What seemed to be a good joke turns out to be as real as it gets. The North American automaker General Motors announced today that a definitive agreement was made between them and the Chinese heavy equipment maker Sichuan Tengzhong Heavy Industrial Machinery regarding the sale of the Hummer brand. The Chinese heavy equipment maker Sichuan Tengzhong will buy Hummer through an investment entity and will own 80% of the company while the rest of the 20% will be owned by Suolang Duoji, a Hong Kong investor. This news comes four months after General Motors declared that they started talking to the Chinese heavy equipment maker.
Fritz Henderson, General Motors President and CEO has stated that ``Hummer is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both General Motors and Hummer``. He continued by saying that ``For Hummer, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future``.
The Chinese company will get the ownership of the Hummer brand, specific IP license rights necessary for manufacturing Hummer vehicles as well as trademark and trade names as part of the terms of the final agreement.
Sichuan Tengzhong will also get business, key components and manufacturing services from General Motors for a transitional period of time which was not clearly specified. For example, the Mishawaka assembly plant will continue to produce the Hummer H2 until June 2011 (optionally extendable until June 2012). The same maximum date of June 2012 is available for the Shreveport assembly plant that will continue to produce the Hummer H3 and Hummer H3T .
Yang Yi, chief executive officer of Sichuan Tengzhong has stated that ``The transaction marks an exciting step for both Tengzhong and Hummer, as we invest in a business that has significant opportunity in the U.S. and around the globe``. He continued by saying that ``We are excited about some of the initiatives already underway at Hummer that we believer our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel efficient vehicles to meet or not only future regulations but also customer expectations``.
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