- Jun 2, 2009
Officially Official: General Motors reaches tentative agreement to sell Hummer
Hummer HX Concept - Click above for a high-res image gallery
As expected, General Motors has announced it's entered "into a memorandum of understanding with a buyer for Hummer," but under the terms of the transaction, the purchaser hasn't been disclosed.
GM's brief release (posted after the break) scratches the surface of the plan, saying only that the deal is expected to close by the third quarter of this year, that the new investor is committed to funding future Hummer products – possibly including the H4 and a two-door H3T – and that 3,000 U.S. manufacturing, engineering and dealer jobs will be saved.
Those last two points caught the eye of PickupTrucks.com, which tapped one of its sources within GM to ask how manufacturing and dealer jobs have escaped the axe. On the manufacturing front, the H3 production facility in South Africa (which makes right-hand drive models for markets outside the States) will be shuttered and assembly will move back to the U.S. Additionally, the memorandum of understanding states that no Hummer dealers in the U.S. will closed.
[Sources: GM, PickupTrucks]
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, June 2, 2009 – 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.