General Motors Co. said talks to sell the Hummer line of sport-utility vehicles to Sichuan Tengzhong Heavy Industrial Machinery Co. remain "on track" after the companies didn't conclude the deal in the third quarter.
"The parties have been in frequent discussions working closely to finalize a definitive agreement," Hummer CEO Jim Taylor said in an e-mailed statement. "Talks are on track. It would be inappropriate to comment further until an agreement is reached."
GM and Tengzhong had planned to close the deal in the third quarter, the companies said when they announced the pact on June 2. Executives from Chengdu, China-based Tengzhong arrived in Detroit on Sept. 30 to complete negotiations, said a person familiar with the talks, who asked not to be identified because the discussions are private. GM hopes to complete the sale by the end of the year, Treasurer Walter Borst said Oct. 1.
"GM is anxious to get this done," said Michael Robinet, an analyst at CSM Worldwide in Northville, Michigan.
GM emerged from bankruptcy July 10 with plans to cut back to four vehicle brands in the U.S. A deal to sell the Saturn brand to Penske Automotive Group Inc. fell through Sept. 30. Its proposed sale of the Saab Automobile brand is progressing, and the Detroit automaker is winding down Pontiac.
Penske, operator of 310 auto retailers, broke off talks to acquire Saturn last week when Renault SA chose not to make future vehicles for the brand. GM said it will now wind down the unit next year.
Chinese Takeover
Christina Stenson, a New York-based spokeswoman representing Tengzhong, declined to comment on Hummer sale negotiations.
The sale of Hummer to Tengzhong would mark the first major Chinese acquisition of a U.S. auto brand. Tengzhong said in June that it was in talks to buy Hummer as part of GM's plans to shed four brands.
The companies have said Hummer will remain based in southeastern Michigan and that the deal would protect more than 3,000 U.S. corporate, manufacturing and dealership jobs.
Tengzhong will assume Hummer's dealer accords and a senior management team, and plans to hire Detroit-based GM to assemble SUVs. The purchase is the first entry into the passenger-vehicle business for Tengzhong, a closely held maker of special-use vehicles, structural parts for highways and bridges and construction machinery.
Credit Suisse Group AG is the financial adviser and Shearman & Sterling LLP is international legal counsel to Tengzhong, while Citigroup Inc. is advising GM, the companies said. The sale is subject to approval by U.S. and China regulators.
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