GM Agrees to Sell Hummer

GM Agrees to Sell Hummer

China’s Tengzhong Is Expected to Pay $150 Million for Brand

Washington Post Staff Writers
Saturday, October 10, 2009

 

General Motors has reached an agreement to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery, the company announced Friday.

The American automaker, now largely owned by the U.S. government, has been shedding brands in an effort to refocus its operations.

It recently announced that it would wind down the Saturn brand.

The price for Hummer was not disclosed, but according to sources familiar with the negotiations, it was $150 million, far less than the $500 million price once envisioned.

For a transition period, GM will continue to make Hummers and help manage the company in a deal that will "secure" more than 3,000 U.S. jobs, according to GM.

"Hummer is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and Hummer," GM chief executive Fritz Henderson said in a statement.

The transaction is subject to regulatory approvals by government agencies in the United States and China, the company said.

If the deal is consummated, GM’s plants in Shreveport, La., and Mishawaka, Ind., will continue to make the vehicles until June 2011, with an optional one-year extension.

 


Tengzhong intends to buy Hummer through a company in which it will hold an 80 percent stake. Suolang Duoji, a private entrepreneur, will hold the other 20 percent stake, GM said.

Tengzhong expects to spend an additional $800 million to $2 billion to bolster Hummer and establish a manufacturing facility in China, said one of the sources, who asked to remain unnamed to preserve business and government relationships.

The source said Tengzhong has ambitious plans for Hummer, perhaps including a cheaper mass-market version for Chinese motorists.

"How can Tengzhong run an auto business?" he said. "It’s like a child riding a bicycle and the agreements with GM are the training wheels."

The gas-guzzling Hummer was a lucrative GM brand when fuel prices were low in the early part of the decade, but last year’s spike in prices dampened demand.

GM vowed when it went into bankruptcy earlier this year that Hummer would be one of the brands it would sell. At the time, it estimated that it might receive as much as $500 million for the line of off-road vehicles.

Tengzhong’s quest to acquire Hummer has been seen by many as a test of China’s commitment to reining in emissions of greenhouse gases. Some observers expect China’s regulators to bar the acquisition.

Mufson reported from Beijing, Whoriskey from Washington.

 

 



Share
Seniority Lists
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Committeepersons
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Guide
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Voith Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier