GM Halts Hummer Production
Friday, January 15th, 2010Despite the ongoing Pontiac, Hummer and Saturn fire sale, news out of Detroit yesterday morning is that GM is halting the production of Hummers at the end of the week, while it waits for Chinese regulator approval of the pending sale of the brand to Sichuan Tengzhong Heavy Insdustrial Machinery Co.
According to a report in Automotive News,Nick Richards, spokesman for Hummer, announced on Wednesday that while production of Hummer H3 and H3T models will stop at GM’s plant in Shreveport, LA, it will resume again once the acquisiton has been completed. Richards did not specify exactly what aspects of the deal still need to be approved by the Chinese government, though he did say that on the U.S. side of the deal, all regulatory issues have been approved.
Kevin Wale, president of GM China Group said the delay from China is related to the fact that Sichuan Tengzhong manufactures heavy-machinery manufacturer, and is not an automaker. He explained, “They have rules that require that people can’t just randomly go into key businesses. They have to get approval so they don’t end up with … too many people trying to compete in key industries.”
Wale added that the delay has nothing to do with China’s concerns about the size and fuel economy of Hummers, but stressed that GM China’s staff is working with the regulators on a daily basis, to help facilitate the deal, and that while he isn’t certain it will reach fruition, he is optimistic.
Under the agreement, after the acquisition has been completed, the Shreveport plant will continue producing Hummers for Sichuan Tengzhong through 2011, with an option to extend production another year beyond that. Production of an additional diesel version of the H3 is also scheduled for 2011, with those units destined for global export to markets including China. Currently, the line is sold in 37 countries.
Shreveport suspended Hummer production last year, but resumed output in October in order to supply dealers with 2010 models. The factory also produces the Chevrolet Colorado and GMC Canyon pickups, and Hummer only accounts for about one quarter of the plant’s capacity. GM is scheduled to close the plant completely after 2011.