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GM gears up Hummer sale

2008-07-29 08:20

General Motors is in negotiations with Hummer dealers to buy out stores as it looks to sell the SUV brand whose popularity has plunged amid high petrol prices, Automotive News reported on Monday.

The No. 1 US carmaker, which has said it is considering "all options" for Hummer including the sale of the brand, also paid out performance-linked bonuses to dealers in advance, the paper quoted several Hummer dealers as saying.

"Hummer is quietly getting dealers to sign off on their stores and making deals with each one," Tim Kelly, a Hummer dealer in Chattanooga, Tenn, told the paper.

GM Chief Executive Rick Wagoner said on Friday GM has heard from some bidders interested in buying Hummer and was moving as quickly as it could toward a sale.

A GM spokesperson could not immediately confirm the report in Automotive News.

The automaker also came to dealers' aid by paying bonuses for the second and third quarters, based on performance in the same period last year, as sales, already hit by a consumer shift toward fuel-efficient small cars, are further pressured after GM started shopping the brand, according to the report.

GM's US sales were down 16% year-to-date through the end of June, led by a 21% drop in truck sales. Sales of the Hummer brand fell 40% in the same period.

In addition to looking to shed the Hummer, GM is increasing production of some of its popular cars and cutting back on truck production as part of plans to cut costs by $10 billion.


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