General Motors will wind down the Hummer brand after sale collapsesWed, 24 Feb 2010 00:00:00 -0800
General Motors will wind down its Hummer brand after a proposed sale to China's Sichuan Tengzhong Heavy Industrial Machines Co. Ltd. fell through.
Tengzhong “was unable to complete the acquisition,” GM said Wednesday in a statement. The Chinese company failed to win government approval of the sale, a source familiar with the negotiations said.
GM will honor warranties, provide spare parts and will support service for Hummers worldwide, the automaker said. GM has 153 U.S. Hummer dealers, spokeswoman Ryndee Carney said in an e-mail.
The failed deal likely seals the fate of the last of GM's four unwanted U.S. brands. GM is winding down Saturn after its sale fell through in September. Pontiac is also being phased out. GM on Tuesday completed the sale of Saab to Dutch niche carmaker Spyker Cars NV.
GM is open to receiving other bids for Hummer as it winds down the brand, the source said. The sale of Saab arose out of a similar situation: Spyker entered a bid after a proposed sale of Saab to Sweden's Koenigsegg Group AB fell through in November. The chances of resurrecting Hummer are viewed as slimmer than they were at Saab, the source said.
GM put Hummer up for sale in 2008, before the global financial crisis that dragged the automaker into bankruptcy.
In June of last year, GM said it expected to sell Hummer to the Chinese heavy machinery maker, which has no experience in the auto industry. Hummer's 67 percent sales decline last year was the steepest of any volume brand in the United States.
GM bought the brand in December 1999 from AM General, which has also continued to make versions for the armed forces.
Hummer entered the civilian market in 1992. Non-government Hummer sales were averaging between 800 and 1,000 units annually when GM bought the brand.
Hummer's U.S. sales peaked at 71,524 in 2006, before demand was choked by gasoline prices that soared above $4 per gallon in 2008. Sales last year dwindled to 9,046.
PRESS RELEASE: Hummer Sale to Tengzhong Cannot be Completed; wind down of HUMMER business to begin
DETROIT -- General Motors today announced that Sichuan Tengzhong Heavy Industrial Machines Co., Ltd. (Tengzhong) was unable to complete the acquisition of HUMMER. As a result, GM will begin the orderly wind-down of the HUMMER operations.
"One year ago, General Motors announced that we were going to divest HUMMER, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward. We have since considered a number of possibilities for HUMMER along the way, and 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 will continue to honor HUMMER warranties, while providing service support and spare parts to current HUMMER owners around the world.
By Chrissie Thompson- Automotive News