Tengzhong-Hummer deal collapses

By: Linda Luo   2010-03-02

DETROIT - General Motors Co. announced on February 24 that its sale of the Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. (Tengzhong) failed as the Chinese "was unable to complete the acquisition" before the agreed deadline. As a result, GM will begin the orderly wind-down of the Hummer operations.

"We are disappointed that the deal with Tengzhong could not be completed," said John Smith, GM vice president of corporate planning and alliances. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner." 

GM will continue to honor Hummer warranties, while providing service support and spare parts to current Hummer owners around the world, GM said in a company statement.

Media reports said the deal collapsed since Tengzhong failed to win government approval of the sale, however, an official from Ministry of Commerce reiterated earlier that they had not received Tengzhong's application for the deal.

GM put Hummer up for sale in 2008. In June of 2009, GM said it expected to sell Hummer to the Chinese heavy machinery maker, which has no experience in the auto industry.