General Motors COO Fritz Henderson spoke to reporters at a press conference in Detroit today and laid out a few more details on the planned sale of the Hummer brand. In a less-than-shocking admission, Henderson conceded that while he'd like to see a decision made by the end of the year, no actual sale is likely until some time in 2009. As it has affected every aspect of the economy lately, the credit crunch has also impacted private equity buyers' ability to borrow money, making large deals like car brand buying difficult to accomplish.
"Private equity, which was a source of capital, has really curtailed its appetite with concerns about credit," says Fritz Henderson. "Ultimately, someone has to buy assets in order to sell them and there has been a dearth of buyers."
Henderson assured reporters that GM was not intentionally delaying the sale to ride out the downturn in the auto industry and that he'd prefer to see Hummer gone sooner rather than later. For now, GM is working on getting all of Hummer's financial documents together so it can present them to potential buyers, whoever they may be, in the next few weeks. The General also is looking at what other assets it can sell as it tries to generate $4 billion from sales as part of its $15 billion restructuring plan.
Henderson also noted that GM is facing slower sales in China and Europe as well, which isn't helping the restructuring plan. On the other hand, he has hope that we may have seen the lowest point of the U.S. market over the summer.
"It feels like all of the negative variables are factored into the market, are factored into the consumer," says Henderson. "Perhaps we have found the bottom ... in the U.S. I can't say the same thing for other markets."