Rumblings & Rants: Saving money, Cutting brands, and what GM SHOULD do to survive

[cire_1wb]

"I agree with you that Saturn was a pointless venture. If GM found themselves to be uncompetitive with the Asian import brands in the '80s, it should have focused on fixing the problems within the scope of its existing brand structure. They could have committed themselves to building better products and improving customer relations without launching another brand to do it. What's even worse was that GM didn't stop with their misguided attempt to launch Saturn. They went on to purchase a financially troubled European company (Saab) and an off-road vehicle company (Hummer). If GM was struggling with building competitive products and retaining their customer base with their 6 core brands (Chevy, Pontiac, GMC, Olds, Buick, and Cadillac), then exactly how did they plan to do it by adding 3 more divisions? It's unfortunate that GM squandered the potential of Saab and Saturn, but it's even more pathetic that they squandered the potential of their 6 core brands prior to launching Saturn or acquiring Saab. If they would have properly taken care of their core brands in the first place, then launching Saturn or acquiring Saab wouldn't have been viewed as necessary by the corporation in the first place. GM definitely needs to do now what they have failed to do in the past: streamline/downsize their North American operations. Once they do this, then they need to focus on clearly defining the brands that remain after downsizing, creating coherent product strategies for these brands that reinforce their position and purpose in the market, ensuring that the products are competitive and exceed the customers' expectations, and improving customer relations and providing market leading customer service."

Oops! I almost forgot about Geo, the Asian import based small vehicle sub-brand of Chevrolet (which Toyota copied with Scion). GM could have saved quite a bit of money by labeling this venture as Saturn since both brands were aimed at targeting import buyers. Why launch an entirely separate division with a dedicated plant and dealer base when you could simply rebadge Asian imports and sell them under a sub-brand within Chevy dealerships? At least with Geo, GM only spent money on signage/advertising/badging (although these were really unnecessary expenditures also). It didn't require the large investment and commitment that Saturn did. Still, GM spent too much money, time, and effort trying to think "outside the box" instead of simply upgrading/improving/evolving what it was doing to recapture the consideration and loyalty of the buying public.

[goatgary]

Brilliant. Absolutely brilliant! Kill off the oldest existing GM brand with the highest customer loyalty, 2nd highest sales volume with a very large dealer network. Why didn't I think of that.

Of course the assumption is that all those customers would go to Chevy. Not. WE know that it is essentially a Chevy but many many buyers don't...and as efforts have grown to differentiate the sheet metal and interiors, less people see it as a rebadge. "Professional Grade" has been the theme now for 10 years...long enough for a large percentage of truck shoppers to believe it. The suggestion that Chevy and GMC buyers are "ever so slightly" different is an erroneous assumption. For the the most part, these people clearly see themselves a "cut above". For that reason, F150 is not on their radar either. No, these are either Tundra or Dodge converts if GMC were to disappear.
To many GMC buyers, the yellow bow tie is cheesy and a considerable step down.

So.......sell Saab and Hummer, continue to refresh the Chevy line-up, bring out the Volt, flesh out the Buick and Pontiac lineup with a car unique to each line and consistent with brand heritage, reinstate a new flagship for Cadillac and call it a day.

[dracleath]

Honestly, I really think that regardless of its problems Saturn is a better brand fit than pontiac for what GM needs to market heavilly to be successful. The main failing of Saturn is that they're unavailible for large swaths of the country due to lack of dealer coverage, and they require an entirely different sales channel.

What I believe they should do is this:

1. Sell Saab, Hummer.

2. Merge Saturn into BPG dealers.

3. Drop all rebadges from Pontiac and Saturn, aside from the. This might mean for a bit the Solstice and G8 would be the only Pontiac models, this is fine. Pontiac should be special, and not just thrown away on crap FWD models.

4. Bring in opels to fill in the blanks in the line ups.

5. MARKET THE CARS.

The final line up would be something like:

Saturn:

Astra
Insignia
Vue

Pontiac:
Solstice
G8 Grand Prix (Pontiac should start to phase in the old names to emphasise the end of the G5-g6 era)
Vibe

Buick:
Lacrosse
Lucerne (eventually should be replaced with a new chinese-style Park Avenue)
Enclave


GMC:
Canyon
Sierra
Acadia
Yukon

The overall marketing theme for the new dealership should be slightly more upscale than chevy, aiming at the volkswagon/mazda/etc segment.

Bingo, a full line of cars, with a distinct theme for each brand that are neither cannibalizing sales from each other nor so completely separate that they don't make sense on the same lot, and also which are distinct from chevy.

[nadepalma]

Originally Posted by stick076

Killing GMC just shows how dumb the people at GMI are. The brand is the second best selling brand at GM. It only sells trucks and a typical truck buyer is the most stubborn car buyer there is. It has basically 5 products (Savana isn't really a retail seller, more commerical) and sells over 500k vehicles. If GMC is gone, 500k sales are gone. Oh how we forget the past with Oldsmobile.

There is no need to kill GMC, Buick, or Pontiac. There does need to be an elimination of overlap from within the dealerships. Treat the entire dealership as one brand. Giving GMC the Acadia with the Enclave right there was not a good idea especially considering that Chevy didn't get anything.

With Escalade sales crashing, keeping Hummer around may not be a bad thing. It could keep Cadillac looking more like a performance luxury company by selling any of the trucks as a Hummer.

Saab makes money everywhere except the US. It should be a European brand that brings cars into the US like Audi, BMW, etc. If they stop worrying about what the typical US buyer wants, they will sell more cars.

Saturn is out there on its own and lost. Could Saturn and Saabs sell side by side? If Saturn were just Opels with a different badge there would be a nice GM dealership of truly European cars.

Chevy, Cadillac/Hummer, Buick/Pontiac/GMC, Saab/Saturn. That would make 4 "brands" instead of 8. This way there is a mainstream brand, a luxury brand, an uplevel brand, and a European brand. Work on eliminating overlap within brands but not between. Each brand would need to have a full lineup or close to it. This way there is no expensive brand elimination, customers are happy, and dealers are happy as they have a wider range of product with less vehicles.

I love your passion my friend and I hope that GM can figure out a way to make all its brands viable.

But my agrument against GMC wasn't because I hate the brand or anything like that. It's merely because that GM is in the situation its in and needs to let go of some of its brands to survive.

I know GMC is GM's 2nd best selling brand - but as I stated earlier, I dont know how much longer this will be the case. Yes, they build great products, but as people shift from trucks and SUVs to smaller passenger cars, GMC sales are likely to dive. This doesn't mean there will still be those who want to buy from the brand - but only that there wont be enough of them to justify GMCs existance when you have a Chevy division selling the same product.

And it will also mean that focus and investment will move from GMC and their lineup to Chevy, Buick, Pontiac, et al.

In a real way, GMC has done such a good job of being the "Professional Grade, Truck Division" it has essentially locked itself in the eyes of the public. There will never be a GMC "Sunfire" or a GMC "Impala" or any other passenger car - which means that in the eyes of the car buying public, its identity will always be associated with SUVs/Trucks/etc and that may not be the best place to be as gas prices continue to influence vehicle sales.

However, as I stated in the first post, I think that GM could save the GMC brand by focusing not on mass-market retails sales, but only selling medium duty trucks, etc.

It may not be the most elegant solution, but still think the idea has merit for GM to eliminate a retail brand, while also trading on the GMC nameplate for commerical/professional products.

Just my two cents...

[nadepalma]

Originally Posted by SierraGS

It amazes me how many GMI members do not understand GMC.

GMC contributes about $4,000,000,000 (billion) dollars in PROFIT to GM annually making it one of the most profitable brands GM has and on a profit to sales basis has to rival Cadillac and would not be surprised if GMC makes more money for GM than Cadillac does.

Why would you close your most profitable (per unit) volume brand that is your second best volume brand?

But this is GMC's current position. As the gas crunch and CAFE continue to squeeze GM, GMC will arguably count for less and less of GM's sales and may fall from the 2nd place position. What's more, GMC may be losing product in the near future anyway - which will assuredly affect their volume.

The fact is (as sad as it is) that CAFE and the continued shift from SUVs/trucks to passenger cars will make GMC less and less relevant as more money is pumped into GM's other passenger car divisions.

As I've stated elsewhere, GMC stands for SUVs/Trucks - and that's it. How do you convince people to consider a GMC when they are shifting away from such products in favor of more fuel efficient ones?

Originally Posted by SierraGS

You contradict yourself when you say it costs money to market "rebadged chevy trucks" then make a case to turn the Canyon into a Pontiac and spends millions to promote a vehicle GM now spends basically no marketing on,

No, it's not a contradiction, its a compromise. The good part about the Pontiac nameplate is that it isn't "locked into" an SUV/Truck image. Just like other mainstream brands, Pontiac could sell just about anything since it is a passenger car brand - unlike GMC. So if, AND ONLY IF, GMC were cancelled and what was left of BPG dealers started to moan and complain they didn't have a small pick up - the compromise would be to sell a small pick up under the Pontiac badge - just as they sell a sporty truck under the Nissan and Mazda nameplates (and VW will possibly sell one as well).

That's all it was - an idea of what could be done if necessary - not a directorate for the Canyon to move to Pontiac. On the contrary, if I were calling the shots, Pontiac would be teamed with Opel and Holden and would have a mix of RWD, FWD, and AWD products that would all be passenger cars and crossovers.

Originally Posted by SierraGS

then you say GMC should be a Medium/Heavy truck maker only obviously ignorant of the fact truck makers like Sterling spend money creating a line of "Sterling" pickups from Dodge Rams.

Actually I made this point in my post... the producdt is called the "Sterling Bullet" and it's essentially a Dodge Ram chasis that can be mated to a variety of products. But its only sold in heavy-duty guises. I've stated that GM could do this to compliment its move toward a Medium Duty/commerical division --- we agree on this.

Originally Posted by SierraGS

If GMC is a Medium/Heavy truck maker it is going to need GMC Canyon, Sierra, Savana, and Yukons to sell next to them for fleet sales to large customers for use by the customer's administrative and maintenance personnell - if you make a few thousand for them why not continue to sell hundreds of thousands to retail customers in Buick/Pontiac dealers?

Many of those fleet customers (outside of the medium/heavy duty ranks) can be serviced through Chevrolet's truck division, in my honest opinion. Those kinds of customers who purchase huge numbers of fleet products typically get serviced through GM corporate anyway (they have an entire division at GM Fleet that handles this) so it makes even less sense for them to sell them in a retail setting.

The difference in the end will be that as a Heavy/Medium duty/commercial only product, GMC will essentially become what is also claimes to be - Professional Grade - and GM will spend less on marketing/advertising and cut down the overlap. This saves GM money. Just like Freightliner, Sterling, and other truck brands, they will get marketed directly to those core commerical customers and not through expensive mass-market advetising campaigns. This itself is a savings and GM will reap bigger profits by shifting GMC's focus.

But again - this was only my opinion.

Originally Posted by SierraGS

You did redeem yourself with an excellent assessment of Buick, Pontiac and Saturn.

I'm glad we agree on someting at least my friend :-)

Originally Posted by SierraGS

Buick would start with a formal styled version of the Cruze...

I think we may see this sooner or later. GM has been hinting at a "Skylark" for GMC for some time. I think it may become a reality depending on how it is received by the press in China.

[nadepalma]

Originally Posted by FierySolstice

I loved this post! Finally, someone saying not to cut Pontiac! As a current Aura owner, I can pretty much say I would either go to next generation G6, I already had the current one, or the upcoming Lacrosse. I think cutting Saturn would be a good move. I also think selling Saab would be a good move as well. The dealer networks should be:
Chevy-Pontiac
Buick-Cadillac
If gas prices get better in the future then bring back GMC, but I don't see why they have two versions of trucks/SUVs at GM anyway. I love GMC's over Chevy, but if takes cutting them to save the entire company, then go for it.

Thanks, I'm glad you agree. I think that having more retail outlets would make Pontiac a better business case, but I'm sure others will disagree. Plus, if Pontiac would get even HALF of the $18 BILLION investment that Saturn has gotten since its inception, then Pontiac would be sitting pretty right about now.

GMC is a great brand - but like I've stated elsewhere, it would be far better for GM to not reinvent the wheel. I'd rather have a healthier GM than see the whole company sink to keep one or two divisions alive.

[nadepalma]

Originally Posted by Lichtronamo

Given that the CTS is already the size of a 5-Series, E-Class or A6, I think they could get away with putting the extended STS from China here as a replacement for both the STS and DTS (as the biggest issue with the current NA STS is that its too close in size to the CTS). Alpha, assuming the program doesn't get cut, then provides the 3-Series, C-Class, A4 competitor GM needs to align its product segments correctly. I would assume this could be accomplished relatively inexpensively.

Yeah, I would think so, but who knows what GM is thinking.

The STS/DTS being turned into a new DTS on a stretched Sigma platform seems like a no brainer. You reuse what you have and reskin the product for relatively little investment. And why not? Since it seems that Zeta Premium is on hold, why not take advantage of what is already available so you have a competitive product out there?

And if they wanted to make even more money and better serve BPG outlets, they could offere a cheaper version that could be marketed as the Lucerne's replacement. This would almost assure that the program is profitable and their investment can be spread out over two divisions.

But again - making common sense decisions like this may not appeal to GM for some God-awful reasons

[CadiEldo67]

Originally Posted by nadepalma

Thanks, I'm glad you agree. I think that having more retail outlets would make Pontiac a better business case, but I'm sure others will disagree. Plus, if Pontiac would get even HALF of the $18 BILLION investment that Saturn has gotten since its inception, then Pontiac would be sitting pretty right about now.

GMC is a great brand - but like I've stated elsewhere, it would be far better for GM to not reinvent the wheel. I'd rather have a healthier GM than see the whole company sink to keep one or two divisions alive.

Agree with the whole statement, but want to just focus on bold print. So I think that the Opel Insignia should be built in the US, as either a Pontiac or a Buick, actually it would make an excellent Lucerne. If Pontiac received the makeover that Saturn did, where would GM be today?

[nadepalma]

Originally Posted by RedVee8

IF GM was to kill Saturn, would they move Saab into the ex Saturn dealerships?
IF GM was to decide to increase the number of Saturn localities, could they not offer a Saturn franchise to Cadillac, Saab and Cadillac/Saab dealers rather than BPG dealers? Keep them in the 'nicer' end of town?
If GM move Saturn into BPG without any cuts, or at least immediate cuts, what would you choose between a G6, Aura & LaCrosse?
I think it is the models that need to be trimmed, rather than the brands per se.

That's an interesting idea as well - if Saturn is killed, could some of those locations carry the Saab brand?

Since GM seems hell bent on consolidating Saab with Caddy locations, it certainly is possilbe that we could see those two brands take over many of the Saturn locations.

Yes, if Saturn were consolidated with BPG, we definitely will have too much overlap - one brand would have to be killed...

[nadepalma]

Originally Posted by CadiEldo67

Agree with the whole statement, but want to just focus on bold print. So I think that the Opel Insignia should be built in the US, as either a Pontiac or a Buick, actually it would make an excellent Lucerne. If Pontiac received the makeover that Saturn did, where would GM be today?

Thanks!

I think the Insignia should be built in the US as well. If I had my way, and Saturn were eliminated, the Insignia would go to Pontiac as the new G6.

Let me explain:

GM has already announced that the Insignia will NOT be a direct replacement for the Aura, unfortunately. The Aura's update has been delayed. So this would have eliminated Saturn from getting the product anyway (even if I weren't to have killed Saturn).

Since the Insignia is based on the Epsilon II platform (so will the LaCrosse) and since they are both roughly the same size, I think that this means that Buick wouldn't be eligible to sell the Insignia either since it would mean two products are sold in the same segment for Buick (they did that with the Centry and the Regal - same size, similar layout, but one was cheaper than the other --- not a good idea).

The Lucerne is way too large for the Insignia to replace -- that product would be far too large and dont know if they could stretch the Insignia's width or length to accomodate it.

Which leaves -- Pontiac. It is the only choice for the Insignia in the US and would make an outstanding product. I'd love to see a chop with the Insignia and a Pontiac twin-port grille!

Any chop-magicians out there who can show that to us?

[nadepalma]

Originally Posted by Citation84

ACBarnett & nadeplama : My post wasn't to denigrate Saab in any way and I hope that no one took it in that fashion.

Not at all my friend. You are just passionate about the GMC nameplate. No worries.

Originally Posted by Citation84

And as far as I can tell, the handwriting is already on the wall for Saturn: No Outlook replacement planned when the next Gen comes out, Insignia is not the new Aura, the current one will continue till.....?????, Sky discontinued and losing $10,000 a unit, Astra planned as a stop gap, imported at a loss for 2 years, then what ? That leaves the VUE as Saturn's only real volume product. And it has never outsold the ION, except perhaps in 07. The Aura has been a sales disappointment regardless how one wants to parse the #s between fleet and retail. So has the Astra. It's simply over for Saturn.

I would think so, but others on GMI - and GM - may diagree.

To me, it makes no sense to continue to blow more money on Saturn. After $18 Billion in investment since the 1980s and a small bump in sales, it just isn't worth it to me.

But GM will do what the corporate masters will do - and that doens't mean their decision will have to make a whole lot of sense. If they made sense, then Saturn never would have been created to begin with - those dollars could have gone to shore up the other domestic brands.

Originally Posted by Citation84

GM squandered the potential of Saturn and Saab. But if the S Series was the best GM could do with a clean sheet of paper and it's best and brightest with a brand new plant.... well that's pretty scary. The money would have been better spent on it's core brands in the first place. For all the energy and good intentions poured into the experiment, all that they could come up with once again was "competitive" in it's class for a couple of years. What was the bloody point ?

Absolutely. I would have loved to have seen how well the S-Series would have sold as a replacement for the Cavalier instead of soldiering on with the same platform for 23 years -- wouldn't you?

Imagine where that money could have gone!?!

Stupid strategy and even dumber planning.

Originally Posted by Citation84

You made a good case to keep Pontiac, but the G3 is a perfect example of what's going to kill it. They won't learn.

Well, if we stick to the "traditional" idea of what Pontiac is, it will not help the brand.

But if we look to a new definition of "performance" I think it can work.

Consider that that products like the Mazda3, Mini Cooper, Fiat 500 and others are both small and sporty. The Mazda3 is a compact that is fun to drive and handles well. Both are essential "performance" credentials. The Mini Cooper and Fiat 500 are each sub-compacts (or perhaps even "super minis") that are equally fun to drive and sporty for what they are. Yes, they wont be confused with a BMW 1-Series, but still handle well and will put a smile on your face. Again, could be defined as sporty or even performance oriented.

When it comes to the G3, Pontiac could have an opportunity to do the same. What if we got a G3 that was fun to drive, handled well, got a spunky turbo engine and was designed well? Yeah, does it jive with Pontiacs traditional version of performance - but it may do well to compliment what the modern interpretation of performance that more and more customers are embracing.

But again, that's just me.

[Bravada]

Since the Insignia is based on the Epsilon II platform (so will the LaCrosse) and since they are both roughly the same size

There is over 10 cm difference in wheelbase, which is probably because the European Epsilon II is an evolution of the SWB Epsilon found in the previous Vectra sedan & GTS, while North American Epsilon II seems to be a revamped LWB Epsilon from the G6, Malibu Maxx, Aura and the new Malibu. Which basically means GM made sure those are NOT interchangeable. Boo!

[Citation84]

Nadepalma: The sporty compact for Pontiac sounds just like what the Astra is. You're on to something.

And yes, that money spent on Saturn instead having been spent on the 95 Cavalier would have made it a knock out. Apparently the Cavalier was used as a mule to test the Saturn 1.9 in the first place !! A picture over on Saturn fans shows a 1st Gen Cavalier and some Saturn engineers taken from sometime in the 80s

Cire_1wb : we are definitely on the same page.

None of my criticism of Saturn is intended to antagonize the fans [as I am one], but formed out of concern for GM's survival. They're not going to find black ink continuing to pour money into Saturn. I'd rather see any more money earmarked for Saturn spent on a Cruze based Skylark any day. Or a genuinely unique version of the Cruze built as a Pontiac.

But if they're not going to do anything more than rearrange the hash, let the Cruze stand alone with no derivatives for Saturn, Buick or Pontiac. Do it right or don't do it at all. Save the money and energy. Fold the VUE, Astra and Corsa into Pontiac. Full line for Pontiac at very little cost, lots of dealers, no direct overlap with Chevrolet or Buick.

BTW: Saturn can't be "sold" as it is simply a brand managed by GM now and not a wholly owned subsidiary with unique factories, design and tech depts, etc. Hummer and Saab could be as they are still essentially independent.

[Caleb02]

GM needs to rename Chevy to GMC as just about every other auto company has a full car line named after themselves:

Ford Motor Company: Ford
Chrysler Holdings LLC: Chrysler
Toyota Motors: Toyota
Hyndai/Kia: Hyndai and Kia (they got 2)
VW: VW
Porsche: Porsche
Fiat: Fiat
Nissan: Nissan
Renault: Renault

So as you can see there are 99% of car companies have a full line named after them. So why doent GM just merge GMC and Chevy into GMC and call it GM and then the clouds will part, Wagner will run for President of USA and win. This is real simple i dont know why people have not thought about this before.

The other thing i would stop doing is to build cars where the only differences are the front and rear ends. If you placed the 2 last generations f-bodies side by side and looked at the side profile one could not tell them apart as they are 99% the same. Granted the Camaro 4th gen had a mirror bump out if you will. other then that its the same thing, even the inside was exactly the same expect for the logos. I say GM only really needs the new GM division and Buick and Caddy. Thats it sell, shut down the reset. I would also close the european and other divisions and replace them with the American divisions.

I would also outsource to China all the makings of GM products as labor is far less expansive their and they want to make cars for americans so its a good fit. Then GM can declair bankruptcy and dump the pensions onto the governement and let them deal with it. Same for ford and chrysler.

[Dr. Show-Me]

As a car enthusiast who does not dwell on what brands should be eliminated, and especially in light of the probable lawsuits from such closings, what would be wrong with having 3 groups - Cadillac, Chevrolet, and Pontiac, Buick, GMC and Saturn - and giving the other brands to each dealer that doesn't have them all? For example, if you're a Pontiac dealer, they give you a Buick, GMC and Saturn dealership as well. A Saturn dealer is given Pontiac, Buick and GMC if they don't already have one. That way, they'd each have product that they would sell, and order according to their marketing decisions. Then, if a brand was falling out of favor, the dealers would still have the others. More choices at more stores should help the consumer and help the dealer to sell more, while greatly reducing the likelihood of lawsuits. Chevy and Cadillac would be the other channels. It would seem to benefit all. What would be wrong with such an approach?