Hummer will start process to shut down
NEW YORK — Hummer, the off-road vehicle that once symbolized America's love for hulking sport utility vehicles, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed.
Sichuan Tengzhong Heavy Industrial Machines said Wednesday it pulled out of the deal to buy the company from General Motors. Tengzhong failed to get clearance from Chinese regulators within the proposed time frame for the sale, the Chinese manufacturer said.
GM said it will continue to honor existing Hummer warranties.
"We are disappointed that the deal with Tengzhong could not be completed," said John Smith, GM vice president of corporate planning and alliances. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner."
GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.
As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a Feb. 28 deadline. That plan, along with other options, was unsuccessful, according to a person close to the situation. The person declined to be identified to speak more freely.
"There's no way forward with that," this person said. "We're out of time."
Tengzhong, in a statement, said it was disappointed it could not pursue the opportunity to build attractive, greener vehicles for sale in China and other new markets as well as Hummer's traditional bases.
"Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price," it said, thanking GM, Hummer and its executives, and "the 3,000 people who produce and support Hummer."
GM spokesman Nick Richards said the automaker would still hear last-minute bids for the brand.
"In the early phases of the wind-down, we'll entertain offers and determine their viability, but that will have to happen in pretty short order," he said.
Hummer, which traces its origins to the Humvee military vehicle built by AM General in South Bend, Ind., acquired a devoted following among SUV lovers.
