GM announced last week it was cutting production at both the HUMMER H2 and H3 plants, and now both are taking action.
The HUMMER H2 plant in Mishawaka, Indiana is owned and operated by AM General, the creator of the military HUMVEE and HUMMER brand. Since 1999, the HUMMER brand has been under control of General Motors, with AM General fulfilling only the production needs of the H2, and leaving all R&D, marketing, etc. to the boys in Detroit. Perhaps being a separate entity from GM has allowed AM General to have a clearer and more certain production future than the GM owned HUMMER H3 plant in Shreveport, LA.
“We are always looking for new business opportunities,” says Craig Mac Nabb, a spokesperson for AM General. “When we built that plant, we never intended it to be and H2 only production facility.” Although Mac Nabb says there are many options on the table would not comment on specifics, we still believe Standard Taxi to be the front running option for AM General. “At some point one of these options, and there have been many of them, will bear fruit,” Mac Nabb added. He also noted that at present time, all options are in addition to the H2, not a replacement.
Another concern of production cuts and slowdowns is job loss, but Mac Nabb said that AM General has been able to absorb any jobs lost in the civilian plant into their military operations. When the H2 started production in 2002, there were 3 times as many workers in the H2 plant than the military HUMVEE plant. Now that situation has reversed with increased demand for the HUMVEE, which according to Mac Nabb, isn’t going anywhere soon. “Sometimes people may read stories about the joint light tactical vehicles program…where it’s often described as a replacement for HUMVEE, but it’s not.” Mac Nabb said the military will likely purchase HUMVEEs for many years, possibly until 2020 or 2030. “The HUMVEE will be in the military fleets for a long time.”
The GM owned HUMMER H3 plant in Shreveport, LA is unlike AM General in that it does not have another vehicle line that is still in high demand. The only other vehicles built there are the Chevy Colorado, GMC Canyon, and the soon to be released HUMMER H3T pickup. Although there will be some increase for the H3T, it won’t be enough to justify keeping a third shift, which means around 800 workers will lose their jobs later this year.
Louisiana’s Governor Bobby Jindal announced this afternoon that he and Shreveport Mayor Cedric Glover will travel to Detroit to meet with GM executives on August 15th. Their hope is to convince GM brass not to eliminate the plant’s third shift. The Governor said he will do “whatever it takes,” and added that tax incentives could be an option. Unfortunately for the Governor and the 800 workers, I think it would take a commitment by the state to purchase around 30,000 of the trucks and SUVs produced in the factory. We’re guessing the two elected officials will do “whatever it takes,” just as long as it doesn’t cost the next election. We’ll stay optimistic, though, for the 800 workers that help build some of the toughest trucks and SUVs on the road.
Both companies are in unique ownership circumstances, though it seems those that AM General’s independence from GM has made them more aware of the market and the business ramifications thereof. Most likely the Shreveport plant will either be re-tooled to also produce some of GM’s new products, or will be considered for partial sale as part of a HUMMER brand sale and GM’s asset reduction to boost liquidity.