The first week of June 2009: Seven days that threaten to change history

Perhaps historians will say that American life changed in the first week of June 2009.

In the summers of 1981 and 1982, Timothy F. Geithner was a student at Peking University but on Monday, June 1, 2009, he was there as the U.S. Treasury Secretary “to explore our common interest in international financial reform.” 1

“China, despite your own manifest challenges as a developing country, you are in an enviably strong position,” Geithner told his audience. But for the United States, “The fallout from these events has been brutally indiscriminant, affecting those with little or no responsibility for the events that now buffet them, as well as on some who played key roles in bringing about our troubles.”

“I believe,” announced Geithner, “that a greater role for China is necessary for China, for the effectiveness of the international financial institutions themselves, and for the world economy. China is already too important to the global economy not to have a full seat at the international table, helping to define the policies that are critical to the effective functioning of the international financial system.”

According to The New York Times, China’s monthly car sales have exceeded those in the U.S. since January, 2009. 2 GM filed for bankruptcy on the same day as Geithner’s speech. 3 This helps explain why, during Geithner’s visit, GM announced on June 2nd a sale of its Hummer brand to China’s Sichuan Tengzhong Heavy Industrial Machinery Co. 4

The price or terms have not been released, but the Shanghai Daily noted that GM had told the bankruptcy court that Hummer’s value was around $500 million. 5

In China, the Hummer is known as “Han Ma”, the “fierce horse.” The $200,000 sales price of a Hummer in China is definitely fierce. 6

One Chinese state-run newspaper described Tengzhong’s purchase of Hummer as a “snake trying to swallow an elephant.” 7 Marketing specialist Wang Yukun described the plan as “childish”. Financial commentator Ye Tan said it was “unpromising”. 8

GM CEO Fritz Henderson explained the reason Hummer was sold to a four-year old Chinese company with no history or experience in automobile production: “The potential buyer Sichuan Tenzhong offered the best overall alternative, and we did not have [a] broad portfolio of other buyers!” 9

China Daily reports “the forces behind Tengzhong’s move may actually be Sichuan Huatong Investment Holding Co. and US-based investment bank Morgan Stanley.” 10 Citigroup was GM’s financial adviser in the Hummer sale. 11

The sale, said a Los Angeles Times columnist, “underscores China’s growing economic might at a time when U.S. industrial prowess is flagging.” 12

Back at the White House, on June 1st, President Obama proclaimed June 2009 to be Lesbian, Gay, Bisexual, and Transgender Pride Month, stating: “At the international level, I have joined efforts at the United Nations to decriminalize homosexuality around the world. Here at home, I continue to support … enhancing hate crimes laws, supporting civil unions and Federal rights for LGBT couples, outlawing discrimination in the workplace, ensuring adoption rights, and ending the existing ‘Don’t Ask, Don’t Tell’ policy ...” 13

On Thursday, June 4th, in Cairo, Egypt, President Obama declared, “I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Islam wherever they appear.” 14

To help the Muslim world, Mr. Obama said, “On science and technology, we will launch a new fund to support technological development in Muslim-majority countries, and to help transfer ideas to the marketplace so they can create more jobs.” 15

On Friday, June 5th, the U.S. Labor Department announced that 345,000 more American jobs were lost in May, pushing the unemployment rate up to a 26-year high of 9.4 percent. 16

And that was the end of the week that changed American life.

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Sharman’s column appears each Tuesday on the editorial page.

1 Speech by Secretary Geithner – “The United States and China, Cooperating for Recovery and Growth,” June 1st, 2009, Peking University - Beijing, China, http://www.treas.gov/press/releases/tg152.htm
2 Goodman, Peter S., “What Would Mao Drive? A Little Red ... Hummer”,
3 “GM Files for Bankruptcy with $215 Billion Debt”, June 02, 2009
http://www.news.com.au/adelaidenow/story/0,27574,25573322-2682,00.html
4 “Who Stands Behind Possible Buyer of Hummer?” June 05, 2009, http://www.tradingmarkets.com/.site/news/Stock%20News/2362300/
5 “Company in Sichuan to Acquire Hummer”,  June 4, 2009
http://english.rednet.cn/c/2009/06/04/1771174.htm (Source: Shanghai Daily)
6 Pierson, David, “Chinese company buys a symbol of American affluence: But Hummer purchase makes little sense, analysts say” June 07, 2009
7 Kurtenbach, Elaine “Reports Question Chinese Hummer Acquisition” AP, Jun 5, 2009‎ http://www.google.com/hostednews/ap/article/ALeqM5hyv5NxsbvX7n7EbxXN4zddjXqb6AD98KE7700
8 Fangfang, Li “Hummer of a challenge for Chinese firm” China Daily June 4, 2009, http://www.chinadaily.com.cn/china/2009-06/04/content_8235629.htm
9 GM CEO Tackles Tough Questions on Sale of Hummer to Chinese, 06-05-2009, http://www.edmunds.com/insideline/do/News/articleId=149907
10 Fangfang, Li “Hummer of a challenge for Chinese firm” China Daily June 4, 2009, http://www.chinadaily.com.cn/china/2009-06/04/content_8235629.htm
11 Smith, Aaron “GM unloads Hummer to Chinese buyer: Bankrupt automaker discloses details of plan to sell truck line to China’s industrial company Sichuan Tengzhong” CNNMoney.com, June 2, 2009
http://money.cnn.com/2009/06/02/news/companies/gm_hummer/?postversion=2009060216
12 Pierson, David, “Chinese company buys a symbol of American affluence: But Hummer purchase makes little sense, analysts say” June 07, 2009
13 http://www.whitehouse.gov/the_press_office/Presidential-Proclamation-LGBT-Pride-Month/
14 Obama, Barack “REMARKS BY THE PRESIDENT ON A NEW BEGINNING”, June 4, 2009, http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-at-Cairo-University-6-04-09/
15 Obama, Barack “REMARKS BY THE PRESIDENT ON A NEW BEGINNING”, June 4, 2009, http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-at-Cairo-University-6-04-09/
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