GM Finds Buyer For Hummer

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Hot on the heals of GM filing for bankruptcy (gulp!!) comes some the welcome good news that The General has finally found a buyer for Hummer. Hummer sales have been in a free fall for months and month, and the last time I looked, they were down over SIXTY percent. So the sale of Hummer must come as welcome news to GM shareholders … hey, that’s us!

So who bought Hummer? No, it is not Ahnuld, der Governator (a noted big fan of the mil-spec trucks) actually it’s … a mystery at this time. All General Motors will say is that they have entered into a memorandum of understanding (AKA an MoU to you MBA FYC out there, OK?) with a buyer for HUMMER (looks like it’s another one of those all-caps brands). The sale “is the result of GM’s strategic review of the HUMMER brand and the company\’s ongoing restructuring efforts.”

Or in other words, ‘we’re drowning in read ink and we had to sell it to save our skins.’ The upcoming sale is expected to be done and done by the end of third quarter of 2009 assuming it jumps through all the regulatory hoops out there.

The real good news is that the deal is expected to secure more than 3,000 U.S. jobs in manufacturing, engineering and at HUMMER dealerships around the country. The transaction also includes plans by the investor to aggressively fund future HUMMER product programs.

The deal means that HUMMER will continue to contract vehicle manufacturing and business services from GM. Meaning that GM\’s Shreveport Assembly plant would continue to contract assemble the H3 and H3T through at least 2010 for example. (I’ve been to Shreveport, had family there. Great people, amazing food, terrible weather. Never visit in August, that’s all I can say.)

\”HUMMER is a strong brand. I\’m confident that HUMMER will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker,\” said Troy Clarke, President of GM North America. ”

Time will tell.

Here’s The General’s press release:

General Motors Announces Preliminary Agreement To Sell HUMMER

Deal could secure more than 3,000 jobs in the United States; preserves HUMMER as global off-road brand

DETROIT – General Motors Corp. (NYSE: GM), announced it has entered into a memorandum of understanding (MoU) with a buyer for HUMMER, its premium off-road brand. This transaction is the result of GM’s strategic review of the HUMMER brand and the company\’s ongoing restructuring efforts.

The sale is expected to close by the end of third quarter of this year and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

The deal is expected to secure more than 3,000 U.S. jobs in manufacturing, engineering and at HUMMER dealerships around the country. The transaction also includes plans by the investor to aggressively fund future HUMMER product programs. Under terms of the MoU, the identity of the purchaser and proposed financial terms of the agreement are not being released at this time.

\”HUMMER is a strong brand,\” said Troy Clarke, President of GM North America. “I\’m confident that HUMMER will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker .”

As part of the proposed transaction, HUMMER will continue to contract vehicle manufacturing and business services from GM during a defined transitional time period. For example, under the proposed agreement, GM\’s Shreveport Assembly plant would continue to contract assemble the H3 and H3T through at least 2010.

“GM has developed HUMMER into a globally recognized off-road brand,\” said James Taylor, HUMMER chief executive officer. \”The proposed agreement will enable us to continue that growth and maximize the brand\’s potential through new, innovative off-road vehicles with improved efficiency and alternative fuel powertrains. Today\’s announcement is great news for HUMMER\’s current and future customers, dealers, suppliers and employees around the globe.\”

Other terms and conditions specific to the sale are not being disclosed at this time. Citi acted as financial advisor to General Motors Corporation.

About GM – General Motors Corp. (NYSE: GM), one of the world\’s largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM\’s largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM\’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.

Photo from Flickr user Michi1308

About The Author

Tony Borroz grew up in a sportscar oriented family, but sadly, it was British cars. His knuckles still show the marks of slipped Whitworth sockets, strains to reach upper rear shock bushings on Triumphs, and slight burn marks from dealing with Lucas Electric "systems." He has written for a variety of car magazines and websites, Automoblog chief among them. Tony has worked on popular driving games as a content expert, in addition to working for aerospace companies, software giants, and as a movie stuntman. He currently lives in a secure, undisclosed location in the American southwestern desert.

1 Comment on "GM Finds Buyer For Hummer"

  1. zach schumack

    Sichuan Tengzhong Heavy Industrial Machinery Co. is the company that put the bid in for Hummer. Now before everyone gets all excited about this story the hummer brand runs contrary to China\’s attempt at developing a globally competitive auto industry by focusing on fuel-efficient vehicles, according to analysts. The government also wants to pare the nation\’s more than 100 automakers to ease competition.

    \”A new entrant in the car industry is not something they\’re looking to see,\” said Chip Chaikin, who helps oversee $800 million as managing director of Shanghai-based Blue Point Capital Partners Asia. \”It\’s pretty unlikely\” the deal will go through.

    With the sales falling through the floor for hummer, a terrible fuel efficiency platform, and the need to get capitol to set up warehouses and re-tool the machinery, it seems unlikely that the state run Sichuan Tengzhong company will be able to convince government officials that there will be a clear ROI for the company and for China in general.

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