GM to shut down Hummer after China deal fizzles
Detroit, February 25, 2010
General Motors Co will wind down its iconic but tarnished Hummer brand after Chinese regulators rejected a $150 million bid by an obscure Chinese machinery maker to buy the money-losing SUV line.
GM had been trying to complete the deal by the end of February after reaching a definitive agreement in October to sell Hummer to Tengzhong, a little-known heavy machinery company based in Sichuan province.
The collapse of the deal represents another setback for GM, which had been working to shed unprofitable brands and focus on its four core brands -- Chevrolet, Cadillac, Buick and GMC -- after emerging from bankruptcy in July.
Closure of Hummer would put about 3,000 jobs at stake, including manufacturing workers, dealers, staff members, and other areas, GM spokesman Nick Richards said. The brand has 153 US dealers.
A brand that grew out of the US military multipurpose vehicle known as the Humvee produced by AM General, Hummer was lauded early on for a tough image but became synonymous with gas-guzzling excess when consumers became more interested in high oil prices and environmental responsibility.
GM bought the Hummer brand from AM General in 1999 and went on to produce several civilian models.
'We have considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed,' John Smith, GM vice president of corporate planning and alliances, said in a statement.
'GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner,' Smith said.
Tengzhong, in an emailed statement to Reuters, said it and GM have decided to terminate the agreement after failing to win Chinese regulatory approval within the proposed time frame. -Reuters