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CNN/Money: GM sells Hummer to Chinese company


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  1. 1. Which THREE of these cartoons are the best?



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:doh: I just read that as well.

http://www.breitbart.com/article.php?id=D98IM9S81&show_article=1

DETROIT (AP) - General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand, while also revealing that it has potential buyers for its Saturn and Saab brands.

GM has a tenatative agreement to sell its rugged Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co. of China, said a person briefed on the deal.

The Detroit automaker announced Tuesday morning that it had a memorandum of understanding to sell the brand of rugged SUVs, but the buyer's identity was not released. A formal announcement of the buyer was to be made Tuesday afternoon.

Sichuan Tengzhong deals in road construction, pplastics, resins and other industrial products, but Hummer would be its first step into the automotive business, said the person briefed on the deal. The person spoke on condition of anonymity because the details have not been made public.

GM said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships.

As part of the proposed transaction, GM said, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to contract to assemble the H3 and H3T through at least 2010.

The automaker also said Tuesday that it has 16 buyers interested in purchasing its Saturn brand, while three parties are interested in the Swedish Saab brand.

Chief Financial Officer Ray Young told reporters and industry analysts on a conference call that GM is continuing to pursue manufacturing agreements with a new Saturn buyer.

GM would like to sell the money-losing Saturn brand's dealership network, contracting with the new buyer to make some of its cars while the buyer gets other vehicles from different manufacturers.

At the same time, bridge loan discussions with the Swedish government are progressing, Young said.

GM, which filed for Chapter 11 bankruptcy protection in New York on Monday, is racing to remake itself as a smaller, leaner automaker. It is hoping to follow the lead of fellow U.S. automaker Chrysler LLC by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.

But GM is much larger and complex than its Auburn Hills-based rival and isn't up against Chrysler's tight June 15 deadline to close its deal with Fiat.

Sharon Lindstrom, managing director at business consulting firm Protiviti, said the companies pose different challenges. But as with Chrysler, she notes that the Treasury Department made sure many of GM's moving parts were in order ahead of time so a quick bankruptcy reorganization might be possible.

"They had a lot of their ducks in a row because the terms of the government financing forced them to get all the parties to the table in a very, very short period of time," Lindstrom said.

In addition to its plan to sell the Hummer, Saab and Saturn brands, GM will also phase out its Pontiac brand, concentrating on its Chevrolet, Cadillac, Buick and GMC nameplates.

Separately, the German government said Tuesday it paid out the first euro300 million ($425 million) in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the U.S.

Over the weekend, the German government agreed to lend Opel $2.1 billion. The loans are part of a deal in which Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of the company.

A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.

Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gas prices rose. Sales at Hummer, which is known for models like the H3 with military-vehicle roots, have been in a steep slide since gasoline prices rose to record heights last summer. For the first four months of this year, Hummer sales are down 67 percent.

GM nailed down deals with its union and a majority of its bondholders and arranged to sell off most of its Opel operations in Europe in order to appear in court Monday with a near-complete plan to quickly emerge with a chance to become profitable.

The government has said it expects GM to come out of bankruptcy protection within 60 to 90 days. By comparison, the judge overseeing Chrysler's case approved the sale of its assets to a group led by Italy's Fiat Group SpA in just over a month. Some industry observers think Chrysler could emerge as early as this week.

During Monday's hearing, GM attorney Harvey Miller stressed the magnitude of the case and the importance of moving GM through court oversight as fast as possible. He noted that the automaker only has about $2 billion in cash left.

"If there's going to be a recovery of value, it's absolutely crucial that a sale take place as soon as possible," Miller said in his opening statement.

The automaker wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would take 12.5 percent of the "New GM," with the United Auto Workers union getting 17.5 percent and unsecured bondholders receiving 10 percent. Existing shareholders are expected to be wiped out.

Attorneys for GM stakeholders packed the stuffy courtroom well ahead of the automaker's first-day Chapter 11 hearing. U.S. Judge Robert Gerber moved swiftly through the agenda's more than 25 mostly procedural motions.

Gerber set GM's sale hearing for June 30, putting it on a path similar to that of Chrysler. Objections are due on June 19, with any competing bids required to be submitted by June 22.

Gerber also gave GM immediate access to $15 billion in government financing to get it through the next few weeks, and interim approval for use of a total $33.3 billion in financing, with final approval slated to be ruled on June 25. The funds are contingent on GM's sale being approved by July 10. Gerber also approved motions allowing the company to pay certain prebankruptcy wages, along with supplier and shipping costs.

The sheer size of GM makes it a more complicated case than Chrysler.

GM made twice as many vehicles as Chrysler's 1.5 million last year and employs 235,000 people compared with Chrysler's 54,000. GM also has plants and operations in many more countries, meaning it will likely have to strike separate deals to navigate the bankruptcy laws of those places.

Henderson said GM has learned a few things by watching Chrysler's case.

"Certainly the court showed that it can address 363 (sale) transactions in an expeditious fashion," Henderson said at a news conference Monday. "Particularly in our case with what will be a very large 363 transaction."

GM's filing for Chapter 11 bankruptcy protection is the largest ever for an industrial company. GM, which said it has $172.81 billion in debt and $82.29 billion in assets, had received about $20 billion in low-interest loans before entering bankruptcy protection.

___

Fowler reported from New York. AP Auto Writer Dan Strumpf in New York and Associated Press Writer Joe McDonald in Beijing contributed to this report.

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Interesting all the interest in Saturn, considering that half the lineup are rebadged Opels. I wonder what a new company is going to do with those cars?

Hummer fans should be thankful that it is surviving. Honestly, I wouldn't have bet on its survival.

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They really should keep Saturn ... pretty much their best brand after Cadillac.

Saturn is Opel rebranded for the American market, with some stupid gimicks like dent resistant body panels. With GM selling Opel, there is no reason to hold onto Saturn. I think Saturn might stay since Magna (Canadian auto parts maker, looking to get into full vehicle manufacturing) is buying Opel. They will probably continue to sell Opel's in Europe (Vauxhaul in the UK) and Saturns in North America.

And how ironic is it that Hummer, the brand that just screamed "America", is now being "outsourced" to China?

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That will help their military out tremendously.

Bingo

I didn't like it when Germany owned Jeep either

I don't know....Diamer Chrysler did some nice things with the Jeeps. Finally brought out the 4 door Wrangler which many have begged for for nearly a decade.

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I don't know....Diamer Chrysler did some nice things with the Jeeps. Finally brought out the 4 door Wrangler which many have begged for for nearly a decade.

It was hit and miss. I wish they would have stayed with the TJ's although the JKs are growing on me (of course I am an early bronco fan(wheel base perfection/4 coils, but where is my v-8)).

The 4 door is okay, but I love the diesel and wish it was turbo'd and allowed here.

It's more the irony of how jeep was said to have won the war for us against Germany and then they end up owning them.

Of course they sold it back to an American company.

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How about gettin rid of GMC vehicles all together!!! I mean Christ, they are duplicate Chevys. How effing stupid was that!?!?!??

All they need is:

1 Eco Friendly Fuel Efficient Car

1 Compact Economy Car

1 Mid Size-Full Size Sedan available in a convertable

1 Sports Car

1 Mini Van

1 Mid Size SUV

1 Light Truck

1 Heavy Truck Line

Thats it. Smaller and more streamline

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They really should keep Saturn ... pretty much their best brand after Cadillac.

Saturn was just them selling Opels in the U.S. They have sold or about to sell Opel.

I hope Saturn's new owners does something different with them though I've asked this in a thread before; just what would they be selling?

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How about gettin rid of GMC vehicles all together!!! I mean Christ, they are duplicate Chevys. How effing stupid was that!?!?!??

All they need is:

1 Eco Friendly Fuel Efficient Car

1 Compact Economy Car

1 Mid Size-Full Size Sedan available in a convertable- To big for Enviros

1 Sports Car- Definitely a no with ENviros

1 Mini Van- No way with Enviros

1 Mid Size SUV- Hell no with Enviros

1 Light Truck- Grudgingly accepted.

1 Heavy Truck Line- **** NO with Enviros

Thats it. Smaller and more streamline

Eventually we will only get small tiny fuel efficient cars. All other cars will be outlawed. Actually, cars will eventually be outlawed.

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Eventually we will only get small tiny fuel efficient cars. All other cars will be outlawed. Actually, cars will eventually be outlawed.

Without my pick up truck, I wouldn't be able to tow my derby car I am getting next week or pick up the weight sets I'm buying tomorrow. And how do I get my kayak to the river?

BTW, I am never buying a new car again. I'll stick to carburated vehicles.

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someone needs to buy SAAB and return them to a quality car... (although i like my 05 SAAB made by GM, but the small ongoing issues are annoying)

When was SAAB quality? My dad had a late 70's model and said it was one of the worst cards he's ever owned. Honest question, I don't know their era of quality.

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