GM To End Hummer Operation

America car giant General Motors (GM) has announced they are planning to wind down their production of their infamous Hummer vehicle, the cars based on the military Humvee that have sparked outrage amongst environmentalists.

Sales of the Hummer have been steadily declining for a while now and GM have finally taken the decision to cease production after a takeover deal with a China based firm fell through.

Tengzhong had tried to initiate a deal to buy the vehicles, and neither them nor GM have announced as to why the deal has fallen through.  Some reports are suggesting however, that the Chinese government have blocked the deal, though there is no actual evidence to support this.

GM had agreed to sell the firm around a year ago, when it entered bankruptcy protection in the US amidst the car market slump and have said they are ‘disappointed’ that the deal could not go through. 

"GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said John Smith, vice-president of corporate planning and alliances.

They have also said that they plan to continue to honour the warranties on all of the cars still eligible, and would continue to provide spare parts and service support for all current owners around the world.

GM have been making many changes to their previous structure since emerging from US bankruptcy protection last summer and have already ended operations on certain brands they owned as well as selling others.

They announced that Pontiac and Saturn would cease to operate whilst the sale was planned of Saab, the Swedish brand which was eventually sold to Dutch outfit Spyker.  It was also planned that they would sell Opel, the front company for GMs European operations, Opel also own UK company Vauxhall.

The original Hummer design, Humvee, was a military vehicle built by AM General and was a huge success in the first Gulf War for the American army. 

Hummer was bought by GM in 1999 after the emergence of the sports utility vehicle as one of Americas most popular types of car.  However recently, as the image of the type of vehicle has died down, so have Hummer’s sales.

Tengzhong had been planning to make them more economical, and introduce a Diesel Hummer engine had the deal gone through.

Posted at 04:21PM Feb 25, 2010 by Marc Stenton in Insolvency  |  Comments[0]