The (almost) sale of Hummer to Sichuan-based Tengzhong Heavy Industrial Machinery Co, a Chinese company with no previous car manufacturing experience, has officially been announced. Although the memorandum of understanding stipulates that production of all Hummer models will now be moved to the Shreveport plant in the U.S, GMSA says this has no effect on SA productivity.By Kyle Kock

“It is our understanding from this announcement that future assembly of the Hummer will be consolidated into a single location at Shreveport in the United States where right and left hand drive petrol and diesel variants will continue to be produced for global markets,” said Steve Koch, president and managing director of General Motors South Africa.

According to Koch, the relocation of Hummer assembly to the U.S. has already been contemplated within GMSA’s restructuring initiatives, which means that the appropriate staff cuts were made well in advance, and that there will be no further impact on local employment levels. In addition, GMSA will now focus on bringing high-volume platforms to Port Elizabeth plant (the only Hummer assembly plant outside North America), to ensure maximum efficiency.

“Since all engineering and design on Hummer is developed in the U.S and 95 per cent of components are sourced from the U.S, the impact on South African operations is minimal. We are committed to engaging with the new owners to seek export opportunities to the U.S for our local suppliers,” added Koch.

As a result, GMSA will import H3 products for distribution through South African dealerships.

Although the deal is only expected to be complete in the third quarter of this year, and is still subject to customary closing conditions, it is expected to save in excess of 3 000 jobs in the US manufacturing industry. Part of the proposed transaction is that Hummer will continue to contract manufacturing and business services from GM for a transitional time period. An example of this is that under the proposed agreement, the Shreveport plant would be under contract to produce the H3 and H3T until 2010.

“Hummer is a strong brand. I’m confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker,” said Troy Clarke, President of GM North America.

Hummer customers in South Africa can continue to enjoy service and warranty agreements, and furthermore, new Hummer purchases are backed by the comprehensive GM’s Total Confidence plan which covers all local GM operations. New buyers can expect a five-year/120 000 warranty, 24-hour roadside assistance programme for the duration of the warranty conditions, and in the event of the buyer being retrenched, up to nine months of vehicle payments.

Original article from Car