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24 May 2017 04:24 (South Africa)
Business

Hummer finally consents to its own death

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business
hummer dies

It was a truck that Arnie took out of the Iraqi war zone and deposited on America's streets around the time of Terminator 2. "I'll be back," you hear the Hummer say? Fat chance.

The system that most motor manufacturers use to measure and publish the total weight of a vehicle is known as "curb weight". Usually, the measurement refers to a car's mass when it's carrying all the standard equipment, a full tank of fuel, and no passengers or cargo. The curb weight of the Hummer H2 is 2,700 kilograms. Not only does this make the vehicle illegal on some city streets, it also sort of compromises its economy rating. On the open road, a Hummer H2 needs 17 litres of fuel to travel 100 kilometres; in the city, the same distance requires 24 litres. Ask yourself: if you were Sichuan Tengzhong Heavy Industrial Machines Co., would you buy the Hummer marque from General Motors?

Thought not.

Although in 2006, when sales of Hummers peaked at over 70,000, you couldn't have paid General Motors enough to sell you the brand. Back then, before Wall Street had upended the global economy and bankers were still the masters of the universe, the average consumer was less worried about oil prices and, seemingly, less concerned about the state of the planet (Hummers have long been to climate activists what fur coats are to animal lovers). That year, the giant American motor company was exporting Hummers to 33 countries; in October 2006, it opened a plant in Port Elizabeth, South Africa, to produce H3s en masse for international markets.

In December 2009, only 325 Hummers were sold worldwide, a drop of 85 percent on the previous period. According to the New York Times, sales never recovered after the price of oil rose above $4 a gallon during the North American summer of 2008. At the end of that summer, of course, the housing bubble burst and the world entered a recession.

Photo: Military-derived Hummer has become synonymous with gas-guzzling excess and has hurt GM's image at a time when consumers were demanding more fuel efficiency. REUTERS/Kevin Lamarque

It appears that Rick Wagoner, former CEO of General Motors, saw the writing on the wall. One day before the company's annual shareholders' meeting in June 2008, he declared that Hummer might be discontinued. Within the week, Wagoner had an offer to purchase from Indian automaker, Mahindra & Mahindra. A Canadian company also made a bid for Hummer, but it wasn't until June 2009, when General Motors filed for bankruptcy, that a deal with an undisclosed buyer was announced.

The buyer, as the New York Times and CNN soon revealed, was Chinese heavy machine manufacturer Sichuan Tengzhong. On Thursday morning, February 25 2010, Tengzhong announced it was pulling out. "The purchase of this brand is not a match for China," a China market analyst informed Time magazine. "The government's general policies [are] about efficiency and environmental protection and number two about consolidation, it is all about these two very broad, general policies. This purchase does not match those."

The Financial Times, for their part, insisted that the deal fell through because of internal flaws. "The collapse of General Motor's plan to sell Hummer to a Chinese buyer reflects flaws in the deal itself rather than any reluctance on the part of Beijing to sanction cross-border deals involving mainland companies," the paper's Shanghai correspondent wrote, after consulting Chinese government officials and people close to the deal.

Still, whatever the truth about the deal's failure, the outcome is beyond dispute - Hummer is to wind down its international operations. While thousands of jobs are likely to be lost, in South Africa it seems the pain has already been taken: General Motors South Africa halted production of the H3 in May 2009, and, according to SAPA, "the process of consolidating manufacturing operations at the Struandale production facility [had already] commenced."

Will the Hummer be missed? Not likely. It's birth can be traced to Arnold Schwarzenegger, who convinced the military contractor that produced the Gulf War Humvee to manufacture a civilian version. The H1, as the original street-legal vehicle was known, was bought by General Motors in 1998, and the company then embarked on a process of creating more reasonable variants - which resulted in the smaller H2, and the even smaller H3. It was a losing battle, of course. Like Arnie himself in this new age of "sustainability and moderation," the muscle truck was always destined to become ridiculous.

By Kevin Bloom

Read more: Time, Financial Times, SAPA in The Times

Main photo: Robby Gordon of the U.S.A competes in his Hummer during the eighth stage of the Dakar Rally being run in South America, from Antofasgasta to Copiapo, January 10, 2010. REUTERS/Gabriel Bouys/Pool

WATCH: Arnold Schwarzenegger at Hummer H1 commercial launch, 1992.

WATCH: Governor Schwarzenegger comments on Hummer sale to Chinese company, June 2009

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business

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