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<< Previous   of   Next >> Associated Press  (click to enlarge) A Hummer sits on the lot at Hummer of Columbus in Dublin, Ohio. Hummer dealers are concerned that General Motors Corp.'s strategic review of the brand could involve its possible sale.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, June 13, 2008 Is GM ready to part with Hummer? Analysts and dealers speculate on the fate of General Motors' gas-swilling SUV line Associated Press DETROIT -- As if high gas prices, a weak economy and a strike by a major supplier weren't enough to drag down Hummer's sales, Hummer dealers are now reeling from the news that General Motors Corp. may consider selling the brand. GM Chief Executive Rick Wagoner told shareholders last week that the automaker was conducting a strategic review of Hummer and was considering all options, from revamping the lineup to a partial or complete sale. Wagoner gave no timeline or further details. "I'm not real happy with General Motors right now," said Brad Johnson, general manager of Hummer of Columbus in Dublin, Ohio. "It was a poor choice of words on their part and it's a bad decision to come out and say something when you don't know what's going to happen." Jim Bushart, parts director at Lynch Hummer in Chesterfield, Mo., said he assumed GM was analyzing the Hummer brand as gas prices pass $4 a gallon and consumers look for more fuel-efficient vehicles. But he was surprised the automaker discussed the review publicly. "Maybe they were hoping that by making an announcement they would drum up some interest," he said. Others griped that the company could hurt sales of Hummer's new pickup, the H3T, which comes out this summer. Hummer has always been a niche brand, with U.S. sales reaching a peak of 71,524 in 2006. By comparison, Honda Motor Co. sold 53,299 Civic sedans last month alone. But unlike small cars whose sales have exploded this year, the Hummer niche is disappearing. Hummer took the worst hit of any brand through May of this year, with U.S. sales down 36 percent compared to the same period the year before, according to Autodata Corp. Dan Towbin, who sits on GM's Hummer dealers' advisory board and whose 60,000-square-foot Las Vegas Hummer dealership is the largest in the U.S., said he wasn't surprised by the news of the review. Towbin said GM has assured him it's giving equal consideration to continuing the brand with newer, more fuel-efficient vehicles. "Obviously the landscape has changed for the automotive industry for a lot of reasons. There's been a dramatic shift from trucks to cars and crossovers, and fuel is an issue for a brand like Hummer," he said. "Like any good business, they must continue to analyze their assets and determine whether they're worthwhile to continually reinvest." GM hasn't named any potential buyers, but they could include Indian automakers Tata Motors Ltd., which just acquired the Land Rover and Jaguar brands from Ford Motor Co., or Mahindra & Mahindra Ltd., which was in the running for Land Rover and Jaguar, according to Aaron Bragman, an auto analyst with Global Insight. Bragman said Chinese automakers also have shown some interest. But Bragman said there are significant barriers to a sale, including the tight credit market and the degree to which Hummer has been integrated into GM. For example, the midsize H3 shares a platform with GM's compact pickups. "I can't see them selling it but I do see them restructuring and coming up with some new product, a rethink of what they're doing with it," Bragman said. Hummer's fortunes were partly influenced by a three-month strike at American Axle and Manufacturing Holdings Inc., a major GM supplier. Craig Hubble, general manager of Hummer of Novi and Detroit Hummer, said he is selling every vehicle he can get, but his inventory has been severely diminished. "The demand is there. It's the supply," he said. But the broader problem for Hummer and other large vehicles has been the fast rise in gas prices. Sales of large pickups fell 21 percent through May, while sales of large SUVs were down 39 percent. The H3 gets 15 miles per gallon, according to government estimates. The government doesn't estimate fuel economy for the H2 because it's so large, but dealers estimate it gets around 12 mpg. With gas at $4 a gallon, it costs $128 to fill up the H2's 32-gallon tank. Ed Williamson, owner of Williamson Hummer in Miami, says GM should respond not by selling the brand but by giving it more options with better fuel efficiency, including crossovers, diesels and hybrids.

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