![]() |
![]() |
GM review threatens Hummer |
|
|
Financial Times 03-Jun-2008 By John Reed in London and Bernard Simon in Toronto Hummer, the gas-guzzling American SUV favoured by celebrities, could be put up for sale by General Motors (NYSE: GM - News) as part of a strategic review. Owners of the marque's military-style vehicles include 50 Cent, the rapper, and Arnold Schwarzenegger, California's governor. But Hummer's fortunes have waned as petrol prices have soared. Its US sales fell 46 per cent in April, compared with last year. GM made the announcement as part of a plan to shift its focus toward more fuel-efficient vehicles. The carmaker said it would close four sport utility vehicle and pick-up truck plants in North America, develop a new Chevrolet compact car in the US, and push ahead with its Volt plug-in electric car. The Hummer came to prominence in an era of cheap credit and fuel, and some environmental activists seized on GM's rethink, with some evident Schadenfreude, as the symbolic end of an era. "People are clamouring for fuel-efficient vehicles and this just underscores the absolute bankruptcy of the model GM chose," said the Sierra Club, the US environmental group. "GM banked on building ever-bigger gas-guzzlers, and . . . was left holding the bag." Jim Kliesch of the Union of Concerned Scientists said: "GM was behind the curve on this one. They bet their future on gas-guzzling, and the realities of the market and global warming are coming back to haunt them." Sales of large SUVs are down about 30 per cent this year, according to research group Autodata, and Ford Motor and Toyota are joining GM by shifting capacity into smaller cars. GM said it was considering all options for Hummer, from a revamp of its line-up to a "partial or complete sale of the brand". Rick Wagoner, GM's chief executive, said said in a speech before the company's 100th annual meeting on Tuesday, that high petrol prices, now approaching a record $4 a gallon, "are changing consumer behaviour, and rapidly". Analysts said GM might still on to Hummer, keeping the brand's brawny styling but boosting future models' fuel efficiency by scaling them down or introducing hybrid versions. "People buy Hummers because they are fashion statements," said Dutch Mandel, editor of AutoWeek magazine. "Some do buy them to tow boat but the majority are using them around shopping malls." Hummer has already scaled down. Its first huge model, the H1, was modelled on the US army's Humvee, and was more than 4.6m (15ft) long and 2.13m (7ft )wide. The model was discontinued last year, and Hummer's current H2 and H3 are both smaller and lighter. The brand has also shown an even smaller concept vehicle equipped to run on 85 per cent ethanol. In spite of GM's announcement, the car still has its fans. Robin Keller, a sales manager at the Hummer dealership in Columbus, Ohio, said: "It would be their loss if they sold the brand," "I think they're panicking." Ms Keller said the dealership notched up record sales in the first three months of this year but acknowledged that April and May had been slow. Companies: General Motors Corp ;General Motors Corp ;Ticker Symbols: jp:7203; us:F; us:GM; NYSE:GM; Subjects: Company News; Divestment; Government News; Mergers & Acquisitions; National Security; Strategy; Countries: United States of America; FT.com Copyright The Financial Times Ltd. All rights reserved. |
|