HUMMER FOR SALE?

DETROIT -(Dow Jones)- General Motors Corp. (GM) has backtracked from its long- standing support of its eight-brand portfolio, announcing plans for a strategic review and possible sale of the iconic Hummer brand.
GM, as part of a series of restructuring measures announced Tuesday, said "all options" are on the table when it comes to Hummer's future. The latest restructuring moves come as gasoline prices top $4 a gallon in many parts of the U.S., sending sales of large vehicles tumbling and auto makers scrambling to adapt.
"At this point we are considering all options for the Hummer brand, everything from a complete revamp of the product line up to a complete sale of the brand," GM Chairman and Chief Executive Rick Wagoner said Tuesday in a conference call with reporters. Wagoner said Hummer dealers will be consulted on the brand's future.
The decision to consider selling Hummer, which recorded a 36% sales decline in the first five months of 2008, marks a significant change in attitude by GM. The company had said repeatedly in recent years it was committed to its eight-brand portfolio, even amid criticism that some brands aren't a good fit. The move also underscores the pressure that Detroit auto makers - which have relied on pickup trucks and SUVs to generate profits - are under to respond to changing consumer trends that don't appear to be temporary.
Removing Hummer from the mix could also bolster GM's credentials among consumers who are increasingly concerned not only about the impact of high fuel prices on their pocketbooks, but about the environmental impact vehicles such as those produced by Hummer can have.
"In the current era of carbon dioxide emissions and fuel concerns, Hummer's current product lineup is very much in question. GM would have to spend a considerable amount of money and time to change the brand," said Erich Merkle, vice president of auto industry forecasting for IRN Inc. based in Grand Rapids Inc.
Hummer Loses Its Cool
The Hummer, which traces its military roots back to the 1980s, hit civilian streets in 1992 as a product manufactured by AM General Corp. GM bought the rights to the Hummer brand in 1999, taking control of marketing and further product development which has included the launch of the H1 and H2.
The vehicle quickly became a symbol of coolness, as movie star Arnold Schwarzenegger was spotted cruising through the California streets driving one of the eight Hummer vehicles he had bought.
But the coolness factor soon faded as consumers began bashing the boxy SUV for its "fuel inefficiency" of 9 to 15 miles per gallon. The vehicle, weighing at more than 6,000 pounds - although reduced to 5,000 pounds with the H3 - became a symbol of the U.S. consumer's inability to think about gas and conservation. Even Schwarzenegger, who is now California's Republican governor and a promoter of the environment, sold off his personal fleet.

By Jeff Bennett