Jerry Flint: GM's Plan To Save Pontiac And Buick

[nadepalma]

Source: http://www.forbes.com/home/columnist...0531flint.html

GM's Plan To Save Pontiac And Buick
Jerry Flint, 05.31.05, 11:07 AM ET

General Motors' new strategy for its six vehicle lines sandwiched between Chevrolet and Cadillac makes sense: narrowly focused lineups and fewer copycat models in each division. In some ways, this is already taking place. For example, U.S. Pontiac dealers are not getting a new small car to replace the Sunfire, nor am I aware of a big sedan in the works to replace the Bonneville when it is discontinued.

In truth, four of those six General Motors (nyse: GM - news - people ) divisions are no problem--if GM can use some common sense. Hummer is fine as Hummer. Of course, GM must realize that Hummers are for he-men. So it must stop doing dumb things, such as putting a weak five-cylinder engine in the new H3. And Hummer still needs a smaller, lower-priced model to take on the Jeep Wrangler.

Saturn has been starved for product all its life, but Vice Chairman Robert Lutz has some good cars coming to that division. Saab is too small to worry about. And GMC is trucks, plain and simple. GM's big problems: Pontiac and Buick.

Pontiac and Buick can be saved, but I'm not enthusiastic about one part of GM's new plan, which is to combine Pontiac, Buick and GMC dealerships. Even with smaller lineups, the dealers end up with too many models to display and stock. Another concern: The customers for such dealerships cover too broad a demographic range.

Next, GM can't avoid building different vehicles from common underbodies, but this shouldn't mean badge engineering. The trick is to give each vehicle a distinct identity while holding down costs with a common platform. GM once knew how to do this. It's what made it the great automaker that it was.

Last year, Pontiac sold 474,000 vehicles, and lots of other auto companies would love to have that volume. But in its best year ever, 1986, Pontiac moved 952,943 units.

When Pontiac was in trouble in the 1950s, Semon 'Bunkie' Knudsen took over the division and saved it. He built high performance cars, such as the first Bonneville, and took Pontiac racing to make the point. Pontiac became a winner. A quarter century later, Pontiac was in trouble again, but Bill Hoglund took over the division and brought it back to life. He figured out that Pontiac should be a "driver's car," meaning driving excitement. Again it worked. And in between Knudsen and Hoglund's reigns, there was John Delorean, who built the first GTO.

It's clear what Pontiac should be: a division that offers affordable performance and handling to a young, striving crowd. A recent Pontiac TV ad has a woman soothing a crying baby with the sound of a Pontiac engine. When Pontiac was a winner, the motto was: "We build excitement," not: "We put babies to sleep."

Let's say it another way: Pontiac's mission is to build a cheap BMW. Even the finance guys should be able to understand that sentence. To reach that goal, Pontiac needs a leader who knows cars and how to make them fast and muscular. I know one man at GM who could do it: Mark Reuss, who currently heads the GM performance group.

Second, they must give Reuss the proper rank: GM vice president and general manager of Pontiac. He needs that clout to ensure that the division gets the right platforms and powertrains and to muster the troops so that new vehicles are launched on time.

The Pontiac Solstice roadster, coming this fall, is a start in the right direction. The new GTO, a project pushed by GM product czar Robert Lutz, is off to a slow start, but it was the best he could do in a short amount of time. The GTO needs some looks and a lower price. Unfortunately, GM just canceled the rear-drive platform that would have gone into a new U.S.-built GTO. So it will be a tough job, but Reuss is the man to do it.

Pontiac also needs a rear-wheel-drive sedan and it needs upgrades for the dated engines and transmissions in its current models. The lineup should also include a sporty minivan and a racy crossover SUV.

What about Buick? Last year, Buick sold 310,000 vehicles. I don't have an executive in mind to head Buick, but it, too, needs to be headed by someone (a vice president, so he has some power) who understands and loves the auto business. That person should look into Buick's long history, to the time when it was a flashy, powerful, comfortable, soft-riding car for a successful, older person. I think there's still a market for such a car today--if it is done right.

Buick needs modern rear-wheel-drive and all-wheel-drive vehicles. It needs a state-of-the-art crossover wagon, and modern V-6s and V-8s throughout its lineup. Value, too, has to enter into the Buick equation. Consumers need a compelling reason to purchase a Buick over a Toyota (nyse: TM - news - people ), Lexus or Acura.

Long term, Buick and Pontiac should have exclusive dealerships. I say, get the product right and the excusive dealers will come.

[dav305z]

I like the Mark Ruess idea. Right now Pontiac has a total marketing guy heading up the division.

[chad4835]

I agree with you on the good news of trying to save Buick and Pontiac and make them more focussed. I am also confused by the merging of Buick GMC and Pontiac dealers. Especially Pontiac since they should appeal to a younger buyer. We have a local Buick GMC dealer and it is a good fit. Upscale cars and trucks are fine, but I am not sure where Pontiac fits. I found the sales figures interesting and alarming considering Toyota sells over 400,000 Camry's annually.

[iluvcamaros]

Where I live we have a Pontiac-Buick-GMC Dealer, which to me seems more like a Pontiac-GMC Dealer which sells Buicks on the side. They have 1 LaCrosse and a few Rainers and Rendevous, but mostly Envoys, Yukons, and Sierras. But not too far down from them is a very awkward Chevrolet-Cadillac Dealer. Its very funny to see a 17,000 Cobalt sitting beside a 40,000 CTS. Not to mention an XLR taking up the tiny showroom with its dead battery which means halfway climbing into the car to use the manual door release in the floorboard. Lumping brands into one dealership can be good, or bad.

[mkaresh]

The reason for putting three brands into one set of dealers is that this way dealer pressure won't lead to each brand getting one of everything. It's easier for GM to combine dealers than for it to resist dealers' requests for full line-ups.

Another justification: this way dealers will be less dependent on a single brand. It's quite possible that when one brand is doing well, the other won't be. This will even things out.

GM won't be creating any new VPs of Pontiac and Buick. It went through a lot of pain to eliminate divisions, and they're not about to create them all over again. Fact is, there hasn't been a Pontiac division for a few years now.

[saturnsteve]

I do not want to see either brand killed myself, so I hope they know what they are doing.

[atomicshark]

I can't help thinking that by combining Pontiac, Buick and GMC under one common roof that it would make it easier for GM to pull the plug on the weaker division if it comes down to it.

[jckjds]

I like some of the author's ideas, except that he says Pontiac needs a minivan and both Pontiac and Buick need crossover SUV's.

Pontiac's entire lineup should consist of Solstice, a Kappa-based 2+2 compact car (see BMW 3 series) with a possible hatch, and a 2+2 or 5 passenger mid-size (GTO) with the BMW 5 series as a benchmark. They should all be RWD. Pontiac does not need SUV's or vans, maybe a couple of hatches instead.

Buick's entire lineup should be LaCrosse (with shorter overhangs--esp front-- and all OHC engines--2.8 and 3.6), Lucerne (see previous comments), and an upscale van (which could be dropped in favor of a Lambda 7 passenger crossover if Saturn provides the upsacale minivan). Send the Velite to Saturn.

Throw in GMC trucks and SUV's, and you have a complete lineup with 6 cars/van and several trucks/suv's.

If the point is to make fewer cars so that the cars that GM does make are better, then this is the ticket. Pontiac would be RWD performance--no large cars needed, and Buick would be FWD luxury--no small cars needed. That leaves Caddy to cover the top end and Chevy to cover the entry-priced stuff. Of course, Saab, Saturn, and Hummer are pure overlap, but specialty brands.

To further reduce costs, it would seem that Pontiac and Holden could collaborate in engineering the small and midsize RWD cars (Torrana, next-gen Monaro, etc.)

[Jay]

So, let me get this straight...

Pontiac is to build a "cheap BMW fighter" but GM has cut the rear-drive platform?

Buick is also to build a competitor to Lexus and Acura (aren't these Cadillac competitors?) but GM has cut the rear-drive platform and Buick has no plans for producing a small, sporty sedan, a coupe, or offering a manual transmission?!? Instead they re-badge a Chevy Trailblazer and a Venture minivan?! Good luck selling that one.

Saab still serves no purpose.

GMC still rebadges Chevies.

This is a joke! Either get serious or kill them off.

I say end the agony now and save everyone a lot of dissappointment. GM only needs to be Chevrolet (bread-and-butter, full range of cars), Saturn (quirky, slightly edgy, euro-style division with a few sporty models), Cadillac, and Hummer (still a popular one for now).

BTW, I'm in favour of making Saturn the sporty, Euro-flavoured division over Saab for the simple reason that Saturn is already far more popular, has a more loyal consumer-base, and already has a more extensive dealer network.

A slimmer, trimmer, more efficient GM will better compete with the likes of Toyota and Honda. Because, let's be honest, the Japanese are doing cars a lot better than GM right now and ook at their simple structure.

[powervette]

saving Pontiac and Buick is the only right way,there are so many brands in the world that build much worse cars and nobody wants to axe them (Seat for ex.)

[TCBNJ]

Originally Posted by jckjds

I like some of the author's ideas, except that he says Pontiac needs a minivan and both Pontiac and Buick need crossover SUV's.

Pontiac's entire lineup should consist of Solstice, a Kappa-based 2+2 compact car (see BMW 3 series) with a possible hatch, and a 2+2 or 5 passenger mid-size (GTO) with the BMW 5 series as a benchmark. They should all be RWD. Pontiac does not need SUV's or vans, maybe a couple of hatches instead.

Buick's entire lineup should be LaCrosse (with shorter overhangs--esp front-- and all OHC engines--2.8 and 3.6), Lucerne (see previous comments), and an upscale van (which could be dropped in favor of a Lambda 7 passenger crossover if Saturn provides the upsacale minivan). Send the Velite to Saturn.

Throw in GMC trucks and SUV's, and you have a complete lineup with 6 cars/van and several trucks/suv's.

If the point is to make fewer cars so that the cars that GM does make are better, then this is the ticket. Pontiac would be RWD performance--no large cars needed, and Buick would be FWD luxury--no small cars needed. That leaves Caddy to cover the top end and Chevy to cover the entry-priced stuff. Of course, Saab, Saturn, and Hummer are pure overlap, but specialty brands.

To further reduce costs, it would seem that Pontiac and Holden could collaborate in engineering the small and midsize RWD cars (Torrana, next-gen Monaro, etc.)

This post is dead on. As the current owner of a 05 GTO (replacing a BMW 3 series) as well as a 95 Firebird Formula convertible (and the prior owner of two 60's Goats), IMHO this prescription fits the needs of Pontiac in the 21st century. To continue otherwise is delaying the inevitable.

[cfch3399]

Originally Posted by dav305z

I like the Mark Ruess idea. Right now Pontiac has a total marketing guy heading up the division.

And therein lies the problem. As long as marketers, lawyers, businesscrooks, and accountants are running things at GM, there is no reason to expect major improvements.
Overall a good article, except for the idea that Pontiac's "lineup should also include a sporty minivan and a racy crossover SUV." That's the last thing that Pontiac needs.

[fatratchevy]

Originally Posted by Jay

So, let me get this straight...

Pontiac is to build a "cheap BMW fighter" but GM has cut the rear-drive platform?

Buick is also to build a competitor to Lexus and Acura (aren't these Cadillac competitors?) but GM has cut the rear-drive platform and Buick has no plans for producing a small, sporty sedan, a coupe, or offering a manual transmission?!? Instead they re-badge a Chevy Trailblazer and a Venture minivan?! Good luck selling that one.

Saab still serves no purpose.

GMC still rebadges Chevies.

This is a joke! Either get serious or kill them off.

I say end the agony now and save everyone a lot of dissappointment. GM only needs to be Chevrolet (bread-and-butter, full range of cars), Saturn (quirky, slightly edgy, euro-style division with a few sporty models), Cadillac, and Hummer (still a popular one for now).

BTW, I'm in favour of making Saturn the sporty, Euro-flavoured division over Saab for the simple reason that Saturn is already far more popular, has a more loyal consumer-base, and already has a more extensive dealer network.

A slimmer, trimmer, more efficient GM will better compete with the likes of Toyota and Honda. Because, let's be honest, the Japanese are doing cars a lot better than GM right now and ook at their simple structure.

Whoa there killer. . .Killing Pontiac, GMC, and Buick is not the answer, though Saab I could be persuaded to axe.

Pontiac is needed for upscale American muscle, there just needs to be a real effort on GM's part to actually deliver on the "excitement" for that division. BMW should be it's goal. . .

GMC is needed for upscale Trucks, with more power, features, and options. These are the trucks that truck owners will want to buy when they get older/wealthier and still want a truck, just more luxury to boot. I, for one, am all for GMC going upscale. . .

Buick is needed for upscale, FWD/AWD cars for those wanting more luxury than Chevrolet, but cant afford a Cadillac. Buick, along with Cadillac, need to aim for the Infinity, Lexus, MB, and BMW buyers. The progression should be Chevrolet, Pontiac/Buick, then Cadillac through the life cycle of a car buyer (monetarily speaking, not age).

Anyhow, I don't want to GM to axe another division, Olds was hard enough to see go (for the name, not the products). Please GM, don't take another division with so much history. . . give them the products needed to make them successful, please. . .

[Snafu_SS]

I agree as well TCBNJ and FATRATCHEVY.

but i wish that pontiac, and buick could get movin and start gettin that new image out there....GMC already has a whole new line up of trucks comin, i mean everything pretty much will be brand new soon, so come on, lets get movin before GM is killin one of you two off like olds!!

[desmo9]

Originally Posted by iluvcamaros

Where I live we have a Pontiac-Buick-GMC Dealer, which to me seems more like a Pontiac-GMC Dealer which sells Buicks on the side. They have 1 LaCrosse and a few Rainers and Rendevous, but mostly Envoys, Yukons, and Sierras. But not too far down from them is a very awkward Chevrolet-Cadillac Dealer. Its very funny to see a 17,000 Cobalt sitting beside a 40,000 CTS. Not to mention an XLR taking up the tiny showroom with its dead battery which means halfway climbing into the car to use the manual door release in the floorboard. Lumping brands into one dealership can be good, or bad.

As crazy as it seems to line up a Cobalt next to a CTS, it's even whackier to park an Aveo next to a Vette. Nevertheless, I'd agree that Chevy and Cadillac showrooms should not be shared.