By on October 8, 2009

A steal of a deal (courtesy:GMI)

GM and Sichuan Tzenzhong hope to close the Hummer deal within the next few days, reports Automotive News [sub]. GM expects to receive $150m for the brand, or about $1m per dealer (pre-cull). Incidentally, GM made each of those dealers pay up to $15m for the “brand faithful” (read: garish) dealership upgrades pictured above. Not to get  all Lou Dobbs about it, but GM already turned down $100m from an American bidder too. But hey, $50m is $50m. Just ask the Hummer dealers. Meanwhile, who else is ready for Hummer to become a symbol of China?

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30 Comments on “GM To Score $150m For Hummer...”


  • avatar
    mtypex

    Ahnuld will be the first to go to China to get his new Hummer.

    $150m? Man, that’s big bucks!

  • avatar
    MasterOfTheJawan

    How much did they pay for the hummer brand when they purchased it from AM General?

  • avatar
    gslippy

    426 Hummers were sold in September, down over 80% from last year, making the annual run rate about 5000 vehicles.
    So the amortization of $150 million is about $6k per vehicle if spread out over 5 years.

    They’d better sell lots of Hummers at a healthy profit to recoup that payout.

    GM, for their part, shouldn’t be selling the Hummer division. Its deletion just makes GM look even more bland. They might have done better to lower prices, dispense with the glitzy showrooms, and of course, improve quality.

  • avatar
    JSF22

    I just ask, do any of you know anyone who wants a Hummer? Do you know anyone who looks up to anyone who drives a Hummer? There you go.

  • avatar
    PeteMoran

    Owning and driving a Hummer is a form of Stupidity Tax.

  • avatar
    folkdancer

    Will this save money for our army? Can you picture a Chinese dealer driving the Hummers over the Himalayas to Afghanistan for our army to take delivery? Be great for breaking them in.

  • avatar
    fincar1

    I believe that I could more readily picture them being driven over some other mountains to Iran.

  • avatar
    ClutchCarGo

    Hummer is actually pretty popular in other countries, where it still represents the kind of in-your-face aspirational object that it was in the US until recently. While the brand isn’t worth much here, Chinese owners could do quite well selling them in Russia and Asia.

  • avatar
    forditude

    I just ask, do any of you know anyone who wants a Hummer? Do you know anyone who looks up to anyone who drives a Hummer? There you go.

    You could replace Hummer with BMW or Volvo and it would still be true for me. I don’t ‘look up’ to people who drive Rolls-Royces, so what difference does that make?

  • avatar

    I’d rather just see it wind down like Pontiac and Saturn.

  • avatar
    Lorenzo

    Hummer may well become a symbol of where China went wrong. The retail Hummer is very flimsy compared to the military-spec Humvees that are made to order. Chances are, the Chinese aren’t going to be getting those contracts.

  • avatar
    slateslate

    How much did they pay for the hummer brand when they purchased it from AM General?

    the price wasn’t disclosed in ’99 but given GM’s experience with other purchases (Hughes, Saab, etc., etc.) GM probably lost lots of money.

    http://www.nytimes.com/1999/07/01/business/company-news-general-motors-to-acquire-hummer-brand-name.html?scp=1&sq=general+motors+hummer+acquire&st=nyt

    http://media.gm.com/ca/gm/en/news/releases/archived%20releases/4f11ad315228a5f98525696d0071124a.htm

  • avatar
    djoelt1

    That is unfortunate that this brand won’t die. There is no place on our increasingly crowded and tapped out planet for a gas guzzling vehicle for posers. I am surprised the Chinese government let the deal go forward, considering the amount of oil it has domestically. The world would be better off if no new Hummers were built.

    Disappointing.

  • avatar
    AKM

    The Chinese do garish, bad taste and nouveau riche even better than the Americans, so I think it’s very appropriate that Hummer will become a symbol of Chin…

  • avatar
    kcflyer

    Since China already owns such a large portion of our ever increasing national debt we should probably get used to seeing American nameplates and places changing hands. Sad but true.

  • avatar
    Rday

    I thought the Chinese were smarter than that. Oh well, if it saves the american taxpayer money, that is probably the main thing.

  • avatar
    Rod Panhard

    You guys have to look at the big picture on this one. Szechuan Tengzhong Heavy Industries (STHI…for future references) is in the business of building heavy construction equipment. Cement mixers and pontoons.

    Now, visualize their anagram, SHTI on the side of a cement mixer, or a construction pontoon floating in a river. That’s not good, especially if you spend, oh, ten minutes or so perusing a website like “engrishfunny.com” where botched spellings and anagrams are sidesplightingly funny.

    So they get to rebrand their products and for $150 million, that’s a steal. Add in a dealer network and a factory in Louisiana, it’s pretty decent.

    For icing on the cake, they obtain rights to build the most macho vehicle in the world, and who cares if it doesn’t sell well in the U.S? That’s not the point. That’s not the target market. There are tons of wealthy people from Singapore to Saudia Arabia who don’t give a rat’s ass about the price of gas.

    What has a better reputation for reliability…a Land Rover product or the bones of a Chevy Truck that make up a Hummer? I think that’s a no brainer.

    But if you’re cynical, you can look at it this way. For $150 million, they get to change their name from “SHIT” to “BLOWJOB.”

  • avatar
    John

    The Chinese are basically getting nothing but the headaches of a dealer network and the name.

    Military Hummvees are built by AM General not GM. AM General is not part of GM.

    They are not getting a factory, the factory produces Colorado/Canyon pickups and will contimue to be owned by GM who will build H3’s at that factory and sell them under contract to the Chinese (at a profit hopefully) through AT LEAST 2010.GM will also manage the parts supply chain for Hummers new owners.

    The H2 is not made by GM or at a GM factory. GM provides AM general with a chassis and engine and the H2 is built on an as ordered basis. This probably will continue with GM as the middleman.

    GM never bought anything tangible except the naming rights to Hummer from AM General.GM was never involved in the military Humvees.They then amassed a dealer network and began producing the H3.

    Sounds like GM is just going to be a supplier of vehicles just like Magna Steyr Fahrzeugtechnik AG & Co KG which produces certain vehicle for BMW (X3) and the Mercedes E class with 4matic.

    If this is managed coreectly this could very well be profitable for GM.

  • avatar
    mkirk

    Who actually builds the real hummerrs used by the Army? Certainly we aren’t going to have the chinese build he army one. I remember the big stink when we firs went to the black beret and they were made in china.

    Although I wouldn’t be suprised. I know most, if not all of our routE clearance stuff is powered by if not built by another country. Mercedes power in the husky, RG-31 is a BAE design from South Africa. Can’t remember the buffalo.

  • avatar
    26theone

    The military spec Hummers are not part of the deal this is only for the retail stuff. AM General was contracted to build the H2 for GM though.

  • avatar
    26theone

    GM also listed in their bankruptcy filing that Hummer should bring in 500M or more..

  • avatar
    gslippy

    @djoelt1:

    Fortunately, car buyers still have some freedom to buy the vehicles they want. Hummer is not the devil; but elitist control of the free market is pretty close.

  • avatar
    Geotpf

    Does that $150 million go to General Motors Company (new GM), or Motors Liquidation Company (the remains of old GM)? I believe it’s the second. The pending sales of Saab and Opel and the failed sale of Saturn also would pay off Motors Liquidation, not GM.

  • avatar
    djoelt1

    gslippy,

    I don’t think it is elitist to draw a bigger circle of cause, effect, need, and want around the inputs and outputs of what goes into a vehicle purchase. One can draw a tiny circle and say I want this car, I can buy this car, this car is for sale, I can buy the oil. That’s a small circle. The bigger circle says I want this car, I can buy this car, I can buy the oil for this car, a small car will serve my essential needs, a fuel efficient car will reduce our trade deficit and need for overseas adventures, a fuel efficient car will reduce CO2 emissions – and yet, a small car will get me where I want to go.

    I don’t think it is elitist to consider the impacts of one’s choices. Quite conservative, and quite commonsensical too.

  • avatar
    tscurt

    One of our local dealers, a few years back, bought the Burger King next door to his Chrysler dealership, knocked it down, and put up his Hummer building. I can’t imagine what he’t thinking now.

  • avatar
    th009

    @mtypex: $150m? Man, that’s big bucks!

    They’ll save much more than that by avoiding the costs of shutting down Hummer.

  • avatar
    Verbal

    So when the Chinese take it over, does that mean Hummer’s crash test scores will plummet?

  • avatar
    stevelovescars

    How many Hummer dealers are still open in the U.S.? Some started shutting down when gas prices rose a couple of years ago and before GM’s bankruptcy was a sure thing. Inventory was piling up like crazy before the economy totally nosedived.

    Anyway, the way I look at is that nobody needs a Huumer, or for that matter any luxury car like a BMW, Mercedes, or Cadillac. Rather, people who pay more than $35k for a car do it because they want others to see them driving the brand. Ok, a small number drive an BMW or Corvette because they take them to the track on club days or really use them as they are capable of being used, but this is a very small minority… just like the minority of Hummer H2 and H3 drivers who ever came close to using the off-road potential of these trucks.

    The Hummer brand doesn’t need to be legislated out of existence… high gas prices and, more importantly, a negative public image will do the job more effectively. If they plan to sell Hummers in the U.S., they have a very difficult job in front of them.

    I’ve actually started to wonder where all of the Hummers went. A few years ago it seemed I saw them all the time… and often with 22″ spinners. Now I see them on the road so rarely that I’m surprised when I do. Did a huge percentage of customers lease them and just give them back? Were people so embarassed to be seen in them that they had them crushed and made into recycled dashboards for their new Priuses?

  • avatar
    gslippy

    @djoelt1:

    I agree with your 2nd post about the choices we draw as consumers, which is one reason I have a small car. But the 1st post gave me the impression that you’d prefer those circles to be drawn by others, i.e. the government. If I mistook your meaning, I apologize. On the other hand, if you were referring to the market being the driving force, I’m with you. The point may also be moot since the market seems to have turned its back on Hummer long ago.

    I would personally never own a Hummer, because I couldn’t afford to, because it’s made by GM, and because I don’t fit into one as well as my xB. Although I’m not a tree-hugger, I buy cars mostly based upon utility.

    But I like the idea of a car company offering a unique brand to the consumer, even if that choice offends the senses of others with different values. To me, Hummer, Escalade, Navigator, and Land Cruiser are all in the same genre, but somehow Hummer has become the poster child of class warfare in the US, perhaps due to its military roots.

  • avatar

    I’d be willing to bet that all you Hummer knockers have never been 4 wheeling in one. It gets better or the same MPG as a Jeep Wrangler 4 door, is a lot more comfortable in town and is just as capable off road.

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