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hulking trucks, is now in the hands of a Chinese heavy equipment
maker. General Motors Co. and Sichuan Tengzhong Heavy Industrial
Machinery Corp. finally signed the much-anticipated deal for GM to
sell the brand on Friday. Tengzhong will get an 80 per cent stake
in the company, while Hong Kong investor Suolang Duoji, who
indirectly owns a big stake in Tengzhong through an investment
company, will get 20 per cent. The investors will also get Hummer's
nationwide dealer network. Financial terms were not disclosed,
although a person briefed on the deal said the sale price was around
$150 million. The person did not want to be identified because the
terms were being kept private. GM's bankruptcy filing last summer
said that the brand with military roots could bring in $500 million
or more. Suolang Duoji also is the controlling shareholder and
chairman of Lumena Resources Corp., a Hong Kong listed mining
company. GM and Tengzhong said in a statement that the transaction
still must be approved by the US and Chinese governments. Chinese
regulators initially expressed reservations about Tengzhong's ability
to run such an enterprise. Hummer's current management team will
stay with the new company, which will be headquartered either in
Detroit or suburban Auburn Hills, Mich. James Taylor, the GM
executive who has run Hummer recently, will remain as its chief
executive officer. Taylor said in an interview with The Associated
Press that he knows resurrecting the brand will be difficult, but the
key will be quickly rolling out more fuel-efficient models that get
over 20 mpg. 'I'm not in any kind of denial that we have a very
steep uphill challenge in front of us,' Taylor said. Hummer, he
said, has been in a state ' suspended animation' since June 2008 when
GM announced it would be reviewed for sale or closure. Since then,
its future has been uncertain and it got no marketing support or new
products. Financing for leases, a big part of its luxury market, also
dried up, Taylor said. Still, GM sold 1,000 Hummers in some months,
proving that buyers are out there. 'There's still a loyal customer
base underneath there that loves Hummer,' he said. Hummer hopes to
keep buying fuel-efficient engines and transmissions from GM, but can
seek them elsewhere, Taylor said. He said the brand has been
unfairly tagged as a symbol of the American gas guzzler, saying
other vehicles get worse mileage. He wants to make sure 'at least
we aren't a victim of misinformation that we stand alone as the
ultimate bad guy in the space, which we aren't.' Hummer hit the
streets for civilian use in 1992 while owned by AM General LLC, which
makes Humvees for the US Army, and California Gov. Arnold
Schwarzenegger was among the first customers. The brand, whose
smallest model gets 16 miles per gallon (14.7 liters per 100
kilometers) in combined city and highway driving, sold well until
the middle part of this decade when fuel prices began to rise. Sales
peaked at 71,524 in 2006. But only 8,193 Hummers have been sold in
the US through the first nine months of the year. That's down 64 per
cent from a year earlier. And only 426 Hummers were sold nationwide
last month, according to Autodata Corp. GM, which spent 40 days in
bankruptcy protection during the summer and has received about $50
billion in US government aid, also plans to sell its Saab brand and
scrap Pontiac and Saturn as it tries to streamline its operations.
The Hummer deal is a victory for GM, which saw a similar agreement to
sell the Saturn brand blow up at the last minute. Auto dealership
magnate Roger Penske's bid fell through just before the deal was to
close last week when a contract to make vehicles for Saturn was
rejected by the Renault board. The company wants to focus on four
core brands: Chevrolet, Cadillac, Buick and GMC.
