GM Sells Hummer but Hopes to Save 3,000 Jobs

GM Sells Hummer after Long Fiscal Ailment

The slow decline of the past year made a GM bankruptcy inevitable, even as Presidents Bush and Obama offered generous cash infusions and former GM CEO Rick Wagoner bowed to the Obama administration's request for a resignation. The car manufacturer that brought us the Geo, Oldsmobile and Pontiac, is making more cuts to its inventory; to this end, GM sells Hummer to a winning bidder.

Hummer Sold - Can the Brand Survive?

As GM sells Hummer, consumers are left to wonder if the gas guzzling off road vehicle brand can survive in a market that has car buyers looking for smaller, more economic cars. Government estimates reveal that the average Hummer H3 gets right around 18 miles per gallon on the highway, and about 14 miles in the city. Compare this to a Ford Ranger pickup with 21 city miles and 26 highway miles, and it makes sense that Hummer might not be as likely to survive today as it might have been a few years ago.

Who Bought Hummer?

As GM sells Hummer, rumors are flying about who is buying Hummer, what impact this will have on the American economy, and - most importantly - what this will do to American jobs. While there is a manufacturing plant in Russia and also one in South Africa, plants making Hummers are also located within the United States; as Hummer sold, the fact that no name was released about who bought Hummer has auto workers wondering about their jobs.

The New York Times reports on a rather cryptic statement from GM that - even though Hummer sold - the brand itself would stay in the United States and roughly 3,000 jobs would be safe. Of course, this also includes jobs at car dealership specializing in selling the Hummer brand.

Initially there were fears that as GM sells Hummer, the production of the brand would be moved to either Russia or South Africa, but according to the information GM releases, the company or person who bought Hummer actually plans on moving some production from South Africa to the United States, in particular the Shreveport plant.

Hummer Sold, But Can It Stay Functional?

It may seem like a time to breathe a sigh of relief - after all, GM sells Hummer, the brand is to stay in the U.S., and jobs are being saved - but a look forward makes one wonder whether or not Hummer really does have a future in the American car-scape. As the Los Angeles Times points out, consumers are looking for fuel economy, and the Hummer (as the embodiment of what went wrong with GM and the direction in which it went) is not it.

Sources

http://www.fueleconomy.gov/Feg/bymake/Hummer2009.shtml; http://www.nytimes.com/2009/06/03/business/03auto.html?ref=business; http://www.latimes.com/business/la-fi-gm-revamp2-2009jun02,1,6166152.story