Two sources with knowledge of the potential Hummer sale say that three bidders remain for General Motors’ SUV brand.
“We have received several strong bids for the brand and those are in the final stages of review,” GM spokesman Nick Richards said. “We are cautiously optimistic that we will report a favorable outcome to sell the brand in a very short time period.” The offers range from $100 million to $200 million in cash plus other commitments.
GM originally hoped to announce its plan for the Hummer brand by March 31st, but GM officials say they need a few more weeks to sort through the final bids after the government-mandated departure of CEO Rick Wagoner.
While the terms of the auction are not public, it is known that none of the bidders are automakers. The potential buyers include private equity and wealthy individuals. Only one bidder is from the United States and other two are from overseas, although sources declined to say where overseas.
Under the terms of sale being discussed, the buyer would take over GM’s liabilities for the 125 U.S. Hummer dealerships and commit to further investment in the brand. The buyer would invest in areas necessary to operate the brand including engineering, marketing, and sales.
The Shreveport, LA plant that produces the Hummer H3, Chevrolet Colorado, and GMC Canyon trucks will not be part of the deal. GM will instead, continue to produce the H3 at the Shreveport plant and supply the new owner with vehicles.
To aid the possibility of a sale, GM hired an engineering firm to prepare an investment plan for future Hummer models. The plan is to be submitted to the remaining bidders for consideration in shaping financial proposals and could save the new owner considerable time and money deciding on additions to the Hummer line.
While GM missed its first planned deadline to decide whether it was going to sell or close its Hummer brand, the company cannot miss the second deadline. GM needs to make a decision within sixty days and prove to the U.S. government it has restructured itself enough to be viable. If GM cannot do so, the government will force bankruptcy and Hummer will likely be one of the assets shed in the bankruptcy process.
Source: Automotive News