Aug 19, 2008 Hummer & GM

What can GM do with Hummer?Posted Aug 19 2008, 07:53 AM by Kim Peterson
Filed under: GM, Kim PetersonRating:
The last thing GM wants these days is to be stuck with the gas-guzzling Hummer brand. But now that the latest potential buyer has bowed out, it looks like GM must live with the sport utility vehicle for a while longer.
China's Hunan Changfeng Motor had talked with GM about buying Hummer. But then it toured Hummer's U.S. plant, and saw "limited potential" to market the vehicle, according to Reuters. The Chinese military can't afford it, and consumers aren't interested now that gas prices have skyrocketed.
That's a disappointment for GM, which saw shares fall 7% yesterday as oil prices began to rebound. Hummer sales in the U.S. plummeted 40% this year, and the company is almost at the point where it can't give Hummers away here. That's why GM is going international in its search for buyers. (Meanwhile, there's a year-long waiting list in the U.S. for Daimler's itsy-bitsy Smart car.)
GM could still find a Hummer buyer in Russia, where the country's richest man, Oleg Deripaska, has shown an interest in selling the brand. BusinessWeek says that an Indian automaker and a Turkish private equity group have inquired about buying the brand, but a simple inquiry doesn't mean a whole lot.
Some analysts say the Hummer brand could sell for $1.5 billion.
Love it or hate it, the Hummer is one of those U.S. cars that quickly catapulted to iconic status. Hummers evoke an intense reaction in people, as evidenced by the numerous scratches and tire slashings that owners report. But Hummer fan clubs are still going strong, even at current gas prices.
The Hummer is a lightning rod that GM could do without. And, at least for now, it's a burden that keeps getting heavier (is one point of view).


When will GM realize that the Hummer has more worldwide appeal than ANY vehicle it produces, even the Cadillac and Corvette. For now, it is berating the brand as the unwanted stepchild. AM General has all they can handle with the Humvee, but I wonder if they have second thoughts about licensing the brand name to GM. On a recent visit to a suburban high school the NUMBER ONE vehicle desired by high school students was the Hummer. In today's youth is the future of many US companies.