Hummer is dead – sale to Sichuan Tengzhong fails at last minute
Perhaps this is for the best, The New York Post tell us more:
NEW YORK (AP) — Hummer, the off-road vehicle that once symbolized America’s love for hulking SUVs, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed.
Sichuan Tengzhong Heavy Industrial Machines Co. said Wednesday it pulled out of the deal to buy the company from General Motors Co. Tengzhong failed to get clearance from Chinese regulators within the proposed timeframe for the sale, the Chinese manufacturer said.
GM said it will continue to honor existing Hummer warranties.
”We are disappointed that the deal with Tengzhong could not be completed,” said John Smith, GM vice president of corporate planning and alliances. ”GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”
GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.
As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a Feb. 28 deadline. That plan, along with other options, was unsuccessful, according to a person close to the situation. The person declined to be identified in order to speak more freely.
”There’s no way forward with that,” this person said. ”We’re out of time.”
GM spokesman Nick Richards said the automaker would still hear last-minute bids for the brand, which employs about 3,000 people who make and sell Hummers in the U.S.
”In the early phases of the wind-down, we’ll entertain offers and determine their viability, but that will have to happen in pretty short order,” he said.
Hummer, which traces its origins to the Humvee military vehicle built by AM General LLC in South Bend, Ind., acquired a devoted following among SUV lovers who were drawn to the off-road ready vehicles. But they drew scorn from environmentalists and sales never recovered after gasoline prices spiked above $4 a gallon in the summer of 2008.
Sales peaked at 71,524 in 2006. But in December 2009, only 325 Hummers were sold, down 85 percent from the previous year, according to Autodata Corp.
Sticker prices start at more than $42,500 and run to about $63,000, according to data posted at the Hummer.com Web site. The H3, the most fuel-efficient vehicle in Hummer’s lineup, averages about 16 mpg. The vehicles are built at GM’s factory in Shreveport, La.
Under the initial agreement to sell Hummer, Tengzhong would have received an 80 percent stake, while Hong Kong investor Suolang Duoji, who indirectly owns a big stake in Tengzhong, would have gotten 20 percent. The investors would also have owned Hummer’s nationwide dealer network.
Financial terms of the sale were not disclosed, although a person briefed on the deal at the time said the sale price was around $150 million. GM’s bankruptcy filing last summer said that the brand could bring in $500 million or more.
Beijing had been cool to the acquisition. Tengzhong lacks a government permit to manufacture cars, and the Chinese government has been seeking to streamline and slow investment in the fast-growing auto industry rather than to attract newcomers.
Richards said the collapse of the sale does not change earlier plans to close the Shreveport facility by 2012. The plant also builds the Chevy Colorado and GMC Canyon and is currently operating on a single 10-hour shift, he said. Hummer production was idled in January.
Hummer is the second brand after Saturn that GM has failed to sell as part of its restructuring. GM sold Swedish brand Saab to Dutch carmaker Spyker Cars NV earlier this year. Pontiac is being discontinued.
GM is focusing its efforts on its four remaining brands: Chevrolet, GMC, Cadillac and Buick.
As with previous GM sales, namely Saab, it could be that someone comes in at the last minute to save the day. Hummer was an unwieldy beast, but they had a fairly unique product that might still have some application in the modern world. Sichuan Tengzhong’s bid for Hummer appeared to be lacking Government support, and yesterday many Chinese media outlets were reporting that Tengzhong was heading for ‘Plan B’ which appeared not to have GM’s support. GM might not want to fall foul of either its owners the US government, or its largest market in China where the government is eager to promote small ‘green cars’ rather than gas guzzling beasts like Humvees.
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A defeat for our beloved, but anachronistic, gas-guzzling brute SUV. Yet this is a clear victory for China which has the guts to say “No” to the further despoiling of its environment.
Kudos to Beijing which has chosen a path that will subdue the ICE and reward those who advance the Zero Emission Vehicle.
Chinese folks deserve the fun that comes with their own
“age of the auto”
See the PRC
In your ZEV……..
And so might go a new tune projecting China into the new century…
Fellow Yankee car lovers will remember:
http://www.youtube.com/watch?v=KGZvQoPxhNs
This is lucky day!
hummers are cool please make em
give hummers a break its real maffia
do they have electic hummers yet
where can i get a chinese hummer
THANK GOD. I don’t know anyone stupid enough to buy such a money and gas wasting brand. The government stepped in at the right time. They are focused on alternative energy vehicles, so I doubt if this deal would’ve survived anyway.
A company doesn’t have to stay as it is. Many companies change to survive as times change. Hummer could have been a brand to be turned around easily. No one ever said that Hummer could only be huge SUVs. Look how successful Subaru has been. Hummer could have been there with a few new models and some good quality designs.
blah blah blah. The truth is Hummers are money and gas guzzlers that no one really needs. They just destroy the environment. Sure, it could be turned around, but why didn’t GM think of that before this happened? GM was stupid.
If Hummer was handed to Tengzhong, I doubt if they could turn the brand around since they are a small company with not much experience, and to be able to turn Hummer into a successful brand requires a tremendous amount of money and effort, and to this date, it’s just not worth it anymore.
Ed so you are saying Tengzhong isn’t creative enough to make anything of Hummer. Huh. Imagine that.
Yeah taking a brand that is known in almost country is worth nothing. Just make your own brand and hope in 15 years that more countries than China know it.
Hummer didn’t have a bad rep for being crap. Just being big and gas mileage. Not something that is hard to overcome. It would be of value to any Chinese brand to grab it and have a known name. As long as they didn’t put out copies of subarus or total junk they would have been on a faster track to success world wide than most of the Chinese brands now.
You are seriously so stupid. I said they don’t have much experience, not they don’t have much creativity. FACE IT, no one wants Hummer and there are plenty of reasons why. I did NOT say it’s worth nothing, but really, Hummer is just a waste of the human race and money. It doesn’t matter how many people know it, it’s still a waste of money.
“Not something that is hard to overcome. It would be of value to any Chinese brand to grab it and have a known name.” If this was so simple, then why didn’t GM do it themselves? It’s obviously not easy to turn Hummer around. Learn some business, it’s not your average piece of cake. Again, I couldn’t care less about how well know they are, in a world today where everyone is pushing to be green, Hummer simply would not be able to survive, especially in China.
and you might wanna correct your first sentence cuz I have no idea of what you’re trying to say. Almost country? lol.
You couldn’t think to throw in an every? I was testing you. You aren’t much for creative writing are you.
Right… you were “testing” me. You should probably test your own intelligence first. I’m a lot more creative than you, and by the way it’s discrimination. Learn your mother language right first before you criticize others. There is no point in replying to someone who is as mentally deficient as you.
great cars love em
hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
love it
sorry
bbbbbbbbbbbbbb sorry love em
great wall
had fun with dad