Hummer Deal Falls Apart

A recent deal in which a Chinese company would buy GM's Hummer division has fallen apart in the face of a Chinese government veto citing the environmental impact of Hummers unless negotiators can secure a reversal of this position.

The company has just six variants in all of two models of vehicles, and the total number of sales for the division are modest: "Following the historic record high of 82,380 annual sales of the vehicle in 2006, Hummer’s popularity has continually declined, and in the year before last and last year, the sales figures were 66,345 and 37,573 respectively.” Hummer's sales were about 1% of the General Motors total North American sales in 2008.

A single Indiana factory has enough capacity to make the entire Hummer division's new vehicles. A purchase of the division by a buyer who kept the current factories where Hummer makes its vehicles in place would save about 3,000 jobs. The small scale of the operation makes in a manageable bite for a smaller industrial company.