GM's Busted Global Alliances

[nadepalma]

Source: http://www.thecarconnection.com/Auto...173.A9415.html

TCConfidential: GM's Busted Alliances



News Wednesday that GM is selling its 20-percent stake in Fuji Heavy Industry to Toyota stirred speculation that GM may look to sell off its other minority interests to raise more cash. GM also owns pieces of Isuzu and Suzuki. Those alliances and stakes, though, have been paying off in more concrete terms for GM, which gets an important supply of diesel engines from Isuzu and small cars and engines from Suzuki.

Still, one can't deny that the alliance strategy of GM's has been a little spotty. Despite the diesel engines from Isuzu, let's not forget that GM once owned 49 percent of the company, but now owns just 12 percent after writing down most of its investment. It's investment in Fiat turned into a fiasco, with a write-down of $1.37 billion of the investment just three years after the deal was done, followed by a payoff to the Italian automaker of $2 billion just to be rid of the alliance.

Suzuki and the purchase of assets of Daewoo has worked a bit better for GM. Suzuki, for one thing, is profitable every year, so that has protected GM's investment.

The deal with FHI's Subaru looked promising when it was struck. But GM could never persuade FHI to adapt engineering of a vehicle to GM's systems. The vehicle that is now the Subaru B9 Tribeca was originally conceived as a joint project between GM and FHI in which the vehicle would be co-developed and built at both Subaru's plant as well as a GM plant and provide a high-volume vehicle for Chevy, Saturn, or both. Subaru, though, would not come off its boxer engine architecture, which GM said was too costly for it to add to one of its factories.

Busted alliances with Subaru and Fiat. Isuzu, a long-term financial drain. And Suzuki-Daewoo the pearl of the strategy. When the Chevy Aveo, a product of that alliance, is the pearl of any strategy, it's a pretty good indicator that the strategy was deeply flawed all along. -Jim Burt

[saturnsteve]

Good, I say get rid of them! Isuzu is a complete joke, two vehicles(rebadges at that!),

[Ramair-WS6]

I am not so sure that GM should get rid of Isuzu, they engineer and build a very strong line of diesel engines. In the coming years GM is going to need diesel options for some of their smaller cars and Isuzu is in a better position to engieer them than is GMNA.

[GM-10]

Originally Posted by nadepalma

Source: http://www.thecarconnection.com/Auto...173.A9415.html

TCConfidential: GM's Busted Alliances


When the Chevy Aveo, a product of that alliance, is the pearl of any strategy, it's a pretty good indicator that the strategy was deeply flawed all along. -Jim Burt

Is that a logical statement with a real argument behind it?

Or is it the usual poorly thought out CRAP that the American press is so famous for?

[mbukukanyau]

Originally Posted by saturnsteve

Good, I say get rid of them! Isuzu is a complete joke, two vehicles(rebadges at that!),

A small world view, one country focus. Isuzu is huge internationally.. Its got a big heavy truck business. Isuzu was never really a car company...
Made pick up trucks and the likes...
Think of GMC without the Chevy SUV's combined with Freightliner...

GM would be foolish to get rid of isuzu..
They are big in diesel engines too.. rivalling Cummins Volvo and Caterpillar....

[Jay]

Originally Posted by GM-10

Is that a logical statement with a real argument behind it?

Or is it the usual poorly thought out CRAP that the American press is so famous for?

I hate the Aveo but it would be hard to deny the car has been a success. I can't see this alliance ending in the near term. GM truly has a benefit in the Suzuki-Isuzu deal for now--they get to sell hot-selling Japanese cars badged as Chevies for very little cost and they get the possibility of diesel engines from Isuzu. There never really was a realized benefit from the Suburu or Fiat deals.

[Cortazzo]

GM was right to dump subaru, they really got very little from the alliance. Suzuki they need because many chevy's are rebadged suzukis in canada, and they sell very well from what i gather. Isuzu maybe be doing poorly in this country, but their prospects in asia are much stronger i believe.

[kenman923]

Originally Posted by saturnsteve

Good, I say get rid of them! Isuzu is a complete joke, two vehicles(rebadges at that!),

I am surprised they don't deep six Isuzu now.

[DirtyMoney]

Originally Posted by saturnsteve

Good, I say get rid of them! Isuzu is a complete joke, two vehicles(rebadges at that!),

Theyt have a hand in architecture and i believe transmissions, as well as engines. Maybe there own vehicles don't sale much, but their R&D is valuable.

[mplin]

Originally Posted by kenman923

I am surprised they don't deep six Isuzu now.

If they did that, then say goodbye to the DuraMax and some of Chevy's and GMC's commerical trucks. I think everyone is so caught up on how poor Isuzu passenger car sales are in the US. They actually do well in other parts of the world and their commerical trucks do well in the US. Isuzu has more going on then most people think. I think it would be a big mistake for GM to dump Isuzu.

[dindak]

Suzuki and GM have a very strong alliance and it's profitable for both. GM will not exit from it, it's a good fit. Not sure about Isuzu.

[nadepalma]

Originally Posted by GM-10

Is that a logical statement with a real argument behind it?

Or is it the usual poorly thought out CRAP that the American press is so famous for?

It is complete crap and more of the same stuff I've expected from most journalists now a days. But honestly, if he's going to put down the Aveo cause it's part of the "Daewoo-Suzuki Strategy" pearl he mentions -- ignoring the fact that this is actually the best selling car in it's segment -- then you could almost point to any other not-so-successful car and blame the alliance partner to question their strategy. The new Nissan Quest has been far from a good seller and lots of people complain that it looks odd inside and out with way too much French influence. Does this mean that Nissan's alliance with Renault is massively flawed and that this "pearl" of their alliance speaks volumes about how bad their strategy is?

As a side point, if this is only one example, then why don't they criticize the Suzuki Verona, Reno and Forenza -- these are all GMDAT sourced products as well, aren't they? So if the Aveo is crap, then they all must be as well, right? Why haven't we read in the press putting down Suzuki the way they put down GM?

[Achelous]

The Duramax is made by DMAX, a company that at one point was a joint venture between Isuzu and GM, but that is now 100% owned by GM, including the rights to the designs and the factory that produces them.

[DuSpinnst]

Izuzu will be next, they only own slightly less than 9% of them. I think GM should outright but GMDAT and increase it's shares in Susuki.

[asim]

Well I can see why that GM would want to sell Subaru, GM only had the 9-2x and the Tribeca platform to deal with. They see that the Lambda will take place of that. I am pretty sure that GM won't sell off Suzuki since much of their lineup are GM Daewoos. Isuzu would go, despite of that Isuzu commercial trucks are completely dominative, but no one would miss if Isuzu consumer goes away.