracts.

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The suggestion comes as Patrick prepares to unveil a fuller version of his much-awaited transportation plan on Friday. While he would not release details today, Patrick said at a Greater Boston Chamber of Commerce appearance that any gas tax increase would be coupled with a freeze on toll rates.

Environmentalists applauded the registration proposal, saying it would encourage people to buy smaller and more fuel-efficient cars, which are increasingly seen as key to curbing global warming. Similar proposals have been proposed in Massachusetts since at least 2001, but without the prominent backing of a sitting governor.

“The social costs of larger vehicles include not only the additional pollution, but also higher crash risks to other vehicles,” said Representative William Brownsberger, a Belmont Democrat who is cosponsoring two bills in the Legislature that would penalize expensive and heavy cars with higher taxes or fees.

But opponents say such fees could penalize families and small businesses who need big cars or trucks and already pay higher fuel prices. And at least one influential player in the transportation debate worries that adding an environmental component to the debate could complicate it, and ultimately delay important plans to fix the state’s broken road and public transit system.

“There’s painful steps that need to be taken to fix our transportation system,” said Stephen J. Silveira, a lobbyist who chaired the Massachusetts Transportation Finance Commission. “Once you bring the environmental aspect into them, you add a whole other layer of debate which makes this harder to get to at the end of the day. And this is hard enough.”

Patrick said today that his administration is looking at the Registry of Motor Vehicles fee structure to create “differential fees based on the efficiency of the vehicle or the emissions of the vehicle.”

“Big gas guzzlers will pay more for their registration,” he added. “Plug-in hybrids would pay less and you’d have a range, that kind of thing.”

Patrick’s office declined to elaborate on the proposal or say whether it would appear as part of his overall transportation plan. RMV spokeswoman Ann Dufresne said state transportation officials have been discussing a gas guzzler fee program, “but I think they’re still trying to flesh that out now.”

Patrick said today that he was continuing to look at raising the state gas tax, but did not commit to it. When asked about it during the Chamber event, he threw the question back to the audience, asking by a show of hands whether the crowd favored a gas tax increase or a toll hike. The crowd chose the gas tax, which has generally been a more popular proposal in the business community.

But Patrick cautioned that even if lawmakers raise the gas tax rate, the state would probably collect less money in the future as drivers buy more fuel-efficient cars and need less gas. Because of that, he is also considering a replacement that would charge drivers a fee for every mile they drive.

That’s another reason environmentalists support the Hummer tax. If the gas tax is eventually phased out, a new fee would keep the pressure on consumers to buy more fuel-efficient cars.

“It allows for technology to evolve every year because it’s always taxing the most polluting and it’s always incentivizing the most efficient,” said Matt Elliott, a clean energy advocate for Environment New Jersey, where the idea is also being debated.

The federal government already has a gas guzzler tax on new cars, passed in 1978. But sport utility vehicles and trucks are exempt, so it affects mostly high-performance luxury vehicles such as Aston Martins and Lamborghinis that have high costs and very poor mileage. Any car that gets more than 22.5 miles per gallon — the vast majority of sedans and coupes — is exempt.

A state fee on gas guzzlers that includes SUVs and gives rebates to drivers of plug-in and other high mileage cars has been proposed in other states, including California, but has yet to pass, according to Charles Territo, spokesman for the Alliance of Automobile Manufacturers, which represent 11 car companies, including the big three American carmakers. Territo warns of unintended consequences on families and small businesses and points out that low-mileage cars are already priced below big cars in most cases.

“Consumers that have these vehicles already pay more,” said Territo, who said his group would oppose such a plan in Massachusetts.

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But contrary to the stereotype of the aggressive sport utility vehicle driver, the report by ISO Quality Planning of San Francisco also found that drivers of Chevrolet Suburbans and Tahoes, big SUVs that share structural and mechanical basics with the H2, are among the least likely to get tickets for moving violations, based on a study of tickets issued nationwide in a 12-month period ended last year by drivers of more than 1.7 million vehicles.

Why the difference? Quality Planning executives can only guess. “The sense of power that Hummer drivers derive from their vehicle may be directly correlated with the number of violations they incur,” president Raj Bhat said in statement. “Or perhaps Hummer drivers, by virtue of their driving position, are less likely to notice road hazards, signs, pedestrians or other drivers.”

On Long Island, homebuilder and renovator Steve Nemiroff of Roslyn Heights said yesterday he has never been ticketed for a moving violation in 163,000 miles of driving the 2003 H2 he bought from North Bay Cadillac Hummer in Great Neck. And he said he does feel safe behind the wheel. “No matter what the weather or where I am,” he said, “I never worry about me getting hurt.”

Quality Planning said other vehicles whose drivers attract above-average numbers of tickets are those that appeal to young people, especially the Toyota/Scion xA, xB and tC; and at least two that appeal to auto enthusiasts, the Mercedes-Benz CLK63 AMG and CLS63 AMG.

Quality Planning’s survey isn’t the first to single out the drivers of Hummers; the Highway Loss Data Institute, a suburban Virginia-based group affiliated with the Insurance Institute for Highway Safety, says on its Web site that H3s have a “substantially worse than average,” rate of claims for property damage, though not for other types of claims.

The institute says the larger Hummer H2 has a substantially worse-than-average record for property damage and also for bodily injury and even fire and theft claims.

Drivers of these vehicles get the most tickets: *

Hummer H2, H3
Scion tC
Scion xB
Mercedes CLK63AMG
Toyota Solara Coupe
Mercedes CLS63AMG
Scion xA
Subaru Outback
Audi A4
Toyota Matrix

Drivers of these get the least:

Jaguar XJ
Chevrolet Suburban
Chevrolet Tahoe
Chevrolet C/K 2500/3500 pickup
Buick Park Avenue
Mazda 6
Buick Ranier SUV
Oldsmobile Silhouette minivan
Buick Lucerne
GMC Sierra C1500 pickup

*In order, based on percent of average rate per 100,000 miles driven

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Wagoner will also be announcing that GM has begun a strategic review of the HUMMER brand. We contacted GM spokesperson Joanne Krell this morning who told us that the review has just begun and there is no time frame for a decision. “The HUMMER brand is a great brand and we’re probably not maximizing it to its fullest. Perhaps somebody else would have that opportunity.” All options are being considered including “ramping up the portfolio,” shutting the brand down or “selling it in whole or in part.” At this point, GM has not had any discussions with other manufacturers about the possibility of a sale, which won’t happen until the review is completed.

On the positive side of things, the board of directors has approved production of a new small Delta platform car (the eventual Cobalt replacement) at the Lordstown, OH assembly plant next year. The Chevrolet Volt has also been approved for production in 2010 at the Detroit-Hamtramck assembly plant.

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Hummer H8 .com
http://www.hummerh8.com/

The Hummer mentality has been taken to a whole new level, so check it out for a good laugh!