Chinese company to buy Hummer from GM? Yeh right?

That's what MSNBC sez, but whats the real deal?


Humvee Remains Dominant Despite MRAP Craze

(NSI News Source Info) NEWTOWN, Conn. - December 3, 2008:

The international market for light wheeled combat vehicles remains a highly competitive and dynamic environment. In its annual analysis "The Market for Light Wheeled Vehicles" the Forecast International Weapons Group expects the market will produce over 71,300 light wheeled vehicles, worth in excess of $21.789 billion, through 2017.
Since 2005, the Forecast International Weapons Group has considered the impact of the AM General High Mobility Multipurpose Wheeled Vehicle on the light wheeled vehicle market.
Prior to the emergence of the global war on terror, the HMMWV served as essentially a utility vehicle, not a dedicated combat vehicle.

SOME HUMMER HISTORY

New York Times

By ANDREW ROSS SORKIN and DANNY HAKIM
Published: Tuesday, August 10, 2004

EXERPTS:

The transaction, which is expected to be completed as early as today, will put Mr. Perelman in partnership with Ira L. Rennert, who bought AM General out of bankruptcy for $133 million in 1992 and who will maintain a stake in the business after selling control to Mr. Perelman, the executives said.

The Hummer line of vehicles marketed to civilians is sold through General Motors as part of a marketing deal struck between AM General and G.M.

Under the terms of the agreement, G.M. designs and markets the Hummer while AM General makes the vehicle.

Still, the company is expected to grow through orders from the military, which represents more than two-thirds of sales, the executives said.

A $400 billion military appropriations bill signed by President Bush last week included hundreds of millions of dollars for new Humvees.

Citigroup is underwriting a $600 million loan to Mr. Perelman's company, MacAndrews & Forbes Holdings, to finance the transaction, the executives said.

The auction for AM General is being run by J.P. Morgan and Cadwalader, Wickersham & Taft. MacAndrews & Forbes was advised by Skadden, Arps, Slate, Meagher & Flom.

Hummers weigh so much that they are exempt from federal fuel economy regulations as well as many federal crash and safety tests.

They also are eligible for special tax breaks originally conceived for pickup trucks but now applied to the heaviest sport utility vehicles.

Reading between the lines