Bankrupt GM Sells Hummer to Chinese Firm

The bankrupt car dealership will unload its big-name SUV brand

Tuesday, Jun 2, 2009  |  Updated 1:36 PM EDT
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Blame Them For Your Empty Wallet

GM will sell its high-powered Hummer brand, the company announced Tuesday.

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DETROIT — A person briefed on the deal says General Motors Corp. has a tentative agreement to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co. of China.

GM announced Tuesday that it has a memorandum of understanding to sell the brand of rugged SUVs, but the company didn't disclose the buyer.

A formal announcement of the buyer's identity was to be made Tuesday afternoon.

Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but the person briefed on the deal says Hummer would be its first step into the automotive business. The person spoke on condition of anonymity because the details have not been made public.

A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.

Other terms of the transaction, which is currently tied to a memorandum of understanding, were not disclosed.

The Chinese firm is planning to "aggressively" finance Hummer's future product programs, according to GM.

"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," Troy Clarke, president of GM North America, said in a statement.

GM is also trying to sell its Saab and Saturn brands and will phase out its Pontiac brand as it concentrates on its Chevrolet, Cadillac, Buick and GMC nameplates.

The proposed deal for Hummer will allow it to continue to contract vehicle manufacturing and business services from GM during the transition process.

The Hummer sale is expected to close by the third quarter's end.

GM sought court protection from its creditors on Monday under Chapter 11 of the U.S. bankruptcy code. The company said it hopes to emerge from reorganization in 60 to 90 days as a profitable entity with fewer employees, factories and dealers.
 

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