Hummer’s sale to Sichuan Tengzhong Heavy Industrial Machinery comes with a boatload of baggage. GM’s finances, jobs, and the brand’s continued existence are only a few of the major items on the line. Under the “jobs” category is the Shreveport, LA plant. If the deal with the Chinese industrial machinery firm does not go through, the facility will be shut down. Officials expect the sale to be completed by the end of Q1 2010, with the Chinese government remaining the only roadblock to the transaction.
The plan to keep Hummer manufacturing at the plant may bring with it the production of other brands at the facility, as Sichuan Tengzhong would only need 25 percent of the capacity for Hummer production. The Shreveport Times describes the plant as an “automotive mall with Hummer as the anchor tenant.”
Recently, incentives have been discussed with the involved companies. An exemption from sales tax on equipment and donated land for plant expansion are the in the cards. This, however, may not be enough to plan against the $40-200 million that have been estimated as layouts for plant upgrades. Plans to upgrade the facility are secondary to the Hummer deal, which has a ticking clock built in.
While a repeat of the Saab Sales Saga would be acceptable, the delays and back-and-forth waffling would sure be nice to avoid. At least this time The General won’t make any announcements to wind down the brand until the Chinese government approves of the deal.[Source: Shreveport Times]