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Update: GM paying Hummer dealers early bonuses, preparing to buyout stores

Update: GM paying Hummer dealers early bonuses, preparing to buyout stores

Nelson Ireson July 28th, 2008 Nelson Ireson By Nelson Ireson Author July 28th, 2008
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December 31st, 1969 Update: With General Motors publicly announcing its doubts about Hummer's viability and plans to sell the brand, many dealers were upset about the carmaker’s seeming lack of care for the predicament they had been placed in by the comments and the potential loss of the multi-million dollar investments made in their stores. A Tennessee dealer has now revealed that GM is quietly getting dealers to sign off on their stores and making deals with each one, reports Automotive News. GM is reportedly paying Hummer dealers second and third-quarter bonuses early, with the average amount in the six-figure range. The bonuses are being calculated for each dealer according to their performance figures last year - during a period when Hummer's sales were around 60% higher than current levels. Hummer dealers across the U.S. are also being negotiated with to sell out stores while GM attempts to avoid angry dealers issuing lawsuits or similar actions for suddenly dropping the brand. Original: Fuel prices are high and climbing and buyers are jumping to more fuel-efficient cars, but Hummer dealers are still confident the brand can make it. The first pickup-truck to wear the Hummer badge, the H3T (pictured), comes out this summer, and many dealers were looking forward to a bump in sales, but now dealers are afraid that GM's announcement may do more to harm sales and brand perception than the fuel crunch has. A GM spokesman said the decision to go public with its doubts about Hummer's future was based in part on showing the public and the industry its commitment to realigning its product to the rapidly shifting demand for smaller vehicles, reports MSNBC. But GM hasn't decided what it is going to do with the brand - it may live on, but with a very different product line. Brad Johnson, general manager of a Hummer dealership in Ohio, thinks GM could have done better to support its dealer network through the rough spot. "I'm not real happy with General Motors right now," said Johnson."It was a poor choice of words on their part and it's a bad decision to come out and say something when you don't know what's going to happen." GM announced the possibility of a sale of Hummer last week alongside its plans for a major restructuring of its entire corporate organization. The announcement came just as May sales results were showing a precipitous drop in SUV and truck sales. GM was hit the worst of the U.S. carmakers, falling over 27% in total sales in may, with Hummer's sales dropping over 60% against 2007 sales. Possible buyers for the nameplate, if it does end up going on the auction block, include Tata Motors, which just completed it acquisition of Jaguar and Land Rover from Ford. One of Tata's main rivals for the British buyout, Mahindra & Mahindra, is also being mentioned as among those GM has approached to gauge interest in the brand.
Update: GM paying Hummer dealers early bonuses, preparing to buyout stores

Update: GM paying Hummer dealers early bonuses, preparing to buyout stores

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Update: With General Motors publicly announcing its doubts about Hummer's viability and plans to sell the brand, many dealers were upset about the carmaker’s seeming lack of care for the predicament they had been placed in by the comments and the potential loss of the multi-million dollar investments made in their stores.

A Tennessee dealer has now revealed that GM is quietly getting dealers to sign off on their stores and making deals with each one, reports Automotive News. GM is reportedly paying Hummer dealers second and third-quarter bonuses early, with the average amount in the six-figure range. The bonuses are being calculated for each dealer according to their performance figures last year - during a period when Hummer's sales were around 60% higher than current levels.

Hummer dealers across the U.S. are also being negotiated with to sell out stores while GM attempts to avoid angry dealers issuing lawsuits or similar actions for suddenly dropping the brand.

Original: Fuel prices are high and climbing and buyers are jumping to more fuel-efficient cars, but Hummer dealers are still confident the brand can make it. The first pickup-truck to wear the Hummer badge, the H3T (pictured), comes out this summer, and many dealers were looking forward to a bump in sales, but now dealers are afraid that GM's announcement may do more to harm sales and brand perception than the fuel crunch has.

A GM spokesman said the decision to go public with its doubts about Hummer's future was based in part on showing the public and the industry its commitment to realigning its product to the rapidly shifting demand for smaller vehicles, reports MSNBC. But GM hasn't decided what it is going to do with the brand - it may live on, but with a very different product line. Brad Johnson, general manager of a Hummer dealership in Ohio, thinks GM could have done better to support its dealer network through the rough spot.

"I'm not real happy with General Motors right now," said Johnson."It was a poor choice of words on their part and it's a bad decision to come out and say something when you don't know what's going to happen."

GM announced the possibility of a sale of Hummer last week alongside its plans for a major restructuring of its entire corporate organization. The announcement came just as May sales results were showing a precipitous drop in SUV and truck sales. GM was hit the worst of the U.S. carmakers, falling over 27% in total sales in may, with Hummer's sales dropping over 60% against 2007 sales.

Possible buyers for the nameplate, if it does end up going on the auction block, include Tata Motors, which just completed it acquisition of Jaguar and Land Rover from Ford. One of Tata's main rivals for the British buyout, Mahindra & Mahindra, is also being mentioned as among those GM has approached to gauge interest in the brand.

Tags: Industry, General Motors

Posted in: HUMMER, News


Comments (14 total)

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  1. By Roy #1, Posted: 6/13/2008

    It really is like watching a slow-motion train wreck. Hummer was just about the only brand in GM's fleet that was UNIQUE. That makes it a bit like Porsche - there's only one 911 and there's only one Hummer. Yes, there's room for a small Hummer, like the Boxster in Porsche's stable. Yes, the big Hummers will still sell (like the 911 has ALWAYS sold). It's all about marketing at this point. I guarantee that plenty of people in Saudi Arabia and Russia will buy them right now...

  2. By jeff #2, Posted: 6/13/2008

    I agree with roy, they should focus on other wealthy nations who want a product like this, as for the states, hummer is done, bad quality, bad image, and aweful fuel efficiency

  3. By Alan #3, Posted: 6/13/2008

    i agree with Roy too, GM really is ruining the brand, may be they should sell the brand and let someone else manage it and hopefully will turn it into a profitable niche brand

  4. By Gus #4, Posted: 6/13/2008

    Hummer was a flash in the pan.
    Useless off-road, no better at anything than the Tahoe it was based on, and an image worse than a popemobile in Tehran.

    Good riddance.

  5. By brent #5, Posted: 6/14/2008

    I agree with much of the criticism of HUMMER, but please, its off-road capabilities are solid. Of that, at least, we can be certain. The vehicle has won awards for its four-wheeling prowess. Call it a crass, blingtastic, totally unnecessary obnoxious-mobile, and I'll agree because that's what they are in the bookstore parking lot. But don't start spouting off about its ability to perform in an off-road environment, for HUMMER in fact excels at what its proportions and styling suggest (albeit, excessively so): off-road performance.

  6. By Gus #6, Posted: 6/14/2008

    Wrong.
    The H1 is amazing, but the H2 is NOTHING but a Chevy Tahoe in drag, and I have pulled MANY of them out of the mud and sand here in Southern California. They don't have the locking diffs or the articulation required for serious off roading. You want off roading? See Jeep Wrangler Rubicon (not the regular Wrangler), or Land Rover Defender.
    It sounds like you have no clue what true off roading is about. Go rent a Rhino sometime, push both the yellow and red button on the dash, and then you'll have some understanding.

  7. By Gus #7, Posted: 6/14/2008

    And that's whay I hate it.
    It is one of those vehicles that says "look at me, don't I look tough" and then the owners try to really go off road, I mean axle deep, rocks boulders and stumps, and then they look verrrrry surprised when thier excessively heavy vehicles get hung up everywhere they go.

    Now, if you put a 2 inch lift (not too much), bigger tires, and an electronic diff lock front, rear AND center, then, and ONLY then, do you have the beginnings of an off roader.

    The bumpy track set up at the dealership, made specifically for the Hummer to clear, does not count. Take it from someone who has been off roading for 20+ years in everything from snow to mud to sand to rocks. The Wrangler Rubicon can do the Rubicon trail BONE STOCK.

    Enough said.

  8. By Paul #8, Posted: 6/14/2008

    H1 is unique, capable and built for a purpose. Everything else is just trying to make a profit (noth'in wrong with that) by gauding up the Tahoe and Colorado. I am still amazed when I see a Soccer Mom dwarfed at the helm of one of these beasts.

  9. By brent #9, Posted: 6/14/2008

    Um...you're right; I'm not a hard-core four-wheeler. In fact, I know very little about how to four-wheeling. But I do know the difference between an H1 and an H2...and an H3, for that matter. And I also know how to read. Therefore, I know that the 2008 H3 -- yes, H3 -- won "Four Wheeler of the Year" from Four Wheeler Magazine and "Best-in-Class: Hardcore 4x4" from Truck Trend. So...I guess now you're to tell us that these magazines are just on the take? I'm pretty sure Jeep's various iterations -- of which I'm also a fan -- have won these very awards from these very publications in the past.

  10. By brent #10, Posted: 6/14/2008

    Argh...wish I could proofread these comments before posting them...please forgive me for the typos....

  11. By Gus #11, Posted: 6/15/2008

    I guess if they like it, it must have some redeeming qualities.

    I just see them stuck all the time, so it's kind of funny to me. I'm sure a LOT of those drivers just have no clue waht ANY vehicle is capable off road, and they are lulled into going places they shouldn't because of the name.

  12. By brent #12, Posted: 6/15/2008

    Fair enough...I've read that HUMMER added a locking differential recently, but I might be misunderstanding something.

    BTW...where do you go to find this preponderance of stuck HUMMERs? I'm just curious.

  13. By Gus #13, Posted: 6/15/2008

    A place north of Los Angeles called San Gabriel Canyon OHV Area.

    On some days there are hundreds of vehicles gathered around a mud pit the size of 6 football fields, daring each other to charge through it.

    I have some pictures, I'll see if I can find them. My favorite is the Lexus LX450 up to it DOOR HANDLES in mud, with this guy sticking his head out the window, his 4 kids inside, with a look on his face that says "but the dealer told me it had 4wd!"...

  14. By bambam #14, Posted: 7/28/2008

    A unique brand indeed but if cutting down won't help it stay in the US. I don't know what else you can do. It's not popular in the USA(fuel prices) but it's still hot outside the US. It just got the wrong volume. Good luck! both ways are easy, but selling it, would get you more if your about the money.

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