Hummer dealers are being told to begin shutting down their operations.
The chances of General Motors finding a buyer for the Hummer brand continue to fade.
GM has quietly told Hummer dealers to wrap up their operations by the end of October and has approved wind-up payments to dealers so they can begin the process of closing their showrooms.
Dealers have been told “their GM Sales and Service Agreement expires Oct. 31,” Hummer spokesman Nick Richards said.
Hummer’s prospects dimmed dramatically, in February, when efforts to sell the Hummer brand to Sichuan Tengzhong Heavy Industrial Machines Co. Ltd. of China collapsed
A heavy truck manufacturer, Tengzhong had no experience in developing or selling vehicles to retail customers. Meanwhile, Chinese authorities also have been eager to consolidate the country’s sprawling automotive industry, which now includes dozens of small, regionally based manufacturers, so they pointedly refused to grant the high-level permission Tengzhond needed to conclude the Hummer acquisition – which, in turn, meant the firm could not raise the needed cash on global financial markets.
After the deal with Sichuan Tengzhong fell apart, GM entertained other offers. The effort produced no tangible results and GM ultimately rejected all of the proposals.
One key reason GM ultimately seemed reluctant to conclude a sale is that it did not want to retain any kind of stake in Hummer. That meant a potential buyer would have to pay up front. That same condition came close to scuttling any sale of the Swedish brand, Saab, though the Dutch manufacturer, Spyker, was eventually able to pull together a financial package with the assistance of the Swedish government and the European Union.
Hummer insiders also have suggested that the effort to sell the brand was botched because of the way GM handled negotiations with Sichuan Tengzhong. It was surprising enough that it picked a buyer with absolutely no background in the consumer vehicle market, at the suggestion of its advisors at Citibank, while rejecting other more plausible offers. But complicating matters was GM’s decision to negotiate with Tengzhong exclusively, rather than pursue parallel paths that might have given more time to come up with an alternative once the Chinese deal collapsed.
Meanwhile, Ford Motor Co. is eyeing one lucrative piece of Hummer’s business. Ford expects to exapnd its exports of its heavy duty pickup truck to the Middle East where Hummer had a solid folowing.