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CNN LIVE AT DAYBREAK

Business Buzz: Hummer Time

Aired August 26, 2003 - 06:39   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL COSTELLO, CNN ANCHOR: Let's shift gears now and get a little business buzz. It's Hummer time at General Motors.
Carrie Lee is at the Nasdaq Marketsite with details.

What's this about -- Carrie?

CARRIE LEE, CNN FINANCIAL NEWS: Shifting gears literally, Carol. General Motors is offering dealership incentives on its remaining 2003 Hummer H2 models. This is according to "The Wall Street Journal."

Now, GM has a 91-day supply of the H2, and it wants to make room for the new models. GM tells "The Journal" that the incentives are not because of slow demand. Still, at the end of last year, GM had just a 13-day supply of H2s.

Now, this latest incentive comes as the Hummers are coming under attack from environmentalist groups for its gas-guzzling ways. Last Friday, a Hummer at a Chevrolet dealership in California was vandalized. About 50 cars, 50 Hummers, were either burned or spray painted with anti-gas-guzzling-type slogans.

And meanwhile, a Merrill Lynch strategist calculated last week that at current gasoline prices, filling up the gas tank of a Hummer H2 for a year could soon cost as much as two or three personal computers, Carol. So, not only are you dealing with about a $48,000 sticker price to start, some incentives now, but then also you have to pay for all of that gas. And, as you know, gas prices have been pretty high lately, too.

COSTELLO: Oh, yes. Very expensive. Hey...

LEE: And if you live in...

COSTELLO: Go ahead.

LEE: Oh, I was just going to say, and if you live in a city like New York, you know they're charging extra to park the thing as well, so...

COSTELLO: I don't even know how you could drive that thing in New York.

LEE: Yes, you see them once in a while.

COSTELLO: I mean, how do you turn the corner in business traffic with all of those taxicabs around you? LEE: Very difficult.

COSTELLO: A quick look at the futures.

LEE: Yes, futures look a little bit weak right now, after two days of selling. We have a couple of economic reports coming out. Durable goods orders coming before the market opens, and then we'll get a reading on consumer confidence, as well as new home sales a half an hour into the session. So, that could change things, Carol. But right now, looking a little bit weak for stocks.

COSTELLO: All right, thanks, Carrie.

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