GM plans Hummer download

China has further confirmed its role as an emergent player in the global car market with the announcement of a local manufacturer's plans to acquire the Hummer brand from ailing US giant General Motors.

The Tengzhong Heavy Industrial Machinery Company announced in a press release issued on June 2 -- the day after GM filed for bankruptcy -- that it has entered into a memorandum of understanding (MoU) with GM and expects to close the transaction in the third quarter of this year.

In accordance with the agreement, Tengzhong will step in, for an as-yet undisclosed sum, taking over all aspects of Hummer operations in the US and around the world.

This means Tengzhong intends continuing with the same senior management and operational team in the US, as well as the existing dealer network.

GM's initial announcement of the MoU left the buyer's identity shrouded in secrecy, but both buyer and vendor decided to reveal Tengzhong as the buyer rather than feed media speculation. Given the Hummer revelation came within a day of GM's announcement it had filed for Chapter 11, it's safe to presume that Tengzhong has struck a good deal. Further evidence of this is based on Rick Wagoner's original projection that a buyer for Hummer would be found before the end of April (more here). The privately owned manufacturer of road, construction and energy industry equipment said it plans to enter into a "long-term contract assembly and key component and material supply agreement with GM."

The plan, according to Tengzhong, is to expand Hummer in both US and global markets. Significantly, Tengzhong CEO Yang Yi said it plans to improve the environmental friendliness of the brand. "We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S." he said.

"Today Hummer is a globally recognized brand with excellent growth prospects, both in terms of new markets and new products for our existing markets," said Hummer chief executive officer James Taylor (pictured here with a certain Hummer customer standing in front of an electric-powered H3).

"With Tengzhong's investment and strong support, we will be able to make our visions a reality. This transaction, if successful, will... allow us to embark on a more aggressive global expansion, ensuring a successful future with our new partners."

The deal would see Hummer H3 and H3T models continue production at the brand's Shreveport assembly plant in Louisiana until at least 2010.

Significantly, the announcement from Tengzhong and GM says the acquisition is expected to save more than 3000 jobs in manufacturing, engineering and at dealerships in the US.

In many ways, Hummer has been symptomatic of the decline of GM with its decidedly Stars 'n' Stripes blatancy in a time of economic strife and environmental fears.

The brand is sold in single-model H3 form in Australia under the umbrella of Holden's GM Premium Brands operation, but has suffered more than many in the current economic downturn. Year-to-date sales this year are running at less than half of 2008 figures with just 309 H3s sold so far.

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