GM And Sichuan Tengzhong Reach Hummer Sale Agreement

DESPITE FEARS earlier this year that the Chinese Government would block the sale, General Motors and China's Sichuan Tengzhong have reached an agreement for the sale of Hummer.

Financial details have not been disclosed by either party, but the agreement will see Tengzhong purchase Hummer through an investment entity through which it will take an 80 percent share, a private investor holding the remaining 20 percent.

Under the agreement, Tengzhong will take ownership of the Hummer brand and trademark, along with all patents and intellectual property necessary for the manufacture of existing Hummer models.

Hummer models will continue to be built by GM until 2011, with H3 assembly managed at GM's Shreveport plant, and the H2 at AM General's Mishawaka plant.

The Chinese manufacturer's purchase of Hummer will mark its first foray into passenger vehicles, previously offering only commercial trucks and industrial machinery.

"HUMMER is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER," Fritz Henderson, GM President and CEO said.

"For HUMMER, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future."

Hummer's existing management team, headed up by CEO James Taylor, will continue to lead the brand's operations.

"We are fortunate to have a partner who understands and recognizes the importance of continuing investment in HUMMER's heritage as a US-based and branded company with a view toward capitalizing on global opportunities," Mr Taylor said.

"Backed by a privately owned and well-capitalized company, we are going to be able to focus on providing customers with more efficient models that deliver HUMMER's promise of authentic, purpose-built design and engineering."

Following the Chinese Government's push to achieve an eco-friendly image for its automotive industry, Hummer will offer an alternative fuel powertrain with every model - the first in the world to do so.

The 2010 H3 and H3T will feature E85 FlexFuel capability, and a diesel version of the H3 is in the works.

Along with the FlexFuel and diesel engines, Hummer is developing more efficient petrol engines and six-speed transmissions.