Toyota’s deal with Tesla was for the plant and some surrounding land. The sale specifically excluded any production equipment used to build the Pontiac Vibe/Toyota Matrix and Toyota Tacoma. Now, however, Tesla has announced that it will purchase $15 million of the plant’s equipment from Toyota and Motors Liquidation Company. What kind of hardware are we talking about? We don’t know and Tesla didn’t say, but if we were to bet, we’d probably put our money on painting equipment and robots.

[Source: Autoblog]

GM expects to finalize the purchase agreement for the plant within the next few months. The facility is used for manufacturing six-speed automatic transmissions and serves third-party car manufacturers as well as GM’s own products worldwide. The 6L50 GM’s Hydra-Matic transmission, for example, is used in the current Cadillac CTS, last-generation SRX and STS, the Chevrolet Camaro, as well as the Holden Commodore and Statesman lines. The 6L45 ransmission, also made at Strasbourg, is used by BMW in the 1 and 3 series as well as the X1 and X3.

According to GM, the plant was founded in 1967 and is a major industrial employer in the Strasbourg region, employing about 1,100 people.

View Press Release

Fisker plans to build rechargeable batteries at the 3.2-million-square-foot assembly plant by 2012 but will initially use the facility to build its Nina model.

The sale of the plant should add a hefty $20 million boost to GM’s balance sheet for Q2 2010, which GM should report sometime next month.

[Source: Freep]

GM says that it would still consider “viable alternatives” to acquire all or part of the brand after the collapse of the sale of Sichuan Tenzhong Heavy Industrial Machinery Co. in late February.

If a party is interested in buying the go-anywhere brand from GM (rescuing it in the process), they would have to show that they have the financial resources to back it up. The last thing GM wants is to sell Hummer and commit to manufacturing vehicles for the new owner, only to later have the venture flop and idle manufacturing plants.  A few firms have expressed interest but none have successfully negotiated a deal with The General.

“Anyone who buys it needs cash to make it work,” Jim Hall, principal of consulting firm 2953 Analytics in Birmingham, Michigan, said of Hummer. “That’s why GM has been turning buyers away left, right and center.”

It’s worth noting that General Motors took the same approach during its divestiture of Saab earlier in the year, declining offers it deemed unsuitable for the long term.

GM is expected to announce the details of Hummer’s shutdown in a conference call today at 10:00 am EST. According to Hummer spokesman Nick Richards, Hummer’s CEO Jim Taylor has decided to retire.

Richards also said that GM is open to selling tooling and equipment used to manufacture the Hummer H3 SUV and H3T pickup at Hummer’s Shreveport, Louisiana factory. The plant is slated to close no later than 2012.

Richards also said that many of Hummer’s 3,000 employees will be transferred to other units within GM and work on the development of models under other brands. He wasn’t specific in giving a particular number.

Hummer sales fell by 72 percent in the first quarter of 2010 to 855 units.

On a trivia note, GM licensed the Hummer brand from the South Bend, Indiana-based AM General, which produced the Humvee military vehicle, in 1999. General Motors’ first Hummer vehicle was the H1 taht sold for $140,000 and weighed 7,600 pounds (3,400 kilograms). GM added the H2 SUV, weighing 6,600-pounds (2,990 kilograms) in 2002 and the 4,700-pound (2,130-kilogram) H3 in 2005. General Motors produced the H3 at its Shreveport, LA plant while AM General built the H1 and H2 for GM.

The GM Authority Take

While the entire GM Authority team is sad to see Hummer go, an complete about-face of the current situation remains a possibility. Just think back to the Saab Sales Saga and you’ll see exactly what we mean!

[Source: BusinessWeek]

At the end of last week, Opel and Vauxhall announced some of the most significant steps in reducing costs and downsizing since GM’s decision to keep the subsidiaries. Negotiations in Spain concluded with an agreement that is yet to be ratified, but it calls for the elimination of 900 jobs at the Zaragoza (Spain) manufacturing facility. Both management and unions in the area have worked hard to negotiate mutually acceptable terms and this represents a true milestone and turning point for Opel in that region. This news comes after GM’s announcement that it will provide Opel/Vauxhall €1.9 billion to fund the automakers’ restructuring efforts.

What’s more, the government of the United Kingdom has announced its approval of a €300 million loan guarantee for Opel. This comes after months of discussion with the UK and signifies important steps in negations with European governments. Political negotiations for loans with other countries continue, with GM hoping that they will result in similar progress. More as it happens.

We have GM’s full presser after the jump!

Show Press Release

One year ago, General Motors announced that we were going to divest HUMMER, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward. We have since considered a number of possibilities for HUMMER along the way, and we are disappointed that the deal with Tengzhong could not be completed. GM will now work closely with HUMMER employees, dealers and suppliers to wind down the business in an orderly and responsible manner.

As we learned with the Saab Sales Saga, this may not mean anything in particular, as a last-minute buyer may swoop in to save the company from the automotive graveyard, where Saturn and Pontiac shamefully lie. Nevertheless, GM will continue to honor Hummer warranties as well as providing service support and spare parts to current owners around the world.

Stay tuned as it happens…

The approval was the last hurdle for the deal to go through, which would transfer ownership of the legendary American SUV brand to the privately-owned Chinese maker of special-use vehicles, structural components for highways, bridges, and construction equipment for only $150 million. This amount is nearly 70 percent less than GM originally valued the brand in bankruptcy court in the summer of 2009.

In the beginning of 2010, GM extended the deadline for the sale until the end of February.

Only Normal…

“It’s only normal for the Chinese government not to approve the deal,” said Lin Huaibin, a Shanghai-based analyst for IHS Global Insight. “To allow this type of vehicle on a large scale isn’t in line with government policy.” What government policy, exactly? In an effort to reduce oil imports and pollution, China has been encouraging automakers to produce more fuel-efficient cars such as hybrids.

Jobs

If approved, the deal was expected to secure nearly 3,000 Hummer manufacturing and sales jobs in the U.S. As of now, these jobs – including som at the Shreveport, LA plant – are in limbo.

Plans For Hummer

What’s interesting here is that both parties have agreed to the deal and want it to go through. Tengzhong has previously stated that its plans include bringing Hummer into markets outside the U.S., which currently makes up more than two-thirds of the brand’s sales. Tengzhong also planned to develop more fuel-efficient SUVs, according to CEO Yang Yi.

But Not All Is Lost…

The deal may still come to fruition even without approval from the Chinese government. This may happen by taking advantage of a few international loopholes. For what it’s worth,  reports of China’s government having blocked Tengzhong’s bid are “not accurate,” according to Wang Chao, assistant commerce minister. Apparently, China’s Ministry of Commerce has not yet received an application for the acquisition, Chao said.

Let’s hope this doesn’t turn into the Saab Sales Saga, round two.

[Source: BusinessWeek]

Hummer’s sale to Sichuan Tengzhong

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]

This means that, going forward, Spyker has taken over the reins and has assumed full responsibility for the (not so much) Swedish automaker.

John Smith, GM Vice President For Corporate Planning and Alliances, had the following to say about the development:

This transaction represents the successful outcome of months of hard work and intense negotiations, all aimed at securing a sustainable future for this unique brand, and we are pleased with the positive outcome. This is a great day for Saab employees, dealers and suppliers, and a great day for millions of Saab customers and fans worldwide.

GM Europe President Nick Reilly also chimed in, saying:

Throughout negotiations over the past year, GM has worked with many parties, including governments and investors, to find a solution for Saab. I’m very pleased that we could come to a positive conclusion, one that presents a viable future for Saab and preserves jobs in Sweden and elsewhere.

And this will officially put an end to GM Authority’s coverage of all things Saab… starting immediately. Unless, of course, GM has a sudden change of heart and decides to buy the brand back. But we’re not holding our breath.

Check out the full press release after the break!

PRESS RELEASE

Spyker Cars Finalizes Purchase of Saab Automobile from GM

Source Of The Problem

As Opel/Vauxhall solidifies its restructuring plan, it has become apparent that the company will require substantial outside help, on the order of $3.7 billion from European governments. Aforementioned Laurson and Pieler argue that such a company is not worth saving. They point to GM’s attempt to sell the company to the international syndicate backing Canadian parts manufacturer Magna, noting that GM could not find a buyer without enormous governmental financial commitments. Indeed, Angela Merkel, Chancellor of Germany, promised money to facilitate the transfer of Opel/Vauxhall from GM to Magna in an attempt to save German jobs. That, according to the Forbes writers, is the source of the current problems

GM’s Political Strategy In Europe

When GM saw that Germany was willing to spend large sums of money to save jobs, it decided to keep Opel/Vauxhall and use it as leverage to demand what essentially amounts to a European bailout. GM’s current restructuring plans in Europe call for an 8,300 worker reduction in its European workforce. If European governments balk at providing ‘necessary’ bailout funds, then GM would be ‘forced’ to cut more jobs. As the story goes, European electorates would turn around and blame such job losses on those holding power come election time, leaving European politicians with few real options.

Give A Mouse A Cookie Scenario

Be there no mistake: The “give-a-mouse-a-cookie” scenario outlined here is real. It is one of the very real reasons that governments do not negotiate with terrorists. But this theory, however interesting a movie plot line, simply does not fit the evidence. Opel/Vauxhall is asking for money it does not deserve, money it did not earn. Such undeservedness characterizes all bailouts. But whether GM is retaining Opel/Vauxhall solely to bilk money from governments, or whether The General is responsible for the associated increase in budget deficits overseas are far less clear than Laurson and Pieler would have their readers believe.

Not So Fast, Laurson And Pieler

First, there is Nick Reilly’s leaked e-mail in which he outlines what the brands need to do to become profitable. On its face, it is a good faith message to employees, and it suggests that the highest representatives of Opel/Vauxhall expect both profitability and product superiority. Moreover, try as they might, the conspiracy theorists cannot deny that the e-mail is candid: He talks about both Opel’s strengths and weaknesses, the latter of which is a gift wrapped ad campaign to any competitor who wanted to use it. In order for the Forbes theory to hold water, it must be the case that the e-mail is either manipulatively insincere, or Mr. Reilly must be entirely unaware of Detroit’s more nefarious motivations. Those scenarios seem unlikely.

Second, the numbers point to a profitable future. Moreover, GM has a history of repaying its bailout funds as soon as possible. If it were really the case that GM was attempting to cheat the system, it would have done so when negotiating with the American government, when the situation was far more urgent.

Finally, it is very difficult to leave The General holding the bag here. It was governments that were initially prepared to bribe the private sector to keep jobs. And voters indirectly apply that pressure by refusing to re-elect representatives who preside over job losses, no matter how little control they may have over the economy. There are certainly some things wrong here, but in this case, The General is doing its best.

[Sources: AP, Financial Times, Business Week, Reuters, Forbes]