GM’s money will help Cunningham, in Livonia, Mich., pay for a feasibility study and business plan to see if a viable market exists for the C7, a two-seat, V-12, luxury touring car with a $250,000 price tag, according to two sources familiar with the deal. GM has the option to purchase up to 50 percent of the company.
In the future, Cunningham may offer its shares to the public.
Cunningham plans to build and sell about 600 C7 cars per year. Lutz and partner Briggs Cunningham III, son of Briggs Cunningham II, who built cars that raced at Le Mans in the 1950s, launched their effort last year before Lutz was hired by GM.
The duo unveiled a concept of the C7 in January at the Detroit auto show. At that time, Lutz said he was seeking up to $4 million from private investors to move the project forward. Lutz has invested $750,000 in the company.
Lutz and GM are minority partners without an active role in the company’s management. But their names are comforting to the big investors needed to supply the tens of millions of dollars necessary to reach production.
GM’s backing also could make it easier for Cunningham to attract the large automotive suppliers needed to design, develop and produce the car.
It has taken months of negotiations to get GM involved. “GM does not want the (investors) to think they are investing in GM or that GM will bail them out. That would be misrepresentation,’’ one source said.
Lutz will not participate in transactions between the two companies, GM said but will continue to be a Cunningham board member. GM will appoint a second executive to that board