General Motors Reaches Preliminary Deal to Sell Hummer
After months of trying to secure a buyer for its Hummer brand, GM reached a preliminary agreement to sell its off-road brand one day after the General entered bankruptcy.
GM announced this morning that it and the Hummer buyer entered a memorandum of understanding for the sale. Under the terms of the memorandum, the buyer’s name will not be released at this time.
However, in early April Reuters reported that sources said there were three bidders in the hunt for GM’s Hummer brand and none of them was anautomaker. Reuters reported that one was from the United States and the other two were from overseas. The sources added that the bidders included wealthy individuals and private equity.
GM expects the Hummer sale to be final by the end of the third quarter this year and believes it will save more than 3000 U.S. jobs. The preliminary terms also call for continued development of Hummer products.
Under the terms, GM will continue to contract assemble several vehicles for the Hummer brand at Hummer’s current Shreveport, LA assembly plant for a specified time. The H3 and H3T — two of Hummer’s more fuel efficient offerings — will be built there through at least 2010.
“GM has developed Hummer into a globally recognized off-road brand,” said Hummer CEO James Taylor. “The proposed agreement will enable us to continue that growth and maximize the brand’s potential through new, innovative off-road vehicles with improved efficiency and alternative fuel powertrains. Today’s announcement is great news for Hummer’s current and future customers, dealers, suppliers, and employees around the globe.”
Source: GM and Reuters