GM: Time to Consolidate
A Commentary By: NSAP
May 21, 2008
I have been on the record many times over here at GMI as one that has been against killing off any of the brands GM has here in North America. I have, for the longest time been very vocal about having a comprehensive strategy to keep all of GM's brands. All of GM's brands have meaning and killing any of them would be a big mistake. Well, call me a Democratic Super-delegate, but I have deflected to the other side. I can no longer justify that argument. There are too many forces working against it; market conditions, lack of funding, dealerships, and most of all...the competition. I am now a firm believer that GM needs to weed through its North American bands now or they will never be able to fully compete with their new big rivals.
The ideal solution to this problem would be to simply to a complete "hold" on a couple of GM's brands until the funding is there to supply everyone with what they need to fully play their role in the GM family. However, we all know that the ideal solution is one that simply cannot happen. You just can't kill off a brand for a couple years then bring it back to life. That brings me to the very big reason the multi-brand strategy needs to go at GM: finances. GM just does not have the money to give every division what it needs. Where GM only has hit and miss global brands, companies like Toyota have fully-global brands that can share product all over. While even Toyota does not have the same lineup of vehicles in every country, they can tailor their products to each market because they have far fewer to develop in the first place! GM needs to start focusing on the global aspect of their divisions...they need a Camry. They need that car that everyone in the world knows about because it is a strong seller globally.
My plan to reduce the amount of divisions in North America calls for the selling of the Saab and Hummer divisions and the killing of Pontiac. I'd say sell off Saab for the simple fact that it has not made GM any money since they bought it. On top of that, GM and Saab management has proved time and time again that they can't make the brand work under the GM umbrella. Saab has become infamous for being a brand of heavy incentives and poor residual values. Even with the heavy incentives, the brand has not taken off sales-wise either. By all accounts the current generation 9-3 "should" have been a decent seller without $4,000 on the hood. I'd sell Saab before killing it. I think a Chinese or Indian firm would pay a decent amount for it in no time. GM could use the extra cash. Plus, since Saab isn't lighting any fires in the U.S., by selling them to a foreign firm...GM would not be giving them big in-roads to the U.S. Market. For the longest time I personally did not like Saab, but the current 9-3 changed my mind; I really do like the brand and think it does have potential, but it is just not worth dealing with for GM at the moment.
The next selloff would be Hummer, the brand GM created. Back in the day Hummer was a good idea, but that was in the day of cheap gasoline and when everyone conveniently forgot that we do not have an endless supply of oil to fuel the world. Hummer, like Saab probably can survive in the future if taken in a direction that I know GM is not willing to take them; mainly because the direction Hummer is ultimately going to have to go will either be far too expensive or just way off of the original Hummer theme. GM will not want to do either with the brand. For the first time, I truly think that GM wants to gain a “green” image as a company; they are quickly proving that with the Volt actually. Selling off Hummer to a foreign firm would be an interesting stunt for them in the face of the environmentalists. I’ve always loved the Hummer brand, I think it was the first brand that GM did “right” in regards to the infrastructure the brand has. Unfortunately it just adds to the crowded GM umbrella a dying market segment and the [PROPER] fix for Hummer is too costly for GM at the moment. The proper fix, of course, being to build off-road vehicles that are really environmental.
My last division axing was the most difficult for me. I am a Pontiac owner. By no means would I get a thrill out of seeing GM kill Pontiac, but I’m almost to the point that it needs to happen sooner rather than later. Pontiac is causing more unnecessary overlap with Chevrolet and Saturn. The division NEEDS to be a true, hard-core performance niche brand, however there are two issues with that now. The first issue being that GM doesn’t have the funding to give Pontiac the unique performance it needs to be different, and the fact that strict CAFÉ legislation is going to kill off a lot of performance vehicles not only because companies will be paying more to develop alternative propulsion, but also because the end user isn’t going to want to buy them (not in the volumes needed to sustain a brand). The recently launched G8 sedan shows promise for Pontiac. I personally had it high on my list as a potential next vehicle (a loaded black G8 GT mind you), but with gas at $4.00 a gallon, forget it. I don’t want a vehicle that gets 15 MPG in the city. I’ve successfully marked the G8 off my buying list, and that pains me very much. However I know if I of all people, am writing the G8 off because of economical reasons…then there is no doubt others are as well. That just gives us a snapshot of what is going to hurt Pontiac. GM needs to kill Pontiac; the writing is on the wall. I say kill it rather than sell it, because a Chinese or Indian firm would buy them in a heartbeat to get in roads into the U.S. market, something that GM should not encourage by any means.
After ridding themselves of Saab, Hummer and Pontiac, GM should then work on the infrastructure of the rest of the divisions. Saturn is the poster child of dealership infrastructures at GM and they need to enforce that idea on the rest of the brands. GM should make all Chevrolet stores standalone. In addition, Cadillac stores in metro areas should be standalone and have all-new showrooms that match the brand’s new identity. GMC and Buick stores can be combined and Saturn can stay off by themselves as well. GM is eventually going to have to mandate that their dealerships build new showrooms (like they did with Hummer and Saturn). Some of the stores are getting so drab that it is ridiculous. The dealership is the front line to the customer and should be topnotch to reflect a “changed” GM. I would go so far as to design the new showrooms with environmentally-friendly materials; bamboo floors, skylights for lighting, solar-panels. Oh, and be sure to have plug-in stations (powered by the Sun!!!) in the customer parking for those future E-Flex vehicles.
A Commentary By: NSAP
May 21, 2008
I have been on the record many times over here at GMI as one that has been against killing off any of the brands GM has here in North America. I have, for the longest time been very vocal about having a comprehensive strategy to keep all of GM's brands. All of GM's brands have meaning and killing any of them would be a big mistake. Well, call me a Democratic Super-delegate, but I have deflected to the other side. I can no longer justify that argument. There are too many forces working against it; market conditions, lack of funding, dealerships, and most of all...the competition. I am now a firm believer that GM needs to weed through its North American bands now or they will never be able to fully compete with their new big rivals.
The ideal solution to this problem would be to simply to a complete "hold" on a couple of GM's brands until the funding is there to supply everyone with what they need to fully play their role in the GM family. However, we all know that the ideal solution is one that simply cannot happen. You just can't kill off a brand for a couple years then bring it back to life. That brings me to the very big reason the multi-brand strategy needs to go at GM: finances. GM just does not have the money to give every division what it needs. Where GM only has hit and miss global brands, companies like Toyota have fully-global brands that can share product all over. While even Toyota does not have the same lineup of vehicles in every country, they can tailor their products to each market because they have far fewer to develop in the first place! GM needs to start focusing on the global aspect of their divisions...they need a Camry. They need that car that everyone in the world knows about because it is a strong seller globally.
My plan to reduce the amount of divisions in North America calls for the selling of the Saab and Hummer divisions and the killing of Pontiac. I'd say sell off Saab for the simple fact that it has not made GM any money since they bought it. On top of that, GM and Saab management has proved time and time again that they can't make the brand work under the GM umbrella. Saab has become infamous for being a brand of heavy incentives and poor residual values. Even with the heavy incentives, the brand has not taken off sales-wise either. By all accounts the current generation 9-3 "should" have been a decent seller without $4,000 on the hood. I'd sell Saab before killing it. I think a Chinese or Indian firm would pay a decent amount for it in no time. GM could use the extra cash. Plus, since Saab isn't lighting any fires in the U.S., by selling them to a foreign firm...GM would not be giving them big in-roads to the U.S. Market. For the longest time I personally did not like Saab, but the current 9-3 changed my mind; I really do like the brand and think it does have potential, but it is just not worth dealing with for GM at the moment.
The next selloff would be Hummer, the brand GM created. Back in the day Hummer was a good idea, but that was in the day of cheap gasoline and when everyone conveniently forgot that we do not have an endless supply of oil to fuel the world. Hummer, like Saab probably can survive in the future if taken in a direction that I know GM is not willing to take them; mainly because the direction Hummer is ultimately going to have to go will either be far too expensive or just way off of the original Hummer theme. GM will not want to do either with the brand. For the first time, I truly think that GM wants to gain a “green” image as a company; they are quickly proving that with the Volt actually. Selling off Hummer to a foreign firm would be an interesting stunt for them in the face of the environmentalists. I’ve always loved the Hummer brand, I think it was the first brand that GM did “right” in regards to the infrastructure the brand has. Unfortunately it just adds to the crowded GM umbrella a dying market segment and the [PROPER] fix for Hummer is too costly for GM at the moment. The proper fix, of course, being to build off-road vehicles that are really environmental.
My last division axing was the most difficult for me. I am a Pontiac owner. By no means would I get a thrill out of seeing GM kill Pontiac, but I’m almost to the point that it needs to happen sooner rather than later. Pontiac is causing more unnecessary overlap with Chevrolet and Saturn. The division NEEDS to be a true, hard-core performance niche brand, however there are two issues with that now. The first issue being that GM doesn’t have the funding to give Pontiac the unique performance it needs to be different, and the fact that strict CAFÉ legislation is going to kill off a lot of performance vehicles not only because companies will be paying more to develop alternative propulsion, but also because the end user isn’t going to want to buy them (not in the volumes needed to sustain a brand). The recently launched G8 sedan shows promise for Pontiac. I personally had it high on my list as a potential next vehicle (a loaded black G8 GT mind you), but with gas at $4.00 a gallon, forget it. I don’t want a vehicle that gets 15 MPG in the city. I’ve successfully marked the G8 off my buying list, and that pains me very much. However I know if I of all people, am writing the G8 off because of economical reasons…then there is no doubt others are as well. That just gives us a snapshot of what is going to hurt Pontiac. GM needs to kill Pontiac; the writing is on the wall. I say kill it rather than sell it, because a Chinese or Indian firm would buy them in a heartbeat to get in roads into the U.S. market, something that GM should not encourage by any means.
After ridding themselves of Saab, Hummer and Pontiac, GM should then work on the infrastructure of the rest of the divisions. Saturn is the poster child of dealership infrastructures at GM and they need to enforce that idea on the rest of the brands. GM should make all Chevrolet stores standalone. In addition, Cadillac stores in metro areas should be standalone and have all-new showrooms that match the brand’s new identity. GMC and Buick stores can be combined and Saturn can stay off by themselves as well. GM is eventually going to have to mandate that their dealerships build new showrooms (like they did with Hummer and Saturn). Some of the stores are getting so drab that it is ridiculous. The dealership is the front line to the customer and should be topnotch to reflect a “changed” GM. I would go so far as to design the new showrooms with environmentally-friendly materials; bamboo floors, skylights for lighting, solar-panels. Oh, and be sure to have plug-in stations (powered by the Sun!!!) in the customer parking for those future E-Flex vehicles.
