DETROIT — It appears that Hummer will not be a casualty of GM's bankruptcy filing. The automaker on Tuesday announced it has entered into a memorandum of understanding with an unnamed buyer for Hummer, the gas-guzzling, iconic American off-road vehicle that has come to symbolize wretched excess in an era of soaring gasoline prices.
This morning on the CBS Early Show, GM President and CEO Fritz Henderson confirmed the potential buyer of Hummer is "quite capable of closing." GM said the Hummer sale is expected to close by the end of the third quarter of 2009. Under the proposed agreement, GM's Shreveport, Louisiana, plant would continue to contract assembly the Hummer H3 and H3T through at least 2010, the automaker said in a statement.
GM did not say how much money it would get for the all-SUV line. But the Wall Street Journal reported that bids were in the "sub-$500-million range." It also noted that "various parties" had bid on Hummer, including "a Chinese investor."
Word of the Hummer transaction came just hours after GM filed for bankruptcy protection and announced further plant closings and job losses. The automaker said the Hummer deal "is expected to secure more than 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships around the country."
"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."
The terms of the memorandum of understanding also include "plans by the investor to aggressively fund future Hummer product programs," GM said.
Inside Line says: Hummer gets to live another day, it appears. Good news, at least for those folks who haven't noticed that gas prices are beginning to creep back up toward $3 a gallon. — Anita Lienert, Correspondent
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