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| Hummer faces shutdown after Chinese sale collapse |
| AP/ PTI / New York Feb 25, 2010, 10:26 IST |
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Hummer, the off-road vehicle that once symbolised America's love for hulking Sports Utility Vehicles, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed.
Sichuan Tengzhong Heavy Industrial Machines Co said yesterday it pulled out of the deal to buy the company from General Motors Co as Tengzhong failed to get clearance from Chinese regulators within the proposed time-frame for the sale, the Chinese manufacturer said.
GM said it will continue to honour existing Hummer warranties.
"We are disappointed that the deal with Tengzhong could not be completed," said John Smith, GM vice president of corporate planning and alliances. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner."
GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.
As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a February 28 deadline. That plan, along with other options, was unsuccessful, according to a person close to the situation. The person declined to be identified in order to speak more freely.
"There's no way forward with that," Smith said. "We're out of time."
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