By Adam Lass
Back around 1940 or so, the American army needed a smallish, versatile, truck-like vehicle to replace trucks – and mules – on and around the battlefield.Seemed like a simple enough idea at the time, and the original Jeep was a simple enough vehicle that served with distinction in most every theatre of WWII and the various “police actions” that followed.

Returning vets sought out their beloved Jeeps on the surplus market for utility use on the home front. Eventually, car execs got wise, and an entire new automotive category was born: the sport utility vehicle.We Need 1,500 Volunteers to Test Our 92%-Accurate “Wall Street Lie Detector”…

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Mine’s Bigger
Come 1979, the folks at the Pentagon began to get a real “size” complex. An average guy in Dubuque could drive to his favorite fishing hole in a Ford, GM, Cherokee or Toyota that was considerably more powerful and sophisticated than the now primitive, “limited” army Jeep.

So the generals put out a request for the biggest darn automotive manhood-enhancement they could manage. At first, Lamborghini took a stab at it with their “Cheetah” concept vehicle. Oddly enough, Lambo’s rear-engine Cheetah was underpowered and handled terribly.

In the end, AM General, the modern descendent of the old Willys Jeep Co., came through with a 6,000lb, 15’ long monster of mobility, designated the High Mobility Multi-Purpose Wheeled Vehicle (HMMWV) or “Humvee.”
The Army liked what it saw, and in 1985, they ordered up some 55,000 HMMWVs for deployment around the world. The Humvee eventually went into battle in the U.S.’s odd little invasion of Panama in 1989.

What Was Down…
Ah, but what goes around, comes around. By 1990, Americans weren’t simply driving SUVs on hunting trips anymore. With gasoline prices running at decadal lows, American families were deploying ever-more swollen 4x4 behemoths on the home front as well. In a veritable highway arms race, soccer moms everywhere insisted that the only way to remain safe on the road was to drive something bigger than the guy next to you.

Desert Storm was our first real-time televised war. When the folks back home got a good look at Humvees racing across the plains of Kuwait, they just knew what the next escalation had to be.

In 1992, AM General began selling a civilian version of Humvee under the brand name “Hummer.” And in 1998, AM General sold the brand name to General Motors.

....Must Come Up
It seems that GM had a problem: It simply could not make money off small cars. So rather than even try, it went whole hog pitching a behemoth (or two) in every driveway. (Certainly not in every garage – there was no way you could fit one Hummer, let alone two, inside any American garage.)

GM didn’t just sell Hummers, mind you. As emblematic as the marque might be, it shared space (in as much as these monsters can share space anywhere) on GM lots with Suburbans, Jimmies, and even 4-wheel drive Cadillacs. This trick actually worked – for a while anyway. When GM first took on Hummer, GM shares were trading for around $32. By 2000, shares had nearly tripled to some $95 bucks. Unfortunately for GM, that was as good as it would ever get. The 2000 crash precipitated a series of plunges that would eventually see GM cut to, well, nothing really.

China Buys the Myth
Which brings us to the present, and hopefully, the point.GM (or what’s left of it, anyway) is finally about to peddle off the Hummer franchise to China’s Sichuan Tengzhong, a smallish, provincial, heavy industrial machinery player with dreams of grandeur.Now granted, China does still have considerable areas where a two-wheel drive car might have difficulties getting about. But I suspect that it is that same “manhood-enhancement” that so attracted the Pentagon, and millions of commuting American dads in the first place, that has caught their eye in China.

The Road to Excess…
Sadly, the road the Chinese are embarking on is already well mapped. When GM bought Hummer, gas at the American pump was hanging out around $1. By the time GM shares peaked in 2000, it had increased 75% to $1.75 per gallon. And in 2006, when GM fell under $20 for the first time in over 20 years, gas was over $3 and headed for $4 bucks a gallon.
Between 1990 and 2010, China increased the number of personally owned vehicles some 90 times, leaving China the world’s second largest consumer of oil. Car ownership is growing some 19% a year. Over the next 10 years, China’s thirst for oil is expected to increase 150%.

China’s internal resources can’t fill this need for speed any more than Pennsylvania and Texas oil wells could satisfy us here in the States.

… And the Cost of Success
In the ‘70s and ‘80s, China actually exported oil into the world market. But by 1993, China became a net importer, and currently brings in some 32% of supply from overseas.

And despite their best efforts to secure supplies from Kazahkstan, Russia, Venezuela, Sudan, Iran and other such friendly, stable and cooperative places, China currently gets more than 58% of its oil imports from the same old guys in the Middle East the rest of us have to suck up to. By 2015, that figure will be more like 70%.

Of course, none of these estimates include a burgeoning national obsession with grotesquely large vehicles. Question one: Can China survive “The Hummer Syndrome”? Question two: Will the rest of us?
(Courtesy: Taipan Daily, Adam Lass is Senior Editor, WaveStrength Options Weekly)