General Motors has lined up a China machinery company as the buyer for Hummer, marking the first entry into the US auto market by a Chinese company. General Motors Corp said on Tuesday it reached a tentative deal to sell its Hummer brand to a privately held Chinese company, part of an effort to drop four unprofitable vehicle lines and leave bankruptcy as a leaner company. GM, a day after filing for bankruptcy, said in a statement that it reached a memorandum of understanding with Sichuan Tengzhong Heavy Industrial Machinery Co for the sale. Tengzhong said it will retain Hummer's senior management and operational team. GM said Tengzhong will also enter into a long-term contract assembly and key component and material supply agreement with GM. Under the deal, which is subject to regulatory review and is expected to close in the third quarter, Tengzhong will assume Hummer's existing dealer agreements. Financial terms were still under discussion and will not be disclosed, GM said. Bankers have said Hummer could fetch about $100 million in cash in addition to other commitments. The deal marks the first time that a Chinese buyer has acquired a brand from one of the struggling US automakers. Based in the Chinese province of Sichuan, Tengzhong makes special-use vehicles, highway and bridge structural components, construction machinery, and energy facilities. Tengzhong will expand into the premium off-road vehicle segment, according to the joint statement from it and GM. Selling off the off-road brand is part of GM's restructuring plan. The company is refocusing itself on four key US brands. It also hopes to sell off Saab and spin off Saturn. Pontiac is being phased out. GM on Tuesday also said it had 16 interested parties in acquiring its Saturn brand. The company has said it has three interested parties in its Saab brand. Company CFO Ray Young told reporters and industry analysts on a conference call that GM is continuing to pursue manufacturing agreements with a new Saturn buyer. Bridge loan discussions with the Swedish government are progressing, Young said.
