UPDATE 6/21!: GM Cutting Another Division?

[FenwickHockey65]

But this is 2008, not 1968. The historical factors and emotional ties don't bring bottom line results.

That may be what you think. But it's NOT what consumers think. Despite what you want to believe, consumers, especially GM buyers, still show brand loyalty. Seeing as how more and more people are just buying vehicles with no thought as to the brand, GM needs to hang on to its current list of loyal owners as much as possible.

[CadiEldo67]

Originally Posted by TriShield

"Oh, this brand is going to stand for this now which is completely different." and expect people to eat it up. It doesn't work that way. Brands with an established history and reputation bear that reputation no matter what shiny thing you try to sell under them.

Hence the problem with Saturn, they made it into a brand that it isn't. It was a frugal import fighter, and now is in Oldsmobile's old spot..

[Hoosier Red]

Originally Posted by fastball

This is the 28th post in a thread with about 300 at this point - I stoped here and didn't read anything further. You know why?

You get it. You are the only one who sees the real deal, and the only way GM as a company will be able to compete in the tight, global, and ultra competitive market they find themselves in today that just didn't exist 30 years ago.

Chevy and Cadillac. And that's it. Everything anyone could ever want in any car or truck can and should be put under either of those nameplates, and ONLY those nameplates.

GM is still far too conglomerate (for lack of a better adjective) to be able to build, place, and move high quality, consistent product. I know there are those who will spin yards about the glory days of Pontiac or the fact that GMC has been building trucks since 19-0-whatever, or how revered and sentimental the Buick tri-shield is.

But this is 2008, not 1968. The historical factors and emotional ties don't bring bottom line results.

I would like to hear you explain how GM extricates themselves from the huge dealer network? Everyone knows how badly they were hurt with the Olds closure. I don't see how the company survives closing BPG and Saturn. Any sale of Saab and Hummer would bring minimal money in relation. Unless they're planning to dive over the cliff of chapter 11 and reemerge with just Chevy and Cadillac, I don't see where they get the cash to bury all those brands.

[fastball]

Originally Posted by FenwickHockey65

That may be what you think. But it's NOT what consumers think. Despite what you want to believe, consumers, especially GM buyers, still show brand loyalty. Seeing as how more and more people are just buying vehicles with no thought as to the brand, GM needs to hang on to its current list of loyal owners as much as possible.

What consumers? GM's market share has been dwindling and dwindling consistently for the last 5+ years. I agree there will be those who will buy nothing else, but that group is not enough for GM to survive. By that logic, you'd have X number of people who will buy GM cars and the rest of the market is left for the competition. That's a sure way down the tank.

The people who've long since left GM for Japan did so less because of number of divisions and more for crappy product. But it's the insane amount of divisions and different cars GM builds that takes away from their attention to building quality product. That's the catch 22 of it.

Besides, when Bob Lutz was first on the job, I remember him refering to Buick and Pontiac as "damaged brands" (you can probably search GMI and find it somewhere). I think he's been right all along. Lutz has done some amazing things, but you can't reverse 30 years of bad management overnight and the fact that GM, I think, is just too damn big for it's own good. They can't compete and be as nimble as other car makers.

[fastball]

Originally Posted by Hoosier Red

I would like to hear you explain how GM extricates themselves from the huge dealer network? Everyone knows how badly they were hurt with the Olds closure. I don't see how the company survives closing BPG and Saturn. Any sale of Saab and Hummer would bring minimal money in relation. Unless they're planning to dive over the cliff of chapter 11 and reemerge with just Chevy and Cadillac, I don't see where they get the cash to bury all those brands.

Well, if you see how fast they are eating their own cash stash lately, GM may just very well be on that brink. They're heavily considering having to borrow $10B. That's not a good situation.

What happens if they can't pay it back?

[FenwickHockey65]

Originally Posted by fastball

What consumers? GM's market share has been dwindling and dwindling consistently for the last 5+ years. I agree there will be those who will buy nothing else, but that group is not enough for GM to survive. By that logic, you'd have X number of people who will buy GM cars and the rest of the market is left for the competition. That's a sure way down the tank.

The people who've long since left GM for Japan did so less because of number of divisions and more for crappy product. But it's the insane amount of divisions and different cars GM builds that takes away from their attention to building quality product. That's the catch 22 of it.

Besides, when Bob Lutz was first on the job, I remember him refering to Buick and Pontiac as "damaged brands" (you can probably search GMI and find it somewhere). I think he's been right all along. Lutz has done some amazing things, but you can't reverse 30 years of bad management overnight and the fact that GM, I think, is just too damn big for it's own good. They can't compete and be as nimble as other car makers.

I agree that GM needs to streamline its vehicle lineups, but is killing off brands really the way to do it? Yes, perhaps Hummer needs to die, seeing as how it has a horrible brand image (and the companies interested in buying it have no idea what they're getting themselves into...have fun eco-terrorists...), but I still think that my solution to the GMC problem, not the death of the brand, works out best for all. Made-to-order GMCs eliminates the need for PBG dealerships to have a massive truck inventory (which looks very bad from a public standpoint), it cuts back on production of GMT-900s, it finally makes GMC worthy of the "Professional Grade" tagline, and it saves the thousands of loyal GMC customers. Once that plan is implemented, GM needs to start regaining consumer trust and loyalty once again through A) Appealing and reliable products and B) Good service, before, during, and after the sale. I have a friend whose father is buying another honda simply because honda replaced their odyssey's transmission for free when the warranty was expired. He saw it as good service and "taking care of their customers." I saw it as a desperate ploy to keep him at honda since the tranny blew out waaay earlier than it should've. If the majority of people are like him and consider that good service, then GM needs to find some way to work like that as well.

Here's a question: Does Saab have that big of a customer base in the US? I know a few people on this site own Saabs...but I seldom see anybody at Saab dealerships here. When looking for a new car, I suggested Saab to my parents and my dad immediately killed the idea, saying that it wasn't worth it. So all things considered, is Saab worth keeping in the US?

[footney]

I think GM has too many divisions in North America and worldwide. The NA market and the global market just does not support GM's current business model. It needs to scale back its divisions, models, production, engines, platforms, etc.

In order to be a stronger competitor, GM should have just two global brands--Chevrolet and Cadillac—and at least one indigenous car brand in every major car market. For example, maintain the Daewoo brand while also selling the Chevy and Cadillac brand in Korea. Same for the North America market, have Pontiac as the indigenous brand stable mate.

This same three-tier brand business model should be used in Australia (Holden), Europe (Opel), England (Vauxhall), Middle East (Opel or GMC), Latin America (Opel), and Asia (Buick or Daewoo). Oppositely, I not as optimistic about the Chinese car market as others are, now that the Chinese Government has scaled back its gas subsidies; I think Buick and other car manufacturers will start to falter in China.

As its competitors become more efficient, GM, again, has failed to evolve. If it does not evolve, as either I have outlined or by some other means, just as GM brought pieces of Daewoo, other will do the same with GM once it fails.

[Lichtronamo]

Originally Posted by Hoosier Red

Unless they're planning to dive over the cliff of chapter 11 and reemerge with just Chevy and Cadillac, I don't see where they get the cash to bury all those brands.

That's exactly where this is going. GM has sold all its non-core assets, launched the new SUVs, pickups, Lambdas, the Aura, the Malibu et al and is still burning cash at an alarming rate just as the NA auto market collapses under the weight of the housing economy and $4/gallon gas (which also happens to have the greatest impact on to the products GM's survival is most dependent upon). RW has shot his wad and the company is still dying - Chapter 11 is the only viable solution left.

[vxl]

Originally Posted by FenwickHockey65

That may be what you think. But it's NOT what consumers think. Despite what you want to believe, consumers, especially GM buyers, still show brand loyalty. Seeing as how more and more people are just buying vehicles with no thought as to the brand, GM needs to hang on to its current list of loyal owners as much as possible.

It would be intersting to know how many Oldsmobile customers left GM for good after the brand was closed.

[TKR]

Originally Posted by Caleb02

kill off european brands all of them

Originally Posted by Caleb02

make the new GMC the international brand

Because current Vauxhall and Opel buyers are going to flock to a GMC....yeah right.

Originally Posted by Caleb02

Next get rid of holden, just a clone of its european brands....

Over my dead body...or I'll never buy a GM product again in my life. Serious!!!

After spending a large part of the previous century building these brands, which do not exist in the US, killing them off would financially cripple GM in the affected markets.
It is better to take the vehicles designed and built by these Divisions virtually unchanged, excepting local market requirements, and put local badges on them as is happening with G8, Astra, Insignia etc.

[seeg]

Again... why do people think cutting a brand means that customers will automatically flock to another GM brand?

[AndrewGS]

Chrysler killed Eagle and Plymouth and it saved their ship.

After Oldsmobile closed all their customers flocked right into other GM brands.

[jry]

Wow. But the GMC trim levels are so much nicer than Chevrolets.
I have a friend with a denali SUV. He'd never buy a Chevy.
I always bought GMC over Chevy. Had a Jimmy, Suburban and looked at their trucks.
Combined, they sell more trucks. Kill the GMC and lose a ton of customers, forever. Most of them will not make the transition.

[SAngelo]

I go back and forth with this but we agree that GM needs to do something. If you had to kill a brand it should be Pontiac and Hummer but if you dont do that then streamline the lineups and find a way to get the public to know Saturn because that division has a solid lineup of cars. AND NO DON'T RENAME IT OPEL !!!!.

If you did kill Pontiac give the G8 to Buick and just make modifications to it so it looks like a Buick, then give the Solstice to Chevy. Then have Buick and GMC merge with Saturn. You would kill the Outlook and GMC would not get a small SUV.

If you keep Pontiac just have the G8, the Solstice and give us a two door G8 and call it a day. We want no overlap with Buick here. Buick would have two cars, the new Lacrosse and a replacement for the Lucerne which should be rwd and the Enclave so thats it.

Buick rwd (Park Avenue, Lucerne) ??
Buick Lacrosse
Buick Enclave
Pontiac G8
Pontiac GTO
Pontiac Solstice
GMC trucks/SUVs

In terms of Saturn ( own a 2000 SL2), its a great little car, I think they need to get increase brand awareness for this division. Either sell them alongside another division or advertise the hell out of their cars and they must increase the number of Saturn dealerships. The dealership experience at Saturn is terrific and now the cars are hot. They should keep their lineup but I would get rid of the Outlook and give more power to the Astra and also give us a trunk version of that car. I think an all new one will be here in a year anyway.

[seeg]

Originally Posted by AndrewGS

After Oldsmobile closed all their customers flocked right into other GM brands.

I thought it was generally accepted that the exact opposite happened and that nothing improved.

BTW, My fault if this is sarcasm.