GM close to Hummer sale
GENERAL Motors, the mammoth US automaker undergoing bankruptcy proceedings, was last night on the verge of selling its Hummer brand to a Chinese machinery firm for between $150m (£90m) and $250m.
Sichuan Tengzhong Heavy Industrial Machinery will buy the company and continue to make the outsized sports utility vehicles (SUVs) in the US for what GM termed a “transitional period”.
The deal would see up to 3,000 jobs at manufacturing plants and dealerships saved, according to GM, although the Chinese firm did not offer any guarantees on its future plans for manufacturing the vehicles.
Tengzhong aims to beef up the brand’s presence in China, where Hummers are often imported by private buyers.
The impending sale comes as US automakers saw the rate of decline in sales level out last month.
GM sold 190,881 light vehicles in May, down 29 per cent from a year earlier, but an 11 per cent rise in volume from April.
Sales declined 42 per cent in the first five months of 2009, although the firm still enjoys a US market share of around 20 per cent.
The US taxpayer has pumped $50bn into General Motors to date and the firm is now 60 per cent owned by the state.
Meanwhile Magna, the Canadian-Austrian company leading the consortium buying 55 per cent of GM Europe, did little to ease the fears of former GM subsidiary Vauxhall’s 5,000 British workers.
Asked about Vauxhall’s van-making plant in Luton, which employs 1,500 workers, Magna International chief executive Siegfried Wolf said: “Companies that are not profitable are not good for society.”
Magna has already said that 10,000 jobs will have to be cut across GM Europe if it completes the acquisition. The European arm of the automaker employs some 55,000 staff in Europe.