Profiting From War - Washington Post

[Klaus]

Profiting From War


By Warren Brown
Washington Post Staff Writer
Friday, April 11, 2003; 12:53 PM


It's a little embarrassing.

No one wants to profit from war; at least, no one wants to admit it.

But profits are flowing into General Motors Corp.'s Hummer Division, largely because its Hummer H2 sport-utility vehicles, at prices starting from $48,455, are selling faster than U.S., British and Kurdish forces are taking over Iraq.

Even sales of GM's super-gargantuan Hummer H1 SUVs are up 21 percent for the calendar year; and those transports are priced from $105,160 to $116,483.

More striking is that sales of those big-money big-rigs are increasing while overall car and truck sales are declining in the United States.

Part of the reason is what some Hummer dealers around the country are calling "the CNN effect." That's CNN as in Cable News Network's round-the-clock coverage of the war in Iraq, a fascinating bit of reality TV in which the military Humvee-the parent of the Hummer H1 and H2-is the leading automotive character.

"Every time you turn on CNN, you're looking at a Humvee rolling into some part of Iraq," said Glen Cardelino, general sales manager of Capitol Hummer in Greenbelt, Md.

Cardelino said that sales of the less-expensive, more civilian-friendly H2 have been strong since GM introduced that sports utility vehicle in July. But the war coverage seems to have sustained that momentum at a time when other vehicle sales are falling, he said.

"Hummer H2 sales are incredibly off the charts," said Cardelino, whose dealership has sold 300 H2 models at an average price of $55,000 with options.

Not only are consumers buying Hummers, they're also buying Hummer T-shirts and coffee mugs and other Hummer paraphernalia. "And we're getting more people who are asking us to put military trim [that means decorations in auto industry parlance] on their Hummers," Cardelino said.

The same thing is happening at Winkel's Rod Hall Hummer in Reno, Nev.

"We have sold every Hummer H2 we could get our hands on," said Chad Hall, the general sales manager. "But we were selling every one we could get before the war. So it's hard to say that the war coverage is having a positive effect on sales that are already going gangbusters."

But it hasn't hurt, has it Chad?

"No," he said. "It doesn't hurt at all to see those Humvees on television all day and night."

If you think this is a testosterone-laden guy thing, think again.

"Women are our biggest H2 buyers," said Hall. "They are using them as their daily drivers. It's a vehicle that's intimidating on the outside; but it's really comfortable and easy for them to handle. They like that."

Said Cardelino: "We have husbands coming in here to buy Hummer H2s for their wives. The guys think the H2 is a softer version of the H1. But we've had a few husbands who gave an H2 to their wives, then decided they liked it themselves, and came back and bought a second one."

At $55,000 a pop for a vehicle that averages 10 miles per gallon?

"Yes," said Cardelino. "We've heard back from just about every customer who bought one from us. They say they absolutely love the thing."

GM executives at the Hummer Division in Detroit are quietly ecstatic about all of this; but they are also a little nervous about the war implication.

"We haven't seen any relationship between CNN's coverage of the war and Hummer sales," said Heather Hall, a spokeswoman for Hummer. She said the division's numbers show that H2 sales "have been strong all along."

Hummers are produced under a cooperative arrangement between GM and AM General. Heather Hall said that the division has the capacity to produce about 40,000 Hummers a year and is on track to do that this year.

H2 sales totaled 3,924 in December 2002, fell to 2,810 in January and to 2,664 in February. But March sales roared like a lion, climbing to 3,014. Many Hummer dealers believe H2 sales will continue at the 3,000-plus pace, because gasoline prices are coming down and a victorious U.S. military is expected to come home.

The very expensive H1, whose sales always have been small, is the apparent beneficiary of the H2's success-and the Humvee's war-related TV exposure.

GM sold 55 of the Hummer H1 models in December, 2002. The company sold 47 H1s in January, 50 in February and 55 in March.

"We aren't selling that many H1 models," said Cardelino. "But we have a number of people with H1s who are keeping them and coming back to buy an H2."

America! What a country!

[Klaus]

Profiting From War


By Warren Brown
Washington Post Staff Writer
Friday, April 11, 2003; 12:53 PM


It's a little embarrassing.

No one wants to profit from war; at least, no one wants to admit it.

But profits are flowing into General Motors Corp.'s Hummer Division, largely because its Hummer H2 sport-utility vehicles, at prices starting from $48,455, are selling faster than U.S., British and Kurdish forces are taking over Iraq.

Even sales of GM's super-gargantuan Hummer H1 SUVs are up 21 percent for the calendar year; and those transports are priced from $105,160 to $116,483.

More striking is that sales of those big-money big-rigs are increasing while overall car and truck sales are declining in the United States.

Part of the reason is what some Hummer dealers around the country are calling "the CNN effect." That's CNN as in Cable News Network's round-the-clock coverage of the war in Iraq, a fascinating bit of reality TV in which the military Humvee-the parent of the Hummer H1 and H2-is the leading automotive character.

"Every time you turn on CNN, you're looking at a Humvee rolling into some part of Iraq," said Glen Cardelino, general sales manager of Capitol Hummer in Greenbelt, Md.

Cardelino said that sales of the less-expensive, more civilian-friendly H2 have been strong since GM introduced that sports utility vehicle in July. But the war coverage seems to have sustained that momentum at a time when other vehicle sales are falling, he said.

"Hummer H2 sales are incredibly off the charts," said Cardelino, whose dealership has sold 300 H2 models at an average price of $55,000 with options.

Not only are consumers buying Hummers, they're also buying Hummer T-shirts and coffee mugs and other Hummer paraphernalia. "And we're getting more people who are asking us to put military trim [that means decorations in auto industry parlance] on their Hummers," Cardelino said.

The same thing is happening at Winkel's Rod Hall Hummer in Reno, Nev.

"We have sold every Hummer H2 we could get our hands on," said Chad Hall, the general sales manager. "But we were selling every one we could get before the war. So it's hard to say that the war coverage is having a positive effect on sales that are already going gangbusters."

But it hasn't hurt, has it Chad?

"No," he said. "It doesn't hurt at all to see those Humvees on television all day and night."

If you think this is a testosterone-laden guy thing, think again.

"Women are our biggest H2 buyers," said Hall. "They are using them as their daily drivers. It's a vehicle that's intimidating on the outside; but it's really comfortable and easy for them to handle. They like that."

Said Cardelino: "We have husbands coming in here to buy Hummer H2s for their wives. The guys think the H2 is a softer version of the H1. But we've had a few husbands who gave an H2 to their wives, then decided they liked it themselves, and came back and bought a second one."

At $55,000 a pop for a vehicle that averages 10 miles per gallon?

"Yes," said Cardelino. "We've heard back from just about every customer who bought one from us. They say they absolutely love the thing."

GM executives at the Hummer Division in Detroit are quietly ecstatic about all of this; but they are also a little nervous about the war implication.

"We haven't seen any relationship between CNN's coverage of the war and Hummer sales," said Heather Hall, a spokeswoman for Hummer. She said the division's numbers show that H2 sales "have been strong all along."

Hummers are produced under a cooperative arrangement between GM and AM General. Heather Hall said that the division has the capacity to produce about 40,000 Hummers a year and is on track to do that this year.

H2 sales totaled 3,924 in December 2002, fell to 2,810 in January and to 2,664 in February. But March sales roared like a lion, climbing to 3,014. Many Hummer dealers believe H2 sales will continue at the 3,000-plus pace, because gasoline prices are coming down and a victorious U.S. military is expected to come home.

The very expensive H1, whose sales always have been small, is the apparent beneficiary of the H2's success-and the Humvee's war-related TV exposure.

GM sold 55 of the Hummer H1 models in December, 2002. The company sold 47 H1s in January, 50 in February and 55 in March.

"We aren't selling that many H1 models," said Cardelino. "But we have a number of people with H1s who are keeping them and coming back to buy an H2."

America! What a country!

[Mike97ZJ]

Good. I like the sound of that, it means more job security for me. The company I work for is a GM supplier.

What was it that the GM execs say in the 50's?

What's good for GM is good for the country, or vice versa.

[BKLYNH2]

You see - it was not a war for oil at all!
The unbiased Washington Post is on the verge of discovering the true Iraq war conspiracy. In an effort to boost sales, GM big wigs trampled over the poor and infirmed on the way to the White House and convinced the corrupt president to start a war with Iraq. By drawing in the apathetic UN they prolonged the whole ordeal by at least 8 months, which only helped the big Hummer buying bash even more. I bet that stroke of genius will be blamed on Chenney, as all he ever does is cater to big oil, right?
Where is conspiracy theory man (aka GHM) when we need him.

[MAC]

Now that I just finished a swim in the perfect 86 degree pool, I think I'll join you in the conspiracy theory talk.

I personally never believe in WMD, nor in helping the Iraqis, we don't like them, they don't like us, but it does make us feel better now that we saved them. The big picture in my humble opinion is 2 things: war on terrorism and oil. Before you right wing nuts jump on me, let me tell you that I am more right wing than you. I strongly support the Gulf War II and President Bush and Chenney, there is nothing wrong with fight the terrorism and grabbing oil.

I love looking at maps. If you look at the map, what is THE prime real estate available? Iraq. It is in the center of every bad guys. Do you want to sit home and wait for the next attack which is sure to come? Or do you mount the best defense: a strong offense. You go straight to the center of all the evil, you shoot your way straight into the hornet’s nest, John Wayne style. There is nothing to apologize for and nobody to apologize to. You hit us on 9/11, we told you we are coming to hit you hard, you have been warned, you messed with me and I will mess with you.

Was Iraq in anyway linked to 9/11? Doesn’t matter, that is the nest we must go in to smash it, hat was the only door if you look at the map. Now we are there, I don’t believe any of the talk that we will leave as soon as all things settle, no way, we are there to stay for 50 years, the same way we stayed for over 50 years in Japan and Germany, which secured Asia and Europe for us for over 50 years. That’s what will be done with Iraq. If you are Iran or any other Arab, how do you feel having John Wayne live next door to you? Would you kindly change your manner? Sure you would.

My family and guests are at the pool calling me, so let me rush to the oil.

Every American Middle East policy in the last 100 years has been based on oil, that is the root of every single policy, may not be the surface. I would be absolutely shocked if this one is not about oil. There is nothing wrong about fighting for oil. Only 16 of over 80 proven Iraqi oil field have been pumped, and all to a very minimum degree, the cost per bbl is under $1, Saudi is $2.50 a bbl, while in the US it is $10 a bbl. If you are the Saudis or OPEC, how do you feel? Not very comfortable I hope. Will you change the way you do business with an oil rich John Wayne next door? You bet.

Let’s not to say we will stop pretending we are searching for WMD, not oil, or saving the Iraqis, of course we shall continue the dance. That is how the business is done.

I am sure tons of people will disagree with me here, let’s start a conversation and tell me I am wrong and I could be totally wrong. My tiny brain needs some excise. I am going for a swim.

[This message was edited by MAC on 06-02-03 at 06:16 PM.]

[bklynh2srock]

I only disagree on one point, albeit minor. Do I believe they HAD WMD at one point and we should have been concerned enough to go to war over it for that sole reason? Yes, because the Inspector Cluseau's over at the UN actually confirmed they had a ton (not literally) of WMD at one point. Do I believe that they may have been destroyed/disseminated to make W look like an ass? Possibly. But I don't care about all of the above in the scope of things, for all the reasons MAC mentioned. Quite frankly, my dear, I don't give a WMD damn.

Link to 9/11? Don't care.

It is obvious that we cannot send the people who plot against us to a shrink and reason with them. After thinking of all those souls that lost their lives on 9/11, after having the wheels of one of the planes (and other unthinkable things) land in front of my office, after being displaced for months and having papers from the WTC land around our apartment (yes, in Brooklyn) and Peter losing many, many people he knew, we personally don't care. We have concluded that anyone that sick does not listen or understand reason, the only thing they understand is overwhelming force. Maybe it is because I am still completely incapable of understanding why anyone would want to cause so much pain. Maybe it is because I am still a very, very angry person.

[BKLYNH2]

Well I am trying to watch a hockey game, but I'm glad some are trying to keep this forum flowing. The last couple of days have been sloooow.

Point 1: I like the offense is defense concept. It seems strategically astute, and just the smart kind of chess I would expect from our team. The only problem I see is that another administration(different party) may not play ball. I know in past history that we have carried on occupations through different administrations, but it seems like the parties are playing less ball with each other. While 9/11 seemed to solidfy our patriotism, politicians are busy dividing us up again. So combine a different party with an inhospitable Iraq and we might be out of there.
Point 2:I'm so tired of war for oil.
I must digress: Last week I had my first Hummer hostile. It was 1:30AM and I was driving home from my hockey game with one of my teamates in the H2. I am stopped at a traffic light and some freaky looking kid is crossing the street in front of me and talking on the cell phone at the same time. He gets about 3/4 of the way past the truck when I guess the high headlights catch his attention. He begins to paint my H2 with his middle digit while giving us an expletive riddled dissertation.He was rather hard to understand but said something about how I was the reason they're fighting over there. He than went to the side of the street and bent down to pick up.............
a twig! which he threw at my H2. Fortunately the light turned green and I sped away before he did something really dangerous like attack me with a feather. I wonder what the person on the other end of his cell phone thought of all this?
OK back to war for oil. No war for oil- it is much cheaper to buy oil than pay for a war, rebuild a country and occupy it. It comes back to security because we could not buy Iraqi oil with out fear that we were funding our own destruction.
By the way you neither confirmed nor denied my previous theory.
Oh boy looks like the game is going to OT. See you later.

[MAC]

I agree.

The thing about oil is that we don't really need to buy that much oil from Iraq, the mere fact that we can will make a big difference. The western oil companies have always been on the ground from the 1920-30s, but by choice they did not pump the Iraqi oil first was due to the depression, secondly for the very obvious reason of not to disrupt the world oil prices. Later on, we never really needed their oil.

I admired the big picture thinking the administration had by looking at the global scale of things and planned their moves many steps ahead, then carry out the plan step by step, it all started at 9/11. It is just my humble point of view that it all has a lot of do with 9/11, it was wake up call for the nation, and even for me about some of my personal life and goals. President W and his team has the courage to take the fight to the evil source, knowing he has to take the heat. The team was ready to take care the problem from the root of the problem, they expected and knew the hits they will have to take and willing to take the hits. I frankly have no idea what are the next steps, but I bet you it is all well planned and they are determined to execute the plan.

Little guys like us don’t make an important move without planning many steps ahead, as Peter said about chess, or playing cards or business projects, smart people in the administration and their outside teams don’t go fight a war without planning the whole thing out for the next 10 years. The wild card could be as Peter said, what if the American people are not convinced and we have a change of party in 2004?

[MAC]

BTW, Peter, you have my respect for driving away from a confrontation with the his cellphone guy. Re-established my faith in the Hummer population. I thought I am the only peewee in a sea of bullies.