• Oct 9th 2009 at 1:13PM
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General Motors has reached an agreement to offload Hummer onto China's Sichuan Tengzhong Heavy Industrial Machinery, with Tengzhong taking an 80 percent stake and a private investor consuming the rest.

Details on the deal (available in the press release after the jump) include Hummer contacting vehicle manufacturing from GM, with the General's Shrevport and Mishawaka plants continuing to produce vehicles through June of 2011, with a possible extension until 2012. A recent report says the sale will net GM around $150 million, although the transaction still has to be approved by both U.S. and Chinese regulatory agencies, which could come later this year or in early 2010.

Tengzhong, which only produces commercial trucks and industrial equipment, has never entered into consumer vehicles before, but according to Yang Yi, chief executive officer of Tengzhong. "We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations."

[Source: GM | Photo by Scott Olson/Getty]

Introduction in Desert Storm
  • Introduction in Desert Storm
  • This aggression will not stand! Discounting Panama and top secret counter insurgency ops in other Central American countries, America hadn't been to war since Vietnam. As you might remember, that particular war didn't go so well.

    And while most Americans wanted to get this Saddam guy real bad, we were a little trepidatious. But thanks to you, High Mobility Multipurpose Wheeled Vehicle (a.k.a. HMMWV or Humvee), our fears were cast aside and we opened a can of whoop-ass on the Iraqis, forcing them back to Baghdad in just three short weeks. Nicely played.
  • Image Credit: photo by DOD
  • Arnold Gets One
  • Yes, well, if you're going to sell a manly truck to the masses, you're going to need the uber male to get 'er done. Enter Arnold Schwarzenegger, six-time Mr. Olympia winner and king of the Eighties action movie box office. Hey, if you're going to sell a truck all pumped up on steroids, why not pitch it with a man that knows the drill?

    The very first civilian Hummer went to the future governor of California. And then he bought several more. This proved to be something of an Achilles Heel during his campaign for governor, as by that point in time, Hummers were known as wasteful, mega-polluters and symbols of obnoxious, conspicuous consumption. No problem - Arnold had one of his converted to run on veggie-diesel.

    Funny foot note: Jello Biafra (and the Melvins) recorded an updated version of the Dead Kennedys' classic "California Uber Alles" in 2006 all about Governor Schwarzenegger. Some lines include, "I'll run you over with my Hummer baby, und I vill Terminate you!"
  • Image Credit: Photo by Chris Weeks/Liaison
  • GM buys Hummer, H2 Arrives
  • It may seem absurd in 2009, but back in the day, SUVs were the key to easy money if you were a carmaker. And hey, the bigger, the better. Thanks to our totally insane tax code, if you bought a vehicle weighing more than 6,000 pounds and used it for work (i.e. you're a farmer and need a tractor) you didn't have to pay as much in taxes. Car companies decided to ride that loophole all the way to the pot of gold at the end of the rainbow.

    Still, H1 Hummers cost well over $100,000 and the margins were low. But, what if you could take a $25,000 truck, pack on 1,500 hundred pounds of extra weight and sell it for $50,000? Meet the H2, a veritable cash cow for GM in the early part of this decade. Emphasis on cow, of course. Er... on cash, too.
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  • Just look at this thing. Could any car be more American? It's almost perfect, as it follows the unwritten rule of American luxury. We don't really want anything too nice, but we want lots of it. Luxury by the pound, or in this case, by the foot. In many ways, big old Hummer limos are in fact the heirs to the giant Caddy limousines of yore. What better car to load up with hormone ravaged teenagers a few short months before they enter dull old adulthood?
  • Hummers Vandalized En Masse
  • As this decade wore on, people started to take a look around and see a few problems with Hummers. Like why, more often than not, is a three-ton vehicle being driven one-handed by a solo dude with spiky hair, a hockey jersey and a cell phone stuck to his ear? Even more sinister, some people felt the Hummer was a symbol for wretched excess and conspicuous consumption.

    Solution? Burn them, Salem witchcraft style. Or just slash the tires, smash the windows and spray paint really mean things on the side. Like this.
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  • Speaking of backlash, a certain segment of society had it in for the Toyota Prius. So frothy and out of control was their animosity that they decided to claim that a Prius is actually worse for the environment than a Hummer H2. As it turned out, little could be farther from the truth.
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  • Oh yes, Hummer branded products. Hey, it works for Ferrari, Lamborghini, Jeep and Porsche... why not? Well, Hummer Cologne might be one reason.
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  • Despite all the fun we've been having at Hummer's expense, the H1, H2 and H3 are all superbly competent off-road vehicles. Naturally then, they lend themselves nicely to a whole host of specialized uses. Like Red Cross disaster vehicles. More of this sort of thing, and less 24-inch dubs with scissor doors might have helped save the brand.
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  • For a lot of us, the good people over at ihumpedyourhummer.com were the only ones to truly make sense of this whole Hummer phenomenon. No, really.


General Motors and Tengzhong Sign Definitive Agreement For Sale of HUMMER

DETROIT and SICHUAN, Oct. 9, 2009 - General Motors (GM) and Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong), today announced that the companies have entered into a definitive agreement that will allow Tengzhong to acquire GM's premium all-terrain HUMMER brand.

Under the terms of the definitive agreement, the buyer will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The buyer will also assume the existing dealer agreements relating to HUMMER's dealership network.

Tengzhong intends to purchase HUMMER through an investment entity, in which it will hold an 80 percent stake. Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena, will hold the remaining 20 percent stake. Financial terms of the agreement were not disclosed.

The transaction is subject to customary closing conditions and regulatory approvals and/or review by government agencies in the U.S. and China. The completion of the definitive agreement enables the companies to continue and further the overall regulatory review process.

"HUMMER is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER," said Fritz Henderson, GM President and CEO. "For HUMMER, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future."

Under the agreement, HUMMER would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. For example, GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T and AM General's Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one year extension until June 2012. The deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacturing of HUMMER vehicles.

HUMMER will continue to be managed by members of its existing leadership team including James Taylor, who will remain in his current role as HUMMER's chief executive officer. Prior to joining HUMMER, Taylor was General Manager of Cadillac where he oversaw a reinvigoration of the brand, leading key innovations in design and technology as well as the development of new models.

"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," said Taylor. "Backed by a privately owned and well-capitalized company, we are going to be able to focus on providing customers with more efficient models that deliver HUMMER's promise of authentic, purpose-built design and engineering."

Once the transaction is complete, HUMMER will become the first automaker to offer an alternative fuel powertrain in every model, with the addition of E85 FlexFuel capability in the 2010 H3 and H3T. HUMMER is also in the process of obtaining emissions certification for a diesel H3 that will be introduced in markets outside of North America. The brand's future product development will focus on improving efficiency and performance in current HUMMER models with alternative fuel powertrains, more efficient gas engines, 6-speed transmissions and diesel engines.

"This transaction marks an exciting step for both Tengzhong and HUMMER, as we invest in a business that has significant opportunity in the U.S. and around the globe," said Yang Yi, chief executive officer of Tengzhong. "We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations."

Credit Suisse is acting as exclusive financial advisor and Shearman & Sterling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM.

For more information on the agreement go towww.transactioninfo.com/tengzhong.

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