Iconic Hummer brand sold to Chinese manufacturer

Hummer, the off-road vehicle that once epitomized America’s love for hulking trucks, is now in the hands of a Chinese heavy
equipment maker.

General Motors Co. and Sichuan Tengzhong Heavy Industrial Machinery Corp. finally signed the much-anticipated
deal to sell the brand on Friday.

Tengzhong will get an 80-percent stake in the company, while Hong Kong investor
Suolang Duoji, who indirectly owns a big stake in Tengzhong through an investment company called Sichuan Huatong Investment
Holding Co., will get 20 percent. The investors will also get Hummer’s nationwide dealer network.

Financial terms
were not disclosed, although a person briefed on the deal said the sale price was around $150 million. The person did not
want to be identified because the terms were being kept private. GM’s bankruptcy filing last summer said that the iconic brand
with military roots could bring in $500 million or more.

Suolang Duoji also is the controlling shareholder and
chairman of Lumena Resources Corp., a Hong Kong listed mining company.

GM and Tengzhong said in a statement that
the transaction still must be approved by the U.S. and Chinese governments, although and Chinese regulators initially expressed
reservations about Tengzhong’s ability to run such an enterprise.

Hummer’s current management team will stay with
the new company, which will be headquartered either in Detroit or suburban Auburn Hills, Mich.

James Taylor, the
GM executive who has run Hummer recently, will remain as its CEO.

"We are fortunate to have a partner who
understands and recognizes the importance of continuing investment in Hummer’s heritage as a U.S.-based and branded company
with a view toward capitalizing on global opportunities," Taylor said in a statement.

Hummer, whose smallest
model gets 16 miles per gallon in combined city and highway driving, sold well until the middle part of this decade when fuel
prices began to rise. Sales peaked at 71,524 in 2006.

But only 8,193 Hummers have been sold in the U.S. through
the first nine months of the year. That’s down 64 percent from a year earlier. And only 426 Hummers were sold nationwide last
month, according to Autodata Corp.

GM, which spent 40 days in bankruptcy protection during the summer and has received
about $50 billion in U.S. government aid, also plans to sell its Saab brand and scrap Pontiac and Saturn as it tries to streamline
its operations.

The company wants to focus on four core brands: Chevrolet, Cadillac, Buick and GMC.

With
backing from a well-capitalized company, Hummer will now focus on improved efficiency and performance and include alternative
fuels, more efficient gas engines, six-speed transmissions and diesel engines.

GM said its assembly plant at Shreveport,
La. would continue to assemble the commercial Hummer H3 and H3T pickup trucks on a contract basis until June 2011, with a
one-year option until June 2012. The military H2 version will continue to be assembled by AM General in Mishawaka under the
same terms.

South Bend, Ind.-based AM General retains ownership of the military versions of the vehicles, which
have been used frequently in Afghanistan and Iraq.

The Shreveport GM plant is currently slated to close by June
2012. For the time being, the plant also is assembling the Chevrolet Colorado and GMC Canyon pickup trucks.

The
plant once employed about 3,000 workers, but layoff and buyouts have reduced that number to just over 700.