Chinese Company Lands Hummer
GM signs deal to sell Hummer to Chinese industrial company for a reported $150 million.
General Motors Co. has inked a deal to sell its premium off-road brand Hummer to a Chinese industrial company.
GM said on Friday that it has a definitive agreement with Sichuan Tengzhong Heavy Industrial Machinery Co. for 80 percent of Hummer. A private investor would buy the remaining stake.
Under the terms of the deal, GM would continue to build the H3 and the H3T until June 2011 on a contract basis. AM General would assemble the H2 for the Chinese owners for that time period as well. The deals have an option to be extended until June 2012.
Financial terms were not disclosed, but GM would reportedly get $150 million. It's still subject to closing conditions and regulatory approvals.
James Taylor, the CEO of Hummer, will stay on and lead the company under its new ownership. He previously was the Cadillac general manager and oversaw that brand's revival.
"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 CEO Fritz Henderson said 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."
The deal could secure about 3,000 jobs in the United States, and Tengzhong would get access to the Hummer dealer network.
Hummer said it plans to add FlexFuel capability to the 2010 H3 and H3T and will sell a diesel H3 outside of North America. The brand also is looking at more options for fuel efficiency, including alternative powertrains and six-speed transmissions.
The agreement is another milestone for GM as it restructures in the wake of its historic bankruptcy. The automaker is shuttering Pontiac and Saturn and trying to sell Opel and Saab. That leaves GM with four core U.S. brands: Chevrolet, Cadillac, Buick and GMC.