HUMMER: The Best of GM’s Brands on the Cusp of Being Thrown Away

[mgescuro]

HUMMER: The Best of GM’s Brands on the Cusp of Being Thrown Away
... another commentary by mgescuro...


Apparently CAFÉ has GM running scared.
All SUV’s are verboten. No one wants them. They’re bad for image. They’re evil. They will never sell ever, ever, ever again!

Normally, I would agree with that notion; however, in the case of HUMMER, General Motors is dead wrong.

Why? Because HUMMER is a niche brand. It’s effect on the market is tremendous in certain segments; however, due to the volume of HUMMER’s sales, they can be seen as negligible in the greater scheme of things at GM.

Customers who buy a HUMMER buy it purely for image. It’s a big, burly, macho machine. It is proving to be one of the most capable off-roading machines this side of Land Rover. So what gives with the throttling back of HUMMER?

Doesn’t GM realize that HUMMER is one of the most desirable vehicles in GM’s entire global lineup? It is as recognizable as a Corvette.

So what if it sells ~85,000 vehicles on a good year?
So what if it guzzles gas?
So what if the enviros have deemed it as the car from hell?

If GM deems HUMMER salable or “strategically ineffective,” who do they believe will buy HUMMER? Obviously someone or some company who sees HUMMER more than a gas guzzling hunk of metal. Obviously, this company will buy HUMMER for its image and for its untapped potential.

All these suppositions just proves that GM remains completely ineffectual when it comes to managing their niche brands. They continue to manage to a spreadsheet. They talk product, but when it come to a brand with a specific type of product, they are unwilling to support it.

There is no logic in shutting down HUMMER or selling HUMMER. It would prove disadvantageous to GM from a product standpoint. It would also allow a competitor to actually show up GM, providing embarrassment in the industry.

Ron Zarella had it right. Manage the brands to sell the product. His problem was he didn't perfect the product. GM now has product, but they are clueless on how to manage a brand. What does GM want to do? Well, sell HUMMERs with Cadillac because HUMMERs are premium. I still fail to see the logic of that maneuver.

GM just doesn’t get it, and they probably never will.

[AMERICA 123]

http://www.marketwatch.com/news/story/gas-could-fall-2-if/story.aspx?guid={2673C102-68E0-41D9-9C9A-10EE2E723948**&dist=TNMostRead

:
Gas could fall to $2 if Congress acts, analysts say

Limiting speculation would push prices to fundamental level, lawmakers told

By Rex Nutting & Michael Kitchen, MarketWatch

Last update: 4:24 p.m. EDT June 23, 2008

WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit

speculation in energy-futures markets, four energy analysts told Congress on Monday.

Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly

drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

Fadel Gheit of Oppenheimer & Co.,

Edward Krapels of Energy Security Analysis and

Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

[mgescuro]

Despite what GM might be trying to convince the media, gas really has nothing to do with HUMMER's existence.
People who buy HUMMER will buy it for its capabilities. It's a matter of shifting HUMMER's marketing direction.

Analysts can speculate about oil speculation all they want. Desiring $2 gas isn't going to get you $2 gas.

Demand is high. 2 of the world's largest largest countries are industrializing. Specualtion or not, demand will remain high for the forseeable future.
Get used to $3-4 gas.

[TKR]

"Hummer by GMC"???

[blaster701]

I have to agree. All you need to do is add a diesel and/or hybrid. The H3T will be nice. An HX model is downsizing further....but, I guess there is no open air 4x4 in my future.

News Flash, there are people that need trucks. I tow a 2,800lb boat and a few jet skis on the weekend. I do not want a Suburban. Currently I own a 2000 ZR2 Blazer. She does the job fine. And get this, it is not my daily driver. I have little 4 banger for that. The HX is exactly what I want....looks like the blazer will stay with me for a while.

[derrado]

It's not just CAFE that is threatening to kill Hummer. It's about GM's reputation. Killing Hummer is also a PR move.

For all their talk about Chevy Volts and hybrids and E85, the Hummer brand threatens to cancel out all that good. The Hummer brand is probably one of the most conspicuous brands out there. That is good but also very, very bad. Everyone knows Hummer. Everyone knows about it being a brand of fairly large SUVs and low fuel efficiency. Selling off or killing Hummer helps solidify GM's desired goal of being a green corporation. At the end of the day, GM wants to be competitive. With the market shifting so dramatically to more eco-friendly, fuel-efficient cars, GM cannot afford to have a brand like Hummer in its stable. It is very damaging to PR.

It's not a full-line, mainstream brand. Yes, that creates an argument for keeping it on as its a niche player. But it also makes it easy to do away with it. Furthermore, it is a niche that is slowly becoming less profitable as "green" technology becomes more prominent and Hummer's image erodes.

Mgescuro, I understand that you believe Hummer is strong because it has a defined goal and focussed vehicles. However, it is a goal and a range of vehicles that are going to become less and less popular. Killing Hummer does wonders for GM's PR and gets rid of a bit of clutter in the brand stable.

[jameskz28]

Ahh...I remember the good 'ol days where the average American had no idea what brands GM had under its belt. For the most part, GM brands seemed more like seperate companies, at least to the layman.

Now everyone just sees GM as one giant company tripping over it's own feet, and all of GM's brands suffer for HUMMER's transgressions. HUMMER will survive, as a GM company or not. Alot of people don't base the purchase of a purpose built Niche vehicle on the price of gas.

People will still buy SUV's and large trucks because there is a need for them...whether that be pulling a trailer or boat, or four wheeling in the desert (think Middle East). HUMMER's are all over Abu Dhabi and Dubai...alot of people love these trucks.

IMO, The worst thing GM could have done was to place those gaudy little chrome GM squares on all thier cars.

GM is a COMPANY, not a BRAND- Give the BRANDS back their identity!

[member12]

How about some diesel engines?

And not the Duramax....small diesel engines with good effeciency. In any case, the Hummer brand is the only one hitting on all cylinders as far as competition. There is no CSV or G6 in the Hummer line up...yet. The only thing holding it back is gas prices.

Those greenies who say that Hummer causes bad press and Hummer hurts the environment would never own one anyways. Hummer can be the best product known to mankind, and people like that would still say things like "it's bad PR" because of the Hummer image. It's the only vehicle with genuine appeal overseas- and just because some stupid brits can't afford the gas for one doesn't mean that GM shouldn't sell it. Those in the religion of environmentalism hate all cars with an internal cumbustion engine, so it's not an "image" thing unless you live in certain areas.

Killing Hummer would just show GM as being weak....and GM needs to learn how to market niche products. So it doesn't sell as well as it did when gas was $1.99/gallon...it's a niche vehicle, it's not supposed to sell like Camrys...and whose idea was it to let Hummer have stand alone dealerships?



GM should let each brand run as it's own company with it's own budget. Then it would actually be fair to decide which ones to axe after a few years.

[mpsrent]

Originally Posted by derrado

It's not just CAFE that is threatening to kill Hummer. It's about GM's reputation. Killing Hummer is also a PR move.

For all their talk about Chevy Volts and hybrids and E85, the Hummer brand threatens to cancel out all that good......

Well stated! For only 85,000 or so prospective sales, can GM really accept the cost that Hummer does to GM's reputation? GM's resources would be better spent on building an additional 85,000 or so Malibu's with the fuel efficient 4cyl 6speed combo than building a truck that the media loves to bash.

GM has more problems than just dated products, inefficient plants and rising costs; GM has a public image or perception problem. Despite the fact that GM has proven that they can build good cars and fuel efficient crossovers, the general public now views GM as the leader for gas guzzling dated designs. Anything that GM can do to reverse this perception will only serve to do GM well in the future, even if it comes at the cost of dropping a brand or two.

[CaptainDan]

Selling Hummer to any potential buyer also doesn't bring anything other than image to the table. Hummer has no engineering or manufacturing facilities. In itself, it has zero ability to produce new products. So there's no future for it, unless updated by a company's existing engineering and manufacturing resources (GM or other).

The H1 was (and still is) designed and built by AMGeneral.

The H2 is a Suburban platform, designed and built by other GM entities.

The H3 is a Colorado platform, designed and built by other GM entities.

Any future Hummer (H4, H5.....?) is a GM engineering developement, which still does not belong to any direct Hummer entity.

[member12]

If GM has a public image or perception problem, then they need to address it with better fuel effecient products. The small cars are weak and they still have no full hybrid car on the market..only large trucks. "GM only cares about SUVs"....well, that can change if GM had one good small car to offer that hit its target market half as good as the Hummer brand has.

Just because their really good SUVs make a bunch of environmentalist upset doesn't mean that those products should be cut. The hate for the Hummer SUV is from mostly environmentalist who would never own one, Ford or Jeep fans who would never own one, or people who could never afford one. If the brand sells between 80,000 and 100,000 vehicles with only 2 products, how bad of an impact could it be (assuming that Hummers pollute more than the average SUV, which it doesn't)?

Face it, these trucks are big and often purchased in bright colors. They are functional, but half their buyers just have one to show off. That kind of attitude enrages some people who are against individualism and personal expression, especially if it disagrees with their point of view. This doesn't count as an image problem since those people wouldn't buy one anyways.

Instead of cutting brands like Hummer, why not improve brands like Pontiac and Chevrolet which rely on small cars for sales but only have mediocore products to offer. Why not offer more engine and transmission choices in the Hummer products? Why not offer the two mode in the Tahoe for the Hummer line (would that even work)? Every other off roader in the world has diesel engines except for American trucks..why not start there?

Originally Posted by CaptainDan

Selling Hummer to any potential buyer also doesn't bring anything other than image to the table. Hummer has no engineering or manufacturing facilities. In itself, it has zero ability to produce new products. So there's no future for it, unless updated by a company's existing engineering and manufacturing resources (GM or other).

By your reasoning, we should cut Saturn, GMC, Pontiac, Buick, Cadillac, Chevrolet, Opel, Vauxhal and every other GM brand that is a part of the GM "family" and just refer to GM cars as "GM".
Bad idea.

[PontiacBixler]

Something smaller than the Hx, but with the off road capabilities of the Hummer brand that is either a Two Mode or a pure electric would open the doors for one of the best marketing moves that the auto industry has ever seen.

Imagine this:

TV commercial opens on a serene outdoor landscape (much like the Adirondacks here in NY). Streams and waterfalls are flowing, birds are chirping.

Voice over talking about how much you love to come up here and would do anything to protect it.

Cut to a close up of a tire creeping along a path silently. You can just make out the recognizable shape of the hub in the rim.

Cut back to deer perking up and watching a blurry object move in front of the camera.

Cut to low shot of all four wheels coming to a stop at the edge of a drop off as the driver's side door opens and someone in hiking boots hops out of the door.

Voice Over: Who says we don't care about Planet Earth?

Pan to a new Hummer H? at the edge of a drop off over looking one of the countless beautiful valleys in the Adirondacks as the driver pops the back hatch and pulls out mountain climbing gear.

Voice Over: Introducing the first all electric sport utility vehicle on the planet. The Hummer H?. Get out there and enjoy mother nature.... without hurting it.

Zoom out of shot slowly still showing man prepping gear as the H? glints and glistens in the sunshine.

Over lay Hummer logo with new catch phrase "Get out there and enjoy mother nature".

Fade to Black.

[dindak]

2-mode Hybrid Hummer 3's seem to me to be the best of both worlds.

Make them GM. You have the technology.

[CaptainDan]

Originally Posted by member12

....By your reasoning, we should cut Saturn, GMC, Pontiac, Buick, Opel, Vauxhal and every other GM brand that is a part of the GM "family" and just refer to GM cars as "GM".

I'm not sure how you got that out of what I said. I just said that SELLING Hummer wouldn't give the buyer anything other than the name. Hummer (as well as the other US car and truck divisions of GM) do not HAVE independant engineering or manufacturing facilities. They are marketing divisions. outside of that, Chevy, Pontiac, Saturn, Buick, Cadillac, GMC, and Hummer actually ARE "just GM".

Why do you think GM shut down Oldsmobile, as opposed to "selling" it? There's nothing there to sell. It couldn't even be spun off as an independant company. There's no company there to spin off!

Holden and Opel (somewhat, but not totally, carrying Saab and Vauxhaul with it) ARE independant. They are NOT divisions, they are "wholly owned subsidiaries" which (potentially) could be sold.

[FenwickHockey65]

Who would buy Hummer?
Apparently a lot of people, since a couple companies are interested.

My solution: Kill off the Hummer brand, but stick the cars into other divisions. No use wasting all that R&D money just to have it go to an Indian company or something.