Recently, one of GM's most toxic assets has been the iconic Hummer brand. The lineup of gas-hungry mammoth vehicles fell out of favor among consumers last year as gas prices soared. Sales plunged by double digits month-to-month in a free fall. With GM now officially in bankruptcy, one of its top priorities was to offload Hummer.
It now appears the company has found a buyer and agreed to terms, according to a press release by the company aired this morning. Hummer spokesman Nick Richards told PickupTrucks.com, "GM has signed a memorandum-of-understanding with an investor. Both parties have agreed to the basic terms [of the purchase] but the financial details and buyer's name are not being released at this time. That’s expected to be announced some time in the near future."
He says the buyer meets GM's basic criteria in that they have experience in the international market, where Hummer sales are stronger. Also, they have a long-term development plan and look to stick with the brand even if it struggles. Troy Clarke, president of GM North America, states, "Hummer is a strong brand. I’m confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker."
The purchase will not include the military technology or military trucks developed by AM General, the original developer of Hummer vehicles. GM acquired the license to the rights to use the Hummer name and develop a civilian heavy vehicle brand under it from AM General a number of years ago.
Mr. Richards speculated on the expected current and upcoming models, stating, "The [Hummer] H4 [also known as the HX] and H3T concepts are good examples of where Hummer’s future products could go. The H3 SUV and pickup and H2 [full-size truck] will also continue in the portfolio. We’re working on ways to change the H2 beyond [its most recent update in] 2008."
The upcoming Hummers will likely include alternative fuel and diesel powertrains to help them adopt leaner fuel economy footprints. They are expected to remain pricey luxury vehicles.
The deal safeguards 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships around the country. The move saves GM's Shreveport, Louisiana facility, which produces the H3 SUV and H3T pickup truck. However, the contacted workers from AM General at GM's H2 plant in Indiana will be released.
One major shift is that the Port Elizabeth, South Africa plant which builds right-handed H3s will close, returning its production to Shreveport. The right handed SUVs, soon to be produced in the U.S. will be sold in Europe and Asia. Currently, thirty percent of Hummer's sales are outside the U.S., but the new management wants that number to rise.
GM plans to provide engineering and transition assistance to the new owners for some time. It also will continue to honor pre-existing warranties. Additionally, the deal still hinges on government approval, with the government GM's new majority owner.