Hummer to China. Any Questions?

Bertel Schmitt
by Bertel Schmitt

The sale of the Hummer brand to a widely unknown maker of cement mixers and bridge pontoons, located in China’s wild west of Chengdu, left many questions open.

Like, how much did they pay?

“Sichuan Tengzhong Heavy Industrial Machinery Co, a machinery company based in western China, will spend 550 million yuan ($80.5 million) to buy the Hummer brand,” reports Gasgoo. According to GM’s bankruptcy files, Hummer’s value was around $500 million.

And will they really, seriously continue making Hummers in Shreveport, Louisiana?

Tengzhong will “invest another 450 million yuan ($66 million) to set up a new Hummer production line in Chengdu,” says Gasgoo. Take that as a no.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Redbarchetta Redbarchetta on Jun 04, 2009

    BS what exactly did they get for their $80 mil. I know they got the HUMMER trademarked name and I guess dealer franchises will be theirs but did they get anything other then that. Any production lines, tooling for the H2 or H3, rights to use of GM drivetrains, any IP at all? For what they paid or are going to pay they got a great deal even if it was only for the name, but did they get anything else to sweeten the deal. The firesale is at the brand end not on the showrooms. I wonder what they will take for Pontiac considering they are just tossing that one in the trash.

  • VLAD VLAD on Jun 04, 2009

    Question is , what do they get? Chassis, power train and most other components come from GM plants or suppliers. Very few proprietary components other then body and trim. They are ASSEMBLY plants that manufacture little or nothing.

  • SCE to AUX SCE to AUX on Jun 04, 2009

    That price is about what old GM lost in 1 day. Whether they got a bargain or not, I'm interested in how desperate GM was to sell a brand they supposedly valued at $500 million for only $80 million - an 84% discount off a fictional value. "Selling price" is when you reach equilibrium between a willing buyer and a willing seller. Those of you who think Hummer was a steal at $80 million should have bid higher. I'm guessing there weren't many suitors; hence, the true value of Hummer is $80 million. One wonders about the alleged value of the rest of the company's assets.

  • U mad scientist U mad scientist on Jun 04, 2009

    Hummer is known as an upscale American luxury name in China, not unlike Coach bags or whatever. Maybe they’ll transfer tooling, technology, production methods, etc. and make stout commercial and/or military vehicles in Chengdu with proven mechanicals. I doubt this was simply so they could try and sell H2’s in China. There are very few real industrial secrets. The chinese already make decent H1's. I think Hippo is correct there isn't much in Hummer factories, but the brand is worth something and probably what they were mainly going for along with a bit of tech/marketing expertise here and there. (and the cars themselves of course).

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