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General Motors finalizes Hummer deal

Posted Oct 10th 2009 9:40AM by Michael FowlkesMichael Fowlkes RSS Feed
Filed under: International markets, Deals, Products and services, Management, Competitive strategy, General Motors (GM), China

General Motors Sells Hummer Truck BrandChina has taken its first major step into the U.S. car market as General Motors announced it had finalized a deal to sell off its Hummer truck brand to Chinese auto manufacturer Sichuan Tengzhong Heavy Industrial Machinery.

Under the deal, GM will continue to make the trucks no later than 2010. While a deal has been reached, it is still going to be up to Chinese regulators to approve the deal and decide if the brand can be profitable and fit into the country's overall national strategy to improve energy efficiency.

General Motors first announced that they were in discussion to sell off its Hummer brand back in June, and marks another big step in the company's downsizing as it comes out of its recent bankruptcy.

GM stated that it hopes to have the deal finalized by the end of the year, and while no official details have been released, The New York Times reported that sources close to the deal reported it to be worth an estimated $150 million.

The Hummer is just one of the brands that General Motors is in the process of eliminating. It has announced plans to terminate its Saturn division by next year, eliminate its Pontiac brand, and sell off Saab to Swedish company Koenigsegg Automotive.

According to the Hummer deal, the current management team will stay in place, including its chief executive, James Taylor. Taylor stated that they plan to prove to Chinese regulators that the Hummer "will not stay as it is," and that it can become a much more fuel efficient vehicle.

It will definitely prove a tough job to rejuvenate Hummer's popularity, especially in America, where SUV sales have plummeted over the past several years, and Hummer sales were down 64% last month. Just how bad are sales? In September the company only sold 426 Hummers nationwide.

Tags: auto makers, AutoMakers, autos, China, deals, General Motors, GM, Hummer, inthenews, James Taylor, Pontiac, Saab, Saturn, suv sales, SUVs

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Last updated: November 22, 2009: 02:54 PM

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