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

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.