GM to Shut Down Hummer After Sale Fails
Posted: Feb. 25, 2010
There may no be more telling sign of the times than this: In the early 2000s, Hummer reached its peak as a flag-waving brand built on an unabashed sense of American pride. Yesterday, the brand was officially pronounced dead after the Chinese communist government blocked an obscure Sichuan construction equipment manufacturer from buying the company.
The Los Angeles Times reports, “The hulking Hummer SUV brand looks to be headed for extinction. General Motors Co. said Wednesday that it was unable to complete a deal to sell its Hummer line to Sichuan Tengzhong Heavy Industrial Machinery Co., a Chinese industrial company.” A short GM press release issued yesterday afternoon promised to begin “the orderly wind-down of the Hummer operations.” The process of shutting the company down “is expected to take several months.”
GM’s statement didn’t explain what caused the purchase agreement to collapse. Media reports, however, focused on the likelihood that Tengzhong failed to obtain Chinese government approval for the deal. Bloomberg cited “two people briefed on the deal” as saying that “the Chinese government isn’t going to approve a proposed sale.”
The Hummer’s image as the ultimate gas guzzler may have done in the brand in the end. Kicking Tires speculates that the “Chinese government’s desire to portray a green image as its huge population is increasingly buying more cars” was the primary “reason it would not approve the sale.” Its relatively high-priced vehicles have been slow sellers through the recent recession. KT notes, “Hummer sales fell 67% in 2009 compared with 2008 to just 9,046 units.”
It is still possible for another buyer to step up to save the brand. Autoblog comments, “As we learned from the Saab sale saga, GM announcing that the brand will be wound down does not completely extinguish hope for another buyer to slip in in the 11th hour, but it does seem highly improbable.”
Current Hummer owners shouldn’t have too much to fear. Edmunds Inside Line explains, “GM said it would continue to honor Hummer warranties and provide service and parts to existing Hummer owners.”
LINK:
GM to Shut Down Hummer After Sale Fails - U.S. News Rankings and Reviews
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