GM Hires Citibank to help conduct HUMMER strategic review

[Hummer Guy]

To help look at the possible full or partial sale of the HUMMER brand, GM has hired Citibank to assist:

http://www.hummerguy.net/hummer-news...rategic-review

[K Dawg ONE]

I hate my work.

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URL: http://www.hummerguy.net/hummer-news...rategic-review

Reason for restriction: Forbidden Category "Games"

[mgescuro]

Any MBA can see the situation clearly and determine the necessary steps here.

Do a proper market sizing of HUMMER's core market. Not just "SUV's," but fully off-road capable SUV's. Also, don't take into account the NA market, but the worldwide market.

If the market is sufficient enough to support a niche product like HUMMER, then determine the proper product mix for HUMMER to make it successful.

The problem is, there is absolutely nothing wrong with HUMMER!!!!!
The issue is the fact that GM is missing the target market, and HUMMER has been slow to get product to market. (Still waiting for the H3T... tick tock...).

GM remains cluess on how to manage a niche brand.

By leveraging HUMMER's strengths in off-roading, plus the rugged image it holds, there's no reason why GM couldn't hold onto HUMMER as a niche brand. In fact, GM can easily penetrate markets that are dominated by Land Rover in global markets.

But what GM see is "Big SUV" and "gas guzzling."
They don't see the forest from the trees.

[nadepalma]

Originally Posted by mgescuro

Any MBA can see the situation clearly and determine the necessary steps here.

Do a proper market sizing of HUMMER's core market. Not just "SUV's," but fully off-road capable SUV's. Also, don't take into account the NA market, but the worldwide market.

If the market is sufficient enough to support a niche product like HUMMER, then determine the proper product mix for HUMMER to make it successful.

The problem is, there is absolutely nothing wrong with HUMMER!!!!!
The issue is the fact that GM is missing the target market, and HUMMER has been slow to get product to market. (Still waiting for the H3T... tick tock...).

GM remains cluess on how to manage a niche brand.

By leveraging HUMMER's strengths in off-roading, plus the rugged image it holds, there's no reason why GM couldn't hold onto HUMMER as a niche brand. In fact, GM can easily penetrate markets that are dominated by Land Rover in global markets.

But what GM see is "Big SUV" and "gas guzzling."
They don't see the forest from the trees.

I was thinking the same thing Marc, but I'm kind of wondering if they are pushing for a sale because GM doesn't have any future platforms to support some of these products to keep Hummer a viable brand?

We already know that GM is looking at putting some of their larger products on smaller platforms - and possibly switch some from BOF to Unibody platforms. This could be trouble for Hummer.

We also know that the larger platforms will hold off on a refresh/update for some time and that some of the current "smaller platforms" (the Trailblazer) are outdated and going bye-bye - without a direct replacement (i.e. the TrailBlazer will be replaced by a unibody/FWD Lambda product, etc).

Since Hummer only sells about 76,000 units a year (and the brand may not expand a whole lot in some markets like North America b/c of gasoline prices), is this worth producing a "unique" platform for one brand at such low volume?

GM may be looking at it from this kind of logistical angles. As CAFE rules rise, GM may be less inclinded to pour money into some of these platforms. And as they rise, bigger products like the H2 may die (as has been rumored) and products below the H3 may be needed to keep the brand viable. Since no small/BOF products are coming on which sub-H3 products could be based, maybe this is their way of letting us know that GM wont support these kinds of platforms across other brands in the future?

Any smaller SUV/Crossover that we've heard about are based on smaller/lighter/FWD/unibody platforms (the possible sub-theta small-SUVs based on either DeltaII or Gamma, etc) and wouldn't suit Hummer at all. That would imply that GM to either make some of these products off a unibody platform or make some FWD based --- Either measure would possibly kill Hummer's brand image.

Yes, they could move to a Unibody product - Land Rover Ranger Rover is like this and the new Jeep Cherokee is as well - but IDK of any RWD/Unibody product GM is producing that would allow for such a set up. Already the only large/unibody/SUV-like product (the SRX) is getting axed.

Its true that the LR2/Freelander 2 is a unibody FWD product (based on a FoMoCo platform shared with Volvo), but would GM pour the kind of money needed into a unibody/FWD platform to make it worth of the Hummer label?

Just think this could be a possible reason we are seeing this happen....my two cents.

[FierySolstice]

I could care less if Hummer goes, they never did thrill me. I rather see them go than GMC though..

Any news about cutting another brand?!?!?

[68CoupeDeVille]

Originally Posted by mgescuro

By leveraging HUMMER's strengths in off-roading, plus the rugged image it holds, there's no reason why GM couldn't hold onto HUMMER as a niche brand. In fact, GM can easily penetrate markets that are dominated by Land Rover in global markets.

I agree 100% here. If you can't sell it well domestically as a soccer-mom-obile, pull all the bells and whistles out and redo it until it's as simple as mud then sell it worldwide as an alternative to Land Rover.

[PontiacBixler]

Agree. Hummer actually needs to survive in the GM portfolio. GM could really take it to a new level as a Jeep/Land Rover fighter and succeed.

Why can't the H3 be the largest Hummer that they offer???? Create the Hx (H4) and then a smaller ute that gets even better MPG than the other two.

Offer a hybrid line to help with the MPG ratings and to show a new, "greener" Hummer line up that concentrates on getting outdoors and enjoying it without killing it.

[member12]

It's a niche brand and GM doesn't know how to do niche brands.

The truth is that this is the only American car other than the Corvette that has widespread appeal overseas.

Everywhere Toyota sells the Land Cruiser and Land Rover sells the Defender- GM should sell the Hummer.

[Rocket 88]

Originally Posted by PontiacBixler

Agree. Hummer actually needs to survive in the GM portfolio. GM could really take it to a new level as a Jeep/Land Rover fighter and succeed.

Why can't the H3 be the largest Hummer that they offer???? Create the Hx (H4) and then a smaller ute that gets even better MPG than the other two.

Offer a hybrid line to help with the MPG ratings and to show a new, "greener" Hummer line up that concentrates on getting outdoors and enjoying it without killing it.

I think the real issue is $$$!!!

How much cash will selling Hummer bring in vs. How much money Hummer is making vs. How much is this going to change in the future?

I think GM expects Hummer's value of building large SUV's to reduce in value so they are considering selling.

[Hummer Guy]

Originally Posted by mgescuro

The problem is, there is absolutely nothing wrong with HUMMER!!!!!
The issue is the fact that GM is missing the target market, and HUMMER has been slow to get product to market. (Still waiting for the H3T... tick tock...).

GM remains cluess on how to manage a niche brand.

By leveraging HUMMER's strengths in off-roading, plus the rugged image it holds, there's no reason why GM couldn't hold onto HUMMER as a niche brand. In fact, GM can easily penetrate markets that are dominated by Land Rover in global markets.

Good point -- here's another article that articulates HUMMER's marketing downfall pretty well: http://www.neurosciencemarketing.com...n-branding.htm

[mbukukanyau]

I will loose faith in Rick if they cannot manage Hummer. They do not even know how to look and evaluate their own business units?
Citi is going to recomend a sale and get a huge commission selling it.

[TruckMan]

This is pretty ironic. Wasn't/Isn't CitiBank on the verge of being bankrupt themselves?

[kmacleod]

Originally Posted by 68CoupeDeVille

I agree 100% here. If you can't sell it well domestically as a soccer-mom-obile, pull all the bells and whistles out and redo it until it's as simple as mud then sell it worldwide as an alternative to Land Rover.

I always thought Hummer was the BRUTE FORCE version of a "Land Rover".
Simplfy the H3 Interior and paint it in OD.......Time for a trip to the Serengetti...........

Ken

[mkwelbornjr]

GM has wasted its time making Hummer a "fake" version of the real Hummer for the public. They should have made it a truely niche product to compete with Land Rover etc. not just a rebadged Colorado, Tahoe, etc...

[ejfx]

Have you ever seen the movie Office Space, when the company brings in these people that evaluate every department to find out weak spots / overlap to save the company money...And then they give out pink slips

Thats what this is...Unfortunatly I just cant see GM keeping Hummer

Hopefully they will integrate the brand with Chevy, GMC or maybe even Saturn.

Saturn...hmmm