Hummers To The Rescue?

If I heard that someone had actually bought a Hummer in this day and age, I'd consider that big news. So when I heard that someone actually bought the entire company, the Hummer brand, I considered it enormous news. As you doubtlessly know by now, if the deal is approved, a Chinese company will buy the Hummer division from General Motors. This raises many questions, but the big one is WHY?

Last year, sales of Hummers fell 51%, and they are down 67% so far this year. Maybe the new owners think that those who weren't buying Hummers were saying to themselves, "What's holding me back is that they're a General Motors product. I'd buy one of those things if they were just owned by a Chinese company."

The prospective owner is Sicuan Tengzhong, a heavy machinery company. They say they plan to keep selling Hummers in America and all over the world, including China. In China, the Hummers would be subjected to a 40% tax that they impose on vehicles with big engines. So, good luck on that. The good news is that Sicuan Tengzhong says that they are going to continue to manufacture Hummers in this country. So at least for now, approximately 3,000 Americans will be able to keep their jobs. But if I were those workers, I'd keep one eye on the want ads, because I don't know how long they're going to keep making these simulated military vehicles.

It's interesting that General Motors was able to unload Hummer before it sold Pontiac, Saab, or Saturn, the other brands that it is dumping. I would've thought Hummer would've been a tougher sale. After all, the Hummer had come to symbolize many of the admitted negatives of the cars that the American auto industry has been making: It's too big, it's not fuel-efficient, and it looks silly in a nursery school parking lot.

I guess those Chinese businessmen see something in the Hummer that I don't. The parties won't disclose how much money the Chinese company is going to pay for Hummer, but I'm sure it was a bargain. And maybe they made one of those deals the car companies keep advertising on TV -- you know, if the Sicuan Tengzhong executive who agreed to this deal loses his job, G.M. will take back the cars and the Chinese company won't owe a penny.

Legend has it that Hummers came about because of Arnold Schwarzenegger. Apparently, while making the classic film, "Kindergarten Cop," he saw a convoy of military Humvees drive by. He loved the way they looked, so he persuaded the Humvee company to make a civilian version, which became the Hummer. Can you imagine having that kind of power? You'd like to have something, so you talk a company into manufacturing it? I wish Schwarzenegger would look at a commercial aircraft, and call the people who make it and persuade them to make one that's comfortable in coach and always on time.

The Hummer story is filled with irony. Since it looks like a military vehicle, the Hummer has always projected the image of a super-patriotic American car. Some of them are even painted with a camouflage design. The company that made the Humvees that Schwarzenegger admired was located in America's heartland – in Indiana. Now you'd have to go to China to talk to the head Hummer honcho.

It's possible that this arrangement won't end up making either side happy. Why do I say that? Guess who G.M.'s financial advisor is for this deal. It's Citigroup. I'm not kidding. That's the same Citigroup that was so mismanaged that the phrase "toxic assets" came into the vernacular. It's the same Citigroup that received billions of bailout bucks. And that's who G.M. went to for financial advice? That makes about as much sense as a military vehicle company taking business advice from an actor who someday would be governor of a state that goes billions of dollars in debt while he's in office.

Like I said, I'm happy that you Hummer workers won't be thrown out of work, but keep your options open. And don't let them pay you in stock.

CEOs At The Wheel

The CEOs of General Motors, Ford, and Chrysler have beentrying some public relations moves lately. They're saying that if Congress bails them out with billions, they will only take a dollar a year in salary. It's part of the "we all have to make sacrifices" approach. I guess they think it makes up for the fact that they made millions last year while their companies were going in the toilet and many of their employees lost their jobs. They probably also think this sacrifice says, "We care more about this industry and our country than we do about personal wealth." Yeah, right.

I know that what's happened to the auto business is not just the fault of these three guys. We can't blame them for the fact that fewer and fewer people have the money or can get the credit to buy cars these days. And there are all kinds of reasons why the American car business has a hard time competing with foreign manufacturers. But these are the guys at the helm. This is their watch. They are the ones getting the big bucks to take the credit or blame for their companies.

I rarely begrudge anyone a big salary. If an actor or an athlete makes $20 million a year, it doesn't bother me. For one thing, it's not coming out of my pocket. I also figure that whoever is paying them is making hundreds of millions. But there's something wrong with how the auto CEOs acted. Picture these execs, sitting down at the dinner table at home after work: CEO's WIFE: "How was work today?" CEO: "Pretty rough. I had to lay off 3,000 workers. Pass the caviar."

In another P.R. attempt, the CEOs decided to drive to Washington this time to ask Congress for money instead of taking their private jets. Was that stupidity or arrogance that guided them to get in those planes last time? Anyway, I don't think driving to Washington was enough of a gesture. For one thing, it was three guys going from the same place to the same place. Don't you think they could have carpooled? Of course, they never would have been able to agree on whose car to take.

Now, I've never been the CEO of a company. I didn't even appoint myself CEO when I had my own corporation. But maybe the business needs some fresh ideas today. So, if I were one of the CEOs, I would have challenged the other two guys to race to Washington in the cars their companies make. Winner gets the most money from Congress.

There would have been some rules. Each of them would have to have driven a five-year-old mid-level model. A lot of people would be interested in knowing how those cars drive when they aren't brand new. Another thing: it would make these executives look more human if their wives and kids were in the car for the road trip, too.

If they were really interested in good P.R, they'd have videotaped the whole drive. Besides, if the taxpayers are going to give or lend these companies billions of dollars, don't you think we deserve to see how their cars hold up on a 525-mile road trip? Wouldn't you like to see these guys dealing with things like driving in the snow, maybe having to jump a battery, and finding a roadside restaurant that all members of the family agree on? These men are paid for making big decisions. I would've loved to have seen how they handle a really big decision – like when their kid says he has to go to the bathroom two minutes after they've pulled away from a rest stop.

But I think the best public relations move for these guys would be for them to resign. And it's not too late. Resignation would really say that they care more about the country and their industry than they do about personal wealth. Then they could take their millions and their stock options and go on a vacation. I'll bet that by the time they get home, some other big company will offer them a CEO job.

Why not? This is America where everybody deserves a second chance. And I have a feeling they will have learned from their earlier mistake. Oh, sure, they might run their new companies into the ground, too. But I'll bet when they go to Washington to ask Congress for another bailout for those new companies, they'll be smart enough to leave those private jets at home.