Merger, Who Is It Good For? A Big Al Rant

[stevecmh]

i think GM is better off than Ford or Chrys.. in platforms and engineering.. but if i had to pick one i would more rather have Ford.. but oh well.. i hope it works.

how about BMW

[MisterMe]

Originally Posted by Firebird00

Because for some reason on this site, a horrible anti-Pontiac tone prevails. ...

Yes. In the last few months, we have seen numerous posts advocating the demise of Pontiac, GM's No. 3 nameplate in sales volume, and GMC, GM's No. 2 nameplate in sales volume. One wonders why don't they go for the trifecta and call for the demise of Chevrolet, GM's No. 1 nameplate. There is a reason why you don't let children play with matches.

[wildgoosechase]

I see it as a good thing. GM has excess capacity, better that Chrysler cars be built in GM factories on GM platforms than Nissan or Fiat. The truck market is shrinking, there is not room for 3 platforms of full size American truck, nor the resourses to develop them in a post CAFE environment. When the Silverado is due a refresh I would not be surprised to see a merged platform. GM is king of badge engineering, it is what it is good at. Why not buy another channel to distribute GM products?

[t-rex]

Originally Posted by MisterMe

Yes. In the last few months, we have seen numerous posts advocating the demise of Pontiac, GM's No. 3 nameplate in sales volume, and GMC, GM's No. 2 nameplate in sales volume. One wonders why don't they go for the trifecta and call for the demise of Chevrolet, GM's No. 1 nameplate. There is a reason why you don't let children play with matches.

It's not that some of advocating axing Pontiac don't like the brand. It's more that there's simply not a business case for it in today's market. Firstly, it's difficult to sell "performance" in an age that's becoming more MPG-conscious, and secondly, it's difficult to sell "performance" when you've got V6 family midsizers that scoot up freeway ramps with 0-60 times that put even some old "muscle cars" to shame.

Now that's not say to say there's not room for hairy sports models like the G8, or interesting smaller models like the Solstice. It's more that these vehicles could just as well be Chevrolet products. It's not as though the Chevy "SS" badge isn't revered amongst car fans.

The problem is, these types of vehicles don't sell in enough volume to justify the expense of administering and advertising for such a small brand. Now if Pontiacs sold at a high list price, there'd be a case for a low-volume, niche brand, but Pontiac has always been a solid blue-collar low-priced car, and sadly, the brand's reputation simply isn't strong enough to charge big bucks for, especially with economic uncertainty looming on the horizon. Pontiac would need about ten specialty "niche" models to keep volume enough to justify the brand, and GM simply doesn't have the resources to flush out a full lineup of performance-, or even sporty-themed, Pontiacs.

One idea tossed around by us armchair-product-planners is to graft twin nostrils onto Opels to flush out the bottom end of the Poncho line, and keep the hairier Holden-based models at the top. But that negates Saturn's existence. Saturn could be axed, but it could be argued that Saturn has a brighter future than Pontiac. Given Pontiac's huge percentage of sales to fleets, it's quite possible that Saturn is outselling Pontiac in the private market.

I've got a deep fondness for many great Pontiacs of the past, but like all but hardcore fans of the brand, most of those date from pre-1973. Pontiac's had a long, interesting history, full of ups (the 1960s) and downs (early 1980s). I'd suggest that GM gradually withdraw the smaller, FWD Pontiacs and just let the G8 run its current course, and let the proud Pontiac brand go down in a blaze of glory, having the last Pontiac off the line be a shiny top-of-the-line G8. I shudder to think of some lame G6 sitting on a floodlit plinth in a museum with a plaque noting it was the "last Pontiac off the line"...

As for GMC... that's a tough call. Two demographics are going to be really hit hard by an upcoming recession (which is all but inevitable at this point): the casual pickup truck buyer (the ones who created the truck boom in the first place) and upper-middle-income earners, who are arguably the most debt- extended. These are the bulk of GMC's customers.

With the likelihood of GMC's customer base — and profit base — vanishing in a deep recession, there's absolutely no use to keep the brand as a mainstream seller. If the customers keep coming, keep GMC, but if they dry up, as many are predicting, GMC may dry up as well. If that happens, I think GM should do what most on this forum suggest — turn GMC into GM's light-and medium-commercial duty arm. Let "Professional Grade" be something real, and not just marketing shtick.

[biggerj]

Originally Posted by wescoent

Yes on all counts.



Pure style.

Ack! Looks like a late 1990's Taurus to me.

[Xenon]

I wonder if this "merger with Chrysler" is really a formal way of asking for a buyout from Cerberus???

[MisterMe]

Originally Posted by t-rex

It's not that some of advocating axing Pontiac don't like the brand. It's more that there's simply not a business case for it in today's market. Firstly, it's difficult to sell "performance" in an age that's becoming more MPG-conscious, and secondly, it's difficult to sell "performance" when you've got V6 family midsizers that scoot up freeway ramps with 0-60 times that put even some old "muscle cars" to shame.

Now that's not say to say there's not room for hairy sports models like the G8, or interesting smaller models like the Solstice. It's more that these vehicles could just as well be Chevrolet products. ...

Assuming facts not in evidence. Nobody said anything about the G8. To the contrary, Pontiac was No. 2 in 2007 before the G8 ever reached the showroom. It is a limited production car that will have minimal impact on Pontiac's sales. Assuming for the sake of argument that Pontiac means performance, it does not follow that performance means a 4000-lb car powered by a large V-8.

As for GMC, the brand has a new and very successful model in the Acadia. I see no reason that the GMC can't follow-up the Acadia with other new and successful models.

It does, however, require recognition that we are entering a brave new world. If we are to survive here, we must adapt. Trying to hold onto the past won't cut it. Neither will blindly throwing away what we have. The automobile manufacturers that are still in business in 2020 will not be building a different mix of its current offerings. They will be manufacturing entirely new cars powered by a variety of different energy sources. GM is in as good a position as any to survive. However, it needs vision and imagination at its helm. It also needs patience among its customers.

[concordefreak]

A merger of equals is not necessarily such a bad thing, GM can get rid of a couple of brands if this deal goes down and consolidate vehicle line ups.

As most people are saying, get rid of pontiac in favor for dodge vehicles, which would be mostly logical as it is the 'affordable' brand with performance oriented vehicles as well (SRTs anyone?)

Pontiac can easily shoot off the G8 as a new RWD impala, send the solstice and G3 to dodge (to get their B class car and their hornet), and throw the torrent to GMC (which I believe its already on task to do so for next gen). What other products would need saving for pontiac anyways? I am a pontiac fan as well, but the neglect of the brand over the years has demolished any love I had for it.

A crazy idea of mine, would be to spin off saturn into chrysler vehicles. Chrysler has a far richer history than saturn, and GM is trying to move saturn towards the 'upscale' market. This gives competitive products to chrysler, which will compete below Buick but above chevy. It is hard to push a newer brand AMERICAN brand through the market, even if they are made overseas.

It is a very hard decision to shut down buick or GMC, as both brands have a major prescence for GM history and sales respectively. Buick is getting refreshed with the new lacrosse, but does have the least product to offer of all GM brands. Hummer is done.

So this will allow for the chrysler dealers to consolidate their 3 brands (CDJ's) which they already do in canada, while GM can cut out pontiac in favour for saab or another upscale brand (caddilac-buick-GMC) and keep saab and chevy alone. I never did understand having your sports brand mixed in with working trucks and lower luxury vehicles.

All of this doesnt include what vehicles would be cut, but this would help both companies with R&D and their dealer issues. As for cutting out LY platforms, they're already been developed and would at least stick around until the next refresh. Its not exactly easy to just put sheet metal over a different platform, they arent BOF cars anymore. Worst comes to worse, GM has more liquidity if the B word comes up, they can always sell chrysler to a foreign company for some cash.

On a side note, chrysler LH cars are awesome. When my father needed to get a new vehicle it came between a GP GT or intrepid ES. The intrepid won him over the GP, and this is someone who has owned 1 ford and 4 GM vehicles over his lifetime. He was far more impressed with the entire vehicle; interior, exterior, ride and handling, a little more horsepower on tap as well.

And this is what I drive to compare the stock LHS posted:

[BigThreeForever]

Originally Posted by MisterMe

Yes. In the last few months, we have seen numerous posts advocating the demise of Pontiac, GM's No. 3 nameplate in sales volume, and GMC, GM's No. 2 nameplate in sales volume. One wonders why don't they go for the trifecta and call for the demise of Chevrolet, GM's No. 1 nameplate. There is a reason why you don't let children play with matches.

I agree. I am sick of the constant anti-Pontiac and anti-GMC chanting, too.

I can agree 100% with the demise of Hummer, which was commercial folly from the get-go . . . not to mention handing GM's critics a huge stick to bludgeon it with. Talk about being out of touch with how the company is perceived. Hummer personified the "cheap fuel will be with us forever and damn the global warming zeitgeist" myopia that the media love to thrash us with.

I also think that Saturn, despite a a very rapid total model overhaul and expansion, has proven that it has no future, and that investment should, in future, if there IS a future, go elsewhere.

So, Chevrolet, Pontiac, Buick, Cadillac, GMC . . . . plus Chrysler, Dodge and Jeep? Still utter brand mayhem.

The great irony is that while GM seems lost as to divisional identity, as does, to a lesser extent, Ford, Chrysler's brand identities are far better defined. With the exception, of course, of mistakes like the Jeep Compass.

[blkwrxsti]

Originally Posted by Xenon

I wonder if this "merger with Chrysler" is really a formal way of asking for a buyout from Cerberus???

You should read the DeLorenzo rant posted by adplusone - he's right that the only sane course of action for GM to take would be to finish picking Chrysler clean.

Merger, Who Is It Good For? A Big Al Rant

I think both GM and Cerebrus find themselves in charge of an asset they have no idea how to maximize - GM with GMAC, Cerebrus with Chrysler. I hope the rumors are true that GM is looking for some cash out of this deal, but I wonder if they overestimate the amount of trouble that Cerebrus would have to go to in order to rid themselves of Chrysler.

The down side is that if Chrysler is going to cost Cerebrus that much to unload, it's likely to cost GM more. If Cerebrus ends up sending Chrysler to chapter 11, it will be interesting to see who ends up buying the minivan, Jeep, etc. My guess is that VW would end up with the minivan, and Toyota would end up with Jeep.

I cannot believe with the amount of money Daimler had to spend to offload Chrysler to Cerebrus a couple of years ago, that it would turn out be such a brilliant move. I wonder if Rick W is wishing he was nicer to Ghosn the last time they talked...

[blkwrxsti]

Oh yeah - I forgot to mention - I'm ok with killing off Pontiac (with or without a Chrysler deal)

[ColinOpseth]

You didn't address issues surrounding their dealership networks. What would happen to existing franchises? You can't just shut them down and I highly doubt Mopar guys will capitulate to GM easily, and vice versa.

[bone]

An interesting read, however, other than Jeep and the minivans I see no benefit to GM. As some have already mentioned, GM currently has too many brands to handle. What GM should be doing is eliminating Saturn, Pontiac, Hummer, and possibly GMC, and buying out poor performing dealers at what would be fire sale prices.

[Z16monte]

I'm simply not sold on the idea that enough Chrysler buyers would buy a Chrysler branded GM product for the merger to be successful. I know several Mopar (Jeep owners included)owners who would NEVER buy a GM product, even with the pentastar attached. As for me, Nothing Chrysler builds strikes my fancy. Selling off idled plants to foriegn manufacturers,Nobody wants them. They're outdated and Union. Don't think for a minute that the UAW won't be picketing outside their gates the minute cars start rolling off the line without their members building them.

[Buickman]

see this as an attempt to deflect criticism from current woes...in effect nothing more than Gorilla Dust.

H. Ross Perot, Newsweek (12-15-91) "Gorilla dust is his expression for the perennially optimistic statements made by Smith and other company executives. Scooping up some imaginary dirt and tossing it in the air, Perot says, 'When gorillas fight, they throw dust in the air to distract one another.'"