Should a Truly Global GM Replace North American GM Brand Cars?

[Ming]

Should a Truly Global GM Replace North American GM Brand Cars?
Commentary by Ming
www.gminsidenews.com

I know what I'm about to propose will be polarizing, and considered radical and wrong by some long time GM fans. But I think it needs to be said. GM needs a way to stave off market share loss, and the slow and steady approach just may just not have time to work. I say, out with the old, in with the Global strategy - in FULL FORCE - not dribs and drabs.

Several of GM's many brands in the USA are literally bursting at the seams with cars of every variety. Despite the promise of fewer cars burdening GM's advertising budget after the death of Oldsmobile, GM took some of those Oldsmobiles and gave them to other GM brands. Now that some of those models are coming up for renewal or have left us, GM has the option, for instance, to tell single brand Pontiac and Buick dealers "no", and give those brands a simpler lineup that works within the Buick-Pontiac-GMC dealer structure.

Regardless of whether they choose to do that or not, GM North America, for whatever reason, simply has too many U.S.A. market-only cars out there to keep fresh, new and appealing. With GM's dedication to R&D (percent of revenue) reportedly lower than major Japanese rivals, it would seem impossible to have truly home run mid-size product in Pontiac, Chevrolet, Buick, etc. With 4 different North America Only W-bodies, GM delays investment in redesigns for many more years than the competition as each brand's model demands time and attention in the Grand Prix, Impala, Monte Carlo, and LaCrosse.

When considering just how many cars GM really has globally, one has to wonder if GM couldn't replace some of these US Market cars with offerings from its international stables.

You have Opel with a great lineup of cars that is used globally just about everywhere GM sells cars except here, in the United States. Saturn fans are hoping to see "Opel Influence" in upcoming cars, but shouldn't they just be getting rebadged Opels instead? Why make things more difficult than they have to be? Import restrictions and the UAW chokehold again? Would long time Saturn fans rebel at the thought of imported GM cars? Or is Saturn in fact the brand that was supposed to appeal to Import customers in the first place?



You have Holden, which is the master of platform sharing RWD car-based vehicles pumping out product that would seem perfect for Chevy and Pontiac. But again, we can't just import those like Chevrolet in Saudi Arabia. No, Americans would much rather have FWD sedans like the Impala. Or would they?



Then we have GM Daewoo, into which GM is injecting so much money and getting good results from worldwide. GM Canada even has several GMDAT cars sold under the Chevrolet nameplate, as well as under Pontiac. But not in the US. No. Americans don't want inexpensive Korean cars unless they are badged as Suzukis. What's that you say? The Aveo is the best-selling car in its segment? OK, maybe Americans DO want inexpensive choices like that in GM brand cars. But you can't have them all. Not in a GM brand in the U.S. Only Canadians want inexpensive 4-cylinder cars, hatches, and wagons like the Optra. Forget that the Forenza is the growth engine for Suzuki USA right now. Forget that Hyundai and KIA based their massive sales growth on "value packed" cars similar to the Daewoo Lacetti.



I understand the UAW beef with imported cars. I understand the patriotic desire to buy only things built and designed in America. I don't doubt that there would be many to cry foul at the idea of an Australian built and engineered Camaro, even if the last ones were built in Canada and the engine in the Aussie car was an American-designed LS2.

But the competition isn't playing on a level field. Toyota/Lexus/Scion doesn't restrict the cars it sells in the U.S. to cars it builds here. And GM can't expect to compete when it doesn't bring the best it offers from around the world to America. I'm not talking about a car here and there, or "Opel influenced design". I'm talking about competing with Toyota & Co. like GM means it, casting off the shackles of UAW contracts, and getting the best GM product available into the US market and NOW. The argument that "Americans don't want cars designed for Europe or Japan," is ridiculous and flies in the face of the proven success of Import brands and GM's shrinking market share. Some of the successful "Scion" brand cars were sold for years in Japan before making it here, and is anyone going to say that BMW's aren't popular with a certain segment of the population?

And who says that it needs to be a one-way thing?

If GM North America can focus on making less cars, then it can make really stellar ones with frequent redesigns - Cars, Trucks and SUVs that Opel, Holden and GM Daewoo would beg to sell in their own dealer networks, like the new Cadillacs that are available in Korean and European markets. Then the UAW would be manufacturing cars (assuming they can make some more affordable, popular ones, too) to be sold worldwide and it wouldn't have to worry about some imported Daewoos, RWD Holdens and techy Opels entering our market here to replace a tired line of refreshed W-bodies, similar but different Delta cars, and FWD land yacht G-bodies.

Like it or not, low-cost Chinese cars are coming. Will they only be low cost for a relatively short period of time before shooting for a more expensive, up-market image like Hyundai? Perhaps. I can only assume however that they will make every attempt to dress themselves up like cheap but attractive-looking radios and other Chinese made electronics sold at Wal Mart. The Koreans are no longer content to have even their lowest cost offerings look cheap either. Jewel-like taillights, silver accent paint on attractive dashes, frequently updated exteriors and interiors are in stark comparison to GM small cars like the Cavalier that went from 1996 to 2005 with hardly any noticeable changes to the interior besides an improved steering wheel and only one major exterior refresh. Time will tell if GM has the resources to keep the new Cobalt as fresh as the years go by. But why duplicate the effort if Opel is making a great-looking Astra that it sells world wide? Britain, Australia, and even GM Mexico get the Astra. Why design something so different for the US when a perfectly good car could be tweaked for US tastes instead? What makes the Astra suitable for all countries except ours?

If GM North America were to claim bankruptcy, it would still have efficient worldwide partners from which to rebuild from the ashes with. (My hope is that GM can do this voluntarily, and not be forced into that position) Pontiac could get a heavier dose of Holden (in addition to the Monaro) in the form of the Commodore variants, Buick could get a Holden Statesman and even a Buick Excelle (China). You can fill in the rest. All of this would be in addition to some great SUVs and Trucks that GM would have more money to invest in, and a very few luxury cars from Cadillac. The Corvette would stay all-American, of course, and GM North America could still have time to do unique cars put together with items from the "parts bin" like the HHR and Solstice - cars in turn that look so great that people from other countries start demanding be sold to them. Again, more work for the UAW.

Some will say the process of getting Opel, Daewoo and Holden cars approved by the U.S. market would be too costly and difficult. How is it then that a small company like Daewoo managed to sell cars across the globe, including here? I submit that having a ground-up car like the ION designed for the U.S. market is more costly in the end.

Some will point to the gradual introduction of models such as the Monaro and future possible "Opels" for Saturn and say "It takes time, wait and GM will eventually do this,". Why did it take so little time for GM to decide to allow 4 more models of Chevy Daewoos into Canada? Why did it take so little time for Toyota to decide the Toyota bbX would make a fine Scion xB in the US? Looking at GM's financial woes, I don't think they have time to wait and play games. If other automakers can base their entire lineup on imported cars, then GM can afford to have more than a couple, and should be able to import them without being harassed by the UAW. Does KIA have to shell out money for each Rio sold to some Union that didn't even work on the car? From what I've heard (I could be mistaken), GM still has to do just that for every Aveo - pay the UAW not to build them.

Toyota, Honda, Nissan, etc. all hit GM with the best that they've got. I say it is time that GM takes the battle on its home turf more seriously and calls in the International Reserves.

Bring back the Caprice and ElCamino, courtesy of Holden. Bring us the hot looking small Opels with navigation systems. Give us more low-cost Daewoos to compete with the Koreans and soon the Chinese. If it means losing some unique-to-USA designs like the Malibu for a reskinned Opel instead then so be it. If it makes the UAW mad, then too bad. Import more to make up for what they refuse to build as they strike. Or at the very least get those next contracts ready and make the UAW sign them, like it or not. Don't insulate the U.S. market like its something special that can't be touched, while continuing to lose market share. Fight back with everything in your arsenal, GM, and I'll be there continuing to buy your product.

[Cortazzo]

I agree with you 100%, toyota and honda have been using their large global network to distribute products all over the globe. Then once they are established, they build in country to cater to specific market desires. GM should have a few very large factories in each continent that can build and distribute cars all over the globe, this would make for VERY efficient production and parts buying.

[oudidntkn0w]

YES!!!!!!!!!!!!!!!!!!!!!!! GOD YESSSS!!! Im all for american cars, but i find myself always looking at holdens and opels more than chevys and pontiacs. GM just DO IT, keep me loyal, keep me a future customer.

I would say replace saturn with opels, pontiacs with holdens, chevys with a little mix of holdens and some small cars and etc. keep caddy the way it is, make a hummer hybrid, kill or completely redesign buick, keep saab on track.

I would seriously jump 14 ft in the air if i saw an astra hatch or holden ute maloo like above for sale here.

[pagemaster]

I don't think GM can really compete using the Toyota strategy. Toyota is too well established all over the world to be hurt by any GM attept. What GM does still have in their favour is the most market share in the US. They should be willing to concede a little bit of market share and build much better cars that demand good pricing. Gm is getting killed with their employee price discount as they loose profit for every sale. Also this weakens their image.

If they just build a car that is in every way better than say a Camry they will have no trouble getting someone into their car. All the surveys in the world can't help them, they have to get owners to have word of mouth to help them build sales.

An example of world class engineering and strategy will be the next Lexus LS model. It will better than almost all the competition when it comes out, it will have no shortcoming like GM does with transmissions (exTS). The same SHOULD be true with the next Tundra. GM needs to adopt this philosophy. The Impala may be as good as the Camry BUT it needs to be better. THe Colorado maybe as good as a Tacoma but it needs to be better. The STS maybe as good as a GS430 but it still needs to be better. Same thing with the solstice.


If GM would just try and build the best there is, they would not have the troubles they have right now.

[asim]

I'd like to see some of the foreign GM cars here, but i don't think it will happen that GM will become truly global. We could get more global by sharing cars that will appeal to the markets. That should and hopefully will happen.

[pagemaster]

Originally Posted by asim

I'd like to see some of the foreign GM cars here, but i don't think it will happen that GM will become truly global. We could get more global by sharing cars that will appeal to the markets. That should and hopefully will happen.

Most GM foreign cars would not do that good here.

[oachalon]

i think a decent amount of opels as saturns and holdens as pontiacs would dominate.

[ChevroletRevived]

GM would do well to integrate it's global assets. It doesn't make sense to have completley different vehicles just for the United States. GM needs to integrate everything, and become more efficient. Toyota has done this and GM needs to do it also. But the thing is GM IS doing that, and we should applaud their recent efforts. I agree though...GM needs to step it up. Time is of the essense...

[nadepalma]

Great Post Ming! I agree with you on many of your points and think this would be the best way for GM (and Ford and Chrysler) to succeed in the market place. No disrespect against the UAW, but they are seriously hindering GM's ability to compete in the market-place. I know lots of folks will say "Well the Japanese/Euros/Koreans build cars here successfully" but the fact is that they aren't constrained by the Unions like GM/Ford/DCX is and they don't have to deal with the same 'rules' as far as importing cars go. There is nothing in Mistubishi's contact with the UAW at their plant in Illinois that prevents (or 'taxes' them) from importing Diamantes, Lancers or Monteros into the country. If GM decided to do this, they'd get slapped by the UAW and have to pay them off or deal with imposed fees. Same goes for Toyota with their joint-GM plant at NUMMI -- when was the last time Toyota got slapped by the UAW for importing Lexuses?

Fact is that it's now a global economy and GM is playing by a rule-book dating back to the 1960s. It's not about Labor v. Management like it was back then -- it's now about Domestic Labor (and the legacies that come with it) v. Foreign Labor/Companies (and the speed in which they deliver products). The world has changed a lot in the past 40+ years and this business model is outdated. If they don't change things up, then GM will be bankrupt and the UAW will be out of work anyway. I know folks can say things like "GM should be building better cars anyway, it's not the UAW's fault, they dug their own grave" -- but fact is the imports don't play by the game by the same rules GM/Ford/Chrysler does. The UAW needs to be part of the solution --- and the sooner the folks on the otherside see this, the better off everyone will be.

[GMfan2381]

Jesus Ming, do you ever have a bad idea? I couldnt agree with you more. For all the talk GM puts out about a truly global platform you would think they would just import the cars as well. Why try to make something more European/Asian/Aussie/whatever when chances are GM is already making it. I dont know why the NA market is so important in terms of design, espically now that its so hard to turn a profit. Importing cars like this would really make GM a global company. Not one that has branches in nearly every continent.

[nadepalma]

Originally Posted by ChevroletRevived

GM would do well to integrate it's global assets. It doesn't make sense to have completley different vehicles just for the United States. GM needs to integrate everything, and become more efficient. Toyota has done this and GM needs to do it also. But the thing is GM IS doing that, and we should applaud their recent efforts. I agree though...GM needs to step it up. Time is of the essense...

Another good point. GM needs to work as quickly as possible to integrate their entire world-wide operation. I think you're starting to see this now with GM in the very recent past -- but more needs to be done. As for "It doesn't make sense to have completley different vehicles just for the United States" -- this makes sense to a point. Some Euro/Asia products don't appeal to Americans just as some American products don't appeal to them. Tha's fine. Honda and Toyota do have unique products for the US that they dont' sell many examples of around the world, and vice versa. For example, the American Accord is unique to NA, every where else they sell the Accord it's much smaller and narrower (the TSX obviously). Or how the Tundra, Titan, Accord Coupe, Solara, et al. are unique to NA. Or how cars like the Nissan Micra and Mitsubishi Colt aren't sold here cause most Ameicans wouldn't like them. That's fine.

But, really that isn't the issue. The issue is whether or not they leverage global resources to pull it off. It's okay for GM to have some cars/trucks/SUVs that are unique to North America to suite North American tastes --- but if they bring it to market by re-inventing the wheel and wasting tons of capital, then it's a dumb move. They should instead do what companies like Honda do -- create one or two very, very flexible platforms in which they can build multiple vehicles in varying sizes without huge investments to re-engineer them. And make them flexible enough to build multiple models in a single factory. Look at the Camry and the cars built off of that basic, single platform: Camry, Camry Solara/Solara Convertible, Sienna, Highlander, RX330, ES330 -- That's a lot of cars competing in different segments built off common components. Now I'm not saying that there isn't some sort of extra tweaking that goes on for each one -- obviously there would need to be if you can get an SUV/Minivan/Sedan/Coupe off a single platform -- but they aren't starting from scratch for each one. The platform is flexible enough to allow all these changes to be made without spending tons of dough.

GM NEEDS to learn this and fast!

[Blackhawk]

it sounds like epsilon 2 could give them more of this capacity so hopefully they do get on the ball and get more common components going.

[nailhead425]

I agree 100%. If GM doesn't globalize and cut the waste, they will continue to hurt financially.

There are plenty of NA specific products to keep the Engineers, designers, and many UAW employees busy.

I'd rather buy a Global GM vehicle, than one built by Toyota-GM after the take over.

[steve333]

Originally Posted by oudidntkn0w

YES!!!!!!!!!!!!!!!!!!!!!!! GOD YESSSS!!! Im all for american cars, but i find myself always looking at holdens and opels more than chevys and pontiacs. GM just DO IT, keep me loyal, keep me a future customer.

I would say replace saturn with opels, pontiacs with holdens, chevys with a little mix of holdens and some small cars and etc. keep caddy the way it is, make a hummer hybrid, kill or completely redesign buick, keep saab on track.

I would seriously jump 14 ft in the air if i saw an astra hatch or holden ute maloo like above for sale here.

Amen, brother.
I was thinking the same thing about the UAW. If they don;t cave, then just import cars. They are better looking and better built anyway. GM has better talent overseas, better workers too.

[paul8488]

I'm nostalgic, and love GM with all the brands... but I can't help but think that a more streamlined approach would be best for a global GM. I think they're well on track, in a way, at least in North America. I could see a Chevrolet-Cadillac-GMC-Saturn-Hummer lineup. Chevy does all shapes and sizes of value-oriented cars, with the occasional blip on the radar (Corvette, Camaro). Cadillac does, well, what Cadillac does: luxury cars for the entire world. GMC would do all the trucks, and no logner share anything with CHevrolet. Saturn could sit at the upper end of Chevrolet, and cover what market Pontiac and Saab both end up splitting now (in theory): sporty alternatives to the midsize class. Hummer could continue to build tanks.

I'm not suggesting this is something that could be done or would even make sense in the short term... but if GM had to wipe the slate clean, I think they'd need to take a deep breath and simplify.

Great article Ming!