BREAKING: HUMMER may die, 4 GM plants to close, Volt approved for production
Gas prices in excess of $4 a gallon and a collapsing market for new home construction is triggering General Motors to undertake yet another round of restructuring and plant closings. The latest victim of the rapidly changing American automotive marketplace may be perpetual green whipping boy, the HUMMER brand. General Motors has just begun a strategic review of HUMMER. Ahead of today's annual meeting GM CEO Rick Wagoner has revealed that the HUMMER could either be strengthened or disposed of going forward. GM Spokesperson Joanne Krell told us that HUMMER's lineup could be strengthened, the brand could go the way of Oldsmobile, or it may be sold "in whole or in part." "The HUMMER brand is a great brand and we're probably not maximizing it to its fullest. Perhaps somebody else would have that opportunity." GM has only just begun the review and has informed employees but no time frame has been set for completion. GM hasn't talked to any potential buyers yet, but it's not clear who would want to buy HUMMER among major automakers.
In other news from GM, the company will move beyond the already announced shift eliminations at truck plants and close four factories. The closures of the truck plants in Janesville, Wisconsin; Oshawa, Ontario; Moraine, Ohio; and Toluca, Mexico will occur by 2010, affecting 10,000 workers. Workers at those plants who are not taking advantage of the current round of buyouts will be offered transfers to other plants where available.
It's not all gloom and down down at the Tubes though. Wagoner revealed that the board of directors has approved two programs for the production. The new compact Chevrolet sedan we talked about yesterday, has been approved for a 2009 launch at the Lordstown Ohio plant and the Chevy Volt has been approved for a 2010 launch in Detroit. Thanks to Craig and Matthew for the tips!
[Sources: Chicago Tribune, General Motors]
Reader Comments (Page 1 of 2)
Charles S 11:23AM (6/03/2008)
Not that I like the Hummer, but I believe the Hummer brand will probably do fine. I think GM would abandon the brand only because it doesn't have enough resources to support the project. It's not like GM is giving up on Suburban or the Escalade, but since the market is shrinking right now, they are just shopping for options.
Overall, I think trucks and SUVs sales will still be around 40-50% of all vehicles sold in US, especially when consumer confidence bounces back in the future. I think the only thing that will kill the truck/SUV segment is fuel shortage.
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Nikax 12:04PM (6/03/2008)
I would think that someone could put diesel/hybrid technology in a Hummer, but the question of "why" persists: why would people keep buying what has sadly become a mainstay of the Blingmobile market? Sad in part because the Hummer is actually a very good off-road vehicle in its DNA.
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Scatter 12:10PM (6/03/2008)
Hurrah! Good riddance!
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Ancon44 12:23PM (6/03/2008)
After GM closes four plants in the US and heads off to build cars in Ubekastan, maybe GM will die out. One can only hope.
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mightcan 1:06PM (6/03/2008)
Well, there's your problem right there! You have an executive calling the Hummer brand a great one...
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TrueBlue 2:03AM (6/03/2009)
Honestly, do you really want to control what people think???? Last time I checked...we lived in America, not a communist country! Get over your brainwashing bullying!
mightcan 9:08AM (6/03/2009)
I'm not sure how that's construed as bullying, but I think the facts bear out that Hummer wasn't a wise choice of company investment dollars and a gross misreading of market opportunity.
Dan Davis 1:44PM (6/03/2008)
Maybe now we'll get a hybrid HMMWV that gets 15 mpg??? SWEET!
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Whopper 2:35PM (6/03/2008)
@Ancon44 et al - I have worked with some of the folks who work at HUMMER, both before and after the acquisition by GM. They are a decent, hardworking group working for a living...a living that you, Ancon44, would like to see come to an end. GM doesn't always make the right decisions, but at least they are still manufacturing here in the US. Take your Toyota and stuff it, Ancon
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meme 2:43PM (6/03/2008)
Whopper: Because Japan doesn't have good, hard-working people? Or because a shift in buyer preferences to smaller cars somehow means the total job pool gets smaller? I'm not following you.
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Dr. Kenneth Noisewater 3:34PM (6/03/2008)
Here's a Q.. Why not, instead of using an Otto-cycle motor at constant RPM as the 'range extender', use a micro turboshaft engine instead?
http://www.turbinetechnologies.com/PT-50/news.html
Lower EGTs by reclaiming the heat for even more power... Turbines are more fuel-efficient than reciprocating engines, they're lighter, they have fewer moving parts.. This particular engine is being designed to accept all military jet fuels, diesel, gasoline..
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Steve 3:42PM (6/03/2008)
The most depressing aspect of the story is that GM it has no plans to re-open the plants with new products.
I don't think the commenters expressing glee at the notion of plants closing fully understand the implications of the layoffs. I've never been a big fan of SUVs, Hummers, or the entitlement mentality of union organizations.
But I recognize that if my neighbor -- be it a few doors down or a few states away -- loses his job and stops pumping his payroll money into the economy, we'll all suffer eventually. Less income means less retail sales, less tips/gratuities, less people purchasing homes, services, investment products, or anything else that has dollar value assigned to it.
It's been said that 13% of the jobs in the country are tied -- directly or indirectly -- to the manufacter, marketing, and sales of American-marque automobiles.
Anybody who cheers the bad news of any economically significant industry is woefully unaware of the impact it has upon his or her own life.
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Scatter 4:03PM (6/03/2008)
I don't know if you're referring to me there but I'm not cheering the loss of jobs.
I'm cheering the hopeful end of a destructive vehicle brand that epitomised how spectacularly wrong our overconsumptive, environmentally damaging society manages its energy.
I say again, good riddance! Hopefully GM will open up a Volt plant there.
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Dave 4:56PM (6/03/2008)
GM should never have made Hummer a separate brand. It was never more than a toy.
GM let it grow far too large and now it has, and will, harm GM, its employees, and its dealers.
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jake 5:27PM (6/03/2008)
@Steve
Ugh, the guilt trip with GM and most domestics is what has been killing the domestic auto industry. Some people buy domestic cars just b/c they are domestic. But I think quite recently that number of people have greatly reduced. If your brand is underperforming then you better improve or you will be going down. Though GM as a whole is improving, Hummer is one of the brands which is underperforming. This isn't so much about green cars, but it's about buying trends in general; if you don't catch up you will continue to fall. Part of it is the "percieved quality" problem, but the domestics unarguably brought it on to themselves by letting it slip without doing anything about it until recently.
It's unfortunate when people lose jobs in the process, but at least GM is making an offer to transfer people to other plants. I don't think people are rejoicing b/c people are losing jobs, but because it marks a transition from the truck era, and I think that's reason to rejoice. And it's not as if foreign automakers aren't building factories in the US, see Toyota and Hyundai for examples. As meme mentions, just b/c we are shifting away from trucks doesn't mean the US job market will necessarily be smaller as a result; esp b/c with the weak dollar other automakers are seeing it as a advantage to make the cars they sell in the US, in the US.
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stevefazek 6:39PM (6/03/2008)
Part of me cringes at the thought of one of the big three going under.
The other part of me thinks wow they really deserve it. They have been thinking only of the next quarter profits over long term growth.
We all knew since the late 90s gas was going to go up dramatically in price. Yet they gave up on cars and concentrated on trucks which are obviously the first thing that will slow in sales when gas is high.
They have always given short term band aids to long term problems.
They much rather dump money into marketing then into product development.
The parasite UAW doesn't help either. The unions doesn't care about its members just filling their pockets. Unions took a major downturn in the 1960s with the advent of mafia control in many of them.
Plus while i would love 20 an hour to bolt in a seat at a factory thats just not economically feasable. The true cost to these companies with the union and pension is more that double the hourly wage.
US companies need to dump money into new technology they are starting but just a few years ago they where selling cast iron pushrod engines with 4 speed autos.
They need at least 5 speed autos 6 speed even better. They need smaller direct injection turbo engines. They need to work on fit and finish and to push the envelope. Pretty much to see what the next generation interior of a american car will look like is to look at a honda from 2 years ago.
This country need to redo its health system totally. Its complete trash. Theres hundreds of different style of forms from all the different companies and regions for these companies for the Same basic treatment. Tons of different billing codes.
Right now 33% of every dollar spent on health care goes to pushing paper. If we had a single standard form and claim process through the different companies and made this LAW even paid for a universal data system. That would be the first step.
Its been years since i wrote the board of the big three telling them what they need to do. All of them said it wasn't a part of their marketing plan because again they are idiots looking only 3 months ahead.
Just now what i told them to do they are starting to do.
Who am i? A Share holder, a customer and some one who knows that current business schools are making people retarded.
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Ryan 9:54PM (6/03/2008)
I think it was the right decision...but it was only made publicly today. So I'm curious how long GM has been bantering this decision. My guess is quite a while and even before the last UAW negotiations. Large vehicles will come back, just not as we know them today. A new gaunlet has been thrown, and the first automotive company to meet the challenge and champion affordable large vehicle PHEVs/EVs/FCs will own that market segment. If I put myself in Lutz' shoes, I'd allow the media focus to stay on the Volt, and build to scale, research, and develop necessary components to "electrify" large vehicles, but I agree with those that say that segment will never be as big as it was in the late 90's early 00's. Toyota's A-BAT and the current small utility (i.e. Ford Escape and even GM's large SUV hybrids) have given us a glint of that future potential...at least in terms of technologies. Can't wait for the next round of auto shows. Lastly, unless I misread foxbusiness.com's article on this, I got the impression the Volt will have a twin that's all electric. Can anyone confirm or deny that claim?
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Mark 1:06AM (6/04/2008)
Let the Hummer brand die. All it is, is a very expensive TANK which has no use except for the 'look what I can afford' mentality.
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Lad 1:54AM (6/04/2008)
I think you will see quite a few changes in the automobile market as we transition over the next decades to a new economy based on solar power and electric-drive transportation. The movement is already in motion fueled by high oil prices and finally the recognition that burning fossil chemicals in the atmosphere is detrimental to the health of the people and the planet. This is a disruptive technology and will demand changes by the management of our largest industries, i.e., the automobile and power industries.
Good management need not disrupt their employee's welfare if proper planning is accomplished to use the skills of these already trained and proven workers. I would hope that GM would not be so insensitive as to remove these valuable workers from their jobs without offering a workable alternative solution. That would be an indication of management at its worse. And, IMO, drive many people from considering buying or driving GM's products.
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Das Boese 7:42AM (6/04/2008)
If GM realized where the untapped potentials of the brand lie and which weaknesses to eliminate, they wouldn't need to ponder killing it.
HUMMER's original appeals are utilitarian design and offroad capability. They need to introduce smaller, more efficient models that capitalize on these aspects. Leave the humongously sized, overweight luxury SUVs to Cadillac, it's a small market anyway.
Remember the HX concept? That rocked. Now put that car on the e-flex platform with a diesel range extender, and it rocks even more. Perhaps add a four-door version. What about a small to mid-size pickup truck? Not much competition in that segment (yet). Boost credibility by participating in offrad racing events. Seek partnership with motorcycle manufacturers such as KTM (think F-150 Harley edition).
Just a few thoughts.
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