• Oct 9th 2009 at 1:59PM
  • 12
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Tengzhong's plan to make a green Hummer can now officially move forward. GM and the China's Sichuan Tengzhong Heavy Industrial Machinery company announced today that a deal to sell off the brand is complete. For $150 million, Tengzhong will take an 80 percent stake, a private investor will get the rest, and GM is rid of one of the most controversial automobile brands ever. Sort of, the deal is set up so that Tengzhong will contract vehicle manufacturing from GM through at least June 2011. U.S. and Chinese regulators still need to approve the deal.

What controversy? Well, there was the whole Prius vs. Hummer thing, which has thankfully died down. And then all those torched Hummers at dealerships – recreated, in a sense, with the Bummer Hummer. Whatever the history, Hummer is now a Chinese brand; it'll be interesting to see how and if the vitriol that has long been aimed at GM translates to the new owners. Tengzhong has previously stated it is investigating biofuels, hybrids and fully electric machines.

[Source: GM]


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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    • 1 Second Ago
      • 5 Years Ago
      The vitriol will increase. Now Hummer will be hated by greenie and jingoist alike.
      • 5 Years Ago
      Well, the Yukon Denali is not far behind in the trash the environment sweepstakes. EPA 12/19. Actually the Hummer was a little better in the city. There will never be a lack of targets.
        • 5 Years Ago
        Don't forget the Toyota Land Cruiser at 13/18, the Nissan Armada at 12/18, the Infiniti QX56 at 12/17, the Lexus LX570 at 12/18, and the BMW X6 at 12/17.

        I just like to remind people that big, low mpg SUVs don't come only from US automakers.
      • 5 Years Ago
      There are a few Hummers here in Italy, I have never spoken to any of the drivers but can never get my heard around why anyone would buy one, wanting to look like a dumb a** or is it just love of oil?
        • 5 Years Ago
        Or perhaps they simply like Hummers.
        • 5 Years Ago
        "Or perhaps they simply like Hummers."

        I love hummers... oh wait, are we talking about cars? Never mind, I hate Hummers.

        I think 4' of snow in your driveway is god's way of saying you should take the day off, stay at home and play with your kids, shovel your driveway, help your neighbors shovel theirs, build a snow-fort....
        I've probably done more off-roading in my Civic than about 75% of Hummer drivers (Not counting the curbs they drive over because the soccer moms who drive them can't tell where the corners are).
        • 5 Years Ago
        4' of snow needs a tractor with a plow to clear the driveway before any Hummer can get down it!
        • 5 Years Ago
        Some people do need large vehicles on a daily basis. I have a friend who lives in an area of colorado called connifer. His driveway is about a half a mile long and when the snow is four feet deep (which happens on multiple occasions per year) you cant get anywhere in anything small. A hummer would certainly be a comfortable way to get out of there. There aren't really any fuel sippers that i could see being too effective at getting though that situation though. Either way, the vehicle has its uses. Not that everyone who owns one actually needs it though. I know a lot of people (including my idiot neighbor) who own them and would never need one... ever.
      • 5 Years Ago
      It's sad that GM had to sell Hummer, but seriously that's what you get when you sell giant SUV 4x4's in an oil crisis. Then they expect government bailouts? How about making good products customers want to buy? Geez.
      • 5 Years Ago
      Good riddance. That won't bring back the EV-1, but it's an important step in reversing that whole chain of Bush-era decisions.

      If this takes off in China, they will need a lot more oil, which will push prices up, which in turn will speed the adoption of EVs. See, that's positive.
        • 5 Years Ago

        I see i lot more hummers in colorado than i see yukon danalis... But thats just my observations...
        • 5 Years Ago
        It is just symbolic. It is all about numbers, isn't it? What do they sell, 20 or 30 times as many Yukon Denalis as Hummers and they get almost identical fuel consumption figures? The Hummer alone, even a Chinese version, will never sell in numbers to make a significant impact. It is the every day car most people buy that gets less than 20mpg commuting to work that makes the difference. Millions and millions of those.
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