Last week, General Motors Company announced that it would wind down its Hummer brand on news that the Chinese government had rejected Sichuan Tengzhong Heavy Industrial Machinery’s acquisition bid.
Now GM says it will extend the franchise agreements of 153 of its U.S. Hummer dealerships as it evaluates other purchase offers.
Hummer CEO, Jim Taylor, said company executives now have until May 1 to find another suitable buyer or wind down the brand. A third option on the table is the possibility of another extension.
Taylor said, We’re going to do everything in our power to bring this home in the next couple of months, and added, GM’s intention will be more than fair in the wind down process if we get to that stage.
He also indicated that there are currently several parties interested in acquiring the Hummer brand, although he stopped short of naming names, saying instead, Some are well-known equity houses, who do this for a living. Some are just those who say, ˜I want to buy it.’
Taylor said, The next step in the process is to sit down with those interested parties and figure out who is serious and who just doesn’t make any sense.
He also said that he has been told by GM CEO and chairman, Ed Whitacre, to move fast. Although Whitacre has not given him at timetable for either selling or winding down the brand, Taylor indicated that it would likely be similar to the 60- to 75-day timetable GM followed in its sale of Saab.
As a result, Taylor said the vetting process would be akin to very fast speed dating. We have to look at each other, see if we like each other and then get it done very quickly, he said.
Taylor said the 153 U.S. Hummer dealers already have wind down agreements with GM, but the automaker has not yet invoked them. If and when it does, Taylor said the process will be similar to that undertaken in the wind downs of GM’s Pontiac and Saturn brands.
Possibly alluding to criticism that arose following Chrysler’s rejection of 792 dealers following its emergence from restructuring bankruptcy, Taylor expressed confidence in the Hummer wind down agreement. The amount of retail support in terms of incentives and advertising was very fair and so if we enter this wind down process it’ll be very orderly and with GM’s support, he said. It won’t leave dealers in a world of hurt.
On January 13, GM halted production of the Hummer H3 SUV and H3T pickup leaving a combined 2,521 vehicles in dealer’s inventories. Despite Sichuan Tengzhong Heavy Industrial Machinery’s assurances of a successful sale, Taylor said, We’ve been very conservative in the amount of volume we produced because we didn’t know for a long time if we’d live or die.
In June 2008, GM announced a strategic review of the Hummer brand. Since then, the company has lost fewer than 10 U.S. dealerships. Taylor said Hummer’s strong dealer network makes the company all the more attractive to potential buyers.
In the annual J.D. Power & Associates Customer Service Index report released last week, customers questioned about their experience with dealership service departments rank Hummer highest among affordable automotive brands.
For more auto industry news, please visit www.everycarlisted.com.