Hummer: Down for the Count?

February 24th, 2010

Hummer began life as GM’s heavyweight contender, crushing smaller, less-mighty opponents with the likes of the monstrous H1.

Over time the lineup got “smaller,” with the introduction of the H2 and H3, but the reputation of Hummer as a street-legal monster truck never went away. Then Hummer became the antithesis of the Toyota Prius and invoked the ire of greenies around the world.

Needless to say, when GM went bankrupt the Hummer brand didn’t fit in with the government’s plans for General Motors, so it went on the chopping block along with Pontiac, Saturn and Saab. Pontiac and Saturn are gone. Saab has officially been sold to Spyker. And Chinese company Sichuan Tengzhong Heavy Industrial Machinery is buying Hummer.

Right?

Probably. Maybe. Or maybe not.

The contract to sell Hummer was completed in October 2009 and was supposed to be done by the end of January. It’s not done yet, though, because Sichuan Tengzhong is having trouble getting Chinese regulatory clearance. (Probably because the Chinese government knows there’s not a viable market for Hummer anymore.)

GM has given the company a one-month extension, but there are no imminent signs the deal will be done by the end of this month, although there are rumors that Sichuan Tengzhong is trying to close the sale off Chinese soil to avoid needing the government’s approval.

While skirting Chinese regulatory rules is a decent idea, I have a better one. I hope GM’s new $3,000-an-hour consultant, Fritz Henderson, reads this, because it’s the kind of obvious idea that highly paid consultants usually miss:

Don’t sell Hummer. Shut it down and sell the distribution channels to a company looking to break into the U.S. market. Think Tata, Geely, BYD or Chery.

Hummer is one punch away from getting knocked out. The brand thrived in the post-9/11 years and grew on one-dollar gas when no one cared about miles per gallon and just wanted gargantuan American-made SUVs. Those days are long gone. The Chinese and American governments know it, GM knows it, and the American people know it.

Shut it down and let another automaker have its dealers.

How do you feel about the demise of Hummer? Would you rather see it shut down or sold to a foreign company?

-tgriffith

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