UPDATE: Hummer reportedly purchased by Chinese heavy equipment manufacturer [w/POLL]
According to sources at The New York Times, General Motors' Hummer division has been sold to a machinery company in western China. That company, Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., presently doesn't build automobiles, it is known for making construction and maintenance equipment, but more recently it has segued into heavy-duty trucks.
The NYT says that the memorandum of understanding between GM and Sichuan Tengzhong needs to be signed off on by Beijing officials, as the government has the discretion to veto any purchases of overseas firms by a Chinese company, particularly those transactions valued over $100 million. Hummer's final price tag isn't yet known but it is widely believed that to be under $500 million. Hat tip to IHC!
UPDATE: It's official. GM's press release announcing the buyer is posted below the fold.
[Source: The New York Times]
PRESS RELEASE
Tengzhong In Advanced Talks To Purchase HUMMER From GM In Strategic Acquisition
DETROIT and SICHUAN, June 2, 2009 - Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong) and General Motors Corp. today confirmed details of their proposed transaction, pursuant to which, Tengzhong, a major industrial machinery group, will acquire the rights to the premium off-road HUMMER brand, along with a senior management and operational team. It will also assume existing dealer agreements relating to HUMMER's dealership network. It is contemplated that Tengzhong will, as part of the transaction, enter into a long-term contract assembly and key component and material supply agreement with GM. In an earlier statement, GM said it expects the deal if successful to secure more than 3,000 US jobs. The final terms of the deal are subject to final negotiations.
Based in the Chinese province of Sichuan, Tengzhong is a privately-owned company and a leading domestic manufacturer of road, construction and energy industry equipment. It will expand into the premium off-road vehicle segment through what will be a strategic acquisition for Tengzhong and a catalyst for HUMMER's growth in the U.S. and around the world.
"The HUMMER brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing HUMMER to innovate and grow in exciting new ways under the leadership and continuity of its current management team," said Yang Yi, CEO of Tengzhong. Mr. Yang continued, "We will be investing in the HUMMER brand and its research and development capabilities, which will allow HUMMER to better meet demand for new products such as more fuel-efficient vehicles in the U.S."
HUMMER will continue to maintain its headquarters and operations in the U.S., and will continue to be managed by its existing leadership team. The team intends to expand HUMMER's dealer network worldwide, particularly into new and underserved markets such as China.
"Today HUMMER is a globally recognized brand with excellent growth prospects, both in terms of new markets and new products for our existing markets," said James Taylor, HUMMER chief executive officer. "With Tengzhong's investment and strong support, we will be able to make our visions a reality. This transaction, if successful, will secure more than 3,000 U.S. jobs, and allow us to embark on a more aggressive global expansion, ensuring a successful future with our new partners."
The transaction is expected to close in the third quarter of this year and is subject to customary closing conditions and regulatory approvals. Financial terms of the agreement will not be disclosed at this time.
Credit Suisse is acting as exclusive financial advisor and Shearman & Stearling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM.
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Reader Comments (Page 1 of 4)
Cougs 1:37PM (6/02/2009)
Haha, well at least they don't have to steal the looks of the Hummer...they can just buy it outright. I do think there is something ironic here...something about the Chinese buying up US debt or something...blast I lost it.
Reply
some1 2:19PM (6/02/2009)
Honestly, its sad to see so many hate on Hummer. I have always wanted one (i know i would take it off roading) and i dont see why the name just tanked suddenly. A nice used H3 isnt THAT expensive if you really look at it.
I love how everyone went insta-green the second gas went up, and now its popular to toss around hummer steriotypes. And yes, shocking, this is coming from a jeep owner.
I'm sad to see yet another american ran company go to china.
and to all the people who will say they cannot afford a hummer, and im sitting on an ivory pedestal about the subject, you can drop it.
the green movement has warped into this trendy empty concept, because the massive majority of the people behind it care more about the green in there pocket, rather then being eco friendly. Its simply a way to mask it.
"i cant afford hummer gas, so im going to buy a civic, and say i support the environment, rather then say i dont have the $$"
Jeff R 3:03PM (6/02/2009)
Well put. I completely agree.
PJ 3:58PM (6/02/2009)
Hummer "hate" is nothing new, and it has as much to do with GM as it does greenies. It's always been an essential part of the brand's strategy that some people would love their trucks, some people would hate them, and that as a result, buyers knew they'd get some kind of reaction out of *everyone.*
From GM's media site, comments from Michael DiGiovanni, then-Hummer marketing director, upon the 2003 H2's release:
"[The H2's] look and feel convey the sense of power, authority and complete control that these buyers actively seek."
"The successful achievers are more likely to drive it on-road as a symbol of their daring and success."
"... HUMMER ownership is really more a state of mind than anything else."
No, I'm not making that up.
It really shouldn't surprise anyone, least of all GM, that when you design a brand whose appeal--more or less--is driving a style statement that flips a giant middle finger at everyone around you, there isn't a whole lot of appeal left after its fifteen minutes of fame are up.
I personally think you'd have to be a total d-bag to get off on that kind of attention, but in terms of GM's bottom line, the H2 was extremely smart. Throwing money at the brand until 2009, though, was not. They should have known that, like Marilyn Manson and butt cleavage, shock acts run out of steam fast once everybody's seen them once. They'd have walked away far richer if they'd sold the brand four or five years ago, just after sales peaked.
Polly Prissy Pants 5:03PM (6/02/2009)
PJ is right. Driving a Hummer is like the being that roided out guy in the muscle shirt and 1" diameter gold chains walking his pitbull in the park with his slutty girlfriend. On the one hand you kinda feel sorry for the guy because he obviously has some serious issues he's just not able to cope with, but then you're also thinking "Wow, what a doosh" at the same time.
some1 7:29PM (6/02/2009)
@PJ
The same "middle finger" concept can be said about almost any brand that is generally expensive. Ferrari is a prime example of the "d-bag" complex. My point is, why is Hummer evil? As i said before, i would love a H3 (actually H3T) and i dont consider buying it for any of those reasons, i think its a good off road vehicle.
I see H2's every day, they are as common here as camaro's in the sticks. Hummer was always looked upon as one of the many d-bag mobiles, but now that this trendy "lets save the earth" crap has come about, its probably the most ripped on brand in the US.
The ironic part about all this? People that rag on Hummer's now are no better then the actual D-bags that drive them. Because for the most part, people are green now, because they dont want to shell out the money for gas, so many people end up being jealous of those who can afford not to care, and thus they end up finding a way to make themselves feel better by compensating, it may be in a different way then H2 drivers, but in the end, its still compensating for something.
Basically what im saying is... the Prius is the Hummer of yesterday. Same D-bag complex, just flipped upside down. Except the prius is the current "in" thing
If someone wants to stereotype me for liking hummer then fine, at least im not a slave to fads with misplaced intentions.
PJ 9:09PM (6/02/2009)
Ferrari is a different kettle of fish, in my opinion, while d-bags may buy them, they do so to buy into a desirable heritage that was come by honestly, through competition and technology leadership over 50+ years—versus Hummer, which was whipped up in a couple of years to take advantage of a burgeoning “lifestyle” market, and whose image largely amounts to a styling gimmick (note that I’m talking about the GM brand, not the AM General product). Far from representing the opposite of a fad, Hummer *was* a fad.
If you, on the other hand, find Hummers appealing primarily for use off-road, you’re not part of that “lifestyle” market and my snarky comments don’t apply to you
That said, your analysis of Prius owners is frankly way off base. 50%-75% of Prius owners have an annual income of $100,000 or more, depending on which study you’re reading, and more often than not they’re trading down from a BMW, Audi, or Lexus, not trading up from something like a Corolla. These are not people who can’t afford a Hummer. By and large, they’re people who could easily afford a Hummer but have a different set of priorities.
Sea Urchin 1:40PM (6/02/2009)
China does not respect human rights, there are no words in Chinese language for intellectual property and to sell in China US companies have to “partner” with their companies and give their know how.
One word
BOYCOTT
Reply
Fiziks 1:57PM (6/02/2009)
Lots of stupid people out there, but Sea Urchin takes the cake for being the most stupid.
tekd 2:00PM (6/02/2009)
Wait, you're whining about boycotting them for NOT respecting intellectual property rights when they want to fork over $500 mill for intellectual property rights? It's morons like you who cause Chinese companies to just steal the intellectual property-why bother paying if they get crap for it even when they pay out the ass for intellectual property.
Seriously how about you stop posting BS before they decide to keep their money and come out with HA-MAH instead.
John 2:01PM (6/02/2009)
Boycotts are stupid and rarely change anything.
Face it, we are hopelessly dependent on China for almost everything. Clinton sold us out to third world countries in the 1990's with unbalanced trade laws. Remember (if you are old enough) when Ross Perot said during the 1992 election campaign that there would be a big sucking sound of American jobs leaving this country? Well, we are seeing the full effect now.
The genie is out of the bottle and will never go back in without radically changing the way international trade is done.
Will 2:03PM (6/02/2009)
but before you go Urch, let us know what important role you play in society that allows you the time to post over 1100 comments in 6 months...ridiculous use of time
jg 2:27PM (6/02/2009)
'Face it, we are hopelessly dependent on China for almost everything. Clinton sold us out to third world countries in the 1990's with unbalanced trade laws. Remember (if you are old enough) when Ross Perot said during the 1992 election campaign that there would be a big sucking sound of American jobs leaving this country? Well, we are seeing the full effect now'
Sorry but Clinton is not the reason jobs are moving overseas. It's not something you can blame on any president (maybe Reagan but its a huge stretch). Ross Perot wouldn't have stopped a single job from leaving. Economics drive that. And the fact that our kids are opting out of an education. You can hire 6 or 7 Indian programmers off shore for the same cost you'd spend on 1 US citizen on shore. Why would you hire the US citizen? Patriotism?
Democrats are idiots but they are not responsible for legislation which makes life easier for big business. At least not directly. It's not a part of thier policy.
Any comments on the number of jobs that took off during Bush's reign? It didn't slow down at all.
Who 'Dis? Who 'Dat? 2:39PM (6/02/2009)
You hit the nail right on the head, John! I do recall Ross Perot making just such a statement. And others behind him, I might add.
But what can you say? We've been squandering our wealth and resources for years. Things like this were almost destined to happen. And if you listen carefully that sucking sound is still going on.
John 2:50PM (6/02/2009)
This isn't a Democrat/Republican issue. I'm not just picking on Clinton. We have become an irresponsible, greedy, and Godless country and now are suffering the results.
This is a national sovereignty issue as well. Corporations have sold out our jobs overseas and we have helped them every step of the way in our quest to buy everything at the cheapest possible price at places like Wallmart and over the internet. The government did their part to facilitate this mess. Soon this country will be majority owned by foreign governments/corporations and will be bowing down to new owners/masters.
zaco 3:26PM (6/02/2009)
"Clinton sold us out to third world countries in the 1990's with unbalanced trade laws"
its not an ex-president selling america out, its called capitalism at its best. think about all the unadulterated profit companies get when they buy cheaply from overseas or outsource the labor. this is the definition of free market, people!
face it...if america cant deal with globalization then the it will be powerless soon, just like the GOP.
Axel 3:28PM (6/02/2009)
"China does not respect human rights"
Who the f*ck runs Guantanamo currently? Who started the last Iraq war based on lies and put a whole region into chaos? Who's got secret CIA prisons around the world were people are being tortured? Which country has nearly 8 million prisoners rotting in state prisons?
Tell me you're any better...
Frank 4:13PM (6/02/2009)
""China does not respect human rights"
Who the f*ck runs Guantanamo currently?"
(Sigh) At Gitmo the prisoners are given 3 "culturally sensitive" meals a day, they get the BEST medical care, exercise, a marker on the floor pointing to Mecca, and something like 700 of them have been released, some of them returning to terroism. The Red Cross visits them, The Red Crescent visits them. News reporters visit them.
You know, just because the Daily Kos says it doesn't mean it's true. But go ahead and be outraged if that makes you feel better.
John 4:14PM (6/02/2009)
"capitalism at its best. think about all the unadulterated profit companies get when they buy cheaply from overseas or outsource the labor. this is the definition of free market, people!
face it...if america cant deal with globalization then the it will be powerless soon, just like the GOP."
1) You are an idiot
2) You can't have free market trade with third world countries. With places like Europe, yes, where the standard of living and wages is similar.
3) You obviously know nothing about capitalism. But I'm sure you think Obama's take over of hundreds of billions in private equity assists is great for capitalism.
Randy 4:38PM (6/02/2009)
I agree with Sea Urchin!
From A to Z
China steals, has very bad human rights, slavery, communism and a plethora of other things. Boycotting is the only way you or I can express our lack of support for the CHUMMER brand!
+1 to Sea Urchin
And keep in mind. I usually tear the guy apart!
BUY FORD