GM: Time to Consolidate

[olds307]

Sell off Saab and Hummer. Keep Pontiac.

Group Buick and Cadillac together, keep Pontiac and GMC together.

Buick needs a small, efficient car, based on the Epsilon platform, available 2 and 4 door, and most importantly available with an optional column shifter. Call it Skylark, as long as it's attractively styled, it will fill a huge niche. It will also round out Buick's lineup, without a compact, since the Skylark was discontinued, the Buick lineup has always seemed lacking.

[GM-Joe]

I don't agree, except maybe Saab; but do you know what, all of the brands mentioned are niche brands that don't get a ton of marketing or r/d money to begin with and except for the G5 and Vibe, they are all pricy. Pontiac has already been merged with GMC and Buick, which you didn't mention and HUMMER and Saab are supposed to be merged with Cadillac. I do think that the weaker brands, the ones mentioned, as well as Saturn and Buick, need a new start and new direction. If GM should get rid of those 3 then Toyonda should get rid of Scion and Acura too; correct?

[logansowner]

Buick = Give the Enclave to Caddy and call it a day
SAAB = Crazy expensive, and nobody buys them anyway
HUMMER = Dumb idea from the start, and every gas increase makes it more irrelevant
Chevy = Obviously safe, the bread and butter
Pontiac = On the fence, lots of brand love, but for every plus (G8)they add a negative (Aveo clone)
GMC= Profitable, but could simply become an upper trim on Chevy trucks
Saturn= Doomed by nobody knowing about it, everything they sell could be divided up between remaining brands.

GM could have quicker model turn arounds and lower marketing costs if they were just Caddy, Chevy and Pontiac.

[logansowner]

Originally Posted by GM-Joe

I don't agree, except maybe Saab; but do you know what, all of the brands mentioned are niche brands that don't get a ton of marketing or r/d money to begin with and except for the G5 and Vibe, they are all pricy. Pontiac has already been merged with GMC and Buick, which you didn't mention and HUMMER and Saab are supposed to be merged with Cadillac. I do think that the weaker brands, the ones mentioned, as well as Saturn and Buick, need a new start and new direction. If GM should get rid of those 3 then Toyonda should get rid of Scion and Acura too; correct?

Well Honda has 2 brands, and Toyota has 3, Ford has 3, Chrysler has 3, GM has...7.

It's like telling a fat lady to run a marathon, and then making her carry a 50 pound back pack as well. How can GM possibly pay to market all these brands, and develop new models before the old ones get stale?

[ChevroletRevived]

Originally Posted by YupYupYup

That rugged military style has raked in a crap load of money for GM. Helped them survice...

While I don't feel it ia perfect brand just yet, read my comments above. Also, Hummer has very good brand loyalty, recognition (better than Pontiac with the younger crowd it seems...), and can still rake in profits, unlike many other smaller GM vehicles. They also have some great dealerships. It is not so much what Hummer is today, but what it could be in the near future with new technology.

Yes, it did at one time rake in a lot of money. But will Hummer help what GM is trying to do going forward? I don't think so. Also, I see any profits that do/did exist ceasing to do so because of declining sales and prices, bringing down residuals, dealers, etc. We'll see though what GM does with them. I wonder what GM could sell it for?

[SAngelo]

I agree, you cant get rid of Buick they sell too well in China plus Pontiac performance will be sacrificed with the Cafe rules. Give the G8 to Chevy and give the Holden Park Avenue to Buick. Saab and Hummer should go to. I think Buick/GMC would be perfect fit with Cadillac, Chevrolet and Saturn standalone.

[Hoosier Red]

Is this the proverbial "rock and a hard place?" Can they afford to close another brand? The expense of closing Pontiac may outweigh the expense of keeping it open. But they can't afford to provide the product it needs. In the short term, there's a huge upfront expense and an almost certain loss of marketshare that would go with closing Pontiac. Does GM have enough resources to survive that short term? I honestly don't know.

[babyfacedkayos]

Originally Posted by nsap

Did you just read the parts you wanted to? I called for Saab's death as well.

Say what you wish, but GMC actually makes money. This coming from a Pontiac fan and owner that doesn't particularly care for GMC.

Its almost IMPOSSIBLE 4 GMC to NOT make money. They cant have 2 many stand alone dealerships, and they have NO exclusive product.

GMC IS THE POSTER CHILD FOR BADGE ENGINEERING!!!
They sell a nicer Tahoe, nicer Suburban, and nicer Outlook.

My grandmother could make $$ running GMC

And i would like 2 thank mgescuro for deciding GM shouldnt exist. Who needs Cadillac, and Hummer, and Saab, and Pontiac... Buick sucks...
I have an idea... LETS CLOSE ALL THE BRANDS! I'd love to know what does he love that ISNT GERMAN.
Warren Buffet thinks the Cadillac DTS is worthy of driving a BILLIONAIRE around... but according 2 some of mgescuro's posts.... he would call him a moron and spit in his face...
OK.... rant over.... real question time....

Can GM even sell HUMMER? Doesn't HUMMER owe its existence 2 initially issuing a civilian version of military tech? GM has all kind of gov't contracts and i doubt selling HUMMER would make even the democrats happy!!! LOL
General Electric couldnt just up and sell some of its divisions to foreign companies due to silly little entanglements known as national security, and the greater good. Just a thought.... anybody know if the gov't would have a fit if GM tried 2 unload HUMMER???

[ghughes]

If you believe GM, closing Olds cost them over $2 billion to buy out the franchised dealers. Not to mention lost sales from brand loyalists. They simply dont have the cash to close any brand save saturn, which has a teeny dealer network. No one would want to buy hummer, prob. not saab. If they have been lying about the costs to pay-off the dealer franchisees, then it might be feasible. I have seen many pontiac loyalists on this site who swear they would defect from GMs stable if Pontiac were to go. I see that Ford is likely prepping volvo for sale, as well. These are desparate times for GM, though. I would want the US govt to bail us out a la Chrysler in the late 70's. Japan continuously bails out their automakers for oh 60 years, so; that is the way the game is played.

[djo165]

Very good article. I also used to think they could keep all the divisions going and just do more dealership consolidation, like what had been going on with Buick-Pontiac-GMC dealers. But as the market tightens and competition increases, I changed my mind about a year ago.

Saab is by far the easiest choice to kill off first. I like the 9-3, but it would require a LOT of investment just to get Saab competitive with the likes of Audi, and even more to compete with BMW or M-B.

Hummer would be a keeper if gas was only $2.50 - $3 a gallon, but at $4 a gallon and "green" becoming more and more chic, they're on their way out as a cool brand. And GMC dealers could take up any orphaned models very easily.

Pontiac? It would be tougher to kill Pontiac not only because it is one of GM's oldest brands, but also because they provide additional sales to a lot of Buick and GMC dealers. If you remove Pontiac sales from those B-P-G dealers, you're going to lose a few Buick and GMC dealers as well. Really, all Pontiac needs is three well-developed sporty models to go along with the three Buick models already at those dealerships. But if GM can't afford to give Pontiac three vehicles that are significantly different than what the other divisions offer, then forget it. And IMHO, right now Pontiac only has two. The G8 and the Solstice. The G6 is too much like the Aura and Malibu.

[djo165]

Want some more good reading on this subject of GM realignment?
Read these.

http://www.autoextremist.com/current/?currentPage=15

"And if the hugely successful launch of the Malibu should have taught GM anything, it’s that once you have an outstanding product, that product deserves an intense, disciplined and focused marketing push that does that product justice. The Malibu is enjoying the benefits of just such an effort right now, winning much deserved accolades and awards left and right. (Now granted, GM had to throw the Saturn Aura under the bus in order to ensure the Malibu was a hit, so you can see how the intertwined difficulties of too many models-too many divisions grow exponentially for GM every time it turns around.)"


http://www.autoextremist.com/current/?currentPage=2

"And here, trying to survive and thrive in this culturally bereft environment, is Pontiac, struggling and scavenging for marketing dollars - and for relevant products - and it’s not going well. Not going well at all, as a matter of fact."

[djo165]

Originally Posted by babyfacedkayos

Just a thought.... anybody know if the gov't would have a fit if GM tried 2 unload HUMMER???

The Feds shouldn't have a problem with it. GM doesn't make the Humvee, which is what the military uses. AM General makes the Humvee, and GM sold the civilian version, the H1, through Hummer dealers.
http://en.wikipedia.org/wiki/AM_General.

The H2 is built by AM General for GM, but it's a GM design I believe.
http://en.wikipedia.org/wiki/Hummer_H2.

The H3 is built in by GM in Shreveport, Louisiana at the same plant that makes Chevy Colorados and GMC Canyons.
http://en.wikipedia.org/wiki/Hummer_H3.

[derrado]

Saab might be hard to offload but... think what Ford did. They bundled Jaguar and Land Rover together to make sure Jaguar got sold.

GM should do that with Saab and Hummer. The Chinese/Indians may not want to buy Saab on its lonesome, but put with Hummer? Sounds like a good deal.

As for Buick/Pontiac/GMC? They need to figure out a way to bring down their average mileage for CAFE. That way, none of them have to be thrown in front of a bus.

[t-rex]

Very well-done piece, nsap. Insightful, analytical, and most importantly, realistic. That a Pontiac owner and GM fan can swallow that bitter pill and admit that Pontiac really needs to be laid to rest in dignity, shows the gravity of that brand's situation.

I think part of me wants GM to hang on to Saab because I'm afraid if it were put on the block, there'd be no takers. Hopefully if GM put it up for sale, somebody (anybody but BMW) would pick it up, and return it to its weird, quirky, brilliantly intelligent, truly aircraft-inspired origins. Sadly BMW would probably be the only company interested, and they'd do, as I noted in another thread, just as I would suspect, and turn it into a pale Teutonic interpretation of what Germans think a Swedish car should be. Or maybe they wouldn't. Either way, selling off Saab would bring some cash in, but I don't see any point in that, since Rick and his twirling band of fartknocker twits would blow it in a few weeks anyway. I say GM put it up for sale and hope someone buys it. If not, oh well. Saab would have died ages ago anyway had GM not have bought it.

If worst comes to worst, maybe GM could sell off everything but Chevrolet, and turn it into a powerhouse global brand. SAIC would probably be more than happy to pick up Buick and Cadillac, and possibly even Oldsmobile (which could be successfully revived if done properly) and Pontiac. GMC's and Hummer's profits will erode with every penny increase in gas prices and both face a risky future. Americans don't seem to want Opels, so that obliviates the need for Saturn.

Who knows? It's just sad though that incompetent Ivy League MBA twits managed to singlehandedly destroy something so significant in American culture - our cherished car brands.

[BBDOS CV8]

I agree on Saab - badgeneering other GM products to it or from it like the Saaburu and the Cadillac BTS just make a joke of it. I always thought Saab owners were Volvo owners who wanted to be different, like the chintzy gearshift lock.

It needs to be owned by someone who maybe doesn't have related and competing product.

Hummer should not exist as separate dealers. Perhaps they, with Pontiac, and Hummer should be sold as part of a premium network as in Europe and proposed for other places: kill ordinarymobiles like the G6, G5 which are just clones of very ordinary cars sold by other divisions and keep the Solstices, G8s and other better vehicles as they arrive.

You could even argue that the Corvette should become less Chev and more GM premium, with the arrival of the Camaro to be the family-guy muscle.

Chev can concentrate on bread'n'butter accessibility with the various versions of the Camaro being the brand's muscle/excitement. Pontiac - twisty road sportscar and GT. Buick is your luxury and Cadlillac your elegance/refinement/techno with tinges of sport.

Then GM Premium sells the aspirational vehicles that are really niche - they can attract the young high-dispoable income types..

Look at Harley - they focussed their brand on their core business after a company board-buyback about 25 years back and now they can't keep up.

They were once like the Detroit 2.5 of motorcycles.

As long as GM keeps acceding to dealers demands for differing versions of the same product and muddling the message of the branding it's hard to see them making headway.

Note that none of this means GM can get away with peddling trash in any division - expensive trash in Caddy won't help it sell. Neither will cheap trash in Chevvy. If the product has deficiencies in the market it's pitched at it still has to be fixed.