GM: Time to Consolidate

[Ambalanche]

This will be considered blasphemy by many of you, hell, before now, I'd even think so, but with the state things are in....

I'd like to see, instead of Pontiac being killed, sell it! And sell it to a FOREIGN company!! OOOOOHHHHHHH!!!

Well, the reason why is, Pontiac has heritage. Yes, it's been with GM for what? 80 some years right? Well, since GM can no longer afford to give it the product it needs, to be a true "American BMW" then why does it have to die? Much was made of the Paul Harvey mistake of thinking the April fools joke about Toyota assuming the Oldsmobile name as the trademark had expired. Did any of you wonder what that might have looked like? Well, I'd be very interested to see what someone else could do with one of GM's "damaged brands".
If GM won't buckel down and invest the money in Pontiac like they did with Saturn, why not give someone else the chance? GM CAN give American Axel 218 million to give to the UAW....

I'm not saying this to piss any of you off. I have GM running through my veins as much or more as any of you do, but I say, if GM can't, or won't do it, then why just kill a storied brand like Pontiac? SELL IT! Let someone else let it thrive! Maybe that would be the kick in the pants GM needs, to see a competitor do with one of it's former brands what it couldn't, or wouldn't.

Maybe I'm way off base here, maybe it's just that GM doesn't have the money to bring things out fast enough, or maybe GM's painfully slow introductions are because it tips it's hat way too far in advance, IE Volt, Camaro, but I know GM cannot survive with a smattering of fantastic product, CTS, Malibu, Enclave and the rest mediocre, or just left to die with no advertising after the initial launch, Aura, all Saturns. Other than some print and only a little internet ads, I have seen NO OTHER advertising for the Astra. Some are calling it a flop. Well, yeah! It was never launched!!

If GM doesn't have the money to support everything then as NSAP proposes, there is going to have to be some pain to ensure the longevity of GM outright. It's a shame, but I'm tired of seeing Toyondassan advance while GM languishes.....

Let the flames begin.....

[nsap]

Originally Posted by Maetrix66

Articles like this really piss me off.

I'm sorry NSAP, I know your heart is in the right place, but I think you are cutting off your nose to spite your face.

Kill Pontiac. But keep GMC?

Let's see. Pontiac is a CAR brand.
GMC is a Chevy truck rebadge factory.

People aren't moving from cars to trucks, it's the other way around. I agree with Saab and Hummer. I understand the global implications behind keeping Buick.

I know it makes little sense just stepping back and looking at the general idea of it (in regards to killing Pontiac over GMC), but GMC does a LOT of sales volume. Pontiac does not. Also, Pontiac is becoming a fleet brand quickly (G6, Grand Prix, and even the Vibe have high fleet numbers), that is doing nothing but hurting GM and the brand. GMC has high retail numbers and does some of the highest volume at GM.

There is no doubt in my mind that eventually GMC is going to have to be killed off too, but that is long term thinking. Right now GM would be shooting themselves killing GMC....there is just too much volume there.

Originally Posted by Ming

I understand the sentiment and agree with a lot of the points here.

But I still think that GM does not need to think in the old terms of Brand=Dealership. Like Toyota shares its dealerships with Scion, a Buick-Pontiac-GMC dealership can make sense, as long as there is absolutely no overlap in product, and I mean as far as not allowing a LaCrosse and Grand Prix to exist at the same dealership. Decide which brand gets the ho-hum midsizer and stick with it. Certainly not an Acadia and Enclave. Pick one. Acadia is irrelevant when Chevy will offer a very similar vehicle and Saturn has one too. The Enclave is the most unique among the GM reskins, so that would make sense to keep. But no Acadias on the same lot.

For all practical purposes, B-P-G should be treated as a single brand. Same with Cadillac-Hummer-Saab dealerships. And GM needs to make clear that it is not a temporary passing of fancy at GM -- that Buick Pontiac GMC will forever be merged into a single unit. If one falls, they all go.

Any dealer who has brands grandfathered in - in some different way - like Buick/Cadillac - must deal with potential holes in their offerings, or buy in to the new brand alignments.

This way when BPG advertises new mid-size crossover SUVs, they are not splitting their advertising budget into two - or three different vehicles. There will be either one Buick or one GMC mid-size crossover.

Where the axe needs to fall is on single brand (other than Chevy) dealerships. It is true that GM can no longer afford to give a vehicle of every type to its many brands, lest GM be ultimately tempted to repeat such rebadging horrors as the CSV minivan quartet (Terraza, Uplander, Relay, Montana SV6).

If this still doesn't make sense to you, think of it like this --- how could you take the existing Chevy lineup and split it into three distinct brands? Where would Corvette go? (Pontiac) Where would the HHR go? (GMC) Where would the Impala go? (Buick) Now, why can't three brands make a whole at BPG? It's just naming and badging.

No more single brand Pontiac or Buick dealers. Make it happen. GM won't lose the customers it lost to import brands when it killed Oldsmobile.

But there must be a hard rule. NO OVERLAP PRODUCT in combined brand dealerships. And fewer Chevy reskins. BPG must not become a mirror brand for Chevrolet with Buicks that are only slightly different from Chevies in styling and a little "quiet tuning". GMC is bad enough as it is, and with big trucks down in sales, the once strong argument for GMC is wearing thin when you consider that GMC eats into the Chevy truck advertising budget. If that means paring down the selection of vehicles for GMC, then do it.

In totality, a BPG dealership should have the same amount of models available as at a Chevy dealer. And this can happen if Pontiac stops selling minivans, cute utes, and sedate family sedans and leaves that up to Buick (and GMC for the cute ute).

When an old-think customer comes in and says "I want a Pontiac SUV", then politely point out that GM has merged Pontiac-Buick-GMC into single dealerships, and did you see the crossover SUV GMC offers over here? Or that new Buick wagon? The models should be a stone's throw away on the showroom floor, and an effort should be made to sell cross brand to old single brand loyalists.

Ming, I totally agree. There is no doubt that all of the current divisions could WORK together. Actually, given some thought, they could work very well and compliment each other. However GM does not have the funding to do what needs done in order to accomplish that.

[vam29]

It would make a lot more sense for Pontiac to become a sporty small-car Division to help GM meet the new Cafe standards than to eliminate it completely. And the "Scorch-Earth" policy to keep this valuable asset out of the hands of the Chinese is not only irrational but displays poor business acumen.

[Maetrix66]

There is no doubt in my mind that eventually GMC is going to have to be killed off too, but that is long term thinking. Right now GM would be shooting themselves killing GMC....there is just too much volume there.

That's just it, I don't think they would lose much volume. People aren't fooled into thinking that GMC's or Chevy trucks are seperate entities. People are loyal to GM trucks, not to Chevy or GMC. why does Chevy sell more than GMC? Price. There are a few people who prefer one over the other, but those people would be appeased with a GMC trim line.

Plus, GM get's to snatch the sales crown from the F150 almost overnight.

The 15% (or less) in sales drop from the small group of people that would buy a GMC but not a Chevy would be lost in a few years anyways as the market shifts to smaller vehicles.

I'm not comparing GMC's sales figures with Pontiac. As someone above said, my grandmother could sell a GMC pickup.

I just see GM losing more sales by closing Pontiac than closing GMC. GMC customers are far more likely to stay in the GM family than lost Pontiac customers.

[Tone]

There are more than one way for GM to deal with the brand issue ... but it needs to pick one route and stick with it.

Either consolodate, leaving fewer (and hopefully stronger) brands. Or grow a pair and institute some discipline to the existing brands -- ensuring that each brand has a place within the hierarchy.

The second option could easily work ... but it would leave only Chevrolet as a "full line" brand. And, even it's top end (say, the Impala on the car side) would need to sit below the next rung up (Buick/Pontiac) to ensure each brand has its place.

Pontiac would have a much more focused performance brand, with no "base" models. If it has a small FWD coupe, even the base version should have decent performance and power. Similarly, there would be no base Buicks -- even the smallest and cheapest should be a premium car in its segment. Leave the value versions to Chevrolet.

GMC would play a similar role to Chevolet on the truck side.

Cadillac really needs to be completely premium ... a clear step up from Pontiac/Buick. In fact, if GM did the Pontiac/Buick products correctly, it would give Cadillac the freedom to stretch higher than the STS.

Saab and Saturn should effectively be bundled, leaving the entry level to Saturn and the premium level to Saab. The whole line would need to be profitable a fairly low volumes, though there might be some opportunity to brand Saturn/Saab in China/India (as GM's Euro brand) to increase global volume.

Hummer should live or die based on its profitability ... either it can make money on relatively low volume, high margin off-road oriented vehicles or it cannot. The brand's equity is its focus ... dilute that and you basically duplicate GMC.

So, I do believe GM could keep its brands -- and use them effectively. But, it requires a lot more discipline than they've exibited ... and I imagine it would require the company to redefine its relationship with its dealer body, which it probably needs to do no matter what strategy it pursues.

[prototype66]

I agree with killing Saab and Hummer but Pontiac should stay and here is how.
My abridged version is simple (if possible) Make Pontiac a 3-4 vehicle company only and keep it with the 3-4 model Buick and GMC reduce to 3 with NO OVERLAP. Any vehicle in the same catagory , one goes. Lambda stays Buick and GMC drops it. Chevy keeps it and Saturn does as well AFTER a facelift taking GMC cues. The rest of Pontiac is G8, Solstice and NG G6 with a possible Firebird(or NG GTO) if needed. I by no means know how to run the worlds biggest car company but loosing Pontiac instead of a major downsize doesn't feel right to me. JMO

[Archangel]

I would kill Saturn instead of Pontiac. Just bring Opels and Holdens as Pontiacs. That way the brand could have some interesting products while being different than Chevy.

[Maetrix66]

I would kill Saturn instead of Pontiac. Just bring Opels and Holdens as Pontiacs. That way the brand could have some interesting products while being different than Chevy.

BING BING BING!

We have a winner!

[tgagneguam]

Thank the good Lord that no one here, to my knowledge, is in charge of running GM. Everyone treats GM's dilemma like a headache caused by a brain tumor: keep taking Tylenol to treat the headache rather than treating the tumor that causes the headache. To date, downsizing has yielded zero gain, so let's downsize some more!

In other words, the brands aren't the problem. It's management. Notice how through all the permutations of a downsized GM, not a single word is ever uttered about treating GM's tumor: management.

But, please, let's continue with the debate. No let's cut Pontiac, but let's keep Saturn. Nah, nah, it's Buick that needs to go, but let's keep Saab, but fold it into Saturn's dealership network. And give the Enclave-with nary a trace of Cadillac design cues-to Cadillac to sell. Of course, the suits will simply change seats and foil any downsized GM.

[stillen]

I agree Saab must go as well as Hummer.

One other Division must go to streamline GM for the future so which one is it If killed off Saturn those Opels could be rolled into Buicks easily because these Opel vehicles would be very good as Buicks and not waste the time spent Blending this to American taste.

So I say kill off Saab. Hummer and Saturn turn those into Buicks keep Pontiac where its going rear wheel drive or the could make the next G6 an Opel.

GM must do something as per described in this thread to survive so streamlining is not an option its a must.

[slowinthefastlane]

The largest Buick/Pontiac/GMC dealer in the San Jose, California just closed down due to lack of volume:

http://www.mercurynews.com/ci_8901753

"In 2007, five General Motors dealers selling Buick, Pontiac and GMC vehicles in Santa Clara County sold 2,132 new cars and trucks, according to R.L. Polk registration figures. That's an average of 426 vehicles per dealership, or eight a week.
Meanwhile, the county's four Toyota dealers sold 19,141 new vehicles in 2007. That works out to 4,785 vehicles each, or 92 cars and trucks a week."

BPG appears to be dead already - at least in northern California. GM just needs to finish them off before it's too late.

[slowinthefastlane]

Originally Posted by rwbooth

However, GM claims it spent $1Billion killing Oldsmobile. What would it cost to kill an additional four brands?

A bulk of those costs went to buying out dealer franchises, transitioning other dealers to other brands, and dealing with dealer lawsuits. Killing some brands like Saturn, Saab, or Hummer wouldn't cost that much because there simply aren't that many dealerships.

If they wanted to kill off a BPG brand, it would probably cost about the same as Olds - unless they did it in a different way. Rather than announcing a shutdown, GM could just stave them of product for a few years. Many of them would go out of business on their own.

[paul8488]

Originally Posted by tgagneguam

Thank the good Lord that no one here, to my knowledge, is in charge of running GM. Everyone treats GM's dilemma like a headache caused by a brain tumor: keep taking Tylenol to treat the headache rather than treating the tumor that causes the headache. To date, downsizing has yielded zero gain, so let's downsize some more!

In other words, the brands aren't the problem. It's management. Notice how through all the permutations of a downsized GM, not a single word is ever uttered about treating GM's tumor: management.

But, please, let's continue with the debate. No let's cut Pontiac, but let's keep Saturn. Nah, nah, it's Buick that needs to go, but let's keep Saab, but fold it into Saturn's dealership network. And give the Enclave-with nary a trace of Cadillac design cues-to Cadillac to sell. Of course, the suits will simply change seats and foil any downsized GM.

Then the only option is to change management (which is probably a very good idea)... which the current management isn't going to do. GM as it sits today doesn't work very well. GM will not have money to do all the wonderful things you want them to do with the brands tomorrow. Or next year. Or even next decade, as they are not going to magically have enough cash for all the brands, well, ever.

I see two possibilities:

1) GM continues to spread the hurt of not enough money and talent for designing, marketing, and selling vehicles across all brands so that none are really 100% competitive, or
2) GM gets rid of the weakest brands and spreads their resources over a smaller number of brands, making those as competitive as possible.

GM's goal is to make money for its shareholders. It's not doing a good job of that today. Their goal isn't about selling the largest possible number of vehicles, though in simple terms that helps. Selling 100,000 Grand Prixs is better than selling 50,000 Grand Prixs, but we all know of GM's nasty addiction to fleet sales. Still, the G6 will sell around 120,000 units per year... I think they're at least at 50% fleet. That's 60,000 units. If GM took the money they've poured into G6 development and marketing and applied that to Malibu development and marketing there's no question in my mind that the Malibu could easily add 60,000 units, or even more.

In an ideal world I'd like to see GM take advantage of all of their brands. GM isn't capable of doing that though. They moved Saturn in to occupy the space Pontiac used to or should occupy... a step up and a step sportier than Chevrolet. If GM thinks that they really need to split the market a 1000 different ways then I think they should get out of building cars. If the Malibu and Aura and Lacrosse and 9-3/9-5 can't cover the midsize sedan market without a G6 then there's something wrong with every one of those models.

If GM sold 1,000,000 Epsilon cars this year I'd say keep all the brands. They don't though. I don't even think all combined they even outsell the singular Toyota Camry. Having extra divisions makes sense if it helps you snag customers that you wouldn't otherwise have, but if a combined Cobalt and G5 can't outsell the Civic then they aren't paying for their own development and marketing costs.

[Tone]

Originally Posted by slowinthefastlane

The largest Buick/Pontiac/GMC dealer in the San Jose, California just closed down due to lack of volume:

http://www.mercurynews.com/ci_8901753

"In 2007, five General Motors dealers selling Buick, Pontiac and GMC vehicles in Santa Clara County sold 2,132 new cars and trucks, according to R.L. Polk registration figures. That's an average of 426 vehicles per dealership, or eight a week.
Meanwhile, the county's four Toyota dealers sold 19,141 new vehicles in 2007. That works out to 4,785 vehicles each, or 92 cars and trucks a week."

BPG appears to be dead already - at least in northern California. GM just needs to finish them off before it's too late.

Except BPG shouldn't be a high volume, low margin channel ... it should be a low volume, high margin one. Chevolet should be doing the high volume, low margin business, akin to Toyota.

But, it does raise the challenge of tranistioning dealers used to higher volumes to a whole different business. There simply should not be 5 BPG dealers in an area Toyota covers in four ... there should be fewer, smaller stores dedicated to a more upmarket customer experience.

[Ming]

Originally Posted by nsap

Ming, I totally agree. There is no doubt that all of the current divisions could WORK together. Actually, given some thought, they could work very well and compliment each other. However GM does not have the funding to do what needs done in order to accomplish that.

Well I can't argue that, NSAP. But if they do start cutting, then something drastic like Buick-Pontiac-GMC would make more sense to me than piecing them off and axing only Pontiac leaving Buick-GMC dealers, then killing Buick a couple of years after that, leaving only GMC, then cutting....see what I mean?

If the BPG strategy is for real, and GM has too many brands -- Rather than just kill Pontiac I say they should all go, and give combined BPG dealers a Chevy franchise where it makes sense.