Hummer's Done | The American Spectator | USA News and Politics
Hummer’s Done
by

The Hummer is history.

GM is desperately looking for a place to unload the brand that, literally, almost no one wants anymore. Even the littlest Hummer — the H3 — has become a hard sell in an era of $4 per gallon regular unleaded.

Total Hummer sales (all models) have fallen to a dismal 10 percent or so of what they were at the height of the cheap gas bubble — 75,939 units circa 2005-2006 — and GM probably feels like a farm dog with a dead chicken tied around its neck right about now.

The scent of death was in the air as long ago as 2006, when GM dropped the hugest Hummer, the military-based H1 that Arnold used to parade around in. That year, only 376 were sold — a canary in the coal mine if ever there was one.

GM should have taken the hint — and folded the entire Hummer line right then. Instead, it tossed a V-8 into the formerly in-line five-cylinder powered H3 — apparently figuring that just what the market wanted was even worse gas mileage.

Sales of the littlest Hummer have predictably tanked.

Ditto the second-largest Hummer, the Chevy Suburban-based H2. GM has managed to get rid of only about 3,000 of them so far this year — $100 fill-ups and 15 mpg have become about as appealing as a saggy 60-something Arnold in a speedo.

Three years ago, GM might have shaken some loose change out of Hummer. Too late for that now. There will be layoffs and plant closings — and tax write-offs.

HUMMER OWNERS themselves (the few, the proud, the profligate) will be left to rumble around in their outre modern-day equivalents of chocolate brown metallic, landau-roofed ’68 Sedan de Villes circa 1975: ungainly relics of a time still within living memory but fading fast.

You’d see one of the old dreadnoughts every now and again, turn to look, and marvel at the spectacle. Did people really drive those things?

For GM, the Hummer’s demise is more serious. Because it’s not just Hummers that are going away but in all likelihood, just about every vehicle that’s like them. And with that goes GM’s — and Detroit’s — profitability.

The whole business is built on big SUVs and pick-ups. GM hasn’t made money on small cars in years. Maybe a few hundred bucks per at the retail level. Inside the biz, such cars were referred to with great contempt as “loss leaders” — and built for the sole reason of making GM’s overall fuel economy track record look a little bit better than it would have otherwise.

No, the money was in big SUVs — which had profit margins (at peak) of several thousand dollars per vehicle. There was more cash to be made selling one GMC Yukon Denali than half a dozen Chevy Cobalts. Who could resist such a mountain of cash?

Not GM (and not Ford, either). That’s why Detroit spent the ’90s cranking out as many big SUVs as possible — and thinking up new models that would be even more colossal, and profitable, while relegating small car development to some distant, hopefully never-to-arrive manana.

THUS IT HAS COME to pass that GM, Ford, and Chrysler all find themselves several days late — and as a result, many dollars short. All three have reported double-digit downturns lately.

GM is throttling back its total truck/SUV production capacity by more than 700,000 vehicles annually — which is huge. But then, so is the $38.7 billion GM lost last year. The automaker hasn’t made a net profit since 2004.

And it’s bound to get worse the higher gas prices go — because all three lack top-tier small cars and are still playing catch-up on the hybrid and electric vehicle front.

GM, for example, has a plug-in electric car (the Volt) on the way. But it won’t get here for another two years. And reports are that GM will want $40,000 a copy, too.

Two. Years.

Meanwhile, arch-nemesis Toyota has been selling its Prius hybrid for ten years now. It has a fleet of highly successful small cars — and is literally swimming in black ink. Industry watchers believe Toyota has enough cash lying around to buy the corpse of GM and pick its bones clean.

Sic gloria transit mundi.

Eric Peters
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