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Hummer Sold; Production to Return to U.S.

Buyer yet to be named; Taylor to stay with Hummer after sale.

by on Jun.02, 2009

GM has confirmed it has a buyer for Hummer but is withholding its name. The automaker will bring back H3 production from S. Africa and concentrate it in Shreveport, LA.

GM confirms it has an unamed Hummer buyer. The automaker will bring back H3 production from South Africa to Shreveport, Louisiana.

General Motors has officially reached an agreement to sell its Hummer off-road brand to a yet-to-be named buyer. The term sheet signing was announced by GM in a press release early Tuesday.

The move is expected to be a boon to workers at a GM plant in Shreveport, Louisiana, who will be picking up production work currently handled at a factory in South Africa.

“GM has signed a memorandum-of-understanding with an investor,” Hummer spokesman Nick Richards told our associates at PickupTrucks.com. “Both parties have agreed to the basic terms [of the purchase] but the financial details and buyer’s name are not being released at this time. That’s expected to be announced some time in the near future.”

Richards said the buyer meets all of GM’s criteria to purchase and operate the Hummer brand’s civilian truck production: They have a proven track record in international business; they know the Hummer brand can perform better globally; and they have a long-term development plan and are willing to invest in future products.Subscribe to TheDetroitBureau.com

“Hummer is a strong brand,” said Troy Clarke, president of GM North America. “I’m confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker.”

The transaction won’t include Hummer-related military technology or military truck production, currently managed by Indiana-based AM General. GM acquired the rights from AM General to make Hummer trucks for civilian applications.

What future products might the newly spun-off Hummer develop?

“The [Hummer] H4 [also known as the HX] and H3T concepts are good examples of where Hummer’s future products could go,” said Richards.

The rugged two-door H4 Concept was designed to compete against the Jeep Wrangler, while the tough H3T Concept previewed the production version of the 2009 Hummer H3T crew cab pickup. The H3T Concept’s two-door cab configuration prioritized off-road capability over passenger space.

“The H3 SUV and pickup and H2 [full-size truck] will also continue in the portfolio,” said Richards. “We’re working on ways to change the H2 beyond [its most recent update in] 2008.”

New alternative fuel and diesel powertrains are also expected to be developed for use in future Hummers.

Pending the successful completion of the deal, the sale of Hummer is expected to secure more than 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships around the country. That figure takes into account GM employees currently building the H3 SUV and H3T pickup truck at GM’s Shreveport, La. but excludes contracted AM General workers making the H2 in Indiana.

“The industry total, including H2 production in Indiana and elsewhere, is approximately 8,000 to 10,000 jobs saved,” said Richards.

Additionally, Richards said that no Hummer dealers will be closed because of the memorandum-of-understanding. GM has previously announced plans to cut about 40 percent of its 6,000-dealer network over the next 18 months.

Hummer’s U.S. domestic production is expected to receive a boost by shifting all current overseas H3 production from GM’s Port Elizabeth, South Africa plant back to Shreveport. Port Elizabeth builds right-hand drive H3s for export into right-hand markets in Europe and Asia as well as for local sale. Richards said about 30 percent of Hummer’s sales volume occurs in countries outside of North America but that figure is expected to grow under the new management team.

Richards said that GM will also provide transitional assistance to Hummer for an undisclosed period, including engineering and information technology support, dealer support and parts services. Vehicle warranties will be fully honored during and after the transition.

The sale is expected to close by the end of third quarter of this year and is subject to customary closing conditions, including receipt of applicable government regulatory approvals.

Mike Levine is founder and Editor-in-Chief of PickupTrucks.com.

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