Am General Repurchase of Hummer? Just a Rumor!

The rumor mill has been turning at a feverish pace these past few months particularly when it has to do with the auto industry. The fortunes of America's Big Three automakers are hanging in the balance and no one is quite certain how everything will turn out.

Back during the summer months we learned that General Motors was interested in selling Hummer. GM purchased the Hummer name from AM General, builder of the military HUMVEE vehicles, in the 1990s and began to expand the line up to include several specialized sport/utility models and pickup trucks. When gas prices surged earlier this year, GM realized that they had a brand on their hands that no one had any confidence in and decided to sell it.

Unfortunately, there hasn't been a buyer for Hummer and, despite rumors to the contrary, there probably won't be one unless GM sells the brand for next to nothing. Though gas prices have retreated from four dollars a gallon and up, no one is all that confident that prices will remain low for the long term. Once the global economy picks up, then gas prices will likely climb as demand for oil increases.

One of the rumors circulating recently had both AM General and China's Changfeng Motors buying Hummer. That move could actually be a good one, particularly for Changfeng, which is looking for an open door to the US market. With a Hummer network in place, Changfeng could scale back Hummer and add in its own vehicles. For AM General, an acquisition of Hummer isn't necessarily a great idea simply because there isn't much of a future with the brand.

Besides, most likely the company is making a bundle producing HUMVEEs for the profitable military market – why would they want to deal with the average consumer?

Well, as rumors come and rumors go, talk of an AM General acquisition (or partnership with Changfeng) have been disproven as the company denies being interested in Hummer. In addition, AM General issued a statement saying that they hadn't even been talking with Changfeng about a possible partnership, casting aside those rumors too.

In all likelihood, GM will find a way to kill off Hummer in 2009, perhaps part of a force restructuring (bankruptcy) being arranged at the federal government's behest. With no where to turn and no desire  to bolster the brand, a quick exit for GM would allow Hummer to die with dignity.