China buys all-American Hummer for $150 million

Nothing was more American than the Hummer.

It was Schwarzenegger, cigars and swagger, laughing in the face of scornful environmentalists.

Only now the Chinese are laughing.

General Motors sold the military-inspired off-road brand to China’s Sichuan Tengzhong Heavy Industrial Machinery Co. for a reported $150 million on Friday, consummating a deal announced in early June.

Tengzhong, a sprawling conglomerate with no car-building experience, will own 80 percent of the company. Hong Kong investor Suolang Duoji, who in turn is a major investor in Tengzhong, will own the rest. They will assume existing agreements with Hummer’s 160 U.S. dealerships, including two in the Washington area.

In its June bankruptcy filing, GM estimated that Hummer was worth $500 million. The deal requires regulatory approval in both Washington and Beijing.

GM said it will continue to make the Hummer at least until June 2011, with an option to continue another year. Hummer’s management team will stay in place, and company headquarters will be located in the Detroit area.

After GM’s attempts to sell its Saturn brand failed last week, analysts called the deal a victory for GM despite the low price tag.

“It’s good news for General Motors, they actually got some money out of it versus having to spend money to wind it down, as they have to do with Saturn,” said Michelle Krebs, an analyst with auto information site Edmunds.com.

Back in February, while seeking more federal aid, GM said that it would sell or close its Hummer, Saturn and Saab divisions in an effort to succeed as a leaner, more profitable company.

Concern about Hummer’s sale to the Chinese was muted.

“Yeah, it feels a little weird,” said Anthony Cancel, new car sales manager at Moore Cadillac Hummer in Chantilly.

“But Americans are still going to build these cars” for a while, Mr. Cancel said. “That’s going to employ 3,000 Americans.”

He noted that even with Hummer’s future in doubt, his dealership was still selling 15 of the vehicles a month, down from a peak of 75. GM has not produced the car for six months, he said.

“It came at a pretty good time, we only have two left. From the time they turn the factory on it takes four weeks for us to get cars,” Mr. Cancel said.

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