GM moves closer to Hummer sale, issues prospectus to potential buyers

Posted Fri Oct 17 2008 2:11 PM by Viknesh Vijayenthiran

Hummer's slumping sales figures could make it even harder for GM to get rid of the brand

General Motors confirmed the sale of Hummer late last month after first hinting at the possibility when it announced the brand was under review during its official North American strategy briefing back in July. Now the company has issued a prospectus on Hummer to potential buyers, moving the process a step further toward sale.

The prospectus being sent out now puts together relevant information on the Hummer brand, such as sales volumes, so that interested parties can make informed bids. GM would give no details on how many copies of the prospectus are being sent, nor on what quantity of information is being revealed, reports Automotive News. So far, Hummer is down 47.4% on 2007's sales numbers, however, so it's not tough to infer the sort of material included in the document.

The confirmation that Hummer was up for grabs came during a slide presentation at the Deutsche Bank Leveraged Finance Conference in Arizona, later posted on GM's media website. GM treasurer Walter Borst, the speaker at the presentation confirming the planned sale of Hummer in late September, also revealed that the company’s transmission manufacturing facility in Strasbourg, France, was also up for sale and that there were further asset sales expected later in the year.

The slides showed that the assets GM was considering selling are worth up to $4 billion, and liquidating them could provide the company with a much needed cash injection, reports the Associated Press. Additionally, GM's focus towards smaller cars and the general deterioration of Hummer's popularity will not affect its profits significantly, making the sale economically sound.

GM's desire to sell off the HUMMER brand has been known for some time, with a number of foreign buyers reportedly interested in the SUV line.

The sale of these assets is part of a bigger strategy to cut $10 billion in costs and raise $5 billion in cash, and hopefully yield improvements in the company's financial results by 2010. In the longer term, Borst explained that GM’s strategy is to focus on foreign markets, with two-thirds of its sales expected to come from overseas by as early as 2010. GM currently makes 59% of its sale overseas.

Reader Comments

Fri Oct 17 2008 2:38 PM
NoNameDenton says

This how they will make the money to buy Chrysler? Should stick the money from the sale into R&D for even better cars

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