G.M. Sells Hummer but Does Not Name Buyer

June 3, 2009
 

G.M. Sells Hummer but Does Not Name Buyer

A day after seeking bankruptcy protection, the automaker General Motors said Tuesday that it had entered a tentative agreement to sell its Hummer brand.

The company, in a statement, did not name the proposed buyer or the price. It said that the sale would probably save more than 3,000 jobs in the United States.

On Monday, G.M. sought bankruptcy protection in federal court in Manhattan and received permission from the court to begin selling some assets. A reconstituted G.M. is expected to emerge from bankruptcy with its best assets, including its Chevrolet, Cadillac, Buick and GMC brands, and with 60 percent government ownership. The remaining stock will be split among a U.A.W. health care trust, bondholders and the Canadian governments.

“This sale continues to accelerate the reinvention of G.M. into a leaner, more focused, and more cost-competitive automaker,” Troy Clarke, president of G.M. North America, said.

G.M. had said for months that it either planned to sell Hummer or close it as part of its restructuring. It also planned to sell Saab and Saturn and phase out its Pontiac.

The sale is expected to close by the end of the third quarter.

Once considered the ultimate muscle car, the Hummer had become a symbol of what was wrong with the American auto industry — big, bulky and gas-guzzling. Its sales of Hummers fell 51 percent last year, the worst drop in the industry.

The Hummer chief executive, James Taylor, said the sale would allow the company to continue to grow and maximize the brand’s potential.

As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from G.M. during a transitional period. G.M.’s plant in Shreveport, La., will continue to build the Hummer through at least 2010.

Citi acted as financial adviser to G.M. in the sale.

 

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