Speaking to analysts during a conference call, marketing maven Mark LaNeve said GM "will continue working with [HUMMER] dealers on the appropriate mix of ads, incentives and dealer programs to keep them going and build franchise value." According to an anonymous source (whose information has been independently confirmed), GM has killed the HUMMER brand. The ailing American automaker told its field teams that it's ceased all corporate investment in HUMMER. This includes updates for existing models, the scrapping of the upcoming H4, and a severe cut-back or elimination of marketing and advertising– as contracts allow and media buys can be diverted to other GM brands. The decision pulls the rug from under 171 HUMMER franchisees, including 71 standalone dealers. According to our tipster, GM field ops– who must make nice with the abandoned store owners– are "crapping themselves." Why wouldn't they? Many of these HUMMER dealers have just spent millions upgrading their dealerships to meet brand requirements set forth just two years ago. The first lawsuits have probably already been filed. The rest will follow. Still, closing HUMMER should cost GM less than the billion dollars it spent shuttering Oldsmobile– although that was back when a billion dollars was real money, not GM's monthly cash burn.
57 Comments on “GM Pulls the Plug on HUMMER...”
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Well, this sucks. AT least for, well, maybe, but then there’s, umm… okay, maybe it doesn’t suck. Good job GM.
Now are they going to Get Smart and pull Chevrolet out of Europe and put Saab and Saturn into the deep freeze as well?
It’s about time this pig went,I feel for the few people who bought one of these,the resale is already bad, they will have to give them away or donate it to some scrap iron company.Long live GM!
With no trace of sarcasm, I say “Good going, GM.”
Maybe this trend will continue. I’m tired of seeing so many re-badges on the street.
The only unique brand GM actually had and they kill it, that figures. Anyone at GM who thought HUMMER should have been more than a niche brand was kidding themselves, but sometimes niches can be very profitable like Jeep, so long as they are managed correctly. Is Saab next? How about GMC, GM’s other all gas-guzzler brand?
Hummer died when they killed the H1. Instead of putting a tonka-toy body on the ancient GMT 360-platform, they should have invested in a successor to the H1. There will always be a market for killer-apps.
There go the Quonset Huts.
Here in Australia Hummer’s aggressive advertising says “Test drive a Hummer, then get lost!”
Irony can be so ironic!
I for one will miss the chance to buy my very own American military vehicle. Just in case the Canadians attack.
In all seriousness, I think this is a mistake for GM. It was the only coherent brand left, and with right-sized production and smart investment it could have been profitable. I had hoped they would sell it rather than kill it completely.
Thank God. If ever there was conveyance that embodied everything I hate in a vehicle, it is the HUMMER. People will look back on this era and wonder wtf were people thinking and HUMMER will be the poster child.
couldnt care less
Can’t you still buy the real military Hummers at gov’t auctions? Those were true to their roots. Not a reskinned Tahoe or Colorado.
A local BBQ restaurant has a H1 parked outside, with a big sign on it: '$12,000 off!' Has been there for a few weeks now…
Dang! Bad news for those CSI: Miami crimefighters. How are they going to look cool and macho without their Urban Assault Vehicles? Horatio Caine in an HHR just isn’t the same.
No great loss. The only one who really gained anything by HUMMER is Ford. This guzzler took the Excursion off the gas guzzler radar screen. Vandalizing HUMMERS became a cool thing for the ELFers to do…
In Novi there is a stand alone Hummer dealer (he’s screwed). In Flint there is a GMC/Buick/Chevy dealer that added a Hummer building on his lot. So, is GM going to reimburse these guys???? NOT!!!
1 down 5 to go.
As Ray Davies sang:
“Who’ll be the next in line?
Who’ll be the next in line for heartache?”
If they kill Saturn tomorrow, I’ll become a Rick Wagoner fan.
50merc:
Rumor has it that CSI Miami’s Hummers will be replaced with Pontiac G3s in the next series.
Hey wait a minute, it’s June 3rd, not April 1st. Wow, great news!
As much as I hate seeing gas get this expensive from a personal pocketbook point of view, I love what these prices are doing to SUVs. Not only will people quit buying them, but they won’t drive the big ones much. I just hope gas prices also put cars on diets. I don’t see why full sized cars should weigh more than my ‘99 Accord (3200 lbs). no-one needs a gazillion power options. I look forward to many more small cars.
Can’t you still buy the real military Hummers at gov’t auctions? Those were true to their roots. Not a reskinned Tahoe or Colorado.
You never could buy old hummers from the gov’t. When they reached the end of their service life, they were cut up and sold for scrap. There were a few that got out that you can get through a private seller, but you’re better off finding a used H1 than a real deal M998.
The only unique brand GM actually had and they kill it, that figures. Anyone at GM who thought HUMMER should have been more than a niche brand was kidding themselves, but sometimes niches can be very profitable like Jeep, so long as they are managed correctly. Is Saab next? How about GMC, GM’s other all gas-guzzler brand?
Hummer was a poisoned brand. Sure it was coherent and had a strong image, but the image it projected could be viewed as self-destructive to GM.
And so the large, inefficient SUV shake-out begins. Not surprisingly, the least practical one of the lot is the first to go. My guess is that the mid-size Trailblazer, Explorer, and Durango will soon follow suit. That market has just completely evaporated with high gas prices.
It will be interesting to see if any of the big originals (like the Chevy Suburban) manage to survive in the coming years as sales continue to tank and they’re weeded out.
GM actually getting rid of a brand! That is news.
No big loss; I always thought that serious off-roaders had many other better choices. Ditto the on-road poseurs that make up 98% of the Hummer market here in SoCal. The one thing that has always impressed me (but in a bad way) is how the H2s and H3s look after they have been involved in an accident: horrible. They just fall apart.
A large dealer here in town just recently got done with a tear down the old dealership and build a new one for the Hummer area.
http://www.bobmoorehummer.com/
It will be interesting to see if any of the big originals (like the Chevy Suburban) manage to survive in the coming years as sales continue to tank and they’re weeded out.
I expect the Suburban and a few Jeeps to carry one, but reduced back to their 1960s natural markets. Suburbans used to be cheap to build because it was just a Chevy pickup truck with an enclosed back instead of an open bed. The Explorer used to be the same trick played on a Ranger truck, but the Explorer evolved on it’s own while the Ranger went into suspended animation.
The Trailblazer is surely a dead duck and I don’t see the Escalade or Avalanche surviving either. Expedition, Navigator, Armada and other bit players are likely to die soon. I wonder what Honda will do with the Pilot and Ridgeline.
Honda is bringing a v6 diesel engine over to put in the Pilot / Ridgeline / Odyssey – maybe in some of their cars too. But they will also have an inline 4 diesel too.
Ahh…at least pull a Ford and sell it to an Indian company! Mahindra would kill for this I bet!
This is a good idea, just badly executed (typical GM). Hummer HAD to go. No, ifs and no buts. Yes, it was a coherent marque (more on than later), but that doesn’t mean it should stay alive. Especially, if the brand competes in a dying market segment.
However, there was absolutely NO need to pull the plug on it. Since Hummer was an extremely powerful and coherent marque, this would have made it ideal for a sale. Hummers sell well in Russia and China, hence, why, I’m sure, AutoVAZ or a Chinese car maker would have paid a fair price for it. Likewise, an Indian company (like Mr Brendino points out, Mahindra and Mahindra) would be an excellent buyer for the following reason.
The Indian military LOVE Land Rovers, they can’t get enough of them (Another reason why I say Jaguar and Land Rover will flourish under Tata). If a competitor, like Mahindra and Mahindra, were to buy Hummer and present it to the Indian military as an alternative to the Land Rover, then, Hummer might survive that way. Dare I say it, maybe even grow……?
So what will corporate buyout bankers buy now? Ford Escape Hybrids? It doesn’t quite send the same message.
quasimondo :
June 3rd, 2008 at 11:20 pm
Can’t you still buy the real military Hummers at gov’t auctions? Those were true to their roots. Not a reskinned Tahoe or Colorado.
You never could buy old hummers from the gov’t. When they reached the end of their service life, they were cut up and sold for scrap. There were a few that got out that you can get through a private seller, but you’re better off finding a used H1 than a real deal M998.
My brother has one with 2800 miles on it. It was a US Forest Service vehicle that was never used. Apparently they got it from the Marines. I can understand why the Forest Service got ride of it. What a POS. The GM diesel has eaten a large number of parts with the added bonus of total inability to keep up with traffic in a school zone.
How many of these Hummer dealers are going to now want to sign-up with Mahindra for their upcoming SUVs and pickups (with diesels, and later, hybrid diesels).
http://www.gv-usa.com/
My guess, is most of them. Adios, GM, they’ll say.
I have to wonder if there will be a certain market for diesel SUVs and pickups, as long as they aren’t 5800 pounds in weight.
Not for me, though. I hate trucks!
Sunk cost thy name is Hummer.
The writing was on the wall at the introduction of the H3 – the ‘economic’ model — denial (corporate and dealer) kept the brand going since then…
Arnold Schwarzenegger is not going to be a happy camper. What will the nouveau gauche drive now? Or better yet attempt to fit in a downsized parking space.
GAKK!!! Who’s going to build my H3 Alpha now? Guess I’ll just do it myself as usual…
I agree as said that have been better off-road options, but it does make me sick to think of the long-haired-maggot-infested-fm-types are happy by this (and more SUV’s to come). Al Gore did call for $5 gal. of gas at one point to get Mr. and Mrs. America out of our cars. Congratulations Mr. Gore as there will be one less SUV on the road for your limo to have to drive behind.
Katie – try to take a HUMMER off-road in a military mode. Then give up.
The car’s useless for such applications. It’s a vanity “I want to be Schwarzenegger” silly oversized car that had no raison d’etre.
The downside of getting rid of Hummer is that we will lose a sure fire way to tell if someone is a giant jerk.
Stein X Leikanger,
That doesn’t make sense. Hummers were used by the US military. Where did they use them? Route 66?
They must have SOME off-roading capability!
Stein X Leikanger,
I think HUMMER is kind of a silly vehicle to own. But I wouldn’t go around saying these things have no off-road (”off-street”?) cred: I believe it was a major 4×4 magazine that recently declared HUMMER “4×4 Vehicle of the Year,” or something like that. And that was for the much-maligned civilian model available at GM dealerships, not the completely different military version.
The parent company that owns the Hummer dealership near me must have seen this coming a while ago. A few months back they made that shop share space with a Cadillac franchise.
qwerty: You’re too kind with your use of the word “jerk”. The appropriate word is either tool or douchebag. :) But it sure is/was a good indicator!
wow, what definition of off-road are people using here?
I mean, the H2 and H3 have competed (and sometimes won) in the stock class of the Baja 1000!
is that not off-road enough? sheesh.
if anything, the problem with Hummer was that they were too off-roadey (even the crappy H2)
in terms of ride comfort, passenger space, cargo volume, and of course price the Hummer couldn’t compete with even the rest of GM’s line of SUVs.
trash on Hummer all you want about fuel economy, reliability, american faddishness, and Arnie’s obsession, but i would think that off-road prowess would be the one of the last things to complain about.
They are very capable vehicles, but are being bought as status symbols not for off-roading. You can’t use 24 inch bling wheels with 40-series tires off-road. Even living in more rugged states along the Rockies, you see them setup that way. And the guys around here that go offroading use old and lightweight Jeeps and trucks.
Good riddance to HUMMER, next up is GMC and Buick. Needless rebadges.
I am going to indulge in a bit of shameless speculating here, and say that HUMMER is going to survive, but without GM at the helm.
First, let’s understand what HUMMER is. It is not a true GM division, in the same way that Chevrolet or Cadillac are, for example. HUMMER is comprised of a trademark that GM licensed from AM General.
The vehicles that are sold by HUMMER are produced as part of a venture agreement between GM and AM General. The agreement pays AM General a fee to assemble vehicles that GM manufactures, markets and distributes. GM provided a loan to build the Mishawaka factory, but AM General owns the plant. That agreement between GM and AM General is about to expire.
This puts a couple of things in perspective. First of all, there isn’t much for GM to sell in this situation. GM owns a trademark and an expiring agreement to have someone else build stuff that GM designs. Not much to offer to a potential buyer.
Secondly, GM may not be the only one with a problem here. AM General added a lot of plant capacity and employees to build the GM vehicles. GM paid for the plant expansion, but its maintenance and labor are AM General’s responsibility. The UAW has an agreement to build these that expires at around the same time that the GM-AM General agreement expires. And of course, you have the dealers, a lot of which are single-brand stores.
What all of that means, I’m not sure. But AM General, the dealers and possibly the UAW might be highly motivated to work together in order to avert their own problems once the GM sheriff leaves town.
Unlike GM, AM General builds only trucks, so they should have no interest in completely abandoning the truck business. AM General is owned by a private equity company that I assume does not want to lose its shirt on this deal, either.
I’m willing to bet that HUMMER is going to end up in AM General’s hands, in some way, shape or form. GM’s announcement to sell was probably the opening salvo to negotiation with AM General to put a deal together. AM General should be in a better position to turn a profit from lower sales volumes than GM ever would be, and even if they aren’t, they may have no choice but to try.
@# KatiePuckrik :
June 4th, 2008 at 9:29 am
Stein X Leikanger,
That doesn’t make sense. Hummers were used by the US military. Where did they use them? Route 66?
They must have SOME off-roading capability!
===
There’s a mountain of distinction between the military issue origin, and what people were tooling about itn hinking they were doing the right thing and fighting the good war at home.
There are 17 variants of the military version. The civilian H1 is down-spec’d and also made road safe … in ways that reduce its military mobility.
http://en.wikipedia.org/wiki/High_Mobility_Multipurpose_Wheeled_Vehicle
Pch101,
interesting analysis. I agree that Hummer could in fact have a future. One thing to remember is that H3’s are built for the world export market in South Africa at about 10000 units exported a year.
man if I were AM General, I’d dump the US plant and focus on the export market using the South Africa plant with its lower (and hopefully sustainable) volumes.
ahh but the devil’s in the details. Where are the parts for that plant coming from? Is it the USA or have they already sourced a lot of it locally or from other places like China.
Who knows, maybe with enough R&D, hard work, and a bit of luck, Hummer vehicles can actually be a competitor to the Toyota Hiluxes/Mitsubishi Pajeros of the 3rd world.
boy it sure would be funny if Hummer became successful everywhere but here in the good ole’ US of A.
edit: Also just in case anyone really wants to know here is a comparison chart from AM General detailing the major differences between the H1 and the HMMWV. (the pdf link at the top of the page has more detail and is pretty humorous too)
http://www.amgeneral.com/vehicles_hmmwv_vs_h1.php
yes it’s a shame the H1 can’t ford 60 inches of water. other than that, the capability and mobility of the H1 and the HMMWV are nearly identical.
I were AM General, I’d dump the US plant and focus on the export market using the South Africa plant with its lower (and hopefully sustainable) volumes.
It’s safe to guess that AM General already has plenty of plant capacity, so they don’t need to add overseas plants. As a US military contractor, they need to operate US facilities. It’s also a relatively small company that probably couldn’t afford to build a new plant, even if it wanted to.
Whether they can be profitable, I don’t know. They were losing money before GM showed up, so maybe not. Still, they should be motivated to try. GM has bigger fish to fry, but AM General doesn’t have that many fish, so it can focus on cooking this one. I’ll bet that AM General is backed into a corner with this one.
It looks like HUMMER won’t be killed outright, but just allowed to fade away (see Isuzu for a recent example of how this would work). Heck, they even have a new product coming out-the H3T, a pickup version of the H3, which is too late to cancel. I think the long wheelbase H3 Alpha is still a go as well.
As far as I can tell AM General sold the HUMMER trademark to GM as opposed to GM merely licensing it; AM General is now a mere contractor to GM, to build the H2. That is, when their contract expires, GM can kill off the H2 and AM General would have no recourse. The H3 is based on, and made in the same factory as, the GMC Canyon and Chevy Colorado, and probably wouldn’t be killed off immediately until that plant closes or those trucks are redesigned.
So, here’s my guess as to what will happen:
The H2 will be killed as soon as GM’s contract with AM General expires, although I imagine leftover stock would still be available for several years. Even though the H1 was cancelled in 2006, a dozen brand new H1s have been sold this year. I imagine the H2’s situation would be similiar, with stock easily available for least a year after production shut down.
The H3 will remain, with the H3T and probably the H3 Alpha joining it.
The H4 is cancelled. This might have had a chance, as being a true small, off-road, Wrangler-like vehicle, but it’s probably not worth the money to put it into production.
Advertising support for the H3 series will be very limited. However, HUMMER will remain in business, selling H3s and leftover H2s, at least until the Canyon/Colorado is redesigned or cancelled.
No sale of the brand would be attempted. While the H2 is produced in a seperate line, the H3 (which makes up about 75% of HUMMER’s sales) is produced at the same plant as GM’s medium sized pickups, so GM would be producing the majority of the brand’s products anyways, even if it was sold. GM would still be directly tied to HUMMER even if it sold the brand, and nobody would buy such a turkey anyways.