Behind the Wheel with Phil Lebeau

HUMMER's End Game


Six weeks.

That's how long HUMMER has before its fate is sealed at General Motors . GM says that by the end of March it will reach a decision to either sell the brand or phase it out. My gut, based on talking with people in GM and the industry, is HUMMER is sold, but for far, far less than what GM wants.

Right now, a Chinese manufacturer and a New York based private equity firm are looking at HUMMER. GM would love it if it could get either suitor to pay $600 Million.

Dream on boys.

If GM gets $300 million it will be lucky according to most I have talked with. And for that, what will the buyer get? A couple lines of tooling to build the Hummer line-up and of course the HUMMER brand.

Knowing that it's essentially giving away HUMMER, why doesn't GM simply hold onto the iconic brand and idle it?

It is because shedding or shutting down HUMMER is a relatively cheap way GM CEO Rick Wagoner can show the Obama Auto Team that his company is re-structuring the business. And believe me, GM executives know they are now in a game of showing the Federal government they "get it". What better way to send that message than to drop a brand symbolic of the gas-guzzling, sometimes arrogant approach that epitomized GM a few years ago.

Remember those days?

Back then, HUMMER was red hot. When the hulking SUV rolled down the street (taking up almost all of its lane) it trampled over the opinion of critics who called it the ultimate gas-guzzler. Fans could care less. Gas was cheap and driving a HUMMER made you feel invincible. The future was so bright, GM convinced dozens of dealers to build stand-alone “Quonset hut" HUMMER dealerships. Looking back now, the absurdity of it all is crystal clear.

Now those dealerships are monuments to how GM lost its way. Critics are getting the last laugh as HUMMER, a brand synonymous with being big and bold, quietly fades in the rear view mirror.

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