Hummer’s Demise Spells Trouble for Jeep And GMC

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Hummer is dead now, the victim of years of making large trucks which got ten miles per gallon and a failed sale of the firm by GM to Sichuan Tengzhong Heavy Industrial Machines in China. The public may never know why the deal collapsed by CEO Ed Whitacre and the brain trust at GM’s headquarters in Detroit.

So, Hummer will go the way of Pontiac and Saturn. And, several large SUVs will probably be next.

Most of the bigger SUVs come from Jeep and GMC. Brands such as Cadillac and Lexus sell a few big trucks but the volume is not likely to be enough to keep them on the market. The really heavy non-hybrid SUVs are living on borrowed time.

Chrysler believes that there is value in the Jeep brand and GM sees value in GMC. Those sentiments may not last. Pontiac, one of the great brands in automotive history, will be dead and gone in a few months. The rising cost of oil, which will probably move up more quickly a year or two from now as the global economy heats up, will push people toward lighter cars and SUVs. Jeep and GMC will have to remodel and “downsize” their model lines to stay healthy. GM and Chrysler may decide that the hundreds of millions of dollars a year it takes to maintain a car brand is too high a price to pay. The two divisions may simply be folded or partly dismantled and made under different brand names.

Hummer is the first SUV brand into the auto graveyard, but it won’t be the last.

Douglas A. McIntyre

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