General Motors has officially reached an agreement with Sichuan Tengzhong Heavy Industrial Machinery Co., to sell HUMMER, with Tengzhong acquiring 80 percent of brand. The remaining 20 percent has been acquired by Suolang Duoji, a private entrepreneur.
"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, GM is going to continue to build the HUMMER H2 and H3 models for Tengzhong until June 2011. There is an optional one year extension that would extend the contract to June 2012. Recent reports have claimed that the sale of HUMMER will bring in $150 million to GM.
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PRESS RELEASE:
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.
Comments (14)
I know a lot of people probably think this is great news, but my experience in business with the Chinese would say otherwise. The buyers will use the tech they are getting from GM to produce other vehicles that they will want to sell here, and as soon as the contract is up they will more than likely cease production here. 150 Million sounds like a lot, but in the grand scheme of things it really is a drop in the bucket to gain modern vehicle manufacturing know how. America sells it's soul a piece at a time....
Posted by Utaka | October 9, 2009 5:38 PM
Posted on October 9, 2009 17:38
Ummm....
GM, modern vehicle tech...wait...
Really? Are the Chinese looking for a good design on a six liter V8? How about plastic interiors that rattle after 75k miles? Just wondering....
(And I LIKE GM! And I do agree about the copy our tech and try and use it in other ways, but sometimes it's easier to just buy the license for it and move on.)
Posted by Brian | October 9, 2009 6:46 PM
Posted on October 9, 2009 18:46
LOL, the only thing the Chinese would learn from the Hummer is how NOT to build a vehicle.
Posted by Brad | October 10, 2009 3:12 AM
Posted on October 10, 2009 03:12
Correct, cheap plastic interiors and poor construction is something the chinese don't need to buy, they already have plenty of skill at producing such things. Odds are it's more the light truck drivetrain.
I liked that jeep looking prototype, I forget what it was called, maybe they'll make it....probably not, but one can hope.
Posted by thetruth | October 10, 2009 9:07 AM
Posted on October 10, 2009 09:07
If it's Made in China it normally will fall apart soon after yo buy it or you will get sick from it. LOL say goodbye to the Hummer and hello to a piece of bigger crap.
Posted by SteelCity1981 | October 12, 2009 2:03 AM
Posted on October 12, 2009 02:03
I can almost guarantee this POS will sell worse than it did before the Chinese got a hold of it. If Americans didn't buy it from crappy GM, they really won't buy it from a Chinese manf.
Posted by t_r_nelson | October 12, 2009 6:04 AM
Posted on October 12, 2009 06:04
What about the H1. Does the military want chinese made Hummers? Hmm, radio controlled self destruct.
Posted by Peter | October 12, 2009 8:43 AM
Posted on October 12, 2009 08:43
Good riddance to garbage. Over-sized, over-priced, and overweight: GM is doing itself, and all of us, a favor by getting rid of these behemoths. What an eye-sore and danger on the road, not to mention parking lots.
Posted by John-guy | October 12, 2009 9:09 AM
Posted on October 12, 2009 09:09
What I find funny is the haters. I was pulling a 25kw generator the other day in the H2 and still manged to walk a Honda Ridgeline... Don't like it, don't buy it.
As for the H1, China already makes knock off's of those. They get the power trains from America however.
Posted by Avatar | October 12, 2009 9:57 AM
Posted on October 12, 2009 09:57
Let's face it, the Hummer brand was stagnant or dying in the States anyway. At least if I read this right, it will allow continued production in the States for overseas markets( I believe the H3 is produced in Louisiana and really all things American sell well in China). Hummer's US demise really came during the gas crunch.
Posted by longdxcommuter | October 12, 2009 2:11 PM
Posted on October 12, 2009 14:11
Lets not get the Former GM Hummer with the arm forces Humvee, because they aren't the same. The arm forces Humvee are made by AM General.
Posted by SteelCity1981 | October 12, 2009 3:34 PM
Posted on October 12, 2009 15:34
I miss the H1, best Hummer ever made.
Posted by 426Hemi | October 12, 2009 8:24 PM
Posted on October 12, 2009 20:24
@Avatar
Wait, you are comparing a truck platform to a V6 Accord? Oh I'm sorry a Ridgeline...yeah about that.
Posted by Brian | October 18, 2009 9:20 AM
Posted on October 18, 2009 09:20
One bright side is that Hummers have always cost less in Asia.
Posted by Patrick | October 25, 2009 5:43 PM
Posted on October 25, 2009 17:43