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

[Lichtronamo]

It's also worth noting again that future products for GMC have been delayed/canned as well. This includes the Zeta based Denali concept and a Lambda based "Ridgeline".

This could be the start of moving GMC away from personal vehicles to professional grade. One of the advantages I see in Sterling selling rebadged Dodge trucks is that it makes for one-stop shopping for fleet manager with preferred vendors.

[Caleb02]

Originally Posted by 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?

that is not a good idea, all they need to do is not have cars that look the same. I would break up GM into seperate companies... Chevy Pontian and Saturn into one Company called Chevy Holdings. Chevy would be entry, Pontian Mid level like acura and Saturn would be like Audi. Then the next company would be Caddy Holding which would be Caddy to take on BMW, Buick would take on Mercedes, Saab to take on Volvo. GMC would be folded into Isuzu for a comeback. and then have gm fold all overseas ops that are not american names.

[SierraGS]

GM has to look at the brand issue from the "Bottom up" rather than "Top Down" and make some basic rules to form a "base" foundation.

A two (2) Brand / two (2) sales channel Chevrolet/Cadillac idea will never work and result in GM drifting off into the sunset and even Toyota is building up (4) brand (3) channel model with the addition of Scion and Subaru.

So the first question is "which 4 brands will make up the foundation of at least a three (3) channel philosophy"?

First two are easy
Chevrolet
Cadillac

The next two are easy also if reviewed from a global perspective.

Buick
GMC

Why?

1. GM needs an established "mid-market" brand to reduce chance of failure.
2. Buick sells in two (2) of the largest markets in the world (U.S. and China).
3. Buick can maintain sales AND margins of offering Opel models in both markets if required.
4. The BPG sales channel is working and will effectively reduce overall dealer count with minimal litigation risk.
5. Opels can be "rebadged" into Buicks for both China and U.S. markets by changing the Opel badge for a Buick one (the last U.S. Regal used a horizontal bar grille similar to the new Opel one).


Why GMC?

1. A "mid-level" brand needs a truck lineup if not a separate brand.
2. GMC truck are holding their own in the worst market in years.

Want proof?

From the GM's August 2008 Sales: Up 31% over July, Down 20% v. 8/07 thread:
Notably in August, Chevrolet Silverado, Avalanche and GMC Sierra had their strongest total sales month since last August, with more than 80,000 vehicles sold, as GM full-size pickups continue to build market share calendar-year-to-date. Silverado sales were up 69 percent, Avalanche was up 59 percent and Sierra sales increased 75 percent compared with July, 2008.

Sierra sales increased 6% more than Silverado sales did in the same market with the same incentives.

My theory is this is due to the fact that BPG buyers have more income and can afford to buy trucks in a tight market and Chevy buyers may not - many GMC truck owners also own a Buick or Pontiac and return to the dealer they got their car from first when truck/SUV shopping.

Most important reason.
3. By designing ONE TRUCK/SUV model as a GMC in place of any other brand GM can sell that model alongside ANY brand globally.

If GM creates a Wrangler or Xterra or Land Cruiser or Range Rover competitor or wants to introduce a Full size Truck/SUV line to a new market it does not have to also create a Chevrolet or Cadillac car line to go with it.

So if GM would offer a Range Rover for South America instead of having to offer Cadillac cars it could just offer a GMC version and this same model could be sold in Korea alongside Daewoo models, or with Buicks in China, Opels in Europe, Holdens in OZ and even Chevrolet models in India.

Using GMC as a replacement for HUMMER will give GM designers more "creatative freedom" to offer a wider range of vehicles with different design themes and would not need to be "tied in" to an existing "styling theme" at Chevrolet or Cadillac.

GMC can and should be GM's Global Truck brand.

Now you have a strong foundation of four (4) brands and three (3) sales channels to build on.

In the Canada/Mexico/U.S. Markets
Chevrolet
Buick-GMC
Cadillac

Globally they would be:

China
Chevrolet
Buick-GMC
Cadillac

Australia/New Zealand
Holden-GMC
Cadillac

Europe
Chevrolet
Opel/Vauxhall-GMC
Cadillac

South America/India/Egypt
Chevrolet-GMC

South Africa
Chevrolet
Opel-GMC
Cadillac

Korea
Daewoo-GMC
Cadillac

Russia
Chevrolet
Opel-GMC
Cadillac

Japan
Chevrolet-GMC
Cadillac

Granted most markets already offer SAAB models so the SAAB question if more of "does GM keep SAAB" than where to offer them and HUMMER appears to be in the process of being sold.

This leaves a much easier problem of picking which of the remaining two (2) brands of Pontiac and Saturn survive and which brand they are matched with.

Since the BPG channel seems to be working and Saturn lacks a definitive "image" and may require a fourth sales channel to maintain "no haggle" it is at a disadvantage.

[Bravada]

Why is anybody convinced GM has to do anything with their brand structure before they get down with removing explicit inefficiency having NOTHING to do with the brand portfolio and EVERYTHING with hopeless mismanagement?

Why does GM develop 3 midsize cars, of which two are almost identical, based on LWB Epsilon and kills the SWB?

Why does GM develop two separate midsize Buicks for different markets?

Why does GM develop three new midsize cars and doesn't import one they've already paid for in Korea (speaking of US market here)?

Why doesn't the Volt share any exterior bits and the interior with the Cruze? It appears that even the platform will be loosely related, and the production is a low-volume thing (Kappas... not profitable... must... repeat...)

[Caleb02]

i say split the company up over anti-trust concerns as they have a majority market share in North America or

i would say they should merge with Toyota or Cherry of China.... The Chinesse could offer a work force that is low in wages and pensions. Or I would have GM continue what they are doing and let the market decide. Just like Desoto, AMC, Packard and others. I would love for the old brands to comeback and be better then ever but their was a reason they are not here today.

[Lichtronamo]

Originally Posted by Caleb02

i say split the company up over anti-trust concerns as they have a majority market share in North America...

What?

GM's market share is a lot closer to 20% than 50%.

GM at one time fought to not exceed 50% market share rather than be forced to split out Chevrolet or more of its divisions (which operated more like separate car companies than marketing arms back in the day).

[SierraGS]

Originally Posted by Bravada

Why is anybody convinced GM has to do anything with their brand structure before they get down with removing explicit inefficiency having NOTHING to do with the brand portfolio and EVERYTHING with hopeless mismanagement?

Why does GM develop 3 midsize cars, of which two are almost identical, based on LWB Epsilon and kills the SWB?

Why does GM develop two separate midsize Buicks for different markets?

Why does GM develop three new midsize cars and doesn't import one they've already paid for in Korea (speaking of US market here)?

Why doesn't the Volt share any exterior bits and the interior with the Cruze? It appears that even the platform will be loosely related, and the production is a low-volume thing (Kappas... not profitable... must... repeat...)

Good questions and a few more to add

Why does GM try to boost sales for a RWD luxury prestige brand by making a copy of a FWD midsize car to sell in the same market as an established one?

Why do they copy this strategy with an all new midsize crossover to sell in the original and new market?

Why do they refuse to "share" a proven but expensive RWD platform with other brands even though it is not being utilized near capacity, then turn around and cancel shared usage of a newly created cheaper to manufacture one?

Why do they not bring a version of this new RWD platform to the U.S. market even though it would have a larger market than the one they did?

Why do they create a desirable version of the expensive RWD platform for their prestige brand yet not sell it in the U.S.?

You are correct, GM must fix it's (mis)management before it can rebuild itself.

[gypsytda]

Long.. Yes.. but excellent.

I have been saying this for decades.. I have long wondered why on earth GM would make so many twins/triplets, etc.. instead of making ONE vehicle well, they chose to make it 2, 3 or more times poorly.

I also thought Saturn was a mistake.. I still recall the bombardment of advertising when Saturn was born.. what a cult! I also recall my 1st test drive in a Saturn (I love cars.. so I always insist on giving even ones I suspect of being junk the benefit for the doubt).. The glare on the windshield was so bad I could not see through it, the callous salesperson states "oh you will get used to it".. i said so that is reason for the plastic body panels, since you will no doubt get in a wreck from driving this thing? she had no reply.

I would LOVE to see GM dump this hole in the pocket, mistake of an albatross! I would love to see them dedicate their time, energy & money into the rest of the vehicles and start FINALLY making reliable cars that Americans can be proud of again!

I do think the line up should be condensed even more than you mentioned.. I know it is costly to do that kind of a change.. so I recommend it in stages.
1st kill Hummer & Saturn
2ndkill saab, Buick & Pontiac

Simply keep Chevy & Cadillac (and GMC as solely a commercial division.. they perhaps could do a public release of trucks as a special event.. it would create excitement, and allow them to keep the trucks known to the public.. )

Since Pontiacs are essentiall sportier Chevys they could offer a GT or Sport trimm level.. since that is all they are anyhow.

Cadillac would be the luxury line, so they can incorporate the saab & buicks into that group and simplify.

Toyota & Honda are successful because they dedicate their time & energy to a smaller group of vehicles.. this allows them to improve them more frequently as well keep an eye on issues. GM has too many, it is impossible to spot all the issues.. and then to correct on all the multiples of the same vehicle.

So I hope GM will trim the fat and become the company we know they can be! Sadly they just kept making the wrong decisions.. and dumping money overboard..

Sorry for my babble.. you had so many of my ideas, I was just so thrilled to see it.. and I thank you!
wishing GM success..

[mikmak]

Welcome to GMI gypsytda, though it sounds like you've been lurking (it doesn't have any negative connotations regardless of how it sounds) for while?

What you have proposed is vey similar to how Holden already runs its business. The Commodore has Omega and Berlina (sort of Chevy equivalents) with SV6 SS and SSV (Pontiac) and the Calais and Calais V (Buick/Caddyish type of mix). Whilst it works fairly well in our smaller market, there was (and still is to some extent) the clash of demographs which may preclude additional sales. The sporty versions are typically associated with disrespectful hooligans, thereby repelling some from looking at the Calais, for fear of being tarred with the same brush. On release of the VE, this seemed to become less prevalent.

This effect may become amplified in a market the size of NA, especially since there has always been such a broad range of choices (even though many may not know that one is a rebadge of the other).

As far as killing Saab, are you referring to a global death or just an NA one? I really think that Saab, with some better product (even if it is rebadged Caddys) would do better in Europe than Caddy's style. Whilst it has been toned down somewhat, globally, it still raises the perception of US trying to push its preferences on the rest of the world. I think that, globally, GM needs something else to fly the luxury/sport flag or lose the Art and Science (or whatever it is called) design language. There is the danger that if Caddy really want to make it globally, that it will lose its American flair, putting a question mark over its sales assurances at home. Having Saab take care of that role, will allow Caddy to have its cake, and Europe gets to pretend they aren't drinking US kool aid.

[Bravada]

Toyota & Honda are successful because they dedicate their time & energy to a smaller group of vehicles..

Toyota builds more separate models than GM in almost every class, and has more unrelated platforms. I am sorry, try again...

I really think that Saab, with some better product (even if it is rebadged Caddys) would do better in Europe than Caddy's style.

This is not a matter of thinking or believing. This is undisputable truth. And also I believe (now matter of belief) not all North Americans, Asians etc. prefer A&S. Cadillac should stick to what people expect them to deliver - large luxury cars. Leave small premium cars to Saab, GM spent a lot of time positioning Saab as "premium", it is a waste to now try to charter those waters with an unproven ship...

Whilst it has been toned down somewhat, globally, it still raises the perception of US trying to push its preferences on the rest of the world.

Not really. It just looks weird. That said, it started to be more "American", and that's a good thing. People don't want a Cadillac that doesn't look American, that's the point of Cadillac. Much like people don't want a Mercedes that looks Asian (which is the reason why Audi is rolling in cash now).

[Caleb02]

Originally Posted by Lichtronamo

What?

GM at one time fought to not exceed 50% market share rather than be forced to split out Chevrolet or more of its divisions (which operated more like separate car companies than marketing arms back in the day).

that maybe but when u exclude the foreign makers and look at just ford gm and chrysler. (Chrysler is 79% american owned) When you look at it from that point then GM does have a majority of the american market and thus needs to be broken up. A broken up GM would not have to fight with itself over who gets what. No i want a Chevy Colorado for my division GMC. No i want a version of the corvette for us at Caddy (Pontiac is the only division that should have a sports car like the corvette) If i ever get elected president I would solve all the worlds problems simply by breaking gm into three companies.

[Lichtronamo]

Given that Ford, Chrysler and GM together have less than 50% of the market, I'm not sure why this would be considered. Further, I don't know how you think you could separate any of the brands into stand alone companies given that all they are now is marketing. All of the behind the scenes manufacturing, engineering, R&D, marketing, financing, everything is shared in common.

[H3AlphaGuy]

Originally Posted by SierraGS

Why GMC?

1. A "mid-level" brand needs a truck lineup if not a separate brand.
2. GMC truck are holding their own in the worst market in years.

Want proof?

From the GM's August 2008 Sales: Up 31% over July, Down 20% v. 8/07 thread:
Notably in August, Chevrolet Silverado, Avalanche and GMC Sierra had their strongest total sales month since last August, with more than 80,000 vehicles sold, as GM full-size pickups continue to build market share calendar-year-to-date. Silverado sales were up 69 percent, Avalanche was up 59 percent and Sierra sales increased 75 percent compared with July, 2008.

Sierra sales increased 6% more than Silverado sales did in the same market with the same incentives.

My theory is this is due to the fact that BPG buyers have more income and can afford to buy trucks in a tight market and Chevy buyers may not - many GMC truck owners also own a Buick or Pontiac and return to the dealer they got their car from first when truck/SUV shopping.

Most important reason.
3. By designing ONE TRUCK/SUV model as a GMC in place of any other brand GM can sell that model alongside ANY brand globally.

If GM creates a Wrangler or Xterra or Land Cruiser or Range Rover competitor or wants to introduce a Full size Truck/SUV line to a new market it does not have to also create a Chevrolet or Cadillac car line to go with it.

So if GM would offer a Range Rover for South America instead of having to offer Cadillac cars it could just offer a GMC version and this same model could be sold in Korea alongside Daewoo models, or with Buicks in China, Opels in Europe, Holdens in OZ and even Chevrolet models in India.

Using GMC as a replacement for HUMMER will give GM designers more "creatative freedom" to offer a wider range of vehicles with different design themes and would not need to be "tied in" to an existing "styling theme" at Chevrolet or Cadillac.

GMC can and should be GM's Global Truck brand.

So you're replacing a brand that has proven capability in the segment your new vehicle would be designed in targeting with an unproven vehicle badged as a GMC?

Actually I was surprised they made their Hummer dealer network have separate showrooms in the first place, when they could have done a GMC/Hummer truck dealership along with the Buick / Pontiac. The Truck Truck stuff would have been GMC, the Rugged / Capable 4WD stuff Hummer, the X-Over "SUV" segment stuff like the Acadia could still be GMC. Would have saved a ton of money in that dealer network, for sure.

I still don't know how you can sell a brand that is 1/3 of a plant in Louisiana (H3, H3T), and contracts production to AM General in another (H2) and expect to get any large amount of cash out of it, definitely not enough to even start to right the ship.

[SierraGS]

Originally Posted by H3AlphaGuy

So you're replacing a brand that has proven capability in the segment your new vehicle would be designed in targeting with an unproven vehicle badged as a GMC?

Actually I was surprised they made their Hummer dealer network have separate showrooms in the first place, when they could have done a GMC/Hummer truck dealership along with the Buick / Pontiac. The Truck Truck stuff would have been GMC, the Rugged / Capable 4WD stuff Hummer, the X-Over "SUV" segment stuff like the Acadia could still be GMC. Would have saved a ton of money in that dealer network, for sure.

I still don't know how you can sell a brand that is 1/3 of a plant in Louisiana (H3, H3T), and contracts production to AM General in another (H2) and expect to get any large amount of cash out of it, definitely not enough to even start to right the ship.

Let's be clear, I am only replacing HUMMER with GMC due to the fact the recent word from GM indicates they have potential buyers for it and they are receptive - NOT A DONE DEAL but looks like it is going in that direction.

I agree that HUMMER could have been positioned better and should have put the 5.3 in the H-3 line from the start just to name one item, and I think your idea of putting HUMMER with BPG would have worked better than what GM did.

HUMMER could have made it, and who knows maybe GM will keep it and have another chance - just hope they do better IF they get a second try.

[Bravada]

I actually believe that with Cadillac leaving the BOF market after the current Escalade, Hummer is even more in place @ Cadillac-Saab dealerships (that I dream of :P)