GM’s plan to sell Hummer brand delayed

GM is selling and/or closing some of its brands to focus on the core brands, Chevrolet, Cadillac, GMC and Buick. They are currently negotiating with Sichuan Tengzhong to sell its Hummer brand.

In any purchase used for making money, the money is made on the buy rather than on the sell. Pretty much a non-fallible way of approaching business.

Looking at the way this Hummer deal has been stalled/slowed or what have you, the Chinese company is looking to make a windfall if this deal goes down at the end of February. When GM entered into bankruptcy, they estimated the value of the Hummer brand at $500M. Now the negotiations revolve around an estimated value of $150M. Sounds like a little equity built in on the part of the buyer. What will happen then if the Chinese company can re-structure the company to make money? If they do so, they will have little debt in relation to the estimated values of only last summer. We the taxpayers are paying for this. If the bailout money used by GM helps to make them accountable to the taxpayers for performance, I cannot see how taking 30% of its value makes sense.

As I have said before, GM is looking to reduce its expenses at the expense of the taxpayers. What happens if this deal does not happen at the end of the month? Will the value of the Hummer brand continue to fall? If so, then what will the final negotiated value be? If it is less than $150M, and GM takes a bigger loss on the deal, what happened to the tax dollars we invested?

GM needs to pull a Ford and restructure without us paying. Ford posted a $4.8B ($4,800,000,000) dollar profit for 2009 after looking at what they can and need to do to make cars for the customers. They have even better product in the pipeline. Case in point, the new 5.0L engine for the Mustang. They created what seems to be a great engine with minimal development time. How did they do that? They were forced to make tough decisions because the customer demanded it to be done RIGHT NOW.

I guess we’ll see if this Hummer deal is finished at the end of February. If it is not, I guess I’ll make another post about GM.

Bear this in mind; I am not an American Car Company hater. I love a lot of the cars GM makes. They have shown they can do it. Let’s just let them know we are watching.