Hummer of a Week for GM: Deals done for Opel, Hummer

Hummer Sold to Chinese Industrial Equipment Manufacterer

General Motors has reached an agreement to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Company based in the province of Sichuan. The Chinese company is looking to sign a long-term assembly and supply contract with GM and to keep all Hummer operations, management and personnel in place, thus securing some 3,000 U.S. jobs.

Tengzhong's plans as a future Chinese automaker were not revealed, but the Hummer brand will give the company a manufacturing and distribution network in the world's largest car market. There are currently 150 Hummer dealers in the U.S.

The new owner did say that the product line-up would be expanded to include alternate powerplants. Hybrids and direct-injection diesel come to mind.


Opel Shuffles Off to Canada

A consortium led by Canadian auto parts supplier Magna International, Inc., has signed a letter of intent to purchase German automaker Adam Opel AG from GM. Magna's partners are OAO Sberbank which currently owns a portion of Opel and automaker OAO GAZ Group, both Russian corporations.

The initial terms have GM retaining a 35pct stake in Opel with Sberbank also holding 35pct. Magna would own 20pct with Opel employees holding the remaining 10pct. GAZ would get the rights to sell Chevrolets in Russia. Another stipulation would prevent Opel from selling cars in the U.S.

Magna, a leader in electric vehicle technology, is expected to move Opel into that market.

Automakers Fiat SpA and Beijing Automotive Industry Holding are still serious suitors should the Magna deal collapse.


Saturn Suitors Lining Up

According to GM, the list of parties interested in the Saturn brand now includes 16 serious suitors.

The Penske Automotive Group is looking to acquire Saturn's distribution and dealer network in partnership with a foreign automaker - possibly Nissan - to build Saturn branded vehicles. Penske is the exclusive U.S. distributor for Smart.

Telesto Ventures has a similar plan to partner with an offshore manufacturer who will build cars branded Saturn. In addition, Magna International is in the mix as is Black Oak Partners, an Oklahoma City-based private equity company.

With the assistance of the S.J. Girsky & Company, GM will soon pare the list to three or four with a final decision coming late in the third quarter.


Dealership Closures

Following the announced closure over the next 17 months of more than 1,100 dealerships, GM sent wind-down agreements to those whose franchises will not be renewed on the Oct. 31, 2010 expiration date.

The terms offered differ depending on each dealer's inventory, regional rank and other cost factors. Cash offers reportedly range from $100k to $1m - these funds earmarked to assist dealers in moving remaining inventory. Dealers accepting the terms will not be able to return unsold inventory to GM, nor may they file lawsuits until after franchise contracts expire. No terminated dealer may order new cars from GM but nonetheless must stay in business until at least Jan. 1.

Such is the nature of protection under Chapter 11. Another 1,400 dealers soon will be under the gun as GM strives to reduce its number of dealerships to 3,600 by the end of 2010.


Bankruptcy

That was Monday.