Chinese owner for Hummer
2009-06-03 13:14
GM has sold the Hummer brand to a privately owned Chinese company, Sichuan Tengzhong Heavy Industrial Machinery.
Specialising in heavy industrial and construction machinery, Tengzhong is based in the Schuan province and should have the deal wrapped up by the third quarter of this year.
Although the exact details and amount of money changing hands with regards to the deal are still secret, Credit Suisse is representing Tengzhong whilst America’s Citi bank is acting as financial advisor to GM.
Hummer’s 150 US dealers are expected to survive, yet with its unbundling from the GM stable, new manufacturing facilities will be needed, with the Shreveport, Louisiana plant (responsible for H3 and H3T) still on contact until the end of next year.
GM's South African manufacturing facility in Port Elizabeth, which built right-hand drive H3s, is in the process of shutting down Hummer production.
AM General’s Mishawaka plant, located in Indiana, faces an uncertain future as it produces the oversized H2 Hummer derivative.
Although US workers will be glad the brand’s core management and dealership network remains, Oriental analysts are at a loss trying to understand the value of the deal. Tengzhong has no experience in the car industry and Hummer is a poisoned chalice of sorts in a world turning away from brash, inefficient, SUV vehicles.
One of the deal sweeteners is a long-term GM supplier agreement for Tengzhong, which could perhaps offset a loss-making Hummer purchase against high revenue supply contracts.
