GM sells Hummer, slams dealers

Once the symbol of “in-your-face” conspicuous automotive consumption and later the poster child for Detroit hubris, Hummer has been sold.

General Motors has signed a memorandum of understanding (MOU) to sell its Hummer brand to an undisclosed buyer for an undisclosed amount of money. The automaker said the sale would close in the third quarter of 2009, hopefully after the new GM exits from Chapter 11 bankruptcy. It’s unclear whether the new GM would receive the proceeds of the sale or if they would go towards settling its stranded debts that would be left with the “old GM.”

The agreement calls for GM to supply new vehicles from its Shreveport, Louisiana, facility through 2010 and there is a possibility the plant could be sold to the new owner. The new owner has pledged to continue development of new products for the brand.

On the first day as an officially bankrupt enterprise, GM wasted no time in dropping the hammer on its dealers. The company is requiring all of its surviving dealers to sign “participation agreements” that say the dealer will perform any required upgrades that GM might care to hand down while it is in bankruptcy. Even those dealers who were terminated will be required to sign “wind-down” agreements. Dealers who fail to sign on the line by the middle of this month will have their franchises yanked immediately. Terminated dealers that do comply will get money to help them close down their franchises over the next 17 months.

Call me cynical, but this type of action, this quickly, reinforces the widely held opinion that GM never planned to do anything but file for bankruptcy.

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