Just when it seemed that General Motors had started down the yellow brick road to solvency comes word that a deal to sell its money-losing Hummer brand to a Chinese company had collapsed. Sichuan Tengzhong Heavy Industrial Machines said Thursday that it was pulling out of an agreement reached eight months ago to buy Hummer, the builder of large sport utility vehicles modeled after the military's Humvee troop transport vehicle. The Chinese company said it was unable to get approval from the Chinese government for the $150 million deal, according to the New York Times. General Motors, which has been trying to sell off subsidiaries in an effort to emerge from bankruptcy protection, said it would close the brand. GM finally was successful this week in selling Saab, but has already announced the closure of Pontiac and Saturn. Had the deal been approved, Tengzhong would have been the first Chinese company to sell vehicles in North America, the Times said. "Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price,” Tengzhong said in a statement.
“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,” said John Smith, G.M.’s vice president for corporate planning and alliances. “G.M. will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.” Hummer caused a splash after its introduction in 1992 with celebrity endorsements, including by California Gov. Arnold Schwarzenegger, who owned several of the powerful-looking SUVs. GM bought the company in 1999. But rising fuel prices dimmed demand for the vehicles, and it became a symbol of inefficiency because of its gas mileage. Hummer sold only 265 vehicles in the United States in January and just over 9,000 last year, a decline of 67 percent, the Times said.