PORT ELIZABETH, South Africa — The country of South Africa has lost its contract to assemble Hummer H3s for the local and export markets. The move follows General Motors' reported sale of its premium SUV brand this week to Sichuan Tengzhong Heavy Industrial Machinery Co., a Chinese company that has not built passenger vehicles before.
GM, which filed for bankruptcy on Monday, said the sale is set to close by the third quarter.
"It is our understanding from this announcement that future assembly of the Hummer will be consolidated into a single location at Shreveport in the United States, where right- and left-hand-drive [gasoline] and diesel variants will continue to be produced for global markets," said Steve Koch, president and managing director of General Motors South Africa.
Port Elizabeth, South Africa, had the only plant assembling Hummers for sale outside North America. The H3 has been produced in this southern coast city since late 2006 for export to markets in Europe, Africa, the Middle East and Asia Pacific. The H3, which went on sale locally in June 2007, will be imported in the future.
"Since all engineering and design on Hummer is developed in the U.S. and 95 percent of components are sourced from there, the impact on South African operations is minimal," said Koch. "We are committed to engaging with the new owners to seek export opportunities to the U.S. for our local suppliers."
General Motors South Africa had already made staff cuts in anticipation of the relocation of Hummer assembly, and there will be no further impact on its employment levels. Koch said the company will replace the H3 with other high-volume platforms at its Port Elizabeth plant, without specifying what those will be.
GMSA, which markets the Cadillac, Chevrolet, Hummer, Isuzu, Opel, and Saab brands, is not part of the bankruptcy filing in the U.S. and will continue to operate as normal. "We continue to generate our own cash and are responsible for our own viability," said Koch.
New models on the horizon include the Chevrolet Cruze, a Toyota Corolla-size competitor to be launched in South Africa by the end of the year, followed by the new Chevrolet Spark mini hatchback and Chevrolet Orlando MPV in 2010.
Inside Line says: South Africa rolls with the changes at GM. — Denis Droppa, Correspondent
Add A Comment »