Chinese Firm Acquires Hummer
Chinese heavy-equipment manager last week reached an agreement to acquire
the Hummer off-road vehicle from General Motors, marking China’s first
major entry into the U.S. car manufacturing business.
Tengzhong Heavy Industrial Machinery Corp. agreed to pay $150 million
for the brand. GM’s bankruptcy filing last summer
estimated that the oversized SUV-brand could bring in $500 million
or more. The investors will also get Hummer’s nationwide dealer network.
the terms, GM will continue to manufacture the vehicles until no later
than 2012, when Tengzhong will take over production. Hummer’s current
management team will stay with the new company, which will be headquartered
either in Detroit or Auburn Hills, Mich.
U.S. and Chinese governments still must approve the deal. Chinese regulators
had expressed concerns regarding Tengzhong’s ability to bring the brand
to profitability and how Hummer ownership would fit with the country’s
national push for energy efficiency.
of the big issues we have is to convince them Hummer will not stay
as is,” Jim Taylor, who will remain Hummer’s chief executive, told
Street Journal. “That
it can be a lot greener and a lot more fuel-efficient than it is.”
of the Hummer, which epitomized America’s gas-guzzling habit, peaked
at 71,524 in 2006 before gas prices started rising. Only 8,193 Hummers
have been sold in the U.S. through the first nine months of the year,
down 64 percent from a year earlier.
an interview with The Associated
Mr. Taylor said the key to any turnaround will be quickly rolling out
more fuel-efficient models that get over 20 miles per gallon. Hummer’s
smallest model now gets 16 mpg.
he said, has been in a state “suspended animation” since GM announced
in June 2008 that it would be sold or closed. Funds for marketing,
new products and lease financing all dried up, he said. Nonetheless,
Mr. Taylor said 1,000 Hummers were sold in some months, proving that
fans are out there.
still a loyal customer base underneath there that loves Hummer,” he
Questions: What do you think of a Chinese firm buying Hummer?
What’s the likelihood that Chinese firms will be increasingly buying
more U.S. brands? What do you think of the chances
for Hummer’s turnaround?
- General Motors
And Tengzhong Sign Definitive Agreement For Sale Of Hummer – General
- Iconic Hummer
brand sold to Chinese manufacturer- The Associated
- GM Finalizes
Deal To Sell Hummer To China’s Tengzhong- The
Wall Street Journal