Analysts: Streamlining GM isn't enough; "Deflecting Attention"

[Ming]

Analysts: Streamlining GM isn't enough
Sat, May. 21, 2005
BY DEE-ANN DURBIN
Associated Press



DETROIT — General Motors Corp.'s plan to streamline offerings from its eight brands won't be easy and is only part of what the automaker needs to do to turn itself around, some industry analysts said Friday.

Mark LaNeve, GM's North American sales and marketing chief, said in a speech Thursday that GM wants Cadillac and Chevrolet to be its only brands with a full lineup of vehicles. The company's other brands — Buick, GMC, Pontiac, Hummer, Saturn and Saab — should have limited offerings that fit within their distinct brand identity.

"I'd rather have four great Pontiacs that are really distinct and stand for athletic design and performance, than seven or eight capable but indistinguishable Pontiacs that fail to fully deliver on the brand's promise," LaNeve told a meeting of the International Motor Press Association in New York.

LaNeve reiterated that GM plans to keep its full lineup of brands. Earlier this spring, GM Vice Chairman Bob Lutz suggested the automaker could phase out some of its "undernourished" brands, such as Pontiac and Buick.

"Far from being a liability, we believe GM's eight brands constitute one of our greatest assets, giving us market coverage no other carmaker can touch," LaNeve said.

LaNeve said GM has successfully established Hummer as "a daring, go-anywhere brand," while GMC is a leader in trucks. Buick needs to be the company's affordable, near-luxury brand, while Saturn will double its vehicle portfolio over the next few years to capitalize on its customer-friendly image.

Art Spinella, an automotive analyst with Oregon-based CNW Marketing Research, said GM has talked for years about streamlining brands, and it has already taken steps like removing the Bonneville sedan from the sporty Pontiac lineup.

"We've heard this story before. Quite honestly, I'm not sure that anybody internally has the fortitude or the weight to actually do it," Spinella said.

Spinella said GM needs to make sure everyone at the company is working toward GM's goal. For example, Toyota Motor Corp. has a huge staff visiting dealers to make sure the company's messages get out. GM isn't matching that effort, he said.

LaNeve addressed that criticism, saying GM dealers haven't been competitive in the look and location of their facilities. But he said dealers are trying to change that.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, agreed that GM's product plans aren't new but said the company may be trying to accelerate them.

"Everyone is paying more attention to it with the current travails of GM, but this stuff has been in the pipeline for a long time," Cole said.

Cole suspects GM is focusing on the product plans to deflect attention from more difficult issues, including negotiations with the United Auto Workers over health care costs and declining U.S. sales and market share.

Article Source: http://www.twincities.com/mld/twinci...s/11700976.htm

[GMfan2381]

I honestly dont think anything will be enough for Journalists. This is a good idea and even if it has been in the works its starting to show itself. Im glad GM is cutting out unnessary models from its lines. Negotiations with the UAW are important as is stemming the market share slide. But this is all tied into having a desirable product. And this will free up much needed money to help bring these products to market.

[hudson32]

I think a lot of those in the media haven't a clue in resolving GM's problems. Over the past few years, models have been axed, Oldsmobile has been cut. The results haven't been promising. I think that the amount of models or divisions wasn't the problem, the mediocrity of the cars of the 1990's was, though. I think GM did coast through with products that gave the impression of "not as good as it could be". Right now, GM produces some very competent automobiles, but perceptions always lag with reality. A lot of people I talk to remembers Buick for the Century, Chevrolet for the Cavalier, and Saturn for the SL1 & SL2 cars. A lot of them don't even know how high GM is doing in terms of vehicle quality. A lot of them come to quick conclusions about GM without actually examining the vehicles. I think a good range of product offerings is a strength to GM. One couldn't have said this a few years ago, but I think better marketing needs to take place to inform consumers how good the cars are in reality.

[dwnhllskiier815]

So this article says Buick will be near-lux, but Lutz says head-on against Lexus? It sounds like those plans may have changed...

[AdmiralViscen]

I think Lutz meant that Buick would pursue the concept of Lexus, not necessarily go head-on with Lexus. That means smooth, reliable, and quiet.

[Ming]

Originally Posted by hudson32

I think a lot of those in the media haven't a clue in resolving GM's problems. Over the past few years, models have been axed, Oldsmobile has been cut.

But its interesting to note that not every Oldsmobile cut actually disappeared, but some spawned a spinoff car / truck in another brand that wasn't there before -- thus those cars didn't really disappear. And new models came along where there was none before. Is GM really ready for a net loss in total vehicles offered? We'll see.

Silhouette ---> Terraza
Bravada ----> Rainier

New:

Relay
HHR
SSR

etc.

[SSrevolution]

The journalists have no idea. This might have been a well written article, but I think that journalists have proved in the past few months that they have no idea what the hell is going on. We know more than these people do.

[tgagneguam]

Originally Posted by hudson32

I think a lot of those in the media haven't a clue in resolving GM's problems...

I agree. To misquote a saying: those who can't, analyze. I wonder how these people would do if they were actually in charge rather than just reflecting in hindsight on the travails of corporations. It's why I question the usefulness of these positions. While lots of GMIer's offer a variety of suggestions regarding the General (some good, some not so much), we also aren't heavily compensated for our comments, either.

[Dutchman]

Bring back Oldsmobile and stop imitating the japanese imitators! Be proud on your heritage! It worked for Harley!!!!!!

[espo19047]

Deflecting Attention first.
Then deflect perception and GM will be on its way.
IS ANYTHING GOOD ENOUGH FOR THESE PEOPLE?

[rayce08]

the media write about whats allready happened , the GM head will dictate what actually happens , i think the ladder is more importent . shut up media please , were all tired of your doomsday propaganda . if you were so smart you would be making the right moves not reporting them .

[ragingfish]

Plain and simple.

Don't knock it til GM tries it! Maybe this WILL be the solution! Maybe it won't. But sometimes, you just gotta TRY something to know if it's the answer...

Screw the media. Now that the election's over, they gotta find something else to whine about...GM seems to have become the target.

[Parkwood60]

This is the right move. Period. For too many year GM management has been paying too much attention to thier dealers and to little attention to "the people", or the market. This is why Cadillac had the Cimmaron way back when, Caddy dealers complained that they wanted to have a full line. This is the reason that the Caprice was almost as fancy as a Buick. Sure, those models are ancient history, the dealers have changed, but I still see them slapping fake convertible tops on the CTS. Why did Buick need a minivan and a body on frame SUV? I suspect the dealers wanted them. As was previously posted, deleting Olds, and moving the Solstice and the Bravada to Buick didn't really gain them much. And then they give a clone to Saturn, and Saab as well? So what did they lose? A small car that was better than the Grand Am (Alero), and mid sized and full sized cars more advanced than what Buick and Pontiac have. Olds had the better V-6 and V-8 motors year ago.

Now is the time for the head office to tell the Dealers what the score is, the way it should be. Pontiac, you are going to be selling exciting, sport cars. Buick, you are going to make solid, quiet, traditional luxury cars, kinda like the Toyota Avalon...

Analysts: Just other people with opinions. Doesn't amount to anything.

[jmiller417]

Originally Posted by dwnhllskiier815

So this article says Buick will be near-lux, but Lutz says head-on against Lexus? It sounds like those plans may have changed...

All but the very top-end Lexuses are considered near-luxury, I believe, so I wouldn't worry about plans being changed.