Done Deal. GM Sells Hummer to Chinese Company
October 09, 2009
General Motors, as expected, announced Friday it had signed an agreement with China's 
Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. Friday to sell Hummer.
The deal is subject to approvals by U.S. regulatory agencies and Chinese authorities. Tengzhong acquires ownership of the Hummer brand, trademark and trade names, as well as specific intellectual property license rights necessary to manufacturer vehicles. Tengzhong also assumes the existing dealer agreements.
Tengzhong intends to purchase Hummer through an investment entity, in which it will hold an 80 percent stake. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena, will hold the remaining 20 percent stake.
Financial terms of the agreement were not disclosed. Sources have told media outlets that GM received $150 million for Hummer, far less than the $500 million value it had put on it during its bankruptcy proceedings.
Jim Taylor, who had been Cadillac general manager and chief engineer before taking the reins at Hummer, will continue in his role as Hummer CEO.
Also under the agreement, Hummer will contract vehicle manufacturing, key components and business services from GM during a defined transitional time period.
For example, GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T, and AM General's Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one-year extension until June 2012. The deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacture of Hummer vehicles.
Once the transaction is complete, Hummer will become the first automaker to offer an alternative-fuel powertrain in every model, with the addition of E85 FlexFuel capability in the 2010 H3 and H3T, GM said.
Hummer is also in the process of obtaining emissions certification for a diesel H3 that will be introduced in markets outside of North America.
The brand's future product development will focus on improving efficiency and performance in current Hummer models with alternative-fuel powertrains, more efficient gas engines, six-speed transmissions and diesel engines.
"Hummer is a strong global niche brand, and this agreement signifies another important milestone in writing the next chapter for both GM and Hummer," said GM CEO Fritz Henderson in a statement. "For Hummer, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future."
Posted by Michelle Krebs at 10:36 AM under Business , Companies , GM , News | Comments (0) | digg this | Seed Newsvine
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