GM: Hummer to close if sale fails

September 17, 2009

GM: Hummer to close if sale fails

BY MARK PHELAN
FREE PRESS AUTO CRITIC

FRANKFURT, Germany — Despite several delays, General Motors still expects to sell its Hummer SUV brand to China’s Sichuan Tengzhong Heavy Industrial Machinery Co., this year, GM CEO Fritz Henderson said while visiting Germany for meetings in conjunction with the Frankfurt auto show Wednesday.

"If we don’t get the deal done, we’re going to close Hummer," he said.

In a wide-ranging interview, Henderson said he also expects Russian automaker GAZ to buy 27.5% of GM’s European operations in 2010. Russian bank Sberbank will hold the stock until oligarch Oleg Deripaska, who owns GAZ, gets "his capital structure in order" following a cash crunch this year, Henderson said.

GM has high expectations for sales of Opel and Chevrolet vehicles in Russia. While GM has an agreement to sell control of Opel to a consortium of Sberbank, Canadian supplier Magna and Opel workers, GM refused to relinquish control of its fast-growing Chevrolet-Russia sales network.

GAZ and Magna’s desire to get Chevrolet’s Russian business was a key issue that led to a months-long deadlock in the Opel negotiations. GM didn’t budge, because Russia is a cornerstone of the automaker’s plan to make Chevrolet a global brand like Ford, Toyota and Volkswagen.

"Russia could become the largest market in Europe," surpassing Germany and reaching a stable four million sales a year within 10 years, Henderson said. He expects a long-term rise in prices for oil and other commodities to fuel steady Russian economic growth.

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