Rejoice GM, somebody wants HUMMER! In fact, AM General, the company that created the original mil-spec HMMWV for American troops back in 1983 is rumored to be in the mix of bidders, joining forces with China's Hunan Changfeng Motor Co. Despite earlier reports, Changfeng has remained interested in the brand since GM first put HUMMER up on the auction block, but had desired a bidding partner. It appears that it found one shortly after touring the automaker's facilities a few months back.
This is an intriguing move, especially since it was AM General that first launched the HUMMER marque in America before selling marketing rights for the brand to General Motors in 1999. Despite the presence of a Chinese partner, rumors indicate that HUMMER would remain an American brand that's marketed predominately towards the United States. It's an interesting footnote, though possibly completely unrelated, that news of HUMMER's impending sale rise and fall in unison with global fuel prices. In any case, this announcement seems to reaffirm GM's stated goal of selling the off-road brand by 2009.
General Motors is moving full steam ahead on its hopeful sale of HUMMER, moving to make a decision on the SUV marque "as quickly as practical." Shortly after appointing Jim Taylor to the head of the brand, the automaker has contacted interested parties with a full sales prospectus. By now, you're surely aware that sales of the gargantuan 'utes are very slow, posting declines of over 50-percent so far this year. No surprise then that the General would be anxious to get the former military-spec brand off its books. Though GM claims it is not necessarily committed to selling the marque, we're not so sure they have many other options. An entire revamp of the HUMMER line would use up precious resources that would surely be better spent on more fuel efficient, forward thinking products like the Chevy Volt, Cruze and Orlando. In any case, look for an announcement regarding the brand's future in short order.
HUMMER's up for sale, and General Motors is looking around the house for other items to include in its yard sale. During a presentation to Deutsche Bank, GM's powertrain plant in Strasbourg was added to the For Sale listings by Treasurer walter Borst. Together, the HUMMER brand and the French transmission plant could bring up to $4 billion. GM's likely not done raiding the attic, either. A list of other salable assets is currently being drawn up as The General continues attempts at righting its ship. A selloff of HUMMER probably doesn't mean much for the brand's lineup in the immediate future. A new owner would be purchasing the name moreso than the GM truck-based H2 and H3. New models based off some other architecture will take a considerable amount of time to work up; it'd likely mirror what's going on with Land Rover and Jaguar under Tata's ownership.
HUMMER, a brand that has seen its sales drop by a shocking 40% so far this year, is apparently burning an SUV-sized hole in General Motors' pocket. Main money-man at the biggest American automaker, Fritz Henderson, says that GM wold like to rid itself of the brand as quickly as possible, saying that its sale is being approached "on an urgent basis." The time frame given was by the end of this year or early 2009 for a completed transaction. So, who would want the brand that represents wretched American excess? We have no idea, but it seems that somebody does as Henderson reiterated that the General's been approached by multiple suitors. Interestingly, these comments were made in India, a country that had previously been rumored to have two separate bidders for the HUMMER brand. Considering the growing sentiment for small cars in the U.S., it wouldn't be surprising to see HUMMER sold to a company that does most of its business outside America.
The HUMMER brand isn't exactly sterling here in the States due to high fuel prices and its standing as the poster vehicle for green groups trying to save the environment from the evils of CO2 emissions. That's probably the biggest reason GM is looking to offload the brand, and while it doesn't seem likely that anyone would want the marque, there are interested parties. According to GM's Middle East Managing Director, Terry Johnsson, one group is a pair of Arab investors. The Middle East has been a player in the automotive landscape over the past few years, as the region is rife with cash and oil and has growing transportation needs. Arab investors were 50% of the Aston Martin sale in 2007, and Abu Dhabi's investment group purchased 5% of Ferrari in 2005. Many of the early suitors for the HUMMER brand have since decided to bow out. Whether the final buyer is Tata Motors, investors from the Gulf, or some yet unknown party, the General will want to move quickly before the brand's value falls any further.
Despite assurances from top GM brass, every bidder for the troubled HUMMER brand appears to be removing itself from the rumormill. Considered one of the strongest suitors interested in the off-road marque, India's Mahindra is the latest brand to pull out of consideration. According to Vice Chairman Anand Mahindra, "There has been a lot of speculation. I want to say categorically we are not pursuing HUMMER." That sounds pretty definitive to us, leaving Tata Motors as the only company from India still reportedly interested. Russian billionaire Oleg Deripaska has pulled his name out of the mix, as has China's Hunan Changfeng Motor Co. Until an official announcement is made, all of this is just speculation, but we have to wonder just how valuable the HUMMER brand could possibly be now that its sales have plummeted so far and so fast.
The continual grousing over fuel prices has earned the HUMMER brand a place on consumers' fecal roster. There's nothing wrong with what HUMMER has on offer, other than the fact that large, off-road capable trucks make terrible commuter cars, and the idiots misusing their H2s for tasks better suited to Cobalts are finally wising up. This re-thinking of emetic consumption has sent HUMMER sales down the sewer, and with no end in sight, GM is seriously considering selling the brand to stanch the cash bleed.
China is a huge emerging market for General Motors – Buick is big there, for example. As such, GM's Fritz Henderson has indicated its willingness to hold discussions with any Chinese company interested in buying the division. It's not like HUMMER is a brand with lots of history, anyway. Only the H1 had any legitimate claim to military lineage, and that vehicle hasn't been available for a while. The survival of the brand in the U.S. market may hinge on competing more directly with the Jeep Wrangler, regardless of ownership. The same way as Jaguar and Land Rover are a handy entre into serious carmaking for Tata, HUMMER could be a way for Chinese automakers to crack the U.S. market.
