Breaking News: The Sale of HUMMER

June 2, 2009, 8:31 UhrAndy

IMPORTANT HUMMER ANNOUNCEMENT (JUNE 2, 2009)

Mark LaNeve, GM North America Vice President, Vehicle Sales, Service and Marketing, and Jim Taylor, HUMMER CEO

06/02/2009

Dear HUMMER Dealer: 

General Motors today announced that we have entered into a memorandum of understanding (MoU) with a potential buyer for the HUMMER brand.  

Together with GM, you have helped develop HUMMER into a globally recognized off-road brand and this proposed agreement will enable us to continue that growth, while providing the capital for future product investments to secure HUMMER’s position as a responsible, premium off-road vehicle brand.  Today’s announcement is great news for HUMMER’s current and future customers, dealers, suppliers and employees around the globe.  

Our goal is to try to close the sale by the end of third quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.  If the sale closes, it is our expectation that the current HUMMER dealer agreements will be transferred to the buyer. 

We expect you will have many questions relative to how this sale impacts your dealership and customers.  While many details will not be available until the deal is complete, we can assure you that it is our intent to conduct the eventual sale as smoothly and seamlessly as possible for you and your customers.  

Attached you will find a Frequently Asked Questions document for your information and use with employees and customers. 

We appreciate your continued support and dedication to GM and HUMMER through this process and challenging environment.  We will continue to communicate with you as further information becomes available on sale and transition process. 

Sincerely, 

Mark LaNeve GM North America Vice President                                                              

Jim Taylor HUMMER CEO 

HUMMER Memorandum of Understanding 

Dealer Frequently Asked Questions 

June 2, 2009 

1. What was announced today? 

A: General Motors announced today that it has entered into a memorandum of understanding (MoU) with a potential buyer for HUMMER. This agreement will allow HUMMER to maximize its potential as a premium global off-road brand through capital investments in new innovative off-road vehicles with improved efficiency and alternative fuel powertrains, and diesels. 

For GM, it’s an important milestone in the company’s restructuring efforts focused on profitability and long-term sustainability. 

This transaction will also secure more than 3,000 jobs directly related to HUMMER in the U.S. in terms of engineering, manufacturing and dealerships, and between 8,000 and 10,000 industry-related jobs overall. 

2. What is a “memorandum of understanding” or MoU? 

A: A memorandum of understanding is a non-binding agreement between GM and the buyer which outlines the principal deal points of the proposed transaction. 

3. What will be included in the sale? 

A: The brand sale will include the assignment of ownership in HUMMER trademarks, trade names and trade dress; ownership in design and shape of current and future models; assignment of ownership in HUMMER related domain names and advertising tag lines; and a license to HUMMER-related intellectual property. 

4. Will the sale include HUMMER military technology? 

A: No. The transaction does not involve any military technology or military vehicles. 

5. How much cash is GM receiving for the HUMMER brand? 

A: Financial and other terms of the proposed transaction are not being released at this time. 

6. Who is purchasing the brand? 

A: Under terms of the MoU, GM is currently not permitted to release that information. However, regardless of who is investing in the brand, the proposed agreement will enable us to continue the brand’s evolution, while providing the capital for future product investments to secure HUMMER’s position as a responsible, premium off-road vehicle brand. 

7. Why is GM selling HUMMER? 

A: In June 2008, GM announced it was conducting a strategic review of the HUMMER brand. As a result of that review, it was determined that a sale of the HUMMER brand was the best option for both GM and HUMMER. 

8. How long will GM provide transitional support? 

A: GM will provide contractual business and manufacturing services to HUMMER for a period of time to be mutually agreed between the parties. 

9. Did you seek government approval for this sale? 

A: GM has advised the U.S. Department of Treasury of the proposed transaction. GM and the buyer will seek all the necessary governmental approvals prior to consummation of the sale. 

10. What are the next steps? 

A: The next step in the process will be the negotiation and finalization of definitive agreements between the parties detailing the transaction outlined in the MOU. We commit to provide you with regular updates as further information becomes available on the sale and transition process 

11. When will the sale be complete? 

A: The sale is expected to close by the end of the third quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals. 

12. Will current GM/HUMMER employees be forced to go with the new company? 

A: In addition to Jim Taylor’s executive staff, select HUMMER team members are being offered the opportunity to continue their support of the HUMMER brand, but no one is being forced to join the new HUMMER company. 

13. Where will HUMMER be based? 

A: HUMMER will remain a U.S.-based company with sales in more than 34 different countries. We are currently evaluating various locations around the country for our permanent global headquarters. 

14. Does the purchase agreement include all HUMMER dealers? 

A: HUMMER’s dealer network is part of the proposed transaction, but we cannot comment on plans for individual dealerships. 

15. Will you close any dealerships? 

A: GM has no plans to close HUMMER dealerships as a result of the MoU. 

16. Will GMAC offer dealer floorplan financing? 

A: We cannot speak on behalf of GMAC. 

17. Will GM provide Sales and Service support? 

A: GM and HUMMER are working together to ensure a seamless transition for the customers and dealers. 

18. Will warranty agreements continue to be honored? 

A: Customers can rest assured that their HUMMER warranty will be honored. 

19. Where will the vehicles be produced? 

A: AM General remains under contract with GM for assembly of the H2 and under the proposed transaction, GM would contract build the H3 and H3T for HUMMER for the North American market through at least 2010. In addition, Shreveport expects to begin building the homologated H3 in right- and left-hand drive for export markets, as well as a new diesel H3 that we expect to begin exporting to overseas markets in early 2010. 

20. Will HUMMER bring back the H1? 

A: Our future product development will focus on improving efficiency and performance in our current models with alternative fuel powertrains, 6-speed transmissions and diesel engines. We will also continue to develop new, smaller, more efficient, yet highly capable off-road vehicles. Vehicles like the HX and H3T Concept provide a good direction for the future of the brand. 

21. Will HUMMER continue to sell vehicles overseas? 

A: Sales outside the United States represent as much as 30 percent of the current HUMMER business, so the global market remains extremely important to HUMMER. 

22. What models will HUMMER offer in 2010? 

A: For the current and upcoming model year, we will continue to sell the 7-passenger bio-powered H2 and the award-winning, highly-capable H3 and H3T midsize vehicles. Stay tuned for additional product announcements. 

1 comment:

  1. GM: HUMMER Sale to Tengzhong Cannot be Completed… - KARL Chevrolet HUMMER (Pingback), February 26, 2010

    [...] afternoon, February 24th, we received word, along with the rest of the world, that GM’s sale of HUMMER to Tengzhong cannot be completed.  It seems that Tengzhong failed to gain the necessary approvals from a myriad [...]

     

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