• by Karl Greenberg , June 4, 2008

To be or not to be? That is the question General Motors is mulling for its Hummer brand as it launches a strategic review of the truck division known for military-style SUVs the H2, H2 SUT (sport utility truck) and H3 nameplates. 

GM only sold 1,843 Hummer vehicles last month versus 4,636 in the month last year, a 60% plunge. Year-to-date, Hummer sales through June are off 36% to 14,086 units.

The company says it is seeking to "determine its fit within the GM portfolio. At this point, the company is considering all options, from a complete revamp of the product lineup to a partial or complete sale of the brand," GM said in a release. The company--attempting to patch the tires while driving--said that it is also planning to launch a compact car program for its Chevrolet brand, shift money to accelerate development of its electric car, Volt, and shutter four plants that make SUVs and trucks. None of those plants make Hummer.

Rick Wagoner, GM/CEO, conceded that the company's three-year-old turnaround plan to return the company to profitability has hit a headwind this year. "Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix."

Michelle Krebs, senior editor at Edmunds.com, points out that there are no easy ways to adapt the division to a fuel-sipping zeitgeist, or sell it outright. "First, whom do you sell it to? The buyer would have to be global with sales in the Middle East. But revamping the brand will cost a lot of money."

Brett Smith, assistant director/manufacturing, engineering and technology at the University of Michigan's Center for Automotive Research, says that since the Hummer line is based on truck platforms from other GM products, trying to sell the division would be like trying to sell one's limb. "It's entirely a GM product--there's nothing unique to Hummer," he says. "So even if someone were to buy the brand, GM would have to continuing building the vehicles for a period while the buyer figured out a way to build the vehicles. It is very difficult to imagine how someone could do it."

He points out that, while some Jaguar vehicles are Ford-based, and some are not. "With Hummer, there's nothing unique." The Hummer H2 is still produced at AM General Corp. (from which GM bought the marque in 1999), but AM General lost the contract to build the next iteration. "That would have presented an opportunity." The H3 is built in GM's plant in Shreveport, La., where the next Hummer vehicle also will be built.

Smith says GM's best option may be converting Hummers to something more in tune with the times, such as a diesel version of the H3 and the forthcoming H4, which will be the smallest vehicle in the Hummer lineup. "But you won't see the H2 for much longer," he predicts. "They will certainly drop that program."<

Krebs argues that refiguring Hummer could be touchy. "If you look at what Chrysler did with Jeep--moving into crossovers and 'soft riders'--they have tarnished the brand. And now [Chrysler chairman] Jim Press has said Jeep should go back to being exclusively for 'Trail-Rated' vehicles." Hummer's not an easy thing to deal with; it's not a brand that fits the times very well."