GM Could Downsize to Just 4 Core Brands
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."
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Comments
Buick is to China as BMW, Mercedes, Audi Combined for the rest of the world. They'll never give that up!
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?
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.
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.
With a loss in competition comes a loss in ingenuity.
I actually really liked your ideas too about the GM product line Motor_Yakuza
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.).
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.
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.
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 ;)
Would accomplish worlds of good, and allow for the introduction of diesel better into the American market.
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...
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.
That said, GM does need to spend more time on quality and stop giving insane discounts because that was a key problem.
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.
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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