Skip to content

Hummer Failure: 4 reasons why Hummer went out of business

HUmmer failure

Table Of Contents:

Remember the days when a Hummer rolling down the street turned every head?

Once the ultimate status symbol of the late 90s and early 2000s, this behemoth of a vehicle was more than just a way to get from point A to point B—it was a statement.

Born from the rugged Humvee that roamed military terrains, Arnold Schwarzenegger, the epitome of Hollywood muscle, cruised in one of the first civilian Hummers.

Talk about adding star-studded credibility to its already formidable reputation!

The sheer size and bold design made it impossible to ignore, a rolling testament to power and wealth.

Join us as we take a nostalgic ride back to the heyday of the Hummer, exploring what made it a legendary status symbol and why its roar eventually quieted.

Answer a few questions and get a roadmap for innovation

Who Makes Hummer: The Beginning of the Hummer

The Hummer began their journey in 1983, when AM General, a heavy vehicle manufacturer, received a $1 billion contract from the Military to develop the High Mobility Multipurpose Wheeled Vehicle (HMMWV).

The truck’s ability to transport troops and cargo over rough terrain made it particularly valuable in military conflict zones.

Since the Humvee was specifically designed to transport troops and cargo, Hummer was founded in 1992 by AM General as a civilian variant of the Humvee truck.

Looking at the growing popularity among celebrities, cultural phenomenon, dipping gas prices, and growing economy, General Motors (GM) purchased the rights to produce and market the Hummer in 1999.

By 2006, Hummer vehicle sales had reached 71,524 in the US.


Hummer Discontinued: What Happened to Hummer?


#1 Their Unignorable Imperfections

The transition from military behemoth to civilian vehicle wasn’t smooth.

From the outset, the Hummer struggled with practicality and suitability for everyday use. While the vehicle did come with basic amenities like a radio and an air conditioner, these additions did little to enhance its practicality for the average driver.

Although the media frenzy helped it stay afloat, the Hummer’s design and features reflected its military origins, lacking the sophistication that many consumers expected in a high-priced vehicle.

Despite its hefty price tag, the Hummer was often criticized for its rough-around-the-edges feel.

Several specific design choices and omissions, such as the absence of airbags, a small steering wheel, and huge hooks on the hood, further dampened its appeal.

That’s why it is important to keep up with user experiences, and ideas from frontline employees, and stay sharp. InspireIP helps you with this by enabling real-time collaboration on innovative ideas from partners, stakeholders, employees, vendors, customers, etc- all in one place.

Take our 30 day free trial and see for yourself!

#2 Environmental Concerns

From early 2000 onwards, Hummer faced significant backlash from environmental activists who saw it as a symbol of excessive pollution and wastefulness.

Since concerns about climate change and the impact of fossil fuels led to increased scrutiny of gas-guzzling vehicles, the Hummer, with its low MPG ratings, became a prominent target for environmental criticism.

Arnold Schwarzenegger, one of the earliest and most high-profile Hummer enthusiasts, had to part ways with his fleet of eight Hummers after facing severe backlash from environmentalists.

The Animal Liberation Front (ALF) and the Earth Liberation Front (ELF) were organizing regular anti-Hummer protests.

Such protests and acts of vandalism impacted Hummer’s brand image.

Public sentiment began to shift towards sustainability, with consumers increasingly valuing eco-friendly and fuel-efficient vehicles.


#3 Economic Factors

The late 2000s marked a period of significant economic turmoil globally. The financial crisis of 2007-2008 led to a severe recession, which hit consumers’ wallets hard.

The Iranian war in 2007 triggered a spike in global oil prices, leading to significantly higher gas prices for American consumers. The Hummer’s poor fuel economy made it increasingly impractical to own as gas prices soared.

One of the critical issues with the Hummer was the unavailability of its parts, particularly its tires. These components were nearly impossible to locate in the market due to their specialized nature and limited production. This scarcity made routine maintenance and repairs challenging.

The high costs associated with owning and maintaining a Hummer ultimately outweighed its status symbol appeal.


#4 Market Competition

During its peak, the Hummer faced little competition in its niche market of luxury, off-road capable SUVs.

However, as other automakers recognized the growing interest in SUVs, they introduced models that combined rugged capabilities with better fuel efficiency and more modern amenities.

Brands like Land Rover, Jeep, and even luxury marques such as Mercedes-Benz with their G-Class offered alternatives that were more refined and less ostentatious than the Hummer.


The Role of Lack of Innovation in Hummer’s Failure

While several practical and economic factors contributed to the decline of the Hummer, the lack of innovation within the organization played a significant role in its downfall.

General Motors (GM), the parent company of Hummer, failed to adapt the vehicle to changing market conditions and consumer preferences, which compounded the issues:

  • Stagnation in Design and Features
  • Fuel Efficiency and Environmental Concerns
  • Lack of Technological Advancements
  • Lack of Market Adaptation

GM had a traditional hierarchical structure that often limited the flow of innovative ideas from lower-level employees to top management.

This structure inhibits the capturing of innovative ideas.

During the early 2000s, GM was slow to adopt comprehensive innovation programs compared to competitors.

While companies like Toyota and Ford were investing in hybrid technology and advanced engineering practices, GM lagged, affecting brands like Hummer.

GM’s investment in continuous employee training and development in emerging automotive technologies was not as aggressive as that of other automakers. This affected the ability of Hummer’s engineering teams to keep up with industry trends.

The mechanisms for incorporating feedback from employees into product development were not robust.

Unlike companies that actively involve employees through continuous improvement processes and tools, GM had limited such practices during the early 2000s.

While employees could have potentially done better with more support, the primary responsibility lies with management’s failure to foster an environment conducive to innovation.

We wonder if there was an innovation management solution available during the time, could they have made the best out of the worst situation?

Generate innovative solutions and solve pressing business challenges: [30-DAY FREE TRIAL] Innovation Management Solution


When did they stop making hummers?

In light of these challenges, General Motors (GM), the parent company of Hummer, had to make strategic decisions.

Following its bankruptcy and subsequent government bailout in 2009, GM underwent significant restructuring.

This included trimming down its portfolio to focus on core brands and models that aligned with emerging market trends.

GM attempted to sell the Hummer brand to Tengzhong, a Chinese manufacturer. However, the agreement was broken.

In 2010, GM announced the discontinuation of the Hummer brand. T

his decision was part of a broader strategy to pivot towards more sustainable and economically viable vehicles.

By discontinuing Hummer, GM aimed to streamline its operations and focus resources on developing cars that met the new consumer demands and regulatory requirements.


The Hummer Reimagined: Do they still make hummers?

Interestingly, the Hummer story didn’t end with its discontinuation. In a move that surprised many, GM announced the revival of the Hummer nameplate in 2020.

However, this time, it would return as an all-electric vehicle under the GMC brand.

The GMC Hummer EV represents a radical shift from its gas-guzzling predecessors. It promises to deliver the same rugged, powerful performance but with zero emissions, aligning with the global push towards electric vehicles (EVs).

This reimagining of the Hummer as an electric vehicle highlights GM’s commitment to sustainability and innovation, showing how even the most iconic brands can adapt to changing times.

One this is for sure: They will need a strong innovation culture to stay afloat because if it was bad before, the market is worse now.

Related Read: From Ideation to Implementation: A Roadmap for Innovation

Liked our blog? Please recommend us.

Your feedback matters. Share away!

Have Any Topic Idea In Mind?

Let us know your topics of interest!

Subscribe To Our Weekly Newsletter!

Join the list of innovation evangelists and receive updates about the content you care about.

Get all our free resources delivered to you

You may also like