On Wednesday, we reported that GM CEO Rick Wagoner had told dealers in a video announcement that GM had received inquiries about Hummer, but had not held any formal talks or solicited any buyers...yet. Wagoner then announced yesterday that GM is now, in fact, preparing information related to the sale of Hummer and preparing for formal talks.
Wagoner's latest announcement confirms months of speculation that GM would eventually try to sell the struggling SUV brand. Wagoner originally announced it was reviewing the brand back in June, and sale rumors have abounded since then, though GM has insisted its been looking into revamping the line. However, sources have told the Wall Street Journal that GM has given up on redesigning the entire brand for better fuel economy because doing so would be too expensive, especially considering GM's current financial state.
A major thorn in GM's side all along has been dealer franchise law, which could give Hummer dealers a lot of leverage against GM in any sale or closing of the brand. Dealers are far more likely to go along with a sale or revamping, so those were the General's first choices. Since the redesign is out, it's on to sale, and the prospects don't look too good. Several parties that were rumored to be interested have announced that they're not, leaving possible suitors to be anyone's guess.
Doing something about Hummer, or losing it altogether, is part of GM's $15 billion restructuring plan, which Wagoner also admitted is having some trouble. He noted yesterday that GM expected some bumps along the way, but that capital markets are "moving in fits and starts" and "have not opened up robustly," which, in non-business-speak, likely means that GM is having trouble generating the extra cash it was hoping for as part of the restructuring plan.