Iconic Hummer brand sold to Chinese manufacturer
Photo
A Hummer is on display with a GM sign in background at a Hummer dealership in Burlingame, Calif., Friday, Oct. 9, 2009. Hummer, the off-road vehicle that once epitomized America's love for hulking trucks, is now in the hands of a Chinese heavy equipment maker.
DETROIT — Hummer, the off-road vehicle that once epitomized America’s love for hulking trucks, is now in the hands of a Chinese heavy equipment maker.
General Motors Co. and Sichuan Tengzhong Heavy Industrial Machinery Corp. finally signed the much-anticipated deal to sell the brand on Friday.
Tengzhong will get an 80 percent stake in the company, while Hong Kong investor Suolang Duoji, who indirectly owns a big stake in Tengzhong through an investment company called Sichuan Huatong Investment Holding Co., will get 20 percent. The investors will also get Hummer’s nationwide dealer network.
Financial terms were not disclosed, although a person briefed on the deal said the sale price was around $150 million. The person did not want to be identified because the terms were being kept private. GM’s bankruptcy filing last summer said that the iconic brand with military roots could bring in $500 million or more.
Suolang Duoji also is the controlling shareholder and chairman of Lumena Resources Corp., a Hong Kong listed mining company.
GM and Tengzhong said in a statement that the transaction still must be approved by the U.S. and Chinese governments, although and Chinese regulators initially expressed reservations about Tengzhong’s ability to run such an enterprise.
Hummer’s current management team will stay with the new company, which will be headquartered either in Detroit or suburban Auburn Hills, Mich.
James Taylor, the GM executive who has run Hummer recently, will remain as its chief executive officer.
“We are fortunate to have a partner who understands and recognizes the importance of continuing investment in Hummer’s heritage as a U.S.-based and branded company with a view toward capitalizing on global opportunities,” Taylor said in a statement.
Hummer, whose smallest model gets 16 miles per gallon (14.7 liters per 100 kilometers) in combined city and highway driving, sold well until the middle part of this decade when fuel prices began to rise. Sales peaked at 71,524 in 2006.
But only 8,193 Hummers have been sold in the U.S. through the first nine months of the year. That’s down 64 percent from a year earlier. And only 426 Hummers were sold nationwide last month, according to Autodata Corp.
GM, which spent 40 days in bankruptcy protection during the summer and has received about $50 billion in U.S. government aid, also plans to sell its Saab brand and scrap Pontiac and Saturn as it tries to streamline its operations.
The company wants to focus on four core brands: Chevrolet, Cadillac, Buick and GMC.
With backing from a well-capitalized company, Hummer will now focus on improved efficiency and performance and include alternative fuels, more efficient gas engines, six-speed transmissions and diesel engines.
GM said its assembly plant at Shreveport, La. would continue to assemble the commercial Hummer H3 and H3T pickup trucks on a contract basis until June 2011, with a one-year option until June 2012. The military H2 version will continue to be assembled by AM General in Mishawaka, Ind. under the same terms.
South Bend, Ind.-based AM General retains ownership of the military versions of the vehicles, which have been used frequently in Afghanistan and Iraq.
The Shreveport GM plant is currently slated to close by June 2012. For the time being, the plant also is assembling the Chevrolet Colorado and GMC Canyon pickup trucks.
The plant once employed about 3,000 workers, but layoff and buyouts have reduced that number to just over 700.
AP Business Writer Alan Sayre in New Orleans contributed to this report.
Oct 12, 2009 at 9:16 a.m.
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Janesvillean, GM only earned an extra $50 million (not $100 million) by selling to the Chinese, and it took an extra six months to do it. Considering GM is 30 or so BILLION dollars in debt, what's $50 million for good will?
Oct 11, 2009 at 11:01 p.m.
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Yah, it is hard to compete with Chinese labor at below US minimum wage and hate to say it, but the Japanese workforce although cheaper labor than the U.S., sure can build some fine vehicles.
Oct 11, 2009 at 7:33 p.m.
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It's unfortunate that GM couldn't sell out to Japan. If that were to ever happen I could possibly have to eat my words with regards to pledging never to buy another GM product:)
Oct 11, 2009 at 7:18 p.m.
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Wait and see, Hummer to China, next Chinese are going to assemble and mfg. GM cars from what I have heard thru the grapevine. This is just the start of GM selling out to China. Then, NO ONE should buy GM products because GM is selling out to anyone who will give them a quick buck.
Oct 11, 2009 at 3:51 p.m.
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council_foe: Who are you referring to?
Oct 11, 2009 at 10:52 a.m.
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Once again Mr. "KNOW IT ALL" tells it like it is (or so he thinks) . Im glad your so smart and everyone else is so stupid .
Oct 11, 2009 at 12:12 a.m.
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A $100 million hit, just to keep an "American" brand in this country, at the expense of the future survival of GM itself? Are you kidding, Zoom?
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pcmagic1, as I said below, the military Humvee is still built by AM General and is NOT part of the sale. All GM is really selling is the nameplate and some SUV technology. The vast majority of civilian Hummers sold are H2s and H3s, which are modified versions of the GM SUV chassis similar to the Tahoe/Yukon formerly built in Janesville. No military secrets are going to the Chinese, nor are we going to start buying military equipment made there.
Oct 10, 2009 at 3:41 p.m.
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thekid-m i thought they closed that place next to dominoes ;)
Oct 10, 2009 at 2:57 p.m.
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Magic: No, not the same. Don't sweat it in any case. Even if they were selling the military version, I have no problem with our enemies being just as burdened as we are. You don't actually think we are bringing any Hummers home from Iraq or eventually Afghanistan, do you? Nope, we'll leave them there/here. HUMMERS are junk, military or civilian - it doesn't matter, IMO.
Oct 10, 2009 at 2:50 p.m.
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So, is this the same Hummer that builds for our military? If so, the foreign governments are now manufacturing some of our military vehicles?
MagicOne
Oct 10, 2009 at 2:03 p.m.
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wow thats fast. just the other day i had a chinese masseuse offer me one of these for only 15 bux when my massage was done. crazy.
Oct 10, 2009 at 11:37 a.m.
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GM could have sold Hummer to an AMERICAN industrialist in April for $100 million. GM wanted $200 million, and rejected the deal. Just another reason not to but a GM.
http://www.reuters.com/article/CARMFG/id...
Oct 10, 2009 at 10:37 a.m.
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This doesn't affect the Humvee, which is regardless already in the process of being replaced. It's a vehicle that was designed for WWIII in Europe, after all.
http://en.wikipedia.org/wiki/HMMWV_repla...
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The Hummer brand boils down to a souped-up, heavy Tahoe and sales have declined precipitously along with other big SUVs. As for imports, at least for the time being they will continue to be made in the US. Whether manufacturing remains here may depend on whether Americans are willing to buy a Chinese SUV. But then look at everyone who shops at Wal-Mart.
Oct 10, 2009 at 8:22 a.m.
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Now the chinese have a dealer network in the states. They will import everything from little cars to scooters under the hummer brand. The military Hummer H1 is separate from what GM had so that shouldn't change with AM General.
Oct 10, 2009 at 6:40 a.m.
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Another slap in the face for the US! More goods for the Chinese to sell us back! Quit buying Chinese stuff, in other words no more Wal-Marts.
Oct 9, 2009 at 8:11 p.m.
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For years this great vehicle was built by AM General for the US military. It set a new standard for mil.spec. off-road capability. Please do not tarnish it's great stature by bringing GM's screwing with it, in the last 5 years, as "history".
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