Beleaguered auto maker General Motors said on Tuesday it has reached a tentative deal with a buyer for the sale of its famed Hummer brand, which could save as many as 3,000 jobs in the US.
The announcement comes a day after the iconic car maker filed for bankruptcy protection, being bogged down by huge losses and plunging sales in recent months.
Without revealing the identity of the buyer, General Motors said it has entered into a memorandum of understanding with a buyer for Hummer, its premium off-road brand.
General Motors said in a statement the deal is anticipated to secure more than 3,000 US jobs in manufacturing, engineering and at Hummer dealerships around the country.
The sale is expected to close by the end of third quarter of 2009.
"Hummer is a strong brand. . . I am confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focussed, and more cost-competitive auto maker," president of GM North America Troy Clarke said.
According to the statement, the transaction also includes plans by the investor to aggressively fund future Hummer product programmes.
As part of the proposed transaction, Hummer would continue to contract vehicle manufacturing and business services from GM during a defined transitional time period.
"The proposed agreement will enable us to continue that growth and maximise the brand's potential through new, innovative off-road vehicles with improved efficiency and alternative fuel powertrains," Hummer chief executive officer James Taylor said.
Citi acted as financial advisor to the General Motors for the proposed deal.
General Motors has been looking to sell off many of its brands including Hummer as part of streamlining its operations. Another brand Pontiac would be phased out in the coming months.
Soon after the auto maker sought bankruptcy protection, US President Barack Obama on Monday said, "The filing for bankruptcy protection paves way for transformation from an old GM to the beginning of a new GM."
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