GM claims to hit the jackpot with the Hummer

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Old 10-19-2003, 09:15 PM
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GM claims to hit the jackpot with the Hummer

GM hits jackpot with hip Hummer

Brand brings in bucks, fills critical SUV niche for automaker

By Ed Garsten / The Detroit News


MISHAWAKA, Ind. -- The eureka moment took place in 1997 with a giant, military-looking sport utility prototype vehicle with a secret code name "the Chunk."

After missing most of the 1990s boom in sport-utility vehicle sales, General Motors Corp. was looking to get out in front of the next trend in the hot light truck market with a Chunk-like vehicle.

It was presented to consumer research groups under several established General Motors Corp. brands -- GMC, for example -- to ambivalent reaction.

Then the company tried something radical -- attaching a brand name it knew resonated with young people.

"We decided to put Hummer on the Chunk and it blew through the roof," Hummer general manager Mike DiGiovanni recalled. "We were astounded how strong the Hummer brand was."

That's when GM knew Hummer was a nameplate it had to have. Two years later, the automaker sealed a deal to buy the military-inspired brand from AM General Corp. The inspiration for AM General's Hummer was the Humvee, which the company has built for the military for years.

DiGiovanni calls it a marriage. J.D. Power and Associates analyst Jeffrey Schuster calls the move "brilliant."

For sure, it's become one of the most profitable acquisitions for GM -- with sales of the first offspring from the deal, the H2 -- still strong. The H1 -- originally the Hummer -- came out in 1991, followed by the H2 in 2002.

"We've exceeded profit targets for the first year, 2002, and 2003 is exceeding profit targets," DiGiovanni said. GM doesn't break our profits per model, but some analysts estimate the automaker is making $18,000 or more in net profit for each H2 sold.

Prices on the 2004 H2 start at $49,180 and skyrocket to close to $60,000 fully loaded. The H1, a larger, more rugged model, ranges in price from $105,160 to $116,483.

The Hummer line has helped GM grab sales from other rival brands with rugged appeal, notably DaimlerChrysler AG's Jeep division.

And while Arnold Schwarzenegger and other celebrity owners have helped give the Hummer iconic status, not everyone has embraced the SUV with open arms.

Environmentalist deride it for its excessive fuel consumption and consumer safety groups insist it is a menace to smaller vehicles on the road during crashes.

With Hummer, GM was trying to appeal to wealthy consumers in their early to mid-40s who have money to burn and want to flaunt their status.

But the brand's allure has grown far beyond those expectations to include consumers such as Mary and Dr. Chip Kroneman of Birmingham. They're well-off, but they're middle-aged with grown children, not exactly the heart of the Hummer's target buyer group.

The couple was looking for a big, upscale vehicle among 30 options, Mary Kroneman said. Their search ended abruptly at Suburban Hummer in Troy.

"We did not want an old person's car, didn't want a mom car," she said. "We thought the Hummer was cool and thought it was definitely the most fun."

With frequent road trips to visit family in Chicago, the Kronemans were concerned about safety and were drawn to the H2's bulky, tank-like stance.

Unlike typical assembly plants that churn out cars and light trucks by the masses, Hummers literally crawl off the line at the AM General Assembly factory in Mishawaka, Ind., just outside South Bend. That's the way GM wants it -- limiting production to create cache for the Hummer.

"We'll do whatever is necessary to protect the brand," DiGiovanni said. "It makes the vehicle aspirational in the minds of consumers because you've got one more unit of demand than you have supply."

GM is not standing pat with just the H1 and H2. The H1 is being updated and refined, and a pickup version of the H2 -- called the H2 SUT -- will debut next year. A smaller, less expensive Hummer, the H3, is in the pipeline for 2005.

Even with the additional models, Hummer will remain basically a niche nameplate.

When all of the new models are available, DiGiovanni predicts the entire line will sell about 100,000 units a year -- half of what Cadillac sold in 2002.

"Hummer can go beyond where it is into different lines that hit mainstream price points without diluting what the brand is," Schuster said.

By remanding Hummer to niche status, GM is following a successful strategy used by Japanese automakers, said Bob Kurilko, vice president of marketing at Edmunds.com, a vehicle purchasing and research Web site.

"Over the last five, six years, you've seen an explosion in the number of models, a microsegmentation in the market," Kurilko said.

"That's the way the Japanese have expanded market share. They identify emerging market segments and build custom tailored products to meet the needs."

The continuing success of the Hummer is not only dependent on the products, DiGiovanni said, but the growing cooperation between GM and AM General, two companies with vastly different corporate cultures.

"GM is a huge organization with many managers," DiGiovanni said. "AM General is more unilateral, they make decisions faster. They understand the DNA of Hummer and kept us on track early on."

That understanding has helped preserve Hummer's essence and prevent it from becoming co-opted as just another GM brand, DiGiovanni said.

And while the big hulking Hummer hangs on to its small but important space in the pantheon of vehicle brands, there's room for it to grow, said Mike Wall, an analyst with CSM Worldwide.

"Getting the Hummer brand was a big coup for GM," he said. "We're only at the front end of what they can do with that brand."

You can reach Ed Garsten at (313)223-3217 or egarsten@detnews.com.
Old 10-19-2003, 09:17 PM
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They did reach the jackpot, they can now change the looks of tahoes, and sell them for 20k more. Good deal.
Old 10-19-2003, 10:07 PM
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sat in one the other day, the exteriors fine, but it has the interior of a jeep wrangler. i guess they can get away with it since the h1 is stripped down but sells for even more, people just want attention not luxury.
Old 10-20-2003, 01:44 PM
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Originally posted by heyitsme
sat in one the other day, the exteriors fine, but it has the interior of a jeep wrangler. i guess they can get away with it since the h1 is stripped down but sells for even more, people just want attention not luxury.
the suburban/tahoe interior completly blows its interior away in every way, hell even the trailblazer interior does
Old 07-29-2008, 11:44 PM
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Troubles fail to drive down Hummer owners' passion

ADAM GELLER
The Associated Press


Jul 29, 2008

PINE GROVE, Penn.–They rumble in on treads called Super Swampers, wearing their hearts on their license plates.

"PLAYDRTY," one behemoth declares. "HUM THIS," dares another.

The digital board fronting the Shell station at Exit 100 winks back: "Welcome Hummers!''

In the fading light, though, it's impossible to ignore the sign at the Sunoco across the road: Diesel, $4.97 9/10.

You've got to be tough to love a Hummer. Soaring fuel is only part of it. Environmentalists, who've always had it in for you, are winning converts. General Motors, which presided over Hummer's transition from a badge of military bravado into a symbol of driveway excess, is looking to sell.

But tonight there's no apologizing or self-pity from Hummer die-hards. They're here to goad machines that can top five tons over boulders the size of Smart cars, through stewpots of mud obscuring who-knows-what and across obstacle courses of stumps, logs and stones – "like riding a slow-motion rollercoaster," one says.

Maybe mega-SUVs are going the way of dinosaurs. Hummer sales have dropped 40 per cent this year.

But these beasts and the men and women who love them certainly don't behave like endangered species.

"I told my wife when we bought this, 'Honey, we're investing in steel and rubber'," says William Welch, a Philadelphia surgeon who, cigar clenched between his teeth, offers a tour of his lovingly tended jet-black H1.

"If it was $10 a gallon," he says, "we'd still be out there.''

Cars are much more than transportation to Americans. In a country where life revolves around the car, you are what you drive.

"We eat 20 per cent of our meals in cars. We spend hour and hours every week (in cars)," says Leon James, a University of Hawaii professor and expert in the psychology of driving. "We see other cars as extensions of the people who drive them and we identify the character of the car with the character of the driver.''

But even in American car culture, the Hummer is an outlier, provoking love and hatred so intense it's easy to forget the basic scrappiness that gave birth to the vehicle in the first place.

The Hummer's DNA traces to the Jeep, produced for the Army in large numbers during World War II.

"It was something that could go to places other vehicles could not go, yet it was reasonably priced," says Patrick Foster, author of books on Jeep and the company that built the Hummer.

Americans were captivated by Jeeps, boxy because they were stamped by equipment previously used to make washing machines. Farmers and foresters snapped them up long before ordinary consumers dreamed of pulling an off-road vehicle in to their driveways.

But by the late 1970s, the Army invited companies to devise a new kind of vehicle.

The winning proposal from engineers at AM General, a Jeep spinoff, was one strange automotive creature.

Its hulking body sat way off the ground while simultaneously hunkered in a crouch, like an overgrown teenager trying to slip into a movie at kid's admission. Its wheels were pushed out past its corners and its drivetrain was yanked up into the interior, putting a huge hump between driver and passenger.

"It has no aesthetics," AM General spokesman Craig Mac Nab says. "It screams at you from across the street: I look this way because I need to.''

AM General called it the High Mobility Multipurpose Wheeled Vehicle. Soldiers dubbed it the Humvee and in the 1991 Gulf War it bulled its way into the public consciousness.

Arnold Schwarzenegger, then a long way from being the Governator, was driving an Oregon highway on his way to the film set for "Kindergarten Cop." Headed in the other direction, an Army convoy packed with Humvees growled past.

"I put the brakes on," Schwarzenegger told reporters in 1992 when AM General started producing civilian Hummers. "Someone smashed into the back of me, but I just stared. 'Oh my God, there is the vehicle,' I said. And from then on, I was possessed.''

There are Hummers and there are HUMMERS. It's that way with their owners, too.

The Hummer pilots flocking to the parking lot of a Hampton Inn tonight are well aware of others who use their vehicles for little more than dropping the kids at baseball.

"Street queens," the serious crowd calls them. "Pavement princesses.''

When GM bought the brand and introduced the H2, owners of the biggest Hummers worried the newbies would dilute the experience. But they voted to let them join in.

So Brandie Lopes, a silkscreen printer, is here from Winterport, Maine, a 600-mile haul that would've been cheaper to fly than to drive in her polished new H2.

She's joined by Howard and Vickie Schultheiss, up from Maryland in a nearly 11,000 pound H1 that bears the scratches and scars of off-road battles. The steel roofrack is carved with letters spelling out "D-Man," the nickname of a fiercely trained German Shepherd, now lost to cancer, whose spirit the couple says lives on the rig.

Nearly all come with a story about how they were smitten.

Watching TV in 1991, John Andres, a software writer from New Albany, Ohio, was transfixed by a report of two dozen U.S. Marines pinned down in the Saudi Arabian town of Khafji. With tanks providing cover, the soldiers packed into Humvees and barreled through Iraqi lines.

"I saw that. I thought, 'forget the Range Rover,'" says Andres, whose sand-colored Hummer jokingly sports silhouettes of the compact sedans he's knocked off, a la the Red Baron. "These things are just bad.''

Dan LaForgia's story is more elemental.

"My mom says my first word was 'truck,'" LaForgia says. In the mid-'90s, LaForgia persuaded his father to drive to the Hummer dealership near his home on New York's Long Island and take one out for a test drive. He was 12 – and hooked.

LaForgia's never taken his off-road. He cringes noticeably as others trade stories of broken axles, smashed windows, and the deep scratches and gashes their vehicles have endured in previous adventures.

But at 8:45 a.m. he joins the others under a tent, ready to embark in groups dispatched by levels of skills and experience.

They head to a former stripmine turned off-road haven. The extreme group – four of the most gung-ho H1 owners – trade jokes over the radio as they part the treeline.

But inside the rig the Schultheiss' have dedicated to their dog, the mood is reverential.

"Cue it up," Vickie says to Howard, her husband.

"All right. Here we go.''

Timpani drums stir from the Hummer's speakers. French horns rise above the engine's growl. The solemn notes are unmistakable: Aaron Copland's "Fanfare for the Common Man.''

Vickie reaches for D-Man's collar, hanging from the rearview mirror. She tugs the chains twice, rubs the gray links between her fingers.

"It's his truck," she says softly.

Threading through branches and over stumps, they reach a river of boulders. They're going to try and drive it's full third-of-a-mile length. A Prius would've been long gone by now.

This takes nerve – and a durable wallet.

Before the day's over, the Schultheiss' truck will break in three places and have to be yanked off the rocks by winch. Other drivers will plunge through a mud pool with the color of cement and the odor of a pigsty.

By evening, there are new stories to trade over barbecue.

"I'm going to get out while I'm ahead," says LaForgia, whose street-pretty Hummer bears its first scar.

"I always say another scratch means another story," counsels a fellow owner, Mike Schoch.

Hummer stories echo each other after a while. Tales of the way a Hummer draws a crowd in a parking lot, or swallows ground in a snowstorm.

But the gut-level lure of the machine itself isn't easy to quantify. That is, until Vickie Schultheiss draw a parallel between her Hummer and the highly trained German Shepherd whose memory it honors.

"To me it had to be just as capable and just as brute as Dikas," she says.

In the woods, she narrows her eyes, studying the terrain ahead, then climbs the Hummer bearing D-Man's name over a mammoth boulder. The truck slams down, bashing steel against stone. Schultheiss swings out of the driver's seat to check out the wheel hanging in mid air.

Her forehead is fringed with sweat. She's beaming.

"Welcome to D-Man's world," she says.

The first Hummers "raised people's eyebrows," says Tom Libby, an analyst with J.D. Power & Associates. Their in-your-face image appealed to buyers seeking pure utility.

Libby cites his cousin, an avowed truck buyer, who declared SUVs ``fake.''

"He said the only one he'd ever consider would be the H1. For him, that was a true truck," Libby says.

Others aren't fans.

"It gave a lot of people a sense of vain superiority, that you're way up there above everybody else," says Mark S. Foster, author of A Nation on Wheels: The Automobile Culture in America Since 1945.

GM's 2002 introduction of the H2 – more polished and sold in considerably larger numbers – netted enemies. One Web site, FUH2.com, drew hundreds of photos from people saluting the Hummer with their middle fingers.

The stepped up culture war found its way to a leafy Washington, D.C. neighborhood last July, when two masked men attacked a parked Hummer with a machete and a baseball bat.

Hummer owners from around the country called Gareth Groves, the owner of the vandalized vehicle, to offer help, even garage space. But they were outnumbered by people who sent hate mail.

Groves wasn't too surprised that people loathed his Hummer. It was how much they seemed to hate him, lambasting everything from his bleached hair to the fact that he lived with his mother.

"It definitely sparks some intense reaction from people on both sides," Groves says.

After insurance repaired Groves' truck, fuel prices and house payments made him briefly think about selling. But he dismissed the idea.

"I love this car," he says.

Even a few hardcore Hummer owners are rethinking.

"It's not a very practical truck," says LaForgia, who plans to sell his H1 to save for a house.

Others are adjusting to new realities. There's a small crowd of Hummer enthusiasts out there running on biodiesel. Welch, the surgeon, is leaning toward buying a hybrid for commutes to a hospital parking garage with ceilings too low for his truck.

"I want to save my carbon footprint, not blow it on my way to work," he says.

But Hummer owners see such decisions as personal choices, not bows to external pressure.

"It's easier to ask for forgiveness then permission," Andres says. "I've always found that to be true.''

He's describing only the fess-up-later approach he takes in explaining money lavished on the Hummer to his wife. For all those folks waiting for Hummer owners to cry uncle, well, don't hold your breath.
http://www.wheels.ca/reviews/article/313624
Old 07-30-2008, 12:57 AM
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Another great article, thanks aficionado.

I've always said it myself.... the only Hummer I'd buy is an H1. For now I'll settle for an 80s 4runner or a YJ.
Old 08-02-2008, 07:53 AM
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damn, that's right up the road from me
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