York's prescription for GM: Dump Saab, and maybe Hummer

[paul8488]

Ummm... is Hummer not one of GM's current success stories? I can see the need for cuts perhaps, and maybe he suspects that Hummer will be hard to maintain over the long term... but it still seems like an odd move to chop off a brand that's got a stellar reputation and increasing sales.

Similarly, Saab is doing well in Europe now, even with a not-so impressive lineup, and expects to make money in the US next year. Cadillac isn't ready just yet to take Saab's global position, so again, I have a tough time fully agreeing that Saab should get the axe. Though I guess of all the brands York has identified the core ones. Guess I just hate the thought of chopping anything!


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York's prescription for GM: Dump Saab, and maybe Hummer

Edward Lapham
Automotive News / January 10, 2006 - 3:00 pm


To fix its troubled North American operations, General Motors needs to dispose of Saab, stop selling Isuzu vehicles and probably unload Hummer too, says its largest shareholder.

In a speech Tuesday to the Society of Automotive Analysts, Jerry York, advisor to Tracinda Corp., said GM management must get into crisis mode, take a clean-sheet approach to the business and make tough decisions.

GM can only support four sales channels, he said: Chevrolet, Pontiac-Buick-GMC, Cadillac and Saturn, York said.


http://www.autonews.com/apps/pbcs.dl.../1011&refsect=

[Arizona Slim]

I think Hummer is GM's most well-defined brand, the only one that hasn't been watered down yet. I guess I don't see the logic in dropping it, except that maybe it can't support very many models.

[desmo9]

Look up "beancounter" in the dictionary, and York's picture is in the margin. Guys like this are masters at one thing ... maximizing short-term profitability, even if it's to the detriment of long-term fiscal performance.

Saab has trouble only because of the way GM's treating the brand. You put little in, you get little out. Doesn't mean that Saab is incapable of bolstering GM's bottom line.

[Jay]

Originally Posted by Arizona Slim

I think Hummer is GM's most well-defined brand, the only one that hasn't been watered down yet. I guess I don't see the logic in dropping it, except that maybe it can't support very many models.

I think the idea is to sell off Hummer now while it is worth something instead of keeping it until it starts losing money. You have to admit that a good proportion of Hummer's success is its novelty. Once that wears off and/or gas prices skyrocket permanently nobody will be buying Hummers and what good does that do GM? Also keep in mind that there isn't a wide range of things designers can do with the brand other than offer big, blocky SUVs.

I don't know if selling Hummer is a good idea or not, but surely there is a case for it.

[lytmup]

Originally Posted by Arizona Slim

I think Hummer is GM's most well-defined brand, the only one that hasn't been watered down yet. I guess I don't see the logic in dropping it, except that maybe it can't support very many models.

What can be more watered down than an off-road vehicle that can barely go off-road (im talking about the H3). Have you looked at the clearance of one of those, or rather lack thereof, not to mention the anemic engine that it has.

I think the only off-roading an H3 could do would be that of driving it in the yard to wash it off.

I totally respect the H1 and to a degree the H2, but the H3 is basically a really big station wagon.

[Jay]

Originally Posted by desmo9

Look up "beancounter" in the dictionary, and York's picture is in the margin. Guys like this are masters at one thing ... maximizing short-term profitability, even if it's to the detriment of long-term fiscal performance.

Saab has trouble only because of the way GM's treating the brand. You put little in, you get little out. Doesn't mean that Saab is incapable of bolstering GM's bottom line.

Saab has always been a forgettable brand. It serves no purpose and has little value no matter what you do with it. Say what you will, but I still don't understand where Saab fits in the GM family if Cadillac is high luxury, Saturn is [going to be] mid-luxury, Buick is mid-luxury, and Pontiac is a sporty Chevy.

[Darc Requiem]

Originally Posted by lytmup

What can be more watered down than an off-road vehicle that can barely go off-road (im talking about the H3). Have you looked at the clearance of one of those, or rather lack thereof, not to mention the anemic engine that it has.

I think the only off-roading an H3 could do would be that of driving it in the yard to wash it off.

I totally respect the H1 and to a degree the H2, but the H3 is basically a really big station wagon.

While I agree on the engine, the H3 can actualy traverse the Rubicon trail. Its my understanding, and I may be mistaken, that the H2 is the worse off the three when it comes to offroad capability. I've actually seen H2's get stuck and have to be towed away by Jeeps ironically enough.

[desmo9]

Originally Posted by Jay

Saab has always been a forgettable brand. It serves no purpose and has little value no matter what you do with it. Say what you will, but I still don't understand where Saab fits in the GM family if Cadillac is high luxury, Saturn is [going to be] mid-luxury, Buick is mid-luxury, and Pontiac is a sporty Chevy.

You're right, you don't understand where Saab fits ... because calling it mid-luxury is misguided, and using it in the same sentence with Buick and Pontiac is misguided.

Far be it from me to use Toyota as an example, but I see Saab to Pontiac sort of as Scion is to Toyota. Toyota has the Yaris and Corolla, but Scion still serves up a quirky mix that's not at all mainstream, thus does not overlap with Toyota.

Sure, the way GM's cooking up Saab, with rebadged Trailblazers and Subaru compacts, makes it seem irrelevant. And if GM continues down this road, I'd agree with you and York. However, using the consequent sales data to conclude that Saab has no potential would be erroneous. It's one of the few GM brands that has a unique and well-defined brand character. It's getting muddled up by the minute, but the purists out there still know what Saab is, and they won't find it in any of GM's other divisions.

[Arizona Slim]

Saab is at a crossroads. If they continue down Rebadge Road, they're done for. It won't take long for mainstream America to forget what Saab used to be. They need to bring back the European flavor that built their following.

[lytmup]

Originally Posted by Darc Requiem

While I agree on the engine, the H3 can actualy traverse the Rubicon trail. Its my understanding, and I may be mistaken, that the H2 is the worse off the three when it comes to offroad capability. I've actually seen H2's get stuck and have to be towed away by Jeeps ironically enough.

While I am not familiar with the Rubicon Trail, I looked at/under an H3 the other day, and there are points underneath of that thing where the max clearance cannot be more than 6". I havent off-roaded in a long long time, but there is 0% chance that I would take an H3 if/when I do it again. (Jeeps are really the best at off-roading)

As far as the H2, I thought that it rode on a Tahoe chassis.

[moman]

Originally Posted by Jay

I think the idea is to sell off Hummer now while it is worth something instead of keeping it until it starts losing money. You have to admit that a good proportion of Hummer's success is its novelty. Once that wears off and/or gas prices skyrocket permanently nobody will be buying Hummers and what good does that do GM? Also keep in mind that there isn't a wide range of things designers can do with the brand other than offer big, blocky SUVs.

I don't know if selling Hummer is a good idea or not, but surely there is a case for it.

Hummer really is nothing more than a cachet at this point that is selling primarly on the success of the novelty as you correctly pointed out. The vehicles aren't class leading in any stretch of the word and are mainly successful due to the ostentatious, in your face attitude they present. No controversial design stays popular for long, especially one as divisive as the Hummer image.

I know it's fiction but the Fox movie "Oil Shock" showed Hummer out of business when gas jumped to $7/gal. (the scary part is that is not out of the realm of possibilities). Just knowing the huge panic seen with gas at $3/gal was amazing.

GM should sell Hummer while it's still worth something and funnel those dollars into a more profitable long-term enterprise.

[Karlog]

Originally Posted by Darc Requiem

While I agree on the engine, the H3 can actualy traverse the Rubicon trail. Its my understanding, and I may be mistaken, that the H2 is the worse off the three when it comes to offroad capability. I've actually seen H2's get stuck and have to be towed away by Jeeps ironically enough.

The H3 is completely capable off road. To test the theory go to your nearest HUMMER Dealer with the Capabilities Demonstration Area (Test Track) and see for your self. The H3 is more controlable than the H1 or H2 due to its size. Also, the engine is fantastic for the low gearing and crawl ratio needed to accomplish the task.

[kenman923]

Keep Hummer and dump Saab!!!

[DmitryKo]

GM may want to retool former SAAB production lines for common platforms, but killing the SAAB brand is useless because it has been a very strong brand in Europe. Just look how the S3X design from GMDAT was customized into the Opel Antara, the Chevrolet Captiva (with another Captiva being the T2X, a 'sporty' version) and the Holden Territory Fighter. I'd bet a version of the S3X from SAAB would have a success as well.

[GTropic]

Originally Posted by lytmup

What can be more watered down than an off-road vehicle that can barely go off-road (im talking about the H3). Have you looked at the clearance of one of those, or rather lack thereof, not to mention the anemic engine that it has.

I think the only off-roading an H3 could do would be that of driving it in the yard to wash it off.

I totally respect the H1 and to a degree the H2, but the H3 is basically a really big station wagon.

If you don't think that the H3 is capable of anything, just go to Google and do a search on "H3". The H3 did tackle the Rubicon and I'm pretty sure that it has more than 6" of ground clearance. The engine might be underpowered for merging on the freeway, but in low gear going over rocks, it has plenty of power.