GM nears sale of Hummer unit

DetroitÔÇÖs General Motors (GM) is nearing the sale of its Hummer business to ChinaÔÇÖs Sichuan Tengzhong Heavy Industrial Machinery for around $150 million. The deal will mark the first major acquisition of US automotive assets by China since the start of the global downturn. Industry insiders have suggested that the deal may close as early as today. When GM initially announced the sale of Hummer in June, it expected the brand would fetch around $500 million. Tengzhong has said that under the terms of the agreement, it will keep HummerÔÇÖs headquarters in Detroit and retain its existing management and operational team, as well as keeping the dealership network of the sport utility vehicle in the US.  A total 3,000 US jobs therefore look set to be protected. However, there is a possibility that a Hummer factory will be built in China sometime in the future, to make the brand more global. The deal is the next step in GMÔÇÖs restructuring program, which has so far included the sale of its Saab, Opel and Saturn operations as part of its government-sponsored bankruptcy recovery plan.  GM is, however, retaining its Chevrolet, Cadillac, Buick and GMC brands. Tengzhong has been in talks to purchase the Hummer unit since June. It is reportedly eager to expand its footprint beyond the south-western city of Chengdu in ChinaÔÇÖs Sichuan province, where it is currently located, and sees the Hummer acquisition as a springboard to help it do this. The purchase is the companyÔÇÖs first entry into the passenger vehicle market. It currently makes special-use vehicles, structural components for highways, and bridges and construction machinery.  The deal will still need approval from Chinese authorities before it can proceed; however, it is not believed that the Chinese government would block the acquisition of such a high-profile western brand.  Hummer is currently sold in over 30 countries worldwide, including China. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *