Detroit, Michigan – General Motors has confirmed a proposed sale of its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Company of Sichuan, China.
Tengzhong, a major industrial group, will acquire the rights to the Hummer brand, along with a senior management and operational team. It will also assume existing dealer agreements relating to Hummer’s dealership network. As part of the transaction, it is contemplated that Tengzhong will enter into a long-term contract assembly and key component and material supply agreement with GM.
In an earlier statement, GM said it expects the deal to secure more than 3,000 U.S. jobs if it is successful. The final terms of the deal are subject to final negotiations.
Tengzhong is a privately-owned company and a leading domestic manufacturer of road, construction and energy industry equipment. “The Hummer brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing Hummer to innovate and grow in exciting new ways under the leadership and continuity of its current management team,” said Yang Yi, CEO of Tengzhong. “We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products, such as more fuel-efficient vehicles in the U.S.”
Hummer will continue to maintain its headquarters and operations in the U.S. and will continue to be managed by its existing leadership team, which intends to expand Hummer’s dealer network worldwide, particularly into new or under-served markets such as China. The transaction is expected to close in the third quarter of 2009. Financial terms of the agreement were not disclosed.