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HUMMER Sale To China's Tengzhong Official

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2009 Hummer H2

2009 Hummer H2

Enlarge Photo

2009 Hummer H2

2009 Hummer H2

Enlarge Photo

2009 Hummer H2

2009 Hummer H2

Enlarge Photo

The saga of GM's sale of HUMMER has finally come to a close. With the sudden collapse of the Penske-Saturn deal last week, many feared a similar fate would befall HUMMER, but today's announcement of the sale agreement between GM and China's Tengzhong puts those fears to rest, at least for the present. The deal must still secure final financing and pass regulatory approval.

Tengzhong, known formally as Sichuan Tengzhong Heavy Industrial Machinery Corp., is the Chinese firm that's been the front runner for the purchase of HUMMER for months now. GM's announcement this morning means that 3,000 U.S. jobs will be saved thanks to manufacturing contracts with the Shreveport, Louisiana and Mishawaka, Indiana plants that currently build the H3, H3T and H2.

Fans of HUMMER, and jingoistic patriots convinced of their moral superiority in particular, can take further solace in the fact Tengzhong plans to put the brand's global HQ near Detroit. Michigan's $20.6 million state tax credit had a huge influence on that decision, but Tengzhong also appears to be very interested in maintaining a strong U.S. presence for the brand.

HUMMER's current leadership team, including CEO James Taylor, will remain on board to run the show as Tengzhong's backing enables the company to move in a more fuel-efficient direction.  "We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations," said Yang Yi, chief executive officer of Tengzhong.

Flex fuel E85 capability, diesel and six-speed transmissions are the focus of the new ownership of HUMMER, according to the release, though the diesel is being eyed only for markets outside the U.S. The addition of E85 capability to the 2010 H3 and H3T will make HUMMER the first manufacturer to offer an alternative fuel powertrain in every model it sells.

Through June 2011, HUMMER vehicles will be manufactured under contract with GM at the Shreveport and Mishawaka plants where they are currently built, meaning they will still be American-made for the next two years, with a possible one-year extension through June 2012. After that, it's not clear where HUMMER vehicles will be made.

The deal officially covers the sale of the HUMMER brand, trademark and tradenames and the intellectual property necessary to manufacture vehicles under license. The existing dealer network will also be transferred to Tengzhong under the agreement.

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Comments (10)
  1. So after Tata own Landrover (the symbol of UK proud car industry). A 'little company; from China will own one of the 'symbol' of the off-road symbols from the USA. Where this world is going to? :) I guess that soon we will see lots of brands in the hands of India, China and Brazil.
     
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  2. These days people are becoming more pragmatic about companies, brands, products and markets. Land Rover will still be British, as long as it's made in the UK (owned by Indians). Premier League teams are still viewed as English (owned by foreigners, many foreign players, but played in England). A large part of the mystique of Hummer is it's "American-ness", so as long as the top-of-the-line vehicles are still made in the US, the brand will survive. There is no reason why large countries with bad roads (China, Brazil, Russia, India) wouldn't want to own Hummer--the company or it's products.
     
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  3. Tengzong is being taken to the cleaners. They are buying a stale, failed brand. Hummer was a one-trick pony that has run out of steam. Also- the type of buyers who buy Hummers are not going to buy a chinese branded car. This is a very stupid move. The other problem is that they are not getting the real R&D and technology know-how that GM posesses.
     
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  4. Now the Chinese will have even more of an incentive not to participate in climate change efforts since an environmentally conscious world will shun the Hummer even more.
     
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  5. Well, really this is like Hummer getting a financial backer, but continuing on -- GM is still making the vehicles in the U.S., the same people are running the company. It won't really become "Chinese" until 2011-2012. Not that I think that's a bad thing. Hummer had gone stale. It needs some new blood.
     
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  6. was very happy to see this news. after the saturn news, needed to see that the other planned dispositions were going to happen (according to the original plan). one less distraction for gm which, regardless of past mis-steps, we all should be rooting for big time.
     
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  7. Wasn't Chrysler suing Hummer over copying its grille? Now that the Chinese own Hummer they can get away with it to their hearts' content and no one will hold them accountable. Anyone wanna bet on a Hummer Patriot?
     
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  8. @Marquis: Chrysler DID sue Hummer, several years ago. In June 2003, a US District Court said Hummer was allowed to use a grille with seven vertical slots (just like Jeep's seven-slot grille). Case closed.
     
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  9. HUMMERs are good for military uses. I don't get people who buy such monsters for day-to-day commuting in the city...
     
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  10. I guess GM had no choice but I don't trust the Chinese-never have, never will. They couldn't even make dog food that wasn't tainted.
     
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