Press Release: Tengzhong In Advanced Talks To Purchase HUMMER From GM

[JoeT]

Press Release: Tengzhong In Advanced Talks To Purchase HUMMER From GM In Strategic Acquisition


Detroit and Sichuans, June 2, 2009 - Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong) and General Motors Corp. today confirmed details of their proposed transaction, pursuant to which, Tengzhong, a major industrial machinery group, will acquire the rights to the premium off-road HUMMER brand, along with a senior management and operational team.

It will also assume existing dealer agreements relating to HUMMER's dealership network. It is contemplated that Tengzhong will, as part of the transaction, enter into a long-term contract assembly and key component and material supply agreement with GM. In an earlier statement, GM said it expects the deal if successful to secure more than 3,000 US jobs. The final terms of the deal are subject to final negotiations.

Based in the Chinese province of Sichuan, Tengzhong is a privately-owned company and a leading domestic manufacturer of road, construction and energy industry equipment. It will expand into the premium off-road vehicle segment through what will be a strategic acquisition for Tengzhong and a catalyst for HUMMER's growth in the U.S. and around the world.

"The HUMMER brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing HUMMER to innovate and grow in exciting new ways under the leadership and continuity of its current management team," said Yang Yi, CEO of Tengzhong. Mr. Yang continued, "We will be investing in the HUMMER brand and its research and development capabilities, which will allow HUMMER to better meet demand for new products such as more fuel-efficient vehicles in the U.S."

HUMMER will continue to maintain its headquarters and operations in the U.S., and will continue to be managed by its existing leadership team. The team intends to expand HUMMER's dealer network worldwide, particularly into new and underserved markets such as China.

"Today HUMMER is a globally recognized brand with excellent growth prospects, both in terms of new markets and new products for our existing markets," said James Taylor, HUMMER chief executive officer. "With Tengzhong's investment and strong support, we will be able to make our visions a reality. This transaction, if successful, will secure more than 3,000 U.S. jobs, and allow us to embark on a more aggressive global expansion, ensuring a successful future with our new partners."

The transaction is expected to close in the third quarter of this year and is subject to customary closing conditions and regulatory approvals. Financial terms of the agreement will not be disclosed at this time.

Credit Suisse is acting as exclusive financial advisor and Shearman & Stearling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM.

About GM

General Motors Corp., one of the world's largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world, and sells and services vehicles in some 140 countries.

In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.

GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.

About Tengzhong

Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. ("Tengzhong") is one of China's major privately owned engineering companies. Tengzhong is a manufacturer of heavy machinery equipment with a presence in special-use vehicles, road and bridge construction equipment and construction and energy industry equipment.

Since its establishment, Tengzhong has quickly become a major manufacturer of machinery and construction components through a series of successful acquisitions. Tengzhong prides itself on its automated manufacturing equipment, its processing systems, significant research and development initiatives and commitment to innovation.

[t-rex]

Sichuan is my favourite style of Chinese food!

[RedVee8]

Originally Posted by t-rex

Sichuan is my favourite style of Chinese food!

Hummer Alpha becomes Hummer Chilli?

A Chinese Hummer to battle for off road supremacy with that Indian firm, Land Rover....
Funny old time we live in.

[meltdown2k]

While I'm sad to see HUMMER move to foreign ownership, if they keep on their word to continue to base operations and production in the US, it will keep jobs that otherwise may be lost, and hopefully keep quality up.

I just hope we see the H4/HX come to life, and see a spread of the HUMMER brand to a more global audience since apparently Americans think its a brand of anti-environmental excess.

[V8GMT360 Guy]

Originally Posted by meltdown2k

While I'm sad to see HUMMER move to foreign ownership, if they keep on their word to continue to base operations and production in the US, it will keep jobs that otherwise may be lost, and hopefully keep quality up.

I just hope we see the H4/HX come to life, and see a spread of the HUMMER brand to a more global audience since apparently Americans think its a brand of anti-environmental excess.

Anti-environmental excess? Well if that's the case, I'll take two!

I do like the idea that GM will still be contracted for production and component supply; what will be interesting is if GM is also contracted to design/engineer vehicles -- that's almost what it sounds like will happen if GM is handing over a "management team" of some sort as part of the deal.

If they do move operations out of the US, it will be interesting to see if HUMMER trucks start showing up wearing lead paint and requiring leaded gasoline

[PontiacBixler]

Now maybe the new Hummer can team up with the Chinese/Japanese (can't remember which country) company that is making those super efficient battery packs and we could have an eco-friendly image for a true outdoorsy nature lover.

I too hope the HX/H4 is put into production as is!

[ZvetteGuy]

Originally Posted by V8GMT360 Guy

I do like the idea that GM will still be contracted for production and component supply; what will be interesting is if GM is also contracted to design/engineer vehicles -- that's almost what it sounds like will happen if GM is handing over a "management team" of some sort as part of the deal.

I hope that GM can maintain supplying the components for such vehicles... like HUMMER, Saturn, etc... but, time will only tell. I know in the past they have done it with Studebaker and other car manufacturers...

Here we go GM, here we go!!! Here we go GM, here we go!!!

[H3AlphaGuy]

Originally Posted by ZvetteGuy

I hope that GM can maintain supplying the components for such vehicles... like HUMMER, Saturn, etc... but, time will only tell. I know in the past they have done it with Studebaker and other car manufacturers...

Here we go GM, here we go!!! Here we go GM, here we go!!!

I wouldn't expect it past any current generation vehicle, since any new designs would be part sourced from different suppliers like a Magna, etc.

It's just much more affordable if not getting the whole plant to agree for those services, and just tool up a facility once instead of doing it twice in a somewhat short period.

[hawaiitahoe]

So china will own the hummer brand but the it will be based in the US with its dealer agreements, etc. and the same team leading/designers now will still be in charge. Plus this is keeping US jobs

Suddenly i think its not so bad buying hummer again?

Somebody re-assure me?

[CheetahDC]

Originally Posted by hawaiitahoe

So china will own the hummer brand but the it will be based in the US with its dealer agreements, etc. and the same team leading/designers now will still be in charge. Plus this is keeping US jobs

Suddenly i think its not so bad buying hummer again?

Somebody re-assure me?

Tengzhong is privately owned, not state owned. It's more capitalist than General Motors at the moment.

[hawaiitahoe]

Originally Posted by CheetahDC

Tengzhong is privately owned, not state owned. It's more capitalist than General Motors at the moment.

right on, thanks

[nikivee]

Anyone who thinks Chinese ownerership of any US company is a good thing is a moron.

[GMusa]

I still hate this!! A true American brand being devoured by the Chinese, makes me sick.

[GmFordFTW]

as much as i hate to see gm loosing brands, i would feel horrible if hummer was sold to the Chinese. Hummer in my opinion somewhat symbolizes the US as it is what the public believes is helping our military. to have that company be foreign owned would be...hmm i don't know.

at least it keeps US jobs

[megeebee]

Originally Posted by nikivee

Anyone who thinks Chinese ownerership of any US company is a good thing is a moron.

They will not own a US company. They will own a US brand. There is no Hummer company. It was a brand name purchased by GM to market vehicles designed to look and perform a certain way using GM designers and parts.

Now, a Chinese company (Not "CHINA") has purchased it in attempt to do something very similar because Americans wouldn't buy them as they are now. It's as simple as that.

And Tengzhong's success is by no means certain. They could very well fail too.

For all the flag waving going on here, I don't see that many of you actually own Hummers. Sales of Hummers never did reach very high and I don't think GM should have bought it in the first place. They paid out a lot of money for a brand that was fairly limited in what it could offer: Trucks.

I don't like this state of affairs better than anyone else. But it's a little too late for patriotism to save Hummer now.

.