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Old 01-24-2009, 12:12 AM
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Default Re: Future of HUMMER, the H4(HX)...

Quote:
Originally Posted by RazM
about: Any regional specificity on where the interest is coming from? Is it the East?

JT: No specificity. The answer is yes, it's not an American company. The good news is, with this broad footprint, and what's going on the rest of the world, I come back to the product and what it does. Developing countries are "developing" for a reason; the road infrastructures and the driving conditions aren't pretty everywhere. You're not just talking about driving around downtown LA. These vehicles lend themselves perfectly to those opening-up markets of India, China, Russia, all of those kinds of places. Therefore, the investment people in those countries are interested too. Some investors are just bankers. They are looking to buy a pure return on investment. But other investors have a desire for the investment they're making to make sense for the country that they live in. Luckily, because of the appeal of HUMMER worldwide, the investment community that's looking at it is also worldwide.

about: Has GM placed any time constraints on you?

JT: Yes. Well, Washington has put some constraints on us. As part of this loan process, as part of documenting our future state. To grossly oversimplify what's going on in Washington, they need proof that we have a sustainable business model. End of story.

about: You mean GM.

JT: GM. As part of that, this mountain of loan documents that have to go to them, you're just defending your business case going forward, to show that you're a viable financial entity. If you were any bank loan officer, you'd want to make sure that you get your money back. So it's completely logical that they'd want that in place. So as part of that -- it's public information -- February, March is when the government's going to make its decisions as to how much more they're going to give us and whether they'll let us keep what we've got. So, likewise, GM is submitting its master business plan of what its approach is going to be. HUMMER is a piece of that puzzle. They'll say, okay, here's what we're doing with HUMMER. So, the time constraint that's placed on me is we have to play our cards out in this first quarter to say we have serious buying partners who are interested in buying the brand, or not. That's our deadline.

about: And if the answer is "or not," is it a restructuring within GM or do you think the brand goes away?

JT: We've been adamant about calling it a "strategic evaluation" in order to keep those doors open. Whether to have to shrink it inside the GM system and continue to manage it here, because we have the dealer network; or, a wind-down. To be overly honest, those are all possibilities. Unfortunately.

about: Has this put all product development on hold?

JT: Yes. We're in a cash flow necessity. When you get into a state where you're looking at the big, bad "B" word, you have to conserve your cash and do only what's absolutely 200% clear is going to occur, and nothing that's in limbo. So product development on this has had to be frozen until we come out on the back of this with either the investor picking it up where we left off, or with GM picking it back up.

about: Any hints on where you left off?

JT: At the time we left off -- hopefully, this is public, but if it isn't, it doesn't matter, I guess -- is with the Hx concept that we had last year really felt right as the new H4. It felt right as a HUMMER from a design and performance standpoint. It opened up more where Jeep travels at a lower price point and a real youthful market. So we had taken that product acceptance as kind of a "go" internally. We're very careful about when we say a car is really a car, because you have to go through some sort of prove-outs and engineering, and then get the capital backing from our board as opposed to outside investors when you're an outside company. And then announce, like we do here, at an auto show. We were acting as if it was going to be a full-bore program. We had a lot of that work done, and we had to put it on hold.

about: So an investor could potentially take advantage of that?

JT: And pick up right where we left off. That's what we're proposing. That's what's in the offer. If you want, you're not starting all over with "I wonder what I should do with HUMMER product." We had upgrades to all of these (H3 and H2) as is, and we had a pretty major effort on the H4.

about: That seems like the no-brainer...

JT: Yes, it is. This isn't sexy stuff like talking about product, and going up mountains and all the stuff that HUMMERs do, but on a business end, it's a pretty serious subject. You pretty much have to get into that H4 space -- smaller, lighter, more fuel-efficient -- to make it in this new CAFE world that's coming at us.
It's going to abilities for niche vehicles like the H2 that are still able to survive, but if you're over a certain volume threshold, the world is just going to dictate that you have extremely high fuel economy in the upper 20s by the time you get out in that time frame. That almost necessitates the H4.
I'm optimistic. I won't make any commitments, because all these internal things and all the stuff in Washington. But if you just asked me today, do I think we'll find a buyer -- well, I think we will. The brand is very well-received by a small group of people. But for those who like it, they love it. They're passionate about it. I still think there's a volume future. Sometimes when brands go away, there stopped being a customer base, and out of necessity you have to make a cold, hard decision. But there's a strong customer base for this product.
If there's a disappointed HUMMER owner, it's because they weren't looking for a HUMMER. They bought the wrong car. If you're looking for a vehicle that does what this does, you're not going to be disappointed.
Thanks for this article. it sounds promising. seems like only the government could bury HUMMER now.
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