HUMMER’s Asset Breakdown

Mon, Dec 21, 2009

Hummer News

HUMMER’s Asset Breakdown

As the regulatory approval process continues for General Motors’ sale of the HUMMER brand to China’s Sichuan Tengzhong, some are wondering what company property and assets will be owned by the HUMMER brand once it is independent from General Motors. While we don’t know the details of the definitive agreement between the two companies, we can take a look at what GM currently owns and doesn’t own when it comes to the HUMMER brand.

A quick search around the web will show there’s a significant amount of confusion surrounding the matter – largely stemming from the previous HUMMER brand acquisition in 1999, when General Motors purchased the brand from AM General, who’s continued presence with the brand (H1 service & warranty, H2 production) doesn’t really make the separation of assets any clearer.

A Brief History

AM General is the company behind the military HUMVEE – they designed it, they built it, and they continue to build it to this day. AM General created a civilian version of the HUMVEE in 1992 and called it simply, “HUMMER.” The limited numbers of HUMMERs sold well, but AM General didn’t have the means or desire to run a large civilian auto company. In 1999, AM General was approached by General Motors who proposed taking the nameplate to the next level by creating a full lineup of civilian vehicles based on the rugged, military-styled HUMMER.

It was later in 1999 that GM purchased the HUMMER brand name, and AM General agreed to help GM design the next HUMMER model: the H2. Even though AM General had a hand in the design process, the H2 is owned entirely by GM. Since AM General helped with the design and had a background in manufacturing, it only made sense for GM to contract H2 production to them. AM General constructed a state-of-the-art manufacturing facility right next to its military HUMVEE plant to build the H2, which to this day is the only facility in North America build the H2.

Even though AM General played a role in designing the H2 and is currently under contract to build it, that’s where the company’s H2 involvement ends.

It is likely that HUMMER’s new owner will continue to contract AM General to build the H2 SUV and SUT models.

HUMMER H1

When the H2 came along, and the HUMMER name was to be used across an entire portfolio of vehicles, the civilian HUMMER model based on the HUMVEE would become the H1. Even though we know this may ruffle the feathers of original “HUMMER” owners, we’ll refer to the model as the H1 for simplicity in this explanation.

When General Motors bought the HUMMER name from AM General, it also bought the rights to market and distribute the H1. While GM owns the rights to the “H1” nameplate, the vehicle and vehicle technology are exclusively owned by AM General. This may be more evident to HUMMER dealership service departments, who deal directly with AM General on all H1 warranty claims and parts purchases, not General Motors.

The divided ownership makes the possibility of an H1 return a little confusing. Here’s why:

Q) Could AM General bring back the H1 on its own? No, the H1 nameplate is owned by GM, ownership of the body design is divided between AM General and GM, and the rights to market and sell civilian models are exclusively owned by GM.

Q) What if AM General completely redesigned a model that didn’t look like the H1 or used the H1 name? Even though AM General owns the vehicle and vehicle technology, GM owns the distribution rights to the civilian market. It’s highly unlikely that AM General would try to design a completely new vehicle that didn’t look or have the same technology as the H1 and market it to civilians.

Q) Could GM build the H1 somewhere other than AM General? No, GM does not own the vehicle or its technology, and couldn’t build it independent from AM General.

Summary

The H2, H3, and H3T models are completely owned by General Motors, and those assets are set to be transferred to a new, independent HUMMER brand. The marketing and distribution rights to the H1 will also be transferred, though it’s unlikely that the military spec civilian model will return to the marketplace anytime soon.

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5 Responses to “HUMMER’s Asset Breakdown”

  1. orh2 Says:

    Very informative. Thank you.

  2. Panama Red Says:

    Did people really think out there that the military spec of the HUMVEE would be part of the deal!?

    Man ingorence is bliss!

    On top of that you really dont need the “official specs” of anything to break down the build of a vehicle.

  3. hummdude Says:

    Hopefully IF bought, H2s will still be made by AM G.

  4. BILL Says:

    once HUMMER IS GONE .I will never by GM products again they just unloaded the coolest vehicle ever AMERICAN ICON SOLD TO CHINA OH I GET IT CHANGE…..H-2 HUMMER WAS A GREAT TRUCK SO WAS THE H-3

  5. donald Says:

    so what is the word on Hummer sold or not?