DTN News: GM To Shut Down Hummer After Deal Collapses

DTN News: GM To Shut Down Hummer After Deal Collapses * Analyze: GM started to work with Chinese counterpart for sale of Hummer at approx. $ 600 million, negotiation took over 2 years and revised counter-offer was made at $ 150 million. In the interim, during negotiation period Chinese counterpart (Sichuan Tengzhong) were able to grasp info on Hummer and felt GM Hummers are a white elephant (gas guzzler vehicles) and they (Chinese/Sichuan Tengzhong) can produce similar vehicle with better mileage, technology and at half the price of GM HUMMER, no binding of agreements and territories, meaning Sichuan Tengzhong can produce and sell similar vehicles around the globe competitively and R&D costing minimal. China is a sleeping dragon and has cornered foreign exchange reserves of $ 2.4 trillion with its SAR territories Macao and Hong Kong would have one third ($ 3 trillion) of the global total foreign exchange reserves of $ 9 trillion. In conclusion, WATCH OUT FOR THE GIANT SLEEPING DRAGON in the year of the TIGER. By Roger Smith ~ Defense-Technology News/DTN News. *Source: DTN News / AP (NSI News Source Info) TORONTO, Canada - February 25, 2010: Hummer, the off-road vehicle that once symbolized America's love for hulking SUVs, has hit a dead end after its planned sale to a Chinese heavy equipment maker collapsed late Wednesday. Heavy equipment maker Sichuan Tengzhong Heavy Industrial Machines Co. pulled out of the deal for Hummer, known for its military-like SUVs, because it was unable to get clearance from Chinese regulators within the proposed deal timeframe, the manufacturer said in a separate statement. GM said it will continue to honour existing Hummer warranties. "We are disappointed that the deal with Tengzhong could not be completed," said John Smith, GM's vice-president of corporate planning and alliances. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner." GM has been trying to sell the loss-making brand for the last year and found a suitor in Tengzhong, but resistance from Chinese regulators created difficulties from the start. As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a Feb. 28 deadline. Hummer, which traces its origins to the Humvee military vehicle built by AM General LLC in South Bend, Ind., acquired a devoted following among SUV lovers who were drawn to the off-road-ready vehicles. But they drew scorn from environmentalists and sales never recovered after U.S. gasoline prices spiked above $4 US a gallon in the summer of 2008. Sales peaked at 71,524 in 2006. But in December 2009, only 325 Hummers were sold, down 85 per cent from the previous year, according to Autodata Corp. Hummer is the second brand after Saturn that GM has failed to sell as part of its restructuring. GM sold Swedish brand Saab to Dutch carmaker Spyker Cars NV earlier this year. Pontiac is being discontinued. GM is focusing its efforts on its four remaining brands: Chevrolet, GMC, Cadillac and Buick.

DTN News: Technology TODAY August 11, 2009 ~ Humvee Still Made In America

DTN News: Technology TODAY August 11, 2009 ~ Humvee Still Made In America

*Source: DTN News / Defense Media (NSI News Source Info) WASHINGTON, USA - August 11, 2009: The military’s High Mobility Multipurpose Wheeled Vehicle, also known as a “HMMWV” or a “Humvee,” will continue to be made in the United States, by an American-owned company. The recent announcement that Detroit-based General Motors will sell their Hummer brand of vehicles to Chinese-based Sichuan Tengzhong Heavy Industrial Machinery Company, has no bearing on the U.S. military’s Humvee. “The Army’s Humvee and the civilian Hummer look similar and share a common appearance,” said spokesman Lt. Col. Martin Downie. “But the rights to produce those two different vehicles are no longer owned by the same company.” Humvee manufacturer AM General is an American company based in South Bend, Ind. The company produced the first 55,000 Humvees for the Army in 1985. The company continues today to produce the Humvee for the military. In the early 1990s, AM General began producing a civilian version of the Humvee, calling it a “Hummer.” But by the late 1990s, AM General had sold the Hummer name to General Motors. While GM will sell the Hummer nameplate to Sichuan Tengzhong, the military’s Humvee, its designs, unique performance capabilities and technologies will continue to be owned by, and the vehicle produced by, AM General.

DTN News: New Look ~ Hummer With Tracks At An Auto Exhibition In Beijing

DTN News: New Look ~ Hummer With Tracks At An Auto Exhibition In Beijing

*Source: DTN News / Int'l Media

(NSI News Source Info) BEIJING, China - July 31, 2009: The Hummer H2 is an SUV and SUT sold by General Motors under the Hummer brand. It is a large truck (lighter and slightly slimmer than the Hummer H1, while slightly longer and slightly taller) with room for six passengers (including driver). The rearmost part of the H2 SUV was modified to a pickup truck bed for the 2005 H2 SUT ("Sport Utility Truck").

A man looks at a Hummer with tracks in place of wheels at an auto exhibition in Beijing, China, Friday, July 31, 2009. The five-day exhibition showcases imported cars, many of them high-priced luxury models.

The H2 is built under contract by AM General at a specially constructed plant in Mishawaka

Indiana, USA. Although it shares GM's GMT820 truck platform with the Chevrolet Tahoe and GMC Yukon, those vehicles differ in many ways and are constructed in three other GM plants. The H2's final frame assembly is made up of 3 sections:

The front uses a modified GM 2500-Series utility frame, the mid-section is all new and is completely boxed, and the rear section uses a modified GM 1500-Series frame which is upgraded for the 8,600 pound (3629 kg) gross vehicle weight. The 2008 Hummer H2 does 0-60 in 8.2 seconds.

The H2 has a massive truck frame and has a wider-than-average track firm that may offer stability against overturning compared to some of the more common light truck SUVs, although objective tests have not been performed by the government or other outside parties due to its specialized vehicle class.

It is marketed as both a general purpose vehicle and as an off-road vehicle. Because of mass marketing by GM, it is primarily used as a passenger vehicle on typical roads. Along with the Ford Excursion, the H2 is also a very common vehicle for a limousine conversion.

DTN News: GM Strikes Hummer Deal With China Machinery Maker

DTN News: GM Strikes Hummer Deal With China Machinery Maker

(NSI News Source Info) DETROIT/NEW YORK – June 3, 2009: General Motors Corp said on Tuesday it reached a tentative deal to sell its Hummer brand to a privately held Chinese heavy machinery maker, part of an effort to drop four unprofitable vehicle lines and leave bankruptcy as a leaner company. Hummer is a brand of off-road vehicles sold by General Motors (GM). The original Hummer H1 was based on the military High Mobility Multipurpose Wheeled Vehicle (HMMWV, or Humvee). However, the Hummer H2 and the Hummer H3 were based on other, smaller civilian-market vehicles. On June 1, 2009, as a part of the General Motors bankruptcy announcement, the company revealed that the Hummer brand would be discontinued. However, the following day GM announced that instead it had reached a deal to sell the brand to an undisclosed buyer. On June 2, 2009 GM announced the sale of Hummer to an undisclosed Chinese company. The New York Times reported that day that the buyer would be the Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., a machinery company in western China, and later that day, Sichuan Tengzhong itself posted it on their own website.The transaction is expected to close in the third quarter of this year and is subject to customary closing conditions and regulatory approvals. Financial terms of the agreement will not be disclosed at this time. Credit Suisse is acting as exclusive financial advisor and Shearman&Sterling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM. GM, a day after filing for bankruptcy, said in a statement that it reached a memorandum of understanding with Sichuan Tengzhong Heavy Industrial Machinery Co for the sale. Tengzhong said it will retain Hummer's senior management and operational team. GM said Tengzhong will also enter into a long-term contract assembly and key component and material supply agreement with GM. Under the deal, which is subject to regulatory review and is expected to close in the third quarter, Tengzhong will assume Hummer's existing dealer agreements. Financial terms were still under discussion and will not be disclosed, GM said. Bankers have said Hummer could fetch about $100 million in cash in addition to other commitments. The deal marks the first time that a Chinese buyer has acquired a brand from one of the struggling U.S. automakers. Chinese parts suppliers and automakers have shopped for U.S. automotive assets, including those at also-bankrupt Chrysler LLC, but no deals have been completed despite the enormous pressure on U.S. automakers in recent years to cut costs. Based in the Chinese province of Sichuan, Tengzhong makes special-use vehicles, highway and bridge structural components, construction machinery and energy equipment. Tengzhong was formed in 2005 through a series of mergers and, according to its website has 4,800 employees, compared with GM's 243,000. The Chinese firm said in a joint statement with GM that it would expand into the premium off-road vehicle segment. "We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demands for new products such as more fuel-efficient vehicles in the U.S.," Tengzhong CEO Yang Yi said. Tengzhong's website (www.sctengzhong.com:8080/tengzhong/weben/gytz.jsp) did not indicate whether the company has experience running plants overseas or of producing passenger vehicles of any kind. GM said earlier on Tuesday that the buyer of Hummer, who it did not initially identify, would contract to build the H3 model SUV and the H3T pickup truck at GM's plant in Shreveport, Louisiana, through at least 2010. In addition, GM said the investor would fund future vehicles for Hummer and invest in alternatives to the heavy gas-guzzling engines that are the hallmark of the brand. In Shreveport, where 800 workers work on a single shift building Hummer H3 and H3T models, there was relief that a new buyer would keep the line running for at least a while longer. "We're just excited that Hummer may live on," said Morgan Johnson, president of UAW Local 2166, which represents workers at the GM plant. DIMINISHED EXPECTATIONS GM had expected Hummer to fetch more than $500 million when it went on sale a year ago. The automaker said in a court filing on Monday that the sale could not proceed on "reasonable terms" due to tight credit and concerns about GM's financial condition. Part of the problem has been that the military-derived Hummer has become an emblem of excess, turning consumer tastes against the brand's macho styling and prices that can top $71,000. U.S. sales fell by more than two-thirds in January-April. First seen as multipurpose, off-road military vehicles, Hummers were originally built by AM General. Its first model was the Humvee, built for the military. GM bought the Hummer brand from AM General in 1999. AM General still makes the Humvee for the U.S. military. After losing $88 billion since 2005, GM is in the process of cutting debt, workers and brands in bankruptcy. It is seeking to sell its Saab and Saturn brands this year and plans to discontinue Pontiac by the end of 2010. That would leave a smaller GM to be rebuilt around the Chevrolet, Cadillac, GMC and Buick brands. Together those account for more than 80 percent of current sales. Credit Suisse is acting as exclusive financial adviser and Shearman & Sterling is international legal counsel to Tengzhong on the transaction. Citi is financial adviser to GM. (Additional reporting by Kevin Krolicki in DETROIT, Chris Kaufman in NEW YORK and Fang Yan in SHANGHAI; Editing by Matthew Lewis & Ian Geoghegan)

DTN News: General Motors Corp To Reorganize In Government-Led Bankruptcy

DTN News: General Motors Corp To Reorganize In Government-Led Bankruptcy

(NSI News Source Info) WASHINGTON - June 1, 2009: General Motors Corp., the century-old automaker battered by the economic downturn, mounting debt and management problems, will file for bankruptcy Monday as part of an Obama administration plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government. General Motors Corp. world headquarters is seen along the Detroit river in downtown Detroit, Michigan May 31, 2009. General Motors Corp and the U.S. government finalized plans on Sunday for the battered company to reorganize, setting the stage for America's largest-ever industrial bankruptcy and heralding a new and uncertain era for the No. 1 U.S. automaker. It will be the largest industrial bankruptcy in U.S. history and the fourth-largest overall and comes as smaller rival Chrysler appears ready to make a speedy exit from its own court proceedings. A GM dealership in New York filed for bankruptcy protection early Monday, beginning the wave of court filings expected in Manhattan bankruptcy court as the automaker begins a complex reorganization that the government insists can be completed within three months. The government will end up with a 60 percent ownership stake and an unprecedented role in reshaping the auto industry. President Barack Obama planned to announce his support for General Motors as it enters bankruptcy protection, vowing to provide billions more in government aid and protect the taxpayers' investment without interfering with the company's day-to-day operations. GM President and CEO Fritz Henderson was holding a news conference in New York immediately following Obama's address from the White House. Administration officials said late Sunday the federal government would provide an additional $30 billion to GM — which has already received about $20 billion in government loans — to help it restructure through bankruptcy. GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week. The officials, speaking on condition of anonymity in advance of Obama's public remarks, said the administration expects the court process to last 60 to 90 days. If successful, GM will emerge as a leaner company with a smaller work force, fewer plants and a trimmed dealership network. Meanwhile, a federal bankruptcy judge has approved the sale of most of Chrysler LLC's assets to Italian automaker Fiat, clearing the way for the American automaker to exit court protection shortly. Judge Arthur Gonzalez said in a court filing Sunday that he approved the sale, the major piece of a plan orchestrated by the federal auto task force. GM will move forward with four core brands — Chevrolet, Cadillac, Buick and GMC. The company plans to cut 21,000 employees, about 34 percent of its work force, and reduce the number of dealers by 2,600. GM was announcing plans to close 11 facilities, idle three others and name the buyer of its Hummer division. GM's stock dropped to its lowest price in company history Friday, closing at just 75 cents. The shares will be virtually worthless in a Chapter 11 reorganization. "There is still plenty of pain to go around, but I'm confident this is far better than the alternative," said Sen. Carl Levin, D-Mich. "It's a new beginning, it's a rebirth, it's a new General Motors." The early Monday court filing by Chevrolet-Saturn of Harlem Inc.'s Chapter 11 petition list the company's largest creditors as a trust company that holds more than $22 billion in bond debt, and the United Auto Workers union, which is owed more than $20 billion dollars. The size of those figures indicate the dealership's filing in Manhattan bankruptcy court is part of GM's overall filing for bankruptcy protection. The automaker itself is expected to file its own Chapter 11 petition around 8 a.m. EDT. Many GM affiliates will have to file separate petitions as part of the process. The Harlem dealership's filing shows the U.S. government will form a new company called Auto Acquisition Corp. to acquire the dealership's assets and many others. The new company would become the "New GM" that would be owned by the U.S. and Canadian governments, the UAW and GM's current bondholders and would emerge from bankruptcy protection as a leaner, competitive automaker that can become profitable. The filing lays the groundwork for the financing from the U.S. Treasury Department and the Canadian government that will keep General Motors Corp. and its affiliates operating while they're in bankruptcy protection. It confirms Albert Koch, who helped Kmart Corp. through its Chapter 11 reorganization, will serve as GM's chief restructuring officer. The bankruptcy represents a dramatic downfall for GM, which was founded in 1908 by William C. Durant, who brought several car companies under one roof and developed a strategy of "a car for every purse and purpose." Longtime leader Alfred P. Sloan built the global automaker into a corporate icon. The billions in federal loans will come from the $700 billion rescue fund for the financial sector, representing another significant intervention into private enterprise. The Treasury has used funding to stabilize banks, take a majority ownership in insurance conglomerate American International Group and guide Chrysler through bankruptcy. Despite its large ownership stake in GM, administration officials said the government intends to avoid interfering with routine management decisions and would strive to shed its ownership stakes "as soon as practicable." But the arrangement was fraught with potential conflicts. Daily operations will be carried out by GM's management but the administration will play a role in selecting a majority of the new board of directors. Obama ordered the firing of former GM CEO Rick Wagoner and instructed GM to trim itself to a break even point of 10 million U.S. car sales a year instead of its previous break even point of 16 million vehicles. For Chrysler, the sale to Fiat means the U.S. company could be out of bankruptcy within the government's original timeframe of 30 to 60 days. Chrysler's plan gives a 55 percent stake of the new company to a union-run trust for retirees. Fiat gets a 20 percent stake to Fiat that can ultimately grow to 35 percent. The U.S. and Canadian governments get smaller pieces. Chrysler LLC was forced into court protection on April 30. Ahead of its own bankruptcy filing, GM rushed to win concessions from stakeholders. A group of large, institutional bondholders, representing 54 percent of GM bondholders, agreed to exchange their unsecured bonds for a 10 percent stake in a newly restructured company, plus warrants to purchase a greater share later. They had balked at an earlier offer that gave them 10 percent of the company. The United Auto Workers union agreed to a cost-cutting deal last week.