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China's Tengzhong says not to build Hummer in China

Published: 04 Jun 2009 19:52:46 PST

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Jun. 5, 2009 (China Knowledge) - Sichuan Tengzhong Heavy Industrial Machinery Co Ltd, the Chinese machinery company that reached a preliminary deal with General Motors Corp (GM) to take over its Hummer brand, said on Wednesday that it will not set up a plant in China to build large SUV and pickup trucks under the famous brand, the official Xinhua News Agency reported.

The company will take charge of the existing facilities and employees in the U.S. instead of setting up plant in China, said Zhao Xiaolu, a spokesman for Tengzhong.

Under the preliminary agreement, Tengzhong will keep the management and operational team along with the Hummer brand, and will save more than 3,000 jobs in GM's plant in Shreveport, Louisiana.

The deal, subject to regulatory approval, is expected to be closed in the third quarter of this year.

If approved, the deal will be the first in which a Chinese firm takes over a famous brand from a struggling U.S.-based auto maker.

Established in 2005, Chengdu-based Tengzhong has become one of China's major engineering companies through a series of successful acquisitions.

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