General Motors in tentative deal to sell
Hummer
NEW YORK – General Motors Corp. said Tuesday
that it has tentatively agreed to sell its Hummer brand, a day
after the U.S. automaker filed for bankruptcy protection with hopes
that it will transform its most profitable assets into a new
company within just 30 days.
The Detroit-based company did not name the proposed buyer or the
price, but said the sale will likely save more than 3,000 U.S. jobs
in manufacturing, engineering and at various Hummer
dealerships.
"We're not today in a position to be able to identify a buyer.
it was part of the agreement," GM Chief Executive Fritz Henderson
told CBS's "The Early Show." "We believe the buyer is
quite capable of closing."
Critics had seized on the rugged but fuel-inefficient Hummer as
a symbol of excess as GM's financial troubles grew and gas prices
rose. Sales at Hummer, which is known for hulking sport
utility vehicles like the H3, have been in a steep slide
since gasoline prices rose to record heights last
summer. For the first four months of this year, Hummer sales are
down 67 percent.
GM and other automakers will report May auto sales later
Tuesday.
A sale of the Hummer brand had been expected. Chief Executive
Fritz Henderson had said in April that the automaker was expecting
final bids from three potential buyers within the month.
Other terms of the transaction, which is currently tied to a
memorandum of understanding, were not disclosed.
The unnamed buyer is planning to "aggressively" finance Hummer's
future product programs, according to GM.
"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," Troy Clarke, president of GM North
America, said in a statement.
GM is also trying to sell its Saab and Saturn brands and will
phase out its Pontiac brand as it concentrates on its Chevrolet,
Cadillac, Buick and GMC nameplates.
In advance of Monday's bankruptcy filing by GM, the
automaker had agreed on a deal to sell a majority interest in its
Adam Opel GmbH unit in Europe.
Under that plan, Canada's Magna International Inc. would get a
20 percent stake in Opel and state-controlled Russian lender
Sberbank would take a 35 percent stake. GM will retain a 35 percent
holding, while the remaining 10 percent will go to Opel
employees.
The proposed deal for Hummer will allow it to continue to
contract vehicle manufacturing and business services from GM during
the transition process.
The Hummer sale is expected to close by the third quarter's
end.
GM sought court protection from its creditors on Monday under
Chapter 11 of the U.S. bankruptcy code. The company said it hopes
to reshape the company within a month and emerge from
reorganization in 60 to 90 days as a profitable entity with fewer
employees, factories and dealers.
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