Or how GM wants to save themselves. There has been intense media coverage on the Big Three, with their $25 billion, then $34 billion request for funds. Mistakes were made. Lesson 1-you do not fly to DC in your private corporate jet to beg for the taxpayers to dig you out of the ditch you dug for yourself. Especially when all those taxpayers drive Camry’s and Accord’s. Lesson 2-you do not tell Congress that as CEO, you refuse to accept a pay cut to save the corporation you are in charge of running, or ruining.
The good news is, the CEO’s came back to DC driving hybrids, and will work for one dollar. No one is in greater danger than GM, as they are asking for the most money to stay alive. Here is what we know:
GM has identified four core brands-Chevrolet, GMC, Buick, and Cadillac. Does that shock you? It should. Let’s visit each of the General’s brands.
Chevrolet
Far and away the most crucial brand to GM. Forget the Camaro-all eyes are on the Volt plug-in hybrid. Chevy also needs to keep the Malibu fresh to remain a contender. The new Cruze, scheduled to replace the Cobalt, also looks promising. Stay tuned.
Pontiac
Looks like Pontiac is about to be relegated to a niche-brand. This is not a bad thing, and this decision stands to save GM a lot of money. Honestly, does anyone care about the rebadged G3 (Chevy Aveo) or G5 (Chevy Cobalt)? GM has been telling us over and over that Pontiac is the performance division. Wouldn’t it be great if they finally lived up to that statement? A focused line of performance cars like the Solstice and G8 makes sense. All of these other rebadged cars simply dilute the image of Pontiac.
Saturn
Saturn was formed in the mid 1980’s with the intent to make a car to rival any Honda or Toyota. It never happened. When the SL sedan finally was sold, it was late, over-budget, and an extremely crude automobile. The competition remained light years ahead, and Saturn never caught up. You know things are really bad when you tap Honda for V-6 engines to power the Vue SUV.
Today, Saturn actually has some nice cars for sale-they are mostly rebadged Opels. The buying public has not noticed. After years of the sub-par SL, and the truly awful Ion, it is a struggle to get people to notice Saturn today. According to CNN, GM is in talks with its Saturn dealers to discuss the future of the brand.
Buick
Buick has half the market share of Pontiac, and offers fewer models than any other GM division, yet GM considers Buick one of its four “core brands”. Buick has no halo car, nothing special or extraordinary to set themselves apart. Unless GM has some major plans for Buick that we have not heard about, I am unsure why this brand has such high status. China seems to like the Buick’s, so that is my guess.
Cadillac
You can’t kill Caddy when they are on a roll. They finally “get it” and are building respectable cars. No, they will likely never attain the status of “Standard of the World” as they had pre WWII. But you get the sense the engineers are truly working hard to build a competent car. You cannot knock them for trying.
GMC
Again-why? Why is GMC a core brand? GMC has no model unique to itself. You are buying a rebadged Chevy truck or SUV. That’s it. If any brand in GM’s portfolio was expendable, GMC was it. It is mind boggling that GM came back to Congress and identified GMC as one of its four core brands. Utter nonsense.
Hummer
We reported this past fall that GM had put Hummer up for sale. There were rumors of interested buyers, but as of today, no sale has been made. Although gas prices have dropped, the economy remains in a recession. In a culture that wants to be green, Hummer is perceived as the antithesis of environmental friendliness. Hummer is the price GM paid for the assumption that our appetite for huge, gas-guzzling SUV’s would never fade.
Saab
Saab, who made its fame building quirky, front-wheel drive turbo-charged sport sedans, holds the honor of the lowest selling GM division. GM bought Saab in the 1990’s, but never did the brand any favors. While its competition were falling over each other to improve their cars, the 9-3 and 9-5 cars soldiered on, year after year, unchanged. Attempts to expand the product line were weak and ill-conceived. Witness the Subaru Impreza WRX based 9-2X and the Chevy Trailblazer sold as the 9-7X. No one was fooled, and Saab’s competition had far better vehicles to sell.
Saab’s future in the US is very much in question. There are other models in the pipeline, but at this point, does anyone care enough to keep Saab here?
Coda
Looking back to the 1950’s and 1960’s, it is impossible to think how GM got to where they are today. GM is, sadly, a victim of themselves. The idea used to be that your first new car was a Chevy. And you would work your way up over the course of your lifetime, finally reaching the zenith-Cadillac. But that business model is ancient, and no longer applies today. The US Congress accuses GM of the same-they are hopelessly out of date, and as a business, should be extinct if the principles of capitalism apply.
What we are seeing here is ego and arrogance. What GM proposes should have happened years ago. But it didn’t. Now we must wait and see if these changes can turn the tide, or if GM was simply too late.
{ 7 comments… read them below or add one }
That’s a great analysis but it has one huge flaw. It’s common sense and whenever you get corporate America and the government talking in the same room common sense goes out the window. It’s inevitable that in this automotive bail-out they will all make a few huge blunders.
I wonder if the GMC brand is being kept around due to the strength of the brand in the heavy truck market.
It’s possible, Gary. One arguement to keep GMC that I had heard, but did not give much weight to was that many dealer franchises sell Pontiac-Buick-GMC under one roof.
The only way keeping GMC around would work would be to stop selling Chevy-badged pickups and SUVs. Should be ‘dead brand walking’, er… rolling.
China is absolutely why Buick would be kept around, although sales are softening there as well.
Thanks for posting Mark. I agree that GMC’s history of selling rebadged Chevy’s is a bad idea. The plan to continue to do is an ever worse idea. But GM has no money to create unique GMC products. Second, there is no chance Chevy will let go of the Silverado or Suburban to let GMC have its own models.
If GM’s plan has one obvious flaw, this is it.
do have to say that I never thought I would buy a Buick – it does have that reputation as “the car your grandparent would drive.” I was however pleasantly surprised by the Buick Rendezvous – it had a great ride for an SUV but it’s not a gigantic size like the Fords and definately a car for 30-40 yr olds. I was able to take out the back seats and fit a 6 ft long futon and another time an 8 ft long rug in the back without a problem.
Granted the city MPG is not the best – I get 220 incity miles with am 18 gallon tank (so I can use about 16 gallons) but I do get awesome highway mileage with it -about 450 miles on a tank
Well worth a look for someone looking to own an SUV that’s not a boat or a minivan without that caravan look
Currently GM has an insurmountable challenge and a stable of brands that have lost their identity, Toyota is more successful with three brands than GM is with their 12 different brands, a clear sign of the times that change and consolidation is inevitable, below listed are the American/international brands owned by GM as well as a strategy to consolidate and help the company to survive in a rapidly changing business market. Below suggestions for merging entire brands into one entity, and reinvigorating certain brands under an international moniker could stave off bankruptcy and give gm the jolt it needs to become relevant in the auto market once again.
Daewoo/Holden/Pontiac merge into Holden Brand (3 Brands become 1 brand) These three brands currently sell similar products. Take three regional players and merge them together under the strongest brand which is Holden. This would introduce a new player to the U.S. market and give the former Pontiac brand more vehicles and a new purpose. The internationalization of the auto market requires that these type of brand-mergers become a reality.
GMC and Chevrolet merge into Chevrolet Brand (2 brands become 1 brand) most GMC and Chevrolet Vehicles overlap and are essentially rebadged copies, make it easier and consolidate into the stronger Chevrolet Brand.
Hummer and Saab sold either jointly or separately to a private equity firm or other automaker. (2 brands divested) Hummer and Saab both require huge sums of investment in their product lines, it makes the most sense to sell these two brands either together or separately at market value.
Opel/Vauxhall/Saturn merge to form Opel (3 brands become 1 brand) All of these brands essentially sell similar products. Take these three regional brands and form a strong international player under the Opel brand name. Saturn as a brand in the U.S. has no relevance but the opel logo and insignia could reinvigorate the entire company and product line.
The above mentioned steps seek to consolidate the GM brand network and dealer network into a more nimble organization. These mergers of core brands eliminate costly dealer-lawsuits from shuttering a brand, while being able to invest in our core surviving brands. The steps outlined above are far overdue and could be the jolt GM needs in order to reinvigorate their core business. The above outlined plan takes 10 brands and marketing strategies and whittles them down to 3 global brands.
The surviving names will be able to receive more attention and investment from GM and will be able to produce more relevant products. By merging brands and product lines the cost to GM can be drastically slashed since most brands carry similar products under different brand names.
The surviving corporate brands would be Buick, Chevrolet, Holden, Opel, and Cadillac, a drastic and necessary shift in response to market realities. I believe the plan put forth is the best way forward for GM and allows it to realize its many core strengths and keep their most prestigious brands. By cutting the brand and dealership network and merging divisions significant synergies and cost savings can be formed it also allows GM to better respond to market shifts and changes in consumer tastes. This way forward plan seems as though the least harsh and one that could provide the quickest results to the company. It should definitely be debated by top GM executives.