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GM calls Hummer sale a strong option

From Automotive News:

GM calls Hummer sale a strong option
Jamie LaReau
Automotive News
June 17, 2008 - 12:01 am ET

DETROIT Several global companies have shown interest in Hummer, making the sale of the brand a strong option, the head of General Motors' premium sales channel told dealers last week.

GM had not talked with Tata Motors, rumored to be a potential suitor, dealers were told. Tata Motors recently purchased Jaguar and Land Rover from Ford Motor Co.

Hummer dealers reported the comments after attending meetings with Mark McNabb, 47, GM's new vice president of the premium channel. The premium channel consists of Cadillac, Hummer and Saab.

" 'There are parties we're talking to' that's what McNabb said," said a dealer who attended one of several roundtable meetings GM is holding for its premium-channel dealers this month. Another dealer at that meeting confirmed he had heard that same information. GM declined to comment.

Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, said in an interview with Automotive News that McNabb's meetings were set up as get-to-know-you sessions. But they come at an opportune time for dealers.

That's because on June 3 CEO Rick Wagoner announced that GM is reviewing Hummer and is considering "all options" from a product revamping to a partial or total sale of the brand. That put on hold GM's efforts to get premium-channel dealers into stores selling Cadillac, Hummer and Saab.
LaNeve, who was not at the meetings, said the dealers he has talked with want the Hummer review completed quickly.

"For them to be concerned is perfectly expected," he said. "For us to communicate with them and get them an answer as soon as possible is what we want to do."

LaNeve said three options remain: a sale, a joint venture or a complete revamping of the brand. Other than that, he said, he doesn't know much.
"If dealers call me, I don't know what to tell them," LaNeve said. "We're going through the review."

Talking to dealers
Here's what GM told Hummer dealers last week.
-- Several global companies are interested in purchasing Hummer.
-- GM had not spoken with Tata Motors about Hummer.
-- 3 options for Hummer are a sale, a joint venture and a revamping of the brand.

Ready to deal
McNabb told dealers at the meeting that engineering a Hummer is sensitive. Because it is such a specialized product, Hummer is not integrated easily into GM's global platforms, making a joint venture with another off-road automaker a viable option.

One dealer said GM has offered to buy him out of his newly acquired Hummer franchise.

A month and a half ago, John Voss acquired a Hummer franchise to add to his Cadillac store in Dayton, Ohio. He had a successful first month selling 10 Hummers. Then he heard the news that GM might sell the brand.
"We paid a premium for it that was all pre-announcement so that's life," Voss, owner of Voss Village Cadillac-Hummer, said. "GM called me two days after the announcement and said, 'We know you just bought it, and we'll give you your money back.' "

Voss said he'll wait to see what GM decides to do with the brand before he walks away with his refund.

'No consensus'
Dealers who attended the meetings said there were divergent opinions among those in attendance about Hummer's fate. "There was no consensus on what to do," one dealer said.

"It was an emotional meeting," said Dave Grundstrom, president of Marvin K. Brown Auto Center in San Diego. He sells Cadillac, Hummer, Saab, Buick and GMC vehicles.

Grundstrom said most dealers at the meeting he attended felt GM should not sell Hummer because it has strong brand equity.

A Miami dealer, Ed Williamson, will go to his roundtable meeting with McNabb on June 25. He said he feels the talk of a sale tarnished the brand.
"I would hope they do a strategic review of every brand every year," Williamson, owner of Williamson Cadillac-Hummer, said. "Unless the sale is imminent, I don't think they had to say a thing about it."
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