The End of the Hummer?

General Motors is missing the point. Again.

It turns out that the difference between impractical and impossible kicks in at around $4 a gallon. That's the lesson General Motors (GM) apparently learned this week, as the company is now hinting that the Hummer H2, its hulking, insecurity-compensating behemoth, may soon go the way of the Dodo. With a fuel "economy" of jut 10 miles-per-gallon (mpg), it's no wonder that sales fell to just 3,000 H2s this year.

Ugly, clumsy, and designed for military use, the Hummer makes as much sense on a paved road as a Porsche 911 does racing down a riverbed. Inside, it's amazingly small and cramped given its giant external girth. Such willful misuse runs counter to the very concepts of specialization and division of labor. Not to put too fine a point on it, but as it stands now, the Hummer cuts against the very Industrial Revolution that birthed GM.

But Hummer owners have always reveled in this disconnect with reality. And nobody is saying they were tricked into buying one, a refreshing counterpoint to the millions of Americans currently claiming they were fooled into signing impossible home mortgages. For those who love their Hummers, it's more than a car; it's a lifestyle.

But the Hummer is an uniquely American phenomenon. Unlike Ford's recent unloading of Jaguar-Land Rovers on India's Tata motors, the Hummer lacks the global cachet to succeed abroad. There will be no new foreign markets to rescue sales.

And while rising oil costs are the prime agent, Hummer's demise has another proximate cause: Japan's recent move into the light truck market, which overwhelmed Detroit's automakers with superior engineering and build-quality. And these Japanese "imports" were rolling out of North American plants to boot. More specifically, the competition heated up when Honda tore up the light truck rulebook and offered the Ridgeline full-size pickup with a mere 255-hp V6 in 2006.

Many automotive observers were skeptical that this would work. Motor Trend openly wondered if American truck buyers would bite, asking, "Are they this rational?" After all, Hummer was moving nearly 80,000 units in 2006. A few months later the rugged, angular, and eminently practical Ridgeline was named Motor Trend's Truck of the Year.

But the real question is not whether GM will simply kill off the Hummer, it's whether or not the company will finally conduct a long overdue internal reorganization. In addition to the Hummer line, which includes the laughable H3 "small" SUV, GM prides itself in duplicating as many V8 powered light trucks across as many divisions as possible. Such emblem-deep "badge engineering" produces full-size SUVs and pick-ups for GM, Chevy, and Cadillac.

This occurs at the behest of GM's dealer network, supposedly to guarantee dealers that they have a vehicle for every customer that walks on the lot, no matter what it costs GM to distribute separate lines of essentially identical products. This problem has been brought up again and again but no one at GM seems capable of dealing with it.

The company—and Ford and Chrysler too, for that matter—should only build those things it is good at building. At least Hummer stood on GM's strength in building big trucks. To maximize that strength, GM should consolidate and streamline, top to bottom, with or without Hummer.

Here's how they should break it down. GM should sell the trucks. Chevy should sell the people movers, from minivans to econo-boxes. And they should build them micro-small to jump up the sex appeal. Pontiac should focus on performance. That would mean that if you're in the market for a Corvette, head to your local Pontiac dealer. Automotive sacrilege? Tough times call for tough measures. Last but certainly not least, Cadillac handles the luxury brands.

I harbor no illusions that this will happen. It's far more likely that GM will loudly trumpet the end of the Hummer but refuse to make the substantive changes necessary for future viability. Meanwhile, they'll file away plans for the Hummer H4 until a gallon of gas drops back down to $3.50.

Jeff Taylor writes from North Carolina.