Last Updated Feb 24, 2010 4:44 PM EST
GM has confirmed that the proposed deal with Sichuan Tengzhong Heavy Industrial Machines Co., Ltd. was off. GM said it now expects to close wind down the Hummer brand. The upside for GM is that it gets rid of a distraction. GM announced back in June 2008 - with U.S. gas prices on the way to a record high in July 2008 -- that it would conduct a strategic review of the Hummer brand. That's corporate-speak for, "sell or close."
Remember, that was well before GM went bankrupt. That tells you how poor Hummer's prospects must have looked, from the inside looking out. Ultimately, bankruptcy reorganization starting last year has seen GM get rid of Saab, Saturn, Hummer and Pontiac. Of those, only Saab has found a buyer.
GM is better off making a clean break, instead of nursing along an ailing franchise, something the company has done far too often.
Meanwhile, I don't think China's Tengzhong is missing out on anything really valuable. The memory of those $4-plus gas prices in 2008 wounded truck-only franchises, maybe fatally except for buyers who really, really need a truck.
A truck brand can survive with some working-guy credibility like GMC or Dodge; with a strong heritage like Jeep; or with small-volume, upper-crust appeal like Land Rover. But Hummer is the worst of all possible worlds - an expensive truck without a prestige brand, with no lunch-bucket appeal, and a poster child for environmental unfriendliness, to boot.
Maybe Tengzhong could have found enough buyers for that proposition, but I doubt it, and certainly not in this country, not any time soon.