Sold! Tengzhong Acquires Hummer for $150 Million
October 9, 2009
General Motors has just confirmed that it has entered a "definitive agreement" with China's Tengzhong Heavy Industrial Machinery Co. to sell Hummer. While the details of the agreement are still officially under wraps, one source cited by Bloomberg said the deal carries a price tag of $150 million.
For a large automaker like GM, $150 million is anything but a Hummer-sized amount for the brand, but given the obstacles already faced in the negotiations process, the automaker probably wants out at any cost.
GM will continue to make H2s and H3s for Hummer until June 2011, at which point Tengzhong is on its own unless it takes the optional one-year production extension through June 2012. Continuing production of these vehicles, GM says, will save 3000 jobs. What happens after June 2011, though, is unclear.
Just last summer, GM CEO Fritz Henderson said selling Hummer should translate to about "$500 million or more."
In August, Hummer CEO Jim Taylor discussed the brand's long-term plans, depending on future funding. An updated full-size H2 could reach dealers in two years at the very soonest while a diesel H3 is in the cards but, at this point, not for the U.S. market. Then there's the possibility of a smaller H4 model or additional H3 variant. Right now, it's unclear whether such a model will ever see the light of a dealer showroom.
Tengzhong doesn't have much experience in the automotive industry, so we're really looking forward to seeing how it manages a high-profile brand like Hummer.
Source: GM, Automotive News (Subscription required)