German government has banned sale of Volkswagen gas turbine business to China
The German government has prohibited the planned sale of Volkswagen's gas turbine business to China's CSIC Longjiang GH Gas Turbine Co (GHGT). According to Reuters' sources in government circles, the Federal Cabinet approved the ban proposed by the Economy Ministry.
In the government, it was argued that MAN Energy Solutions' gas turbine division could not be sold to CSIC Longjiang GH Gas Turbine Co under the Foreign Trade Act because its parent company, China State Shipbuilding Corp (CSSC), is too close to the military of the country.
Volkswagen's subsidiary had already announced on Tuesday that it would accept the decision. According to business circles, the development of new gas turbines will then be stopped, but the profitable maintenance should remain. The MAN Energy division currently produces and maintains gas turbines with 100 employees in Oberhausen and Zurich. These gas turbines are used for energy generation or as drives for pipelines but may also be used for warships.
- Despite the prohibition by the Federal Government, Volkswagen's gas turbine business still seeks potential buyers globally, as the sale to China's CSIC Longjiang GH Gas Turbine Co was halted due to proximity to the country's military.
- The Federal Government's decision to ban the sale of Volkswagen's gas turbine business to China's CSIC Longjiang GH Gas Turbine Co is considered a significant move, given the size of the potential transaction and its impact on the large gas turbine business.
- Volkswagen's gas turbine business, which operates in proximity to the military in China through its partner CSIC Longjiang GH Gas Turbine Co, has faced objections from the German government, leading to the controversial sale being called off.
- The press release from Volkswagen stated that they will continue operations in the gas turbine business, despite the proximity to China's military and the prohibition from the Federal Government on selling to CSIC Longjiang GH Gas Turbine Co.
