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Hummer H1 On GM Hit List

DETROIT, May 12, 2006; Reuters reported that General Motors Corp. said on Friday it will stop building the gas-guzzling Hummer H1 truck, a military-style status symbol with poor sales, and focus its resources instead on better-selling vehicles.

The last H1s, which get about 10 miles per gallon, will roll out in June, the automaker said. The H1 is the foundation for GM's Hummer brand.

"We are discounting it because it's a low volume niche vehicle and we will dedicate our resources now to produce smaller-sized and higher-volume vehicles for Hummer," said Dayna Hart, GM spokeswoman for the Hummer brand.

GM sold 374 H1s in 2005, down 16 percent from 2004.

AM General LLC makes the H1, and also builds the Humvee, the military vehicle on which the truck is based.

AM General will convert all its assembly lines from retail production of the H1 to the building of Humvee models for the military, Hart said, adding that no jobs will be lost.

The H1, GM's biggest and most expensive model, sells for between $130,00 and $140,000.

The world's largest automaker, which lost $10.6 billion in 2005, is in the midst of a broad restructuring to stem losses and adjust itself to a shrinking U.S. market share.

Dissident-turned-director Jerry York, who serves as an adviser to GM's largest individual shareholder, Kirk Kerkorian, has criticized management for not moving fast enough into "crisis mode" and in January suggested the automaker eliminate the Saab and Hummer brands.

GM will continue to build the H2 and H3 sport-utility vehicles under the Hummer brand, Hart said.

The H1 was first marketed to the public as the Hummer in 1992 by AM General. Hollywood actor Arnold Schwarzenegger, now governor of California, was AM General's first civilian customer.

GM bought marketing rights to the Hummer name in 1999 and called it the Hummer H1.