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

[GTOken]

Originally Posted by Shotgun

GM would crumble faster than wet toilet paper.

My point exactly.

[Ambalanche]

Well, The writing may already be on the wall since Saturns products have essentially been stopped in development. The Insignia should have been debuting early next year as a '10. Regardless, GM needs to make some concrete decisions quickly and stick to it! Seems like every week or two we hear about another program that has either stopped or been pushed back or rethought....The Cruze will come out in the last year of the Civic and be superior, for one year, just like last time. Watch and see.... Stop messing around GM or you're not going to be around!

[steve333]

Saturn needs to be rebadged as Opels and put under the P-B-G dealer network. There simply arent enough Saturn dealers to make the brand worthwhile.
Chevrolet
Buick-Opel-Pontiac-GMC
Cadillac
Dump Saab, sell Hummer or keep it mainly for export purposes.

Chevy gets all it needs:
Beat or Groove or Trax, Metro(Aveo), Cobalt (do NOT call it Cruze), HHR, Camaro, Malibu, Impala, El Camino (G8ST), Colorado, Silverado, Equinox, Traverse,Tahoe, Suburban. (Kill off the Trailblazer).

Cadillac needs a well thought program and then just execute it properly:
BTS (Small RWD 3 series fighter), CTS Sedan Coupe and Wagon, CTX Crossover (SRX), DTS, DTX Crossover, Escalade Hybrid.

Sell all Opels as they are in Europe with same names:
Opel Corsa, Astra, Meriva, Antara, Insignia.

Pontiac gets only RWD vehicles but retain classic names-LeMans small RWD, Grand Am (midsize RWD), Grand Prix (G8), Solstice.

Buick is a Lexus fighter:
Buick Skylark (small FWD), Regal (LaCrosse), Electra or Invicta (Lucerne), and Enclave.

GMC remains because GMC buyers will not switch to Chevy.

[PeteM143]

I truly enjoyed the article you have written. It was very well thought out.
I have to agree with you about GMC. They have to go all commercial trucks. The best GMC dealer in Southern NJ where I live does exactly what you have suggested. They sell loads of Vans and Work Trucks. Every once in a while you'll see an Acadia or Envoy with their badge on the back, but it seems as though they are driven by women. I am betting that these are units bought by the businessmen who need something for their wives to drive, and because they buy so many vehicles from that dealership, they tend to buy an SUV for the family there for convenience. Maybe GMC and Chevrolet could work out an agreement where they refer those sales to each other and split the sales commissions to keep those buyers in the family.

As to Pontiac and Saturn, although your reasoning makes sense on its face, I have to disagree that Pontiac is worth saving. Saturn has a much higher sales per dealer ratio and I am guessing a much higher foreign car conquest ratio. I think they should fold Pontiac and offer some of the better Pontiac dealers a Saturn dealership in its place. The problem with Saturn is that they simply dont have enough outlets and Pontiac siphons away the advertising and product development dollars that should be spent at Saturn. Some of the Pontiac dealers we have where I live are absolutely deplorable. There are two of them I can think of that I wouldn't visit to buy a go-cart, let alone a car. One in particular sells lawn mowers on the lot with GMC trucks and Pontiacs. That's a joke. This guy can't sell enough cars, so he sells friggin' riding lawn tractors. They need to be cut and the good ones should get Saturn product. Saturn should get the sporty Pontiac successes and big dealerships, which I think would increase volume significantly.

[GM-Joe]

I don't have the patience to read the entire monologue, but one thing is correct that GM needs to spend more time and money on developing each brand's theme and creating stronger brand awareness. One thing that Honda does better than anyone, except maybe Toyota is they preach quality. My girlfriend says the best car she ever has owned was an '88 Accord because it was rusted out and lasted 11 years. To me that is a complete POS, yet she thinks it is wonderful, thus it is wonderful. That is what GM has lost; Chevy has been preaching quality with the Silverado and Malibu, but must do so throughout their range and it wouldn't hurt to do the same with Saturn too.

As for the problem brand's, I believe GMC/Pontiac/Buick are a nice 1 - 1.5 million unit per year seller. The brand's that scare me are HUMMER and Saturn. To me, unless you can sell the HUMMER name for a good price, then just treat it like SAAB, sell it would wide and at a premium. Since HUMMER's are expensive, I really doubt they lose money; especially since they are based off of Chevy's. As for Saturn, they scare me the most, mostly because of their low volume. But would it be better if they sold 400k units like Hyandai, yet half of their vehicles were rentals? Saturn has good things going for it, mostly the fact it doesn't have a black eye and secondly, they have high resale value. Thus, once the Astra is assembled in Mexico, it will make sense to market it for high sales and those sales will then move up to Vue, Insignia, and Outlook.

I think GM is in fairly good shape considering they take care of so many of our retired and are at such a competitive disadvantage when compared to the Asian manufacturers. So GM need not panic and let things come together in time. Look at it this way, if you are a Toyota fan, there isn't much to be excited about except for maybe the IS and J. As for Honda, the Civic is pretty sharp, but after that all they have to look forward to is a 40k TL. When was the last time you heard someone say that the Ridgeline was B.A.; or the Pilot was so cool? So GM has a lot going for it, they just need more time to build on the momentum of their current offerings and win with their future offerings.

[FBODYRULES]

Originally Posted by 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.

I agree with most of this, this I think is the answer,
and I personally think GM will cut overlapping models etc.
I dont think GMC should be cut though.
if Hummer cant be saved by new fuel saving technologies in the near future then sell it, but surely the US army buys alot?

[Xenon]

Originally Posted by Ambalanche

Well, The writing may already be on the wall since Saturns products have essentially been stopped in development. The Insignia should have been debuting early next year as a '10. Regardless, GM needs to make some concrete decisions quickly and stick to it! Seems like every week or two we hear about another program that has either stopped or been pushed back or rethought....The Cruze will come out in the last year of the Civic and be superior, for one year, just like last time. Watch and see.... Stop messing around GM or you're not going to be around!

To be honest, a LOT of future GM products have been delayed/canned in one way or another, not just on Saturn's end. The DOHC V8 program got canned, so did most of Cadillac future cars (STS/DTS replacement canned, Alpha delayed) Chevy Impala canned, Camaro Z/28 pending, etc.

[rocky]

Global Thinkinking:
Anybody here remember GM in the fifties. GM went well beyond just automtive. Then the good old Federal Gov't decided GM was too large and had it's hands in too many products. The feds busted GM up into a single bite. Then when Chrysler couldn't stand on it's own feet, GM started gearing up to grab its share of the market. The Feds again yelled Monopoly and Stopped GM by bailing out Chrysler. And to add insult to injury the Fed's brimg foreign conglomerates in to finish them off. The US owes GM bigtime. Our Government took the largest Corporation in the world and beat it to death just for being successfull. Read GM's complete histoy. GM knew more about Global Thinking than anybody it was the politics of its own country that killed GM.

[BORG]

Very interesting case for Pontiac, although any investment in the brand is still costly and dubious while Chevy and Caddy are likely to see return on any investment while appealing to the same customers. Pontiac subsists largely on the G6 remember, a very run-of-the-mill sedan which can be plugged into any brand. It does not necessarily sell because it's Pontiac but because it's a high volume segment housed at MANY more dealerships than Saturn.

Buick and Pontiac could resemble the relationship between Lincoln and Mercury. Each brand would need to be tailored to share a showroom.

While I believe GM must become Chevy/Caddy only in N/A, I agree Saturn, Hummer, and GMC must go now and the rest can solider on with wiser investments. I for one am sick of seeing GM struggle to maintain its brand portfolio, I want to see a healthy GM so it's time to start making the hard choices and live with the pain and suffering for a bit so it doesn't continue indefinitely until oblivion.

However, it's important for people to understand that markethsare is not everything! Ford ditched the Taurus when it represented a substantial part of their marketshare. However, it was all bad marketshare, sold to daily rental agencies. You must cut the fat for meaningful and profitable markethsare. GM's preoccupation with being number 1 in sales has got to end.

[Lichtronamo]

Nice opinion piece that is a clear summation of GM's challenges and opportunities. You got it exactly right about which brands should be cut outright and put forth a thoughtful argument about the Pontiac/Saturn debate.

In order to flush out your conclusion that Saturn should go, a comparison of the number of Saturn stores relative to Oldsmobile when it was closed, the terms of the Olds dealer termination and costs would probably strengthen your position. My guess is that there are fewer Saturn stores now than Olds dealers when it was axed. Also the termination agreements provided payment based on peak sales for a period of years. Given Saturn's limited model range and modest sales, closing Saturn could be a bargain compared to Olds while addressing fundamental problems within GM's current structure.

Interestingly, NSAP's promised Pontiac news that was posted today also supports your theory. While the focus of Nsap's story was Solstice, the termination of the Kappa program is another one of those well regarded Saturn products effected by the continuing changes in GM's product plans in response to the current environment.

Also, I believe Maximum Bob said himself that if the products Saturn has now didn't revitalize (can you revitalize something never vital?) the brand, nothing would.

[markthewood59]

CHEVROLET---stand-alone brand (entry level)
GMC, SATURN & BUICK in same sales channel(upscale, move-up buyers)
CADILLAC & SAAB (High-end luxury vehicles)
Kill PONTIAC & HUMMER
Eliminate ALL duplications in each sales channel

GMC, SATURN & BUICK
GMC---Sierra Denali, Yukon Denali, Acadia Denali, move Vue to Denali lineup lose everything else 2WD,4WD, AWD
Saturn--- Lose Outlook and Vue, add G5 convertible, keep everything else all FWD and or AWD
Buick--- Lose Enclave, Add G8, Add 2 Dr convertible, keep everything else.... should be all RWD, and/or AWD,

The Denali Brand is extremely viable, and should be seen as an upscale truck and SUV brand, Saturn should be marketed as an upscale euro brand, and Buick should be marketed as upscale performance.

[stevecmh]

Originally Posted by genjy

Needs a 56k warning.

really.. does anyone have 56k anymore.. lol


great points though.. GM is going to need to change soo.. to survive. i hope they can

[Beau]

The unfortunate part is that, in order for GM to survive they must put people behind the corporate wheel without emotion.

It's our emotions to Pontiac, or to Buick, or whatever that keeps us GM fans. I am a Pontiac fan. I no longer own a Pontiac becauase it didn't have the appeal I was looking for. Still a fan though, and want to see it sucessful.

If I were steering the GM ship, I'd crash it accidentally due to my emotional responses to specific things.

[CadiEldo67]

This has got to be the best post I have ever read. It says exactly what's wrong with GM, and I think that a copy should be sent to Bob, stat! And I agree with cutting Hummer and Saturn, or at least selling them as a combo, and making GMC simply a commercial grade vehicle. I always felt that the biggest reason that GMC was so needed was because the Pontiac/Buick brands were so lacking in product, being models worthy of buying other than a truck, with the big change in perception for fuel efficiency, cars are going to be way easier to sell, and should push the bottom line for Pontiac and Buick.

My dream lineup for GM consists of:

Chevy: with one of everything

Pontiac/Buick:
Sporty Nissan-like lineup for Pontiac, cars only. G8 and Solstice are RWD, while a new G4 and G6 are FWD with the option of AWD. And I think that names would also help Pontiac out, the alphanumerics are too forgettable for a brand with such heritage. That heritage is priceless and GM needs to find a way to utilize it.
Buick tackles whatever Pontiac doesn't, such as a full sized FWD Sedan- the Lucerne, the Enclave, with a smaller Enclave-like version called the Rendezvous, and possibly a RWD coupe/convertible that sounds good as the Riviera. This makes for 8 models between 2 brands, and is more than enough to support a dealer network in the future.

Saab/Cadillac
Saab deals with the FWD luxury type vehicles, like upper VW models, Acura, upper Nissan models, and such. Still just as fuel efficient, and when paired along Cadillac, fills in the gaps.
Cadillac is more of a RWD luxury, targeting BMW, MB, and Infiniti. The CTS line is the middle of the road vehicle with a sedan/coupe and wagon version. The BTS is the new 3-Series competitor, and the DTS becomes the full size RWD vehicle that Cadillac needs. The BRX and SRX fill out the lineup, as does the Escalade SUV.
My lineup does it in 32 models throughout 5 brands, while the current GM lineup manages with nearly 50 models through 8 brands, theres definately some money to be saved.

[cire_1wb]

I enjoyed reading your article. You presented some interesting and intelligent ideas based on facts and figures. As far as the brand management topic, I partially agree with what you have submitted.

1) Hummer: GM should attempt to sell it. If GM can't sell it, they should either shut it down or reassign it to be the corporation's commercial/industrial vehicle outlet (I have other plans for GMC).

2) Saab: GM should sell it. Saab has always been a bit of a distraction to GM. The corporation doesn't have the resources to properly support the brand and doesn't need the distraction at this point. Saab needs a parent company with the resources to properly support it and GM could use the revenue that the sale of this division could generate for the corporation.

3) Saturn: GM should close it down. Saturn will never transcend its humble, quirky, "cheap and cheerful" car beginnings. Trying to align the brand with Opel is a terrible case of miscasting as well as a waste of Opel's potential in North America. Despite GM's mediocre and misguided efforts to transform the brand, Saturn will always be an alternative mainstream brand for GM shoppers who shun Chevrolet. GM doesn't need 2 mainstream brands. The corporation's resources should be utilized to make Chevy the strongest mainstream brand in the market.

4) Chevrolet: This division should retain its place as the corporation's high profile, mainstream, volume division. The division's lineup should consist of affordable FWD cars and FWD/AWD crossovers, truck/SUVs (Chevy would be GM's sole truck/SUV division), the Camaro, and the Corvette.

5) Pontiac/GMC: These two divisions should become the midmarket, sporty, import inspired dealer network. Pontiac/GMC would utilize slightly altered, North American built Opel products to form the basis of their lineups. Additional products would be added to complete the lineups. Pontiac would focus on cars and GMC would focus on crossovers and MPVs (MPVs would be a GMC exclusive). I think Pontiac/GMC are a good match for Opel because Opel's products represent what Pontiac/GMC should be in North America: aspirational, edgy, and sporty. Pontiac would revert back to using some of their past model names and ditch the ridiculous alpha-numeric G-series model designation system. My preference would be for Pontiac to receive an all RWD lineup, but I seriously doubt GM would follow through with that plan at this point. Since that is the case, I would rather see Pontiac carry rebadged Opels than twin-nostrilized Chevy clone products.
The Pontiac/GMC lineup would look like this:
* Pontiac Fiero = Opel Corsa subcompact 3-door/5-door.
* Pontiac LeMans = Opel Astra compact 3-door/5-door/sedan and possibly wagon.
* Pontiac Grand Prix = Opel Insignia midsize sedan and possibly wagon. A coupe version would be cool, but Mr. Lutz has stated that the Insignia line doesn't need one.
* Pontiac Bonneville = Holden Commodore sedan and possibly wagon.
* GMC Phoenix = Opel Meriva subcompact MPV.
* GMC Ventura = Opel Zafira compact MPV.
* GMC Safari = Opel Antara compact crossover.
* GMC Terrain = Upcoming GMC midsize crossover.
* GMC Acadia = Existing GMC large crossover.

6) Buick/Cadillac: These 2 divisions would be combined to form the luxury dealer network. Buick would focus on FWD luxury cars and FWD/AWD luxury crossovers. Cadillac would focus solely on producing well executed, world class RWD luxury cars. The sizes of the divisions' lineups would be reversed (Buick slightly expanding, Cadillac slightly shrinking), but Cadillac would be free to pursue its quest to become a top-tier RWD luxury car brand.

Basically, GM should downsize its North American operations to include 5 retail divisions configured into 3 dealer networks:
* Chevy: Mainstream, affordable dealer network.
* Pontiac/GMC: Midmarket, sporty, import inspired dealer network.
* Buick/Cadillac: Luxury dealer network.