GM officially announced this morning a preliminary agreement's been reached to sell the Hummer brand out of a desire to look like a company building vehicles more in line with what Washington politicians believe 'merica wants. No word yet on who's buying.
General Motors Announces Preliminary Agreement To Sell HUMMER
Deal could secure more than 3,000 jobs in the United States; preserves HUMMER as global off-road brand
DETROIT, June 2, 2009 – General Motors Corp. (NYSE: GM), announced it has entered into a memorandum of understanding (MoU) with a buyer for HUMMER, its premium off-road brand. This transaction is the result of GM's strategic review of the HUMMER brand and the company's ongoing restructuring efforts.
The sale is expected to close by the end of third quarter of this year and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
The deal is expected to secure more than 3,000 U.S. jobs in manufacturing, engineering and at HUMMER dealerships around the country. The transaction also includes plans by the investor to aggressively fund future HUMMER product programs. Under terms of the MoU, the identity of the purchaser and proposed financial terms of the agreement are not being released at this time.
"HUMMER is a strong brand," said Troy Clarke, President of GM North America. "I'm confident that HUMMER will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker."
As part of the proposed transaction, HUMMER will continue to contract vehicle manufacturing and business services from GM during a defined transitional time period. For example, under the proposed agreement, GM's Shreveport Assembly plant would continue to contract assemble the H3 and H3T through at least 2010.
"GM has developed HUMMER into a globally recognized off-road brand," said James Taylor, HUMMER chief executive officer. "The proposed agreement will enable us to continue that growth and maximize the brand's potential through new, innovative off-road vehicles with improved efficiency and alternative fuel powertrains. Today's announcement is great news for HUMMER's current and future customers, dealers, suppliers and employees around the globe."
Other terms and conditions specific to the sale are not being disclosed at this time. Citi acted as financial advisor to General Motors Corporation.
About GM - General Motors Corp. (NYSE: GM), one of the world's largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.
Forward-Looking Statements - In this press release and in related comments by our management, our use of the words "plan," "expect," "anticipate," "ensure," "promote," "believe," "improve," "intend," "enable," "continue," "will," "may," "would," "could," "should," "project," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to comply with the requirements of our credit agreement with the U.S. Treasury; our ability to execute the restructuring plans that we have disclosed, our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; the ability of our foreign subsidiaries to restructure and receive financial support from their local governments or other sources; our ability to restore consumers' confidence in our viability and to continue to attract customers, particularly for our new products; our ability to sell, spin-off or phase out some of our brands, to manage the distribution channels for our products, and to complete other planned asset sales; and the overall strength and stability of general economic conditions and of the automotive industry, both in the U.S. and globally.