General Motors Corp said Tuesday it has found a buyer for its off-road brand Hummer just a day after it filed for bankruptcy protection as it seeks to quickly exit the court supervised process and emerge with less debt and only its strongest brands, Chevy, Cadillac, GMC and Buick.
GM, which expects to stay in the Chapter 11 bankruptcy process for up to three months, said Tuesday it has entered into a memorandum of understanding with an undisclosed buyer to sell Hummer and expects to close the sale by the third quarter of this year, according to a released statement.
GM has already announced that it will shut down its production of the Pontiac brand and is seeking options to do away with its Saturn and Saab units. It has also entered into a memorandum of understanding to create a partnership involving its OPEL/Vauxhall European brands with Magna Intl.
The investor has plans to “aggressively fund future Hummer product programs,” GM said. The proposed transaction is expected to secure more than 3,000 U.S. jobs at dealerships around the country, GM added, noting that financial terms of the deal were kept secret under terms of the memorandum.
The President of GM North America Troy Clarke expressed said Hummer was a “strong brand” and expressed confidence that it “will thrive” under new ownership. Hummer's chief executive officer James Taylor said the agreement “will enable us to continue that growth [in Hummer's brand] and maximize the [it’s] potential through new, innovative off-road vehicles with improved efficiency and alternative fuel powertrains.”
The sale is subject to customary closing conditions, including regulator approvals.
As part of the proposed deal, Hummer will continue to contract vehicle manufacturing and business services from GM during an defined but undisclosed transitional time period, the automaker said. GM’s Shreveport Assembly plant would continue to assemble the H3 and H3T models through at least 2010, the company said.
Citigroup acted as GM’s financial advisor.