Hummer’s Demise Spells Trouble for Jeep And GMC

By Douglas A. McIntyre Published Feb 25, 6:09AM EST

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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.