China firm to buy Hummer
General Motors Corp. also announced that it had potential buyers for its Saab and Saturn brands.
DETROIT - General Motors Corp. took a key step toward its downsizing yesterday, announcing a deal to sell its Hummer brand to a Chinese manufacturer, while also disclosing that it has potential buyers for its Saturn and Saab brands.
GM agreed to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co., the companies said in a joint announcement. The price was not disclosed.
Sichuan Tengzhong deals in road construction, plastics, resins, and other industrial products, and Hummer would be its first step into the automotive business.
Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gasoline prices rose. Sales at Hummer, which is known for models with military-vehicle roots, have been in a steep slide since gasoline prices rose to record heights last summer.
GM, which filed for bankruptcy protection Monday, said the sale probably would save more than 3,000 U.S. jobs in manufacturing and engineering, and at various Hummer dealerships.
As part of the proposed transaction, Hummer will contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to assemble the H3 and H3T through at least 2010, GM said.
The automaker also said yesterday that it had 16 buyers interested in purchasing its Saturn brand, while three parties were interested in the Swedish Saab brand.
GM would like to sell the money-losing Saturn brand's dealership network, contracting with the new buyer for GM to make some of the cars while the buyer gets other vehicles from different manufacturers.
Besides its plan to sell the Hummer, Saab, and Saturn brands, GM will phase out its Pontiac brand, concentrating on four core nameplates - Chevrolet, Cadillac, Buick, and GMC.
The company hopes to follow the lead of fellow U.S. automaker Chrysler L.L.C. by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.
But GM is much larger and complex than its Auburn Hills-based rival and isn't up against Chrysler's tight June 15 deadline to close its deal with Fiat Group S.p.A.
Separately yesterday, the German government said it paid the first $425 million in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the United States.
Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of Opel.
A sale of the Hummer brand had been expected. Chief executive officer Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.