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

[Xenon]

Originally Posted by chickenkicker

The problem with Pontiac is that it has many brand loyalists who would say screw the general if they axed it. I'm sure closing down Saturn would alienate some buyers but probably not as many as killing a long established brand like Pontiac. I know a few people who would turn to Toyota/Honda/Ford if Pontiac were closed, I can't say that about any other Gm brand.

Again that's another factor that GM needs to consider. Either way when GM decides to close a brand, some sales will be lost permanently, but what's better, poor product and all the brands intact, or good product, but losing a few brands in the process? Like I said earlier, this isn't exactly a 'no-brainer' decision.

[RB35SLT]

Originally Posted by chickenkicker

The problem with Pontiac is that it has many brand loyalists who would say screw the general if they axed it. I'm sure closing down Saturn would alienate some buyers but probably not as many as killing a long established brand like Pontiac. I know a few people who would turn to Toyota/Honda/Ford if Pontiac were closed, I can't say that about any other Gm brand.

Exactly.

It would cost GM dearly IF they shut down any brands like Olds, right?

[CharlotteFirebird]

1. Sell Hummer
2. Combine Saturn into BPG. S/P would be one full-line together. Saturn would be FWD and Pontiac would be RWD. This would equate Holden/Opel elsewhere, largely.
3. Cut some overlapping models. Leave 3 models for GMC.
4. Saab should stick with coupes, sedans, convertibles. No more crossovers.


Caddy- Alpha Sedan/Coupe, CTS Wagon/Sedan/Coupe, Zeta Sedan, Theta Crossover, Lambda Escalade
Saturn- Astra, Aura, Vue, Delta Minivan, Possible Volt
Pontiac- Alpha Sedan/Couple, Zeta Couple/Sedan, Solstice
Saab- 9-1, 9-3, 9-5 Sedans, Wagons, Coupes, Convertibles
Chevy- Everything essentially
GMC- Sierra, Torrent Replacement, Acadia
Buick- LaX, Riveria, Delta Sedan, Theta Crossover, Zeta Sedan

I know...it's not happening, but that reduces overlap and models. It reduces dealerships. Three dealer outlets: Chevy, BPGS, Caddy/Saab...base, middle, premium

The next step would be to kill Saturn and/or GMC.

[Shotgun]

Get rid of SAAB and Hummer, first. Other than that, GM has great product and it's actually geared in the right direction. Buick is turning around. Cadillac is getting to where it should be, Pontiac is SLOWLY going toward more "performance" cars, Chevrolet is continuing the "mainstream, generic" brand (save for the Corvette), GMC is the truck producer, and Saturn is trying to be the import fighter.

As far as trucks go, if anything, dump 95% of Chevy's line and make all Chevy trucks W/T. I feel that GM would lose less customers by trying to get Chevy truck buyers into a GMC than vise-versa.

GM will survive, but cutting a brand like Buick, GMC or Pontiac will cripple them beyond recovery.

[EldoFan]

Originally Posted by Xenon

Again that's another factor that GM needs to consider. Either way when GM decides to close a brand, some sales will be lost permanently, but what's better, poor product and all the brands intact, or good product, but losing a few brands in the process? Like I said earlier, this isn't exactly a 'no-brainer' decision.

Good product while loosing a few brands should definitely be the way to go.......starting from scratch will look hard and inevitably it will be so for some time, but if the product is very good to start and only gets better, brand loyalty can be rebuilt (and become stronger?) and perceptions can truly be transformed.

[Kennyboy]

I suppose GM can axe HUMMER or return HUMMER to it's original owners. GM doesn't own HUMMER, it only own the rights to the name. If GM can sell the rights to a private equity firm similar to Cerbus, then that's easy money right there.

[Bravada]

To those wanting to cut Saab and Hummer - do remember GM is actually making money overseas, and from the business point should actually get rid of the North American operations (if they only could). Those brand are one of their few growth-promising footholds in the global premium markets, and Hummer is actually still profitable. If CAFE kills Hummers in the US, fine, stop selling them there, move production to China. But I guess Hummer margins will always make up for CAFE penalties.

Also, do remember the prophet of our times - Paris Hilton.

As concerns Saab - this is the brand that should've got all the dev money that went into so many other brands. I can make my case for almost any GM model.

Moreover, I believe GM is terribly inefficient in spending their scarce R&D money, and still poorly managed on many fronts. There is a lot evidence laying around in many threads in those forums. This is what needs to be addressed first, rather than making a "bold" IR/PR move of cancelling a brand, model, platform or plant.

[Smoothcat]

The only brand I see that should really be expendable is Hummer. While there are plenty of directions the brand COULD be taken, I think the market is just too weak and the money in too short of a supply to continue to support it. As has been said numerous times, anything done by Hummer could be done just as well by Chevy, GMC, or even Cadillac. Plus Hummer's negative image will take years to turn around, if ever.

I've been a Saturn fan for a long time, so it's hard for me to recommend killing the brand. I think going forward, IF (and I know that could be a big if) the brand can be tied even closer to Opel, it can be economical to continue selling it in the US. The sales might not be super, but could they really get worse? Use Saturn as an almost 100% successor to Oldsmobile. Let them collaborate with Saab to work on new technology for both powertrains and whatever else. Don't give them an SUV bigger than the Vue, and for God's sake, bring over the Corsa. Make a hybrid option for every vehicle. Offer a somehow different Volt-related product. Saturn needs to be the "Chevrolet of Green Vehicles" for GM. A little higher price point, but a slightly "better" car with outstanding gas mileage.

Now my other issue is where to sell the Saturn brand? If Saturn is combined with BPG, it instantly brings it to many smaller towns that have never been within driving distance to a Saturn dealer. This alone could influence sales significantly. It would also allow GM to FINALLY push Pontiac as all-RWD. Pontiac would be further marginalized, but would become what so many on GMI want it to be. The sales would suffer but could (theoretically) be made up from the increase in Saturn sales. Long-term it would decrease the overlap in platforms such as Delta and Epsilon, while giving Pontiac a truly focused purpose. Within this "SBPG" dealership, you would have:

*Saturn: Corsa, Astra, Aura, Volt-based vehicle, Vue, and maybe a small people mover (Meriva?)
*Pontiac: G6 (Alpha sedan, coupe to replace Solstice), G8, GTO (G8 coupe)
*Buick: Small sedan, Lacrosse, Enclave (leave RWD to Caddy)
*GMC: Rebadge Chevy trucks as needed, these will become less important

There is little overlap in this lineup, as long as the two Buick cars are true "luxury" and noticeably nicer than the Astra and Aura. Saturn becomes the closest thing to a "volume" brand for the channel.

After Saturn is assimilated into BPG, I would (and I have no idea if this is even possible, it's just my fantasy) transform old Saturn stores into standalone Cadillac/Saab dealerships. I know of cities that have Chevy and Cadillac dealerships combined. That's garbage. Caddy should have the newer, cleaner, nicer Saturn stores at their disposal. They should ONLY be combined with other brands in markets where they already exist with no Saturn dealer. Otherwise, move them in ASAP. The Cadillac dealership experience should be the nicest possible, befitting of what the brand ONCE stood for. As for Saab, it gives Caddy some room to offer a small, FWD alternative for people that want a fun car and a luxury experience but no RWD. And frankly, it just gives Saab an ability to reach markets they have absolutely no presence in at the moment. If they are going to remain in the GM lineup, they at least need to be out there for sell.

Sorry for the length. This is my proposal. It's probably been said before, but regardless it's my idea for success. GM can make it with these 7 brands if they put the effort needed into it. The question is, will they, and will they even have time?

[Xenon]

Originally Posted by Bravada

To those wanting to cut Saab and Hummer - do remember GM is actually making money overseas, and from the business point should actually get rid of the North American operations (if they only could). Those brand are one of their few growth-promising footholds in the global premium markets, and Hummer is actually still profitable. If CAFE kills Hummers in the US, fine, stop selling them there, move production to China. But I guess Hummer margins will always make up for CAFE penalties.

Isn't it because Hummers tend to have massive mark ups (Compared to the price in America) overseas? And I'd doubt that would stay profitable at the rate that people are ditching SUVs globally.

[mpsrent]

A great read- well done nadepalma!

Yes, here in Canada Pontiac is viewed as upscale from Chevrolet. We have been use to Pontiac/Buick/GMC stores for what seems like forever. Even 5 line stores with Chev and Cadillac are common in many one store communities.

Here in Canada, Saturn is rare; so rare that they are a sales disaster. As bad as it is, the Astra acutally sells well due to the Canadian love affiar with small cars. If the Astra was a Pontiac, it would be a huge succes. I would rather see Saturn's product sold through a Pontiac store and eliminate the Saturn line altogether.

The only point that I might question is Saab but it might only be because of my Canadian perspective. Saab is almost a non entity in Canada, so if GM sold the product line, few would miss it.

Saturn has great products and a very weak dealer network. Kill it and move the cars into Pontiac. Just my 2 cents.

p.s. Even though a own a GMC, moving the line into Chev does make sense.

[Bravada]

People don't seem to be ditching SUVs globally. SUVs only really sold in the US and some selected markets. And only in the US is there any real backlash trend in sales. In other markets, including China, SUVs are more and more popular.

FWIK, the Hummer H3 starts at some $4K over Tahoe or Envoy - I guess this is a handsome markup. As concerns global markets - there is no market for "regular" huge SUVs, there is only the Hummer, so it's hard to compare...

[mgescuro]

*phew*
I tried reading all of that, and I ended up skipping paragraphs.
It felt like I was reading something right out of Time or Newsweek.

Anyways to try and distill it all:

Zarella was absolutely 100% right. Branding and the strength of the brand is the key to success.
However, Zarella was 1,000% wrong when it came to developing products and determining which brands to focus on.

The Brand strength does not come from the individual models, but from the actual division.

And this is where GM falter today, with them focusing on "General Motors" as the actual brand. "General Motors" is NOT a brand. It never in its 100 year history been a brand. It is more synonymous with a holding company -- like Berkshire Hathaway.
For example, there is no "Berkshire Hathaway Underwear Co." It's Fruit of the Loom. There is no "Berkshire Hathaway Chocolate Co." It's called See's Candies. There is no "Berkshire Hathaway Insurance Co." It's GEICO.

GM doesn't know how to brand.

GM does have too many products. However, the company is stuck in its old ways, and the cultural shift necessary to change the company may be too significant to make.



See... what GM's doing here? It's under the guise of "channel consolidation."
The main issue with the shut down of Oldsmobile was that it left hundreds of dealerships hanging. Combining channels allows a few things: 1) More product to sell, 2) Allows GM to shut down a brand, while maintaining product within the channel, 3) Less dealership "disruption."

GMC can be folded within Chevy trucks and be reborn as a true "Professional Grade" brand.
Pontiac can die.
Buick can be, shall we say, "contemporary luxury."
Chevy is the all-American car brand.
Cadillac is, shall we say, "world class luxury."
HUMMER remains focused on premium off-roading vehicles.
Saab is the premium European niche.
Saturn is all purpose European cars for Americans.

[regfootball]

wow. a lot of effort to basically say not much new.

do we really need another thread or opinion on this?

[Bravada]

Marc is right about the brand being 100% everything and about GM being "the brand" in North America. I'd argue, though, the brand's strength is in their product. How can you build a strong brand around a selection of mediocre, indistinct cars that are actually to be had from any other GM division (speaking of 1980s GM here). GM has moved on, but they are gradually improving, rather than completely change the mindset and the losing game they've been playing for so long.

GM should've made the "GM Saturn" dealership standard and simply convert the salvageable ones, helping to fund the turnaround financially, or weed out the rest cutting down margins.

[peterj2706]

You are right on target. But anybody bet that GM kills Pontiac instead? Don't know what it is but Saturn seems to lead a golden life, no matter how much they can't sell. My only twist on it would be that any high end Opels would be ripe for Buick. Good job - you put a lot of thought into it.