GM Bets on a Macho Gas Guzzler
1998: GM acquires Hummer from AM General, setting the company up to become the ultimate symbol of the gas-guzzling culture in the U.S., just as Toyota moves to launch the Prius. The acquisition of Hummer comes at the height of the boom in SUV sales in the U.S. Underlying the acquisition of Hummer is the myopic view that oil shocks are a thing of the past and fuel prices will remain at relatively low levels for the foreseeable future. The purchase also highlights the steady deterioration of GM's other brands, which the company's management seems powerless to arrest. To GM's thinking, Hummer made a bold, macho statement. But it also tagged the company as flagrantly indifferent to environmental concerns despite its investment in electric vehicles. Hummer has been up for sale since last summer.