GM's Hummer sold to Chinese company
03 June 2009
In the first ever acquisition of a US car maker by a Chinese business, privately-owned Chengdu-based road and construction equipment maker Sichuan Tengzhong Heavy Industrial Machinery Company, has acquired bankrupt auto giant General Motor's large sport utility vehicles and pickup trucks sold under the Hummer brand in a deal believed to be $500 million.(See: GM to sell Hummer; gets court nod for vehicle protection and incentive programmes).
GM filed for bankruptcy protection yesterday with debts of $172 billion and the agreement for the divestment to the Chinese firm, expected to be completed by the third quarter, also marks GM's rebuilding efforts under in Chapter 11 bankruptcy protection. According to the Telegraph of the UK, the sale also"highlights a continuing shifting in economic power from West to East."
''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,'' Yang Yi, the chief executive of Tengzhong, said in a statement released by GM.
''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 US,'' the statement said.
Sichuan Tengzhong, which has agreed to aggressively fund future Hummer product programmes, plans to expand the SUV's dealership network globally, while maintaing the main production in the US, protecting 3,000 jobs.
Troy Clarke, the president of GM North America, expressed the view that this sale would accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker. "Hummer will thrive globally under its new ownership," he said.