Fate of Hummer brand to be decided by Tuesday

DETROIT (AP) - By Tuesday, General Motors Corp. will have to decide whether its struggling Hummer brand will die a quiet death or live on with a new owner.

The wounded automaker has told the federal government that it will make the decision to jettison or sell Hummer by the end of the first quarter as part of a plan to justify the government loans on which it is living.

GM says it’s still talking to several possible buyers, and many of Hummer’s dealers nationwide are hoping that someone, perhaps a Chinese automaker, will come to their rescue and buy the brand, which traces its roots to rugged vehicles used for transporting soldiers.

The automaker has told dealers it will make an announcement about the brand’s future on Tuesday, but until then, GM will say only that it’s still negotiating with some interested parties.

“We are cautiously optimistic,” about a sale, said GM spokesman Nick Richards, adding that the companies with which GM is talking are from “all different parts of the world.”

Hummer dealers, many of whom sell other brands such as Cadillac, are hoping for a sale and trying to concentrate on customer service. GM put the Hummer brand up for sale in June of last year, and dealers have been in limbo ever since.

Ed Williamson, owner of Williamson Cadillac Hummer in Miami, says GM has told him only that an announcement is coming Tuesday, but he’s optimistic someone will buy the brand, perhaps to use the dealer network to distribute other models not currently sold in the U.S.

“My understanding is that they’ve got more than one candidate,” he said. “One of the best assets as part of this sale is the dealer body, 160 of the best dealers in the country,” he said.

But Erich Merkle, an independent auto analyst in Grand Rapids, Mich., said that despite the deadline, Hummer’s situation isn’t much different than it was when GM announced the sale in June.

“I don’t know what’s going to make it look more attractive as time goes by,” Merkle said, adding that the dealer network isn’t large enough to be attractive to a foreign buyer.

Hummer’s relatively poor fuel economy could hurt GM’s ability to meet stricter government fuel efficiency standards that go into effect for the 2011 model year, he said.

GM has been living on $13.4 billion in government loans and has requested $16.6 billion more. Chrysler LLC, it’s Detroit-area counterpart, has borrowed $4 billion and is seeking another $5 billion.

Both face a Tuesday deadline to submit completed restructuring plans to the government to justify the loans and prove they can become viable and repay the money.

President Obama is set to announce a plan Monday for the government to provide more money in exchange for tough concessions from union workers, bondholders and others.

Under a viability plan filed with the government in February, GM also plans to sell off Saturn and Sweden’s Saab, as well as make Pontiac a niche performance brand. By trimming the brands, GM would focus on Buick, Chevrolet, Cadillac and GMC, spending less on product development and marketing.

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