GM had promised to have a decision by the end of March on whether it would sell or fold HUMMER. They missed that deadline along with other key targets set by the White House-appointed Presidential Task Force on Automobiles (PTFOA). Not that there wasn’t interest in the aptly named pornography-on-wheels. GM simply, well, blew it.
The HUMMER brand could have been sold by in March, Reuters reports. According to their latest report, an industrialist from Kentucky offered GM $100 mil in cash for the brand, along with an investment commitment of another $100 mil. Most importantly, the obviously nutty or filthy rich Kentuckian offered to assume GM’s franchise agreement liabilities, estimated at about $350M. The bidder, owner of several companies that supply parts to the auto and aerospace industries, put together plans for new powertrain options for HUMMER, including a hybrid H3 that would have doubled the Hummer’s “fuel economy.”
Did GM sing hallelujah, jump at the offer and go on to solving more pressing matters? Of course not. GM wanted another $100M in cash. After not receiving it, they walked away from the deal.
As reported by RF, HUMMER is still for sale. Reuters says three bidders are still in the running; the deals under discussion have less sugar content than the one from Kentucky. Offers range from $100M to $200M in cash, “in addition to other commitments.”
GM’s plant in Shreveport, Louisiana, which makes the Hummer H3 and the H3T pickup, will not be part of the deal. GM wants us the factory to make HUMMERs and supply them to the new owner. GM’s PTFOA sugar daddies may not like this, as they are putting GM “under pressure to simplify its vehicle line-up and streamline its engineering efforts.” Good luck with that.
The only reason I can think of is that GM believes they can get $550 million from selling off Hummer in pieces, so they won’t accept less than that for the whole kit’n’kaboodle.
Hard to believe GM didn’t jump at this. Is there more to this story? If somebody offered me $100 million in cash for the brand, plus solved a $350 million headache for me, I’d take it.
Shreveport also makes the Chevy Colorado and GMC Canyon small pick ups.
The bigger question is why would anyone want to buy Hummer in the first place except for the brand name?
Obviously the Mothership GM is still in denial.
Instead of getting $100m right now they’ll get 10% of that after CH11. Maybe less?
Wow, what a bunch of freaking boneheads. I guess when GM goes Tango Uniform you’ll be able to get Hummer for about $25 and a bag of Cheetos. Anyone interested in buying should just wait, what, 50 more days? They kicked RiR to the curb and forgot the rest of the asshats running the show (into the ground).
For once GM doesn’t screw a (potential) investor.
$100M plus an estimarted $350M in liabilities seems like an awful lot for the dealership network and brand name of a company that is losing money, but maybe that’s just me.
Willian Shatner has a horse farm in Kentucky. Was it William Shatner? That would be cool. He could come out with an even bigger model called the Enterprise.
And Larry Flynt’s from Kentucky…that would be cool too, Hustler in the car manufacturing business. Porn stars running dealerships, free lingerie instead of floor matts.
Man, this could have been good. Damn GM.
GM blows Hummer deal? That sucks!
(Well, someone had to say it) ;-)
I clicked on the link but just got a Page Not Found message. I did a cursory search at the Reuters home page and didn’t find it, just a story about how there are three bidders left. Did Reuters pull the story?
Worst photochop ever.
I wouldn’t buy Hummer for one dollar.
NickR
And Larry Flynt’s from Kentucky…that would be cool too, Hustler in the car manufacturing business. Porn stars running dealerships, free lingerie instead of floor matts.
The “HUMMER” brand name certainly would have fit in. Just imagine the marketing possibilities!
If this is true then they turned down what equates to $550 mil when they’re running out of money, and have said they want to unload this brand. And it would be one less thing for them to work on while the clock is ticking. Did the PTFOA get a vote on this decision?
If they’ve got a better plan then Ford must have been pretty dumb letting Aston-Martion and JLR go so cheap.
I wonder what Wagoner would have got for Hummer, when Kerkorian had Jerry York lay out the plan years ago?
I wonder how the bidding for Viper is going over at Chrysler? 10-30 million I would think, if that!
I clicked on the link but just got a Page Not Found message. I did a cursory search at the Reuters home page and didn’t find it, just a story about how there are three bidders left. Did Reuters pull the story?
Indeed, they pulled the juicy part and replaced it with a bland version. It is getting curiouser and curiouser.
The full story is still at http://money.cnn.com/2009/04/09/autos/Hummer.reut/index.htm?postversion=2009040906
Grab it while you can!!!!
Hahahaha, I could see it now!
If, as Superbadd says, I can buy a Hummer for $25 and a bag of Cheetos, I think I might just do that for a hoot.
I’d park the Hummer right next to my Prius and set up a boom microphone so that I can hear the comments of my neighbors on their evening walks!
Turned out the “Kentucky industrialist” was Colonel Sanders, whose only manufacturing experience has been production of biodiesel feedstock. And even GM is sane enough to not negotiate with a dead man. Accordingly, Reuters is pulling back on the story.
For posterity:
From CNN/AP:
Bidder rejected
An industrialist from Kentucky in March offered GM $100 million in cash for Hummer, along with an investment commitment of a $100 million for engineering, another source with knowledge of those talks said.
The offer also assumed GM’s franchise agreement liabilities with Hummer dealers, estimated at about $350 million, the source said.
The bidder, who owns several companies that supply parts to the auto and aerospace industries, had also put together plans for new powertrain options for Hummer, including a hybrid version of the H3 that would double its fuel economy from the current 14 to 18 miles per gallon.
GM rejected that bid last month, after asking for the cash offer to be raised by $100 million, the source said.
Investment bankers had initially estimated that Hummer could fetch between $500 million and $750 million, considering it a distressed asset.
But as the months have passed by, that valuation has been hurt by the weakening economy, continued tightness in credit markets and a lack of interest, bankers have said.
GM is also facing the challenge of selling the gas-guzzling brand amid a plunge in U.S. auto sales, which have fallen to their lowest level in almost three decades.
Moreover, the Hummer auction started last summer, when oil prices reached record highs and caused consumers to shun big SUVs and trucks, a shift most analysts expect to be permanent.
Porn stars and Hummers, where do I buy one.
Buy? Those you only rent.
ZoomZoom
That’s funny. I guess we could call it the Two-Face Garage or fuel economy Bambi vs. Godzilla
ZoomZoom: I actually meant if you wait long enough, you might get the whole brand for that sum. GM let basically $550mil walk out the door, no telling what else they’re willing to let pass.
Ole Stang :
Porn stars and Hummers, where do I buy one.
godflesh :
Buy? Those you only rent.
Kind of like cheap beer or Mad Dog wine!
superbadd75 :
ZoomZoom: I actually meant if you wait long enough, you might get the whole brand for that sum. GM let basically $550mil walk out the door, no telling what else they’re willing to let pass.
Indeed, you’re right! Okay, I’ll buy it for $25 and a bag of chips. I’ll give a handful to the Myth Busters people (I’m sure they can find some sort of myth to bust!), one to each person in my neighborhood and one to each TTAC member/contributor. Maybe I’ll give a few out to the homeless, what do you think?
Oh yeah. The gasoline is on the recipients. Deep down inside, I’m just not that nice of a person!
ZoomZoom: I can’t say that I’d want a Hummer, even free. They’re just hate targets these days. I can creep down the street in my TrailBlazer all day without so much as a glance, but Hummers seem to have the propensity to make people cuss and get all pissy.