General Motors announced that the once-promising deal to sell its Hummer Division to a little-known industrial equipment manufacturer based in Sichuan, China, has collapsed. As a result, GM will begin an orderly wind-down of the Hummer operations. Made public last June, the agreement was to have seen Tengzhong Heavy Industrial Machines pay GM $150 million to acquire rights to the Hummer brand and its existing product lines. In late October, the automaker set a January 31st deadline to complete the sale, a condition contingent on Tengzhong receiving full approval of the transaction from the government in Beijing. While that date was subsequently pushed back to late this month, the approvals were not received, leading GM to take this alternative course of action.
In an official statement, John Smith, GM vice president of corporate planning and alliances, said that the company had considered a number of possibilities for Hummer since deciding to divest itself of the division a year ago, and this hoped-for sale was seen as the best way to keep it a viable entity. "We are disappointed that the deal with Tengzhong could not be completed. GM will now work closely with HUMMER employees, dealers and suppliers to wind down the business in an orderly and responsible manner." He also indicated that GM will continue to honor all Hummer warranties and provide service support and spare parts to current owners around the world.