Hummer Gone In Six Months. We Promise

[SoCalCTS]

Business Link news story

GM: Hummer Gone In Six Months. We Promise

G.M. is getting closer to dealing its gas guzzling Hummer division, says The Deal. Who wants such a vehicle with gas prices sky-rocketing? Middle Eastern investors, of course. That's probably the only place it costs less than a monthly mortgage payment to fill up.

The Deal: The second in command at General Motors Corp. said Wednesday, Sept. 3, the automaker expects to sell its Hummer brand by early 2009 as part of the company's plan to raise cash to weather a slumping economy that has dragged down car sales....

Original article in The Deal

GM to unload Hummer by early 2009

by Lou Whiteman

Updated 06:13 PM EST, Sep-3-2008

The second in command at General Motors Corp. said Wednesday, Sept. 3, the automaker expects to sell its Hummer brand by early 2009 as part of the company's plan to raise cash to weather a slumping economy that has dragged down car sales.

Detroit-based GM put Hummer on the block in June, part of an effort to reduce the company's emphasis on selling gas-guzzling sport utility vehicles in favor of manufacturing more fuel-efficient vehicles. The company said last month it has received expressions of interest from potential buyers and that it is preparing to open formal talks over a possible deal.

Speaking to reporters in India, GM chief operating officer Fritz Henderson said the Hummer auction is being conducted "on an urgent basis." He also said a deal by the end of the year is possible, while noting that "if it takes us to early next year, that is OK, too."

Company officials have mentioned a handful of unnamed Middle Eastern investors as potential bidders for Hummer, and industry sources say those parties or private equity firms could partner with an emerging-markets automaker to buy the brand.

India's Mahindra & Mahindra Ltd., which last year lost out to domestic rival Tata Motors Ltd. in an auction of Ford Motor Co.'s Land Rover and Jaguar units, and Russian billionaire Oleg Deripaska's Russian Machines have been mentioned as potential suitors for Hummer, though both have denied interest. Most in the industry still expect foreign nameplates to get involved in a Hummer auction, although fear of a global slowdown could temper enthusiasm and lower the final sale price.

Indeed, a sale of Hummer, though significant, is unlikely to make a major dent in the $15 billion GM has said it plans to raise by the end of 2009 to survive a slowdown in the U.S. economy.

The automaker, which had $21 billion in liquidity as of June 30 but which burned through more than $1 billion a month in the second quarter, has said it hopes to use white-collar restructuring, new asset-backed borrowing and divestitures to boost its cash pile.

The automaker lost $15.5 billion in the second quarter and has bled through more than $50 billion, including charges, over the past three years. GM on Wednesday said U.S. light-vehicle sales fell 20.3% year-over-year in August to roughly 307,000 units, with light trucks leading the way down with a 24.1% sales decrease. This year, GM sales in the U.S. are down 18.5%.

GM knows firsthand how difficult it can be to sell truck assets in the current environment. The company saw a potential sale of its medium-duty truck business to Navistar International Corp. fall apart last month due to high oil prices and weakening demand for the fuel-hungry vehicles. Navistar and GM said they intended to continue discussions about the unit, which would give Warrenville, Ill.-based Navistar much-needed scale in the truck business.

[regfootball]

watch hummer flourish once its sold

[FUTURE_OF_GM]

watch hummer flourish once its sold

Oh yeah...

That's what we do (the american auto industry) we invest in brands and rebuild them, then are forced to sell them off by the media and 'the street'

[SoCalCTS]

Oh yeah...

That's what we do (the american auto industry) we invest in brands and rebuild them, then are forced to sell them off by the media and 'the street'

It's too bad "the media and the street" couldn't have forced GM into making better cars. Then they wouldn't need to sell Hummer.

[Robert Hall]

Sooner they get rid of those turds the better their CAFE will be...and more money to spend on cars. A win-win.

Edited September 4, 2008 by moltar

[cire]

Sooner they get rid of those turds the better their CAFE will be...and more money to spend on cars. A win-win.

+1

Edited September 5, 2008 by cire

[VenSeattle]

So far being sold off hasn't worked out well for Jaguar and Land Rover... both are still suffering badly.

[CMG]

Sooner they get rid of those turds the better their CAFE will be...and more money to spend on cars. A win-win.

+2

The original Hummer was a cool vehicle. The H2 and H3 are NOT in my opinion, and the faster the Hummer brand is sold the better off GM will be. A win-win for sure.

[Brougham-Holiday]

I hope this will free us development ability and cash to allow GM to build more relevant cars like the Invicta and Cruze. Maybe by removing the Hummer line GM can afford to have other big cars like the Park Avenue in the future?

[ToniCipriani]

If selling Hummer means more money on the "fixing" the "damaged" core brands, then I'm all for it.

[GMTruckGuy74]

I wonder how many H3T pickups will actually be sold in 2009??? What a way to launch a new vehicle Maybe I can get a brand new one real cheap next summer? FIRE SALE!!