Chinese Company Buys GM’s Hummer Brand

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Jun. 3 – General Motors has announced tentative plans to sell its Hummer brand to Chinese industrial machinery firm, Sichuan Tengzhong, although details of the sale are still pending.

The deal will give Tengzhong brand rights and management of existing dealer agreements in addition to saving 3,000 jobs in the United States.

The announcement comes after GM filed for bankruptcy protection last June 1. GM, once an icon of American capitalism, was forced to file for bankruptcy and accept U.S. government funding to save the company’s ailing finances from years of declining profits.

It is the largest industrial bankruptcy in U.S. history. Under section 363 of the bankruptcy code, GM assets will be transferred to a new group comprising of the U.S. government, Canadian government, bondholders and the United Auto Workers Union.

The company may still make the Hummer vehicles but on a contract basis. Last year, sales of the huge sports utility vehicle dropped by 51 percent, the largest drop in the U.S. auto industry.

Tenzhong is a privately-owned company based in Sichuan Province and the top local manufacturer of road, construction and equipment for the energy industry in the country.

“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.,” Tengzhong CEO Yang Yi said in a press release.