Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
TEXT OF STORY
Steve Chiotakis: Today, we were supposed to learn the fate of General Motor’s floundering Hummer brand. That is, until GM found itself with other pressing business on its plate. Namely a 60-day presidential timetable to make a survival plan or face bankruptcy. The Hummer problem will have to be addressed soon, because sales there have really tanked. And given its dire state, GM doesn’t need any more baggage. Rico Gagliano reports.
Rico Gagliano: Oh, how the Hummer has fallen. Sales were down 68 percent in the first two months this year.
Rick Kranz, an editor at Detroit’s Automotive News, chalks it up to the powerful car’s puny gas mileage:
Rick Kranz: When gasoline was at, what, $4.50, $5, $5.50 a gallon, people looked elsewhere for products and Hummer suffered.
By the time gas prices came down late last year? GM had already announced it was looking to unload the company.
Kranz says that didn’t exactly breed sales. Still, GM says they have bids on the table from other companies to buy Hummer.
Analyst Michael Robinet of CSM worldwide says any buyer would have a lot of work to do:
Michael Robinet: Hummer is a rough-and-ready vehicle, it has a very muscular image. But really for Hummer to survive longer-term, they’re gonna have to either expand the portfolio and make it a little bit more environmentally friendly, or slim it down and make it a niche brand.
In which case, he imagines fewer Hummer models, and few — if any — Hummer dealerships.
Whether the brand lives or dies, through, it won’t affect the military. GM owns the Hummer name and makes its own versions of the car, but a completely different company called AM General supplies Humvees to the armed forces.
In Los Angeles, I’m Rico Gagliano for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.