ERJ staff report (AN)
Detroit, Michigan -- General Motors Co. is examining offers for Hummer in the wake of a Chinese machinery maker's failed bid for the SUV brand, press reports said.
GM is giving prior bidders a fresh look after Sichuan Tengzhong Heavy Industrial Machinery failed to win approval from Chinese regulators for its planned purchase, The Wall Street Journal reported. Bloomberg News, citing five people briefed on the talks, said interested parties have done little or no due diligence and GM may still wind down the brand.
Hummer spokesman Nick Richards declined to comment on the reports. He said GM is willing to entertain other offers during the wind down process.
GM's sale this week of Saab arose out of a similar situation: Spyker Cars NV entered a bid after a proposed sale to Sweden's Koenigsegg Group AB fell through in November.
The chances of resurrecting Hummer are viewed as slimmer than they were at Saab, a source told Automotive News yesterday, when GM announced plans to shut Hummer down.
Hummer dealer Will Churchill said he's waiting to see whether the previous bidders come through before he makes a Plan B for his standalone store in Fort Worth, Texas.
"It's not over yet," he said today. "Everyone wants to put a tombstone on it. They've got two or three weeks to entertain offers. I think you will get something out of it."
If a Hummer sale doesn't look like a possibility by the end of March, he said, he'll start acting as if Hummer is winding down. For now, he said, he's almost profitable on the 75 percent cost cut he made last spring by moving his Hummer franchise into the Buick-GMC store he has 20 yards away.
GM said in June that it expected to sell Hummer to the Chinese heavy machinery maker, which has no experience in the auto industry. Hummer's 67 percent sales decline last year was the steepest of any volume brand in the United States.
GM bought the Hummer brand in December 1999 from AM General, which has also continued to make versions for the armed forces.
AM General's factory in Mishawaka, Ind., was to produce the H2 until June 2011 under the Tengzhong deal. GM's assembly plant in Shreveport, La., was to make the H3 and H3T. That plant will idle no later than June 2012, GM spokesman Otie McKinley said. It currently runs on one shift, making the Chevrolet Colorado and GMC Canyon pickups.
Hummer entered the civilian market in 1992. Non-government Hummer sales were averaging between 800 and 1,000 units annually when GM bought the brand.
Hummer's U.S. sales peaked at 71,524 in 2006, before demand was choked by gasoline prices that soared above $4 per gallon in 2008. Sales last year dwindled to 9,046.
Chrissie Thompson contributed to this report.
From Automotive News (A Crain publication)