General Motors Company and China’s Sichuan Tengzhong Heavy Industrial Machinery Co., have announced that they have entered into a definitive agreement that will allow Tengzhong to acquire HUMMER from GM.
“Under the terms of the definitive agreement, the buyer will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The buyer will also assume the existing dealer agreements relating to HUMMER’s dealership network,” GM said in a statement.
Tengzhong will now hold an 80 percent stake in HUMMER with 20 percent going to Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena
Financial terms of the agreement were not disclosed, but it was reported yesterday that Tengzhong paid $150 million for the brand.
Under the agreement, HUMMER would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. GM’s Shreveport assembly plant will continue to assemble the H3 and H3T and AM General’s Mishawaka assembly plant will continue to assemble the H2. Both plants will produce the models until June 2011 with an option extension to June 2012.
The deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacturing of HUMMER vehicles. James Taylor will continue on in his role as HUMMER’s CEO.
– By: Omar Rana