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GM and Tengzhong Agree on Sale of Hummer

GM’s Shreveport plant remains open until at least June of 2011.

by on Oct.09, 2009

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GM's Shreveport assembly plant will contract build the H3 and H3T models until 2011 or 2012.

General Motors (GM) and Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong) have just announced that the companies have entered into a definitive agreement that will allow Tengzhong to acquire GM’s premium all-terrain Hummer brand.

Under the terms of the definitive agreement, the buyer will acquire the ownership of the Hummer brand, trademark and tradenames, as well as specific intellectual property license rights necessary for the manufacture of Hummer vehicles. The buyer will also assume the existing dealer agreements relating to Hummer’s dealership network.

Tengzhong will purchase Hummer through an investment entity, in which it will hold an 80% share. Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed nardite producer Lumena, will have the remaining 20%.

Financial terms of the agreement were not disclosed.

“This transaction marks an exciting step for both Tengzhong and Hummer, as we invest in a business that has significant opportunity in the U.S. and around the globe,” said Yang Yi, chief executive officer of Tengzhong. “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.”

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Q&A: Hummer’s Jim Taylor

How do you translate, “The brand environmentalists love to hate,” into Chinese?

by on Jun.02, 2009

Hummer at the crossorads.  GM has signed a preliminary deal with a Chinese maker which hopes to take over the controversial SUV brand later this year.

Hummer at the crossroads: GM has signed a deal with Chinese maker Tengzhong. It hopes to take over the controversial SUV brand later this year.

Life — and business — can take some strange turns.  Jim Taylor is a great example.  He was trained as an engineer, yet somehow wound up taking over General Motors’ flagship Cadillac division and, as general manager, leading it through its “renaissance” project, with the launch of products like the well-acclaimed CTS sedan.

But a year ago, Taylor was unexpectedly reassigned to GM’s Hummer brand, a division that serves as public enemy number one for environmentalists.  Taylor’s primary job was to oversee the spinoff of the once-popular brand, one of the four divisions GM will shed as part of his Chapter 11 reorganization.

Early Tuesday morning, the automaker announced it had found a buyer.  Initial intentions to keep details secret didn’t last long, as the folks at Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd, in Chengdu, China, were quick to start crowing about their new acquisition.  From one of the symbols of American prowess to the latest Chinese toy, Jim Taylor talked with TheDetroitBureau.com’s Bureau Chief Paul A. Eisenstein about the sale and what’s to come at Hummer, which he has agreed to stay on with when the sale is formalized, in the coming months.

Subscribe to TheDetroitBureau.comTDB: Hummer’s sale surprised some folks, who thought the brand was damaged beyond repair.

Taylor: The first thing investors look at it is cash: does it make money?  We’re peddling an asset capable of turning a profit.  We had to find someone willing to make a serious investment.  This is not for the faint-of-heart.  This is an expensive date and goes on for a long time.  In the auto industry, as we’ve all seen, you can chew through a lot of cash, fast, so we were looking for a select group of investors with very deep pockets and a long-term vision. (more…)