Why did yet another GM brand sale collapse? Find out what happened to Hummer, and what will happen to its 3,500 employees, inside.
Yet another part of GM's fire sale to get rid of non-core brands has collapsed. A deal by GM to sell Hummer to China-based Sichuan Tengzhong Heavy Industrial Machinery has been cancelled after months of negotiations.
As a result, the Hummer brand will be wound down completely. Its remaining stock of under 2,500 units will be sold off, with warranties guaranteed by GM, and as many as 3,650 jobs in Indiana, Louisiana, and Michigan will likely be eliminated.
The two sides have been working in earnest since last summer, when GM announced they had a buyer for Hummer one day after their 2009 bankruptcy filing. Few details of the agreement have leaked out since, but it is believed the marque was sold for $150 million.
However, the Chinese company needed regulatory approval from China's national government, who declined the transaction in an ongoing effort to encourage smaller fuel efficient vehicles. "Tengzhong is disappointed that the transaction cannot be further pursued, but the company respects the outcome," the company said in a statement. "Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price."
General Motors has failed in its attempt to sell Saturn and Opel/Vauxhall. The deal to sell Swedish brand Saab to Dutch supercar maker Spyker closed yesterday after months of turmoil.
"We are disappointed that the deal with Tengzhong could not be completed," said GM Vice President John Smith. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner."