GM Could Downsize to Just 4 Core Brands

Saturn, Saab & Pontiac Face the chopping block

Saturn's future looks bleak

By Michael Gauthier
January 12, 2009 7:58 PM
Filed Under: American, Corporate/Financial, General Motors

When GM accepted its portion of the US government's automaker bailout package it was required to take drastic steps in order to make the company more competitive. As previously announced, GM will focus on Buick, Chevrolet, Cadillac and GMC but new reports suggest that Saturn's future could be coming to an end.

In an interview with Automotive News, GM's North American President, Troy Clarke, went on the record to say that the company intends to follow the plan submitted to Congress by focusing on the four brands. He stated that "We have to re-engineer the way we're doing business in many regards" and went on to say "We're going to be a smaller company."

So far the only brands that are officially up for sale are Hummer and Saab. While Hummer has garnered some interest from potential buyers, Saab appears to be a black sheep. Given Saab's nearly two decade long history of failing to make a profit and Hummer's dismal sales figures, GM has a number of hurdles to overcome when convincing possible suitors.

That leaves Pontiac and Saturn as the only two left with an uncertain future. In a separate interview with the magazine Bob Lutz said Pontiac would consist of just five models: the G8, G5, Vibe, Solstice and Solstice hardtop coupe. What that means for the G6 is unclear, one possibility is that the G6 will go on hiatus while assembly plants undergo retooling for the recently shown refreshing or the model could simply be killed off. It is possible that Lutz was misquoted because it is hard to believe that the brand would kill off their top selling model especially after it was just updated.

In regards to Saturn, Clarke went on to say that GM has "...entered into a very, very open and candid dialogue with our Saturn retailers" and that the brand "...just hasn't been a good business for us."

 

Source: Automotive News

Comments

afterace2
January 12, 2009 8:02 PM
Kill Buick or something, but leave Saab alone !!

joshg_5
January 12, 2009 8:05 PM
You obviously have no education on foreign markets.

Buick is to China as BMW, Mercedes, Audi Combined for the rest of the world. They'll never give that up!

politz
January 12, 2009 8:28 PM
Always sad to see a brand die.

Motor_Yakuza
January 12, 2009 8:54 PM
I know, but Saturn it's just useless right now,If they import Opel in the U.S., they will have cars with a german badge, and people prefer german cars, more then american cars, so kill Saturn or make it a rival for Scion, or make Pontiac a performance car brand, no SUV,s, no sedans, no compact cars, no nothing, make a Muscle car GTO, bring back the Tans Am, make a cooler Solstice, and make a coupe to fight the RX-8,the TT the 370Z and other cars like this.

Andres2007
January 12, 2009 9:41 PM
You're obviously not a US Citizen, Motor_Yakuza. The average American is more eager to buy an American product than a European product. I personally don't care about nationality, but the average American does, especially during the times of crisis. It is absolutely impossible that imported Opels would even sell 75% of what Saturns do.

Motor_Yakuza
January 12, 2009 9:44 PM
Hmm, I donno man, look at VW, how well it sells, and VW is way uglier then Opel.

politz
January 12, 2009 10:13 PM
True, Americans tend to buy american when in times of trouble... and I think the Opel brand would have a real hard time in that market too.

I myself, if in charge of GM - thank God I'm not - would basically turn the Saturn brand into some sort of sub brand, selling youth-oriented Scion rivals in Chevrolet's dealers. You know, just for the sake of saving the brand.

Would do the same for Pontiac, selling sport-oriented cars (coupes, hot hatches and sports sedans) through Buick dealers.

Well, Saturn was once created as GM's answer to the frugal, compact, clever japanese imports. After all, isn't that about time to learn something?

joshg_5
January 13, 2009 12:56 AM
German cars are the BEST.

Whether or not they're over-priced, people (American) still buy them in droves.

They are superior. And if Opel was offered in N.A., I for one would buy it before any other mid-priced American or Japanese car.

Just b/c Americans used to buy American doesn't mean they will today. Times are very different, they've never been like this.

Motor_Yakuza
January 13, 2009 2:39 AM
joshg_5 ur a bit arrogant man. don't u think, It's all about image, like u said, in china, ppl see Buick, better then any german car, it's just brand image and marketing, I mean german cars are good, but not the best, they are a bit overpriced, and a bit overrated, and for some people, like Jeremy Clarkson, me or other people, car designs like VW and Porsche are boring.

joshg_5
January 13, 2009 7:45 AM
No, I agree. I only said that I liked Opel.

I really don't like the direction that companies like Mercedes and BMW(especially) are going. Audi I do like however. VW I don't personally like either.

I should have been more specific in saying that EUROPEAN car manufacturers have -in general- the most interesting engineering and business ideas with their products.

joshg_5
January 13, 2009 7:53 AM
BTW, I think that it's horrible these companies are disappearing.

With a loss in competition comes a loss in ingenuity.

I actually really liked your ideas too about the GM product line Motor_Yakuza

lucifa
January 13, 2009 10:51 AM
joshg_5, i'd have to back you up that german (and, i suppose, most other european) cars are the best. the japanese would come a close second because of their unbeatable value for money, but the european cars are just more interesting. however, Motor_Yakuza is closer to the truth about brand image - how a company is recieved depends upon their marketing in the country, and buick has been very successful marketing-wise in countries like china.

joshg_5
January 13, 2009 5:46 PM
Thank you, and I agree with every one of yours and Yazuka's points. I too stated in an earlier comment that Buick has been deployed and marketed terrifically in Asia. It's GM's crown jewel right now really.

I also agree that Japanese cars (in general - average Toyotas, Hondas, Nissans) are a 'close' second to the German cars, which SOME people buy primarily for image, but that image is justified. I would buy the EU cars because of what direction they're going for. I find that Japanese cars are good at following suite with the German cars, sometimes doing it better (Nissan GT-R etc.).

Andres2007
January 13, 2009 11:51 PM
joshg_5, you got some points but don't be so disparaging when talking about American cars. True, the last decade hasn't been the best and there are really few American cars that could intimidate their European counterparts, but that doesn't mean the American auto industry is inferior or anything like that. It's just undergoing a very bad phase.

The American auto industry has traditionally been the strongest in the world. Not necessarily the best, but by no means the worst. Perhaps in the late years it has not been as revolutionary and up to the latest standards as it used to be before, and that's why it has fallen to the point where the American car is less prestigious than its Japanese or European counterparts, but there's something called business cycles, right?

As of now, the Cadillac CTS is perhaps the best purchase one could make at the niche of the market it belongs, over any imported competition. Cadillac is reinventing itself, and so is the rest of GM. The new Mustand, the Challenger, and the Camaro have demonstrated that tough times doesn't mean boring times, and the Corvette ZR1 shows that an all-American can beat the European elite in terms of performance. Ford and Chrysler have a heck of a lot of work to do to bring themselves back to the top of the industry, but that they're in crisis doesn't mean that they're dead.

Despite the fact that I don't consider myself an over-patriotic, anti-foreign son-of-a-gun, I abhor people who have the nerve to tell the American public that they should buy "German engineering" during these tough times for the American industry (i.e., the Volkswagen Tiguan—aka Chrysler with a German logo—ad). German cars are usually better, yes, but they're more expensive as well. What's the sensible thing to do for the average American: support his fellow American who is about to lose his job, by buying an American car that represents a new possible awakening for the country's industry, or buy an imported car that is more expensive and will not help his fellows in Michigan?

It might be difficult for a European to see this, just as it is difficult for an American to understand why some Europeans resent the American monopoly in other industries (e.g., computers). But understand that, as Europeans, your perspective, your necessities, and he country that you love is absolutely different than that of us, Americans.

That's it. And thanks for being classy and sensible in debating.

lucifa
January 14, 2009 11:27 AM
agreed on the ZR1, that really came out of nowhere and blitzed all the current EU sportscars. but while it may be a sensible choice for an american citizen to back up his country's industry by electing to buy an american car, that logic doesn't really apply to the rest of the world - most people worldwide are quite happy to see american industry burn and buy german, because they're more interested in the car than the industry behind it. it's a good idea for americans to buy american cars, but at the moment american cars have very little to cause people from the EU, australia and other nations to buy them instead of the trusted german engineering.

Xanavi23
January 14, 2009 5:23 PM
He wasn't talking about the rest of the world Lucifa.

joshg_5
January 14, 2009 7:24 PM
Andres2007,

I apologize for not mentioning that my favorite sports car is the ZR1. favorite sedan: CTS-V. Favourite compact sports car: Saturn Sky Redline.

The ironic thing is: both the CTS and ZR1 were engineered, designed, and tested IN GERMANY, on the RING!!!! haha.

that says something.

I however am a capitalist, and if the American corporations are going under that's the way it's going to happen. They deserve to fail if they are a failing company. Besides, a large part of Ford and GM's problem is the huge wages they have to pay overpaid UNION line workers...

In a sense, Union workers on the line are just as much to blame as the cars rolling off it.

Please be careful how you use "best" (ie: American market). That's a very relative term.

At the end of the day, there's a handful of absolute gems in the American market that I wouldn't be able to stand letting go of. But the majority, would be better gone...

PS: the mustang and challenger aren't exactly great feats of engineering. I do however love the Camaro. What a piece of art.

Andres2007
January 14, 2009 9:11 PM
Lucifa—"most people worldwide are quite happy to see american industry burn"--on what grounds, exactly, should people feel that it's a good thing that an entire industry, once the heart and the vessels of an entire region in which tens of millions of people live, is falling apart? That is the whole part of the argument that I cannot understand.

joshg_5: Thanks for replying. Read carefully, however—I didn't say the American industry was the best! On the contrary, I said that it can neither be considered the best nor the worst, as it has historically been the largest but of late it has lacked the leadership or technological progress that other industries like the German or the Japanese display.

Being a capitalist myself, I also agree with you that if the three companies are undergoing such a rough phase is because of THEIR fault and that they get what they deserve, but I also see that they are making every effort possible to make up for the errors of the past, and I believe Americans have got to give them a second opportunity ;)

As for the Vette ZR1 and the Caddy CTS-V, Nurburgring was a strong factor in their development but they are still as American as a chinese-made apple pie (believe me, they have those). That Nurburgring is the best track in the world to test performance cars doesn't mean that the two cars' engineering is not American. They basically show that when American companies have the determination to make really good cars that can compete with the elite Euros in their very home field, they can actually do so.

It's a shame that the rest of the American cars are not like that, and that GM, Ford, and Chrysler have seemingly lost the spirit and the passion that it takes to design great cars. But hey, like I said, they're not dead yet!

As for the muscle triumvirate, they are definitely not the most revolutionary cars ever in terms of technology, but the amount of beauty, fun, and horsepower that you get for such a small amount of money is simply spectacular. It might take years for Americans to be innovative again, but as long as I can get a gorgeous, exciting Camaro for less than 25K, I'm happy ;)

Max_Speed
January 12, 2009 8:54 PM
Just when they started to bring the Astra in the US, they are killing Saturn.

Xanavi23
January 13, 2009 9:35 PM
Seriously. Saturn was just getting good. In Canada, i sure as hell see alot of Astras and Insignias.

AKCarfan
January 12, 2009 9:37 PM
It seems that the best solution would be to do away with GMC Truck. They have no stand alone models and had their start has commercial trucks, so leave has medium duty and chevrolet as light duty, this was you would see Chevrolet light duty outsell the Ford F-series and leave Saturn as the cutting edge leader for GM to introduce diesels and other innovative technologies for the US. If we remember the EV-1 was sold through Saturn retailers, and then later introduced Hybrid models of the VUE and Aura. Presently with most of the line having been designed and engineered in Europe, it would seem possible that importing the diesel technology would be easier with Saturn than the other GM car brands.

joshg_5
January 13, 2009 12:53 AM
Agreed, they need to simply re-badge Saturn as a Opel.

Would accomplish worlds of good, and allow for the introduction of diesel better into the American market.

guidofanconi
January 12, 2009 11:33 PM
I'm so glad they are killing Pontiac -- world's ugliest cars!!

iFiredMyBoss.com
January 13, 2009 12:39 AM
OPEL??? Last time anyone in US saw Opel was some crappy little cars in the 70's.

joshg_5
January 13, 2009 12:52 AM
This is no longer the 1970's. Times have changed.

WildMaverick1200
January 13, 2009 2:28 AM
I'm glad to see that GM is finally taking the trash out of the house.

tbrodie
January 13, 2009 2:33 AM
I've heard GMC buyers have more expendible income than Cadillac, but it sure seems it completely overlaps Chevrolet and Cadillac.  I'd keep Saturn and dump GMC.

carcrazy1234
January 13, 2009 3:56 AM
saturn= fail since the beginning of time saab... wtf??? WHY would they cancel that?? that's sad GM, very sad. pontiac... ahhh..... i dunnnoooo.... probably the only "sporty" part of GM. w/e... who cares bout these brands.... go fisker and all those IMPORTANT companies :):)

Xanavi23
January 13, 2009 9:38 PM
You have no idea what you're talking about. Saab makes good cars but they fail, they dont sell. Pontiac is good but GM wants to keep the most important to itself companies. It wants Chevy alive, cause its a Chevy, GMC is their name sake, and Buick is doing better and better all the time. So they have to get rid of what doesn't sell or what they have less value for.

shadowphantom
January 13, 2009 4:43 AM
This is bad. But if they made desirable cars before now they would be much better off. Now is a little too late no one can afford the cars now.

wongnawa
January 13, 2009 4:17 PM
i dunno but i think managing lots of brands at the same time is really a tough job compared to working fully 100% on just one or two brands like toyota and honda. they should've expand these brands to the world market earlier rather than saving it only for North America in order to become profitable. but SAAB is really an exception, i wish that another company would buy it coz SAAB still has a cool and unique image in the global market.

joshg_5
January 13, 2009 7:05 PM
I totally agree with that.

Unfortunately Saab hasn't made a profit for over a decade. So, especially in financial times like these, no one is really willing to take on the risk of acquiring a company like that. Sad really...

Xanavi23
January 13, 2009 9:40 PM
Im with Josh here. Saabs are great cars, i love the 9-3...but if it doesn't sell and GM is doing pretty bad and the U.S. needs GM to live to keep the economy going then sadly, its time to say good bye to the Crowned Red Lion.

Xanavi23
January 13, 2009 9:40 PM
*wait, that Crowned Red Lion might be a Griffin.

500lbman
January 14, 2009 5:06 PM
More Americans would by American cars if they were a good value, but the American car dealer constantly $10k to $15k discount on a $50k car in the middle of the model year?

When they offer "employee pricing" and other ridiculous offers, it instantly de-values all of their other cars on the road. Therefore, buying American is a very bad financial decision. If you go to a Cadillac dealer and get a $15k discount (and I have seen this happen) on a new Escalade, guess what? You are still $10k-$15k upside down when you drive it off the lot. What does that say about the money you are spending on the Cadillac? Are you getting a good value for the dollar you are spending?

Because of this there is no room for bad quality, since it is the only thing the American manufacturers have left after they have de-valued their product during the sale. Since the quality of American cars has become almost non-competitive due to poor management decisions about how much to spend on research and development, what reason does the American car buyer have to spend $20k to $60k on a new car. "To help the guys in Michigan" is not a good enough reason for me to spend $40k on their cars or trucks.

I personally believe that the German manufacturers have the finest driving products, even if their features are overly complicated. I buy cars because of the way they drive and the safety factors. If you ae looking for a good economy car for around $20k, you cannot beat the Honda Civic or the Toyota Carolla. And I personally hate Toyotas, but the value for the dollar is undeniable. A Honda Civic will never die on you and gets great gas mileage. And, it actually drives pretty good.

Until the American manufacturer gets the "value" part of the equation down, they will continue to go down the tubes.

Xanavi23
January 14, 2009 5:26 PM
Your opinion is fair. However if everyone does the same as you and doesn't help the Big 3, you will all cry when they go into the shitter. It would indirectly smack the hell out of all of America one way or another.

That said, GM does need to spend more time on quality and stop giving insane discounts because that was a key problem.

Andres2007
January 14, 2009 9:18 PM
Everything starts from the bottom and builds its way up. The Escalade may not be a decent rival to the GL, but the Chevy Camaro, for example, offers a lot more style and value than the Nissan 370Z. Then you got the Caddy CTS, which is a more sensible purchase than a BMW 5 or a Mercedes E. The Malibu may or may not be comparable to its Japanese competition, but it is definitely worth considering.

That, right there, is a big step forward compared to what we had five years ago. Ten years from now, who knows? Probably the Caddy STS will be able to rival a BMW 7 Series.

Otherwise I sadly agree with you. Most segments are dominated by the Germans and the Japanese, as they generally offer the best value and the best quality.

500lbman
January 14, 2009 7:27 PM
The fall of the big 3 would initially hurt. There would be many lost jobs and the economy would suffer. However, sometimes the only way to fix a problem that so fundamentally flawed and so entrenched into the current way of life is to "slash and burn". Bankruptcy would kill the UAW, which s a major problem with the American car manufacturer, and it would force them to downsize and focus on making good products instead of focusing on how many cars they can manufacture in a year. Over production is another reason the American vehicle has no value. The Honda Civic Si when it was redesigned in 2006 had a waiting list to buy it for the first full year of production. That is because Honda did not release very many cars so as not to flood the market. Hence, their cars held their value.

Here in Texas we are a not as prone to the woes of a weak economy as the rest of the country, but the downfall of the American car manufacturer in its current form would hurt initially.

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