Official: GM to Sell Hummer to China's Sichuan Tengzhong
10/9/2009
General Motors announced today it has reached an official agreement with Sichuan Tengzhong Heavy Industrial Machinery to sell its Hummer brand, pending government and regulatory approval.
Official details will be released later, but reports show GM will sell the Hummer brand including trademarks, trade names, and all licensing rights to manufacture and sell Hummer vehicles to Sichuan Tengzhong for about $150 MM USD.
Tengzhong currently produces commercial trucks and heavy equipment, and claims it will eventually produce the Hummer trucks itself.
Under the new agreement, GM and AM General will continue to manufacture the Hummer trucks at its facilities until June 2011. At that point, Tengzhong will begin producing the vehicles itself. If Tengzhong is not ready at that point, the contract allows for a one year extension for manufacturing by GM and AM General.
As far as financing goes, Tengzhong will supply 80 percent of the capital and Hong Kong exchange-listed Lumena will provide the remaining 20 percent.
Initially, Hummer will continue to be managed by the existing leadership team. Once the transaction is complete, Hummer intends to change its image by revamping its lineup, focusing on alternative fuel powertrains and improved fuel efficiency. Current Hummer CEO James Taylor will lead these initiatives, using his experience as General Manager of Cadillac during its recent reinvigoration.
The deal is subject to regulatory approval, but both the US and China are expected to approve the deal.
