JACKSON, Miss. —General Motors will halt Hummer production next week at its Louisiana plant until sale of the brand to a Chinese company is completed.
Kevin Wale, president of GM's China Group, said, meanwhile, he's optimistic, but uncertain, that the Hummer deal will be approved by Chinese government regulators.
GM agreed last year to sell Hummer, once synonymous with America's love for big off-road vehicles, to Sichuan Tengzhong Heavy Industrial Machinery . It had expected the deal to close early in 2010 after approval by U.S. and Chinese regulators.
Assembly of Hummers at GM's Shreveport, La., plant will be suspended Jan. 19 because there's "sufficient inventory in the field" to sustain dealers while the sale makes its way through the regulatory process, Hummer spokesman Nick Richards said Wednesday.
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The approval delay is because Tengzhong is not an established manufacturer, something normally required by Chinese governments, Wale said after a speech Wednesday at the Automotive News World Congress in Detroit.
"It's not a recognized car manufacturer, and they have rules that require that people can't just randomly go into key businesses," Wale said. "They have to get approval so that they don't end up with too many suppliers, too many people trying to compete in each industry. It's not a specific issue associated with Tengzhong or Hummer. It's just a structural management of their economy."
It was unclear how jobs would be affected at the plant in Shreveport, which also builds Chevrolet Colorado and GMC Canyon pickup trucks, Richards said.
"It hasn't been determined what the impact will be right now, but Hummer production is under a quarter of production" at the plant, Richards said.
The Louisiana plant once employed about 3,000 people, but layoffs and buyouts have reduced that to about 1,120.