General Motors Corp. is studying possible elimination of some of its brands, with options including Pontiac, Hummer and Saab, the Free Press has learned.
| I'd suggest splitting them off into their own companies and letting them stand or fall on their own, but nobody listens to me because I'm an old crank. |
A person familiar with the company's deliberations told the Free Press that all options are being considered as executives look at potential savings and devise a plan to submit to Congress in GM's bid for government loans to help it through a cash crisis.
In addition to the storied Pontiac brand, Hummer and Saab, Bloomberg reported Wednesday that the review included the Saturn brand. GM declined comment.
Saturn only made sense if the idea was to introduce the Toyota way to GM. Now that Saturn cars are just clones of whatever Chevy has there's no need for them. Aura = Malibu, and Vue = Equinox.
The real issue: which divisions are selling cars? Which divisions have any sort of brand identity that one can build on in a new GM? Buick should be toast: it's lost its identity, and if the idea is to sell upscale cars, sell Cadillacs, not Buicks. Pontiac used to be the muscle car division, the glamour cars. If that's gone then there's no need for Pontiac. Hummer made no sense and was an acquisition back when GM had cash. Ditto Saab: Ford did the same thing buying Volvo and Jaguar and had to sell them both to raise cash. GM should do the same.
You could argue that a new GM has but four divisions: Chevrolet (basic and family cars, and trucks), Saturn (upscale small cars), and Cadillac (upscale medium and large cars), and GMC (trucks for the Cadillac dealers who need something more). But each division has to have a brand identity distinct enough to make sense. Toyota has three divisions: Toyota, Scion and Lexus. Each division is clear enough such that there is no confusion in the marketplace. GM lost its way, in part, because people couldn't see any difference between a Buick, a Pontiac and an Oldsmobile. And they were right: there was no difference. |
"There is a lot is a lot speculation about what will or won't be in the plan next week, and we are going to decline to comment on it," said company spokesman Tom Wilkinson. "We are not likely to say anything in advance of the plan."
GM and its Detroit brethren, Chrysler LLC and Ford Motor Co., are preparing plans to send to Congress next week in their bid for $25 billion in emergency loans. Faced with frozen credit markets that have prevented consumers from getting auto loans, U.S. sales hit a 25-year low last month.
GM has said it could reach the minimum levels of cash it needs for operations by the end of the year, and its board has reviewed the possibility of bankruptcy.
Before the U.S. economy crashed this year, the automakers already were losing money as they restructure to bring production capacity -- and workforce levels -- in line with demand and to shift their lineup toward more fuel-efficient vehicles and away from the pickups and SUVs that brought them huge profits in the 1990s.
The companies' chief executives were sent back to Detroit last week after lawmakers criticized them for coming to Washington, D.C., without showing a plan for how they will run their businesses differently if they get the money. They were told to come up with plans by Tuesday, and new hearings are set next week.
Critics have long called for GM to pare its offerings, as it did with Oldsmobile in 2000, and eliminate overlap as its market share in the United States has slipped.
The first Pontiac -- the Series 6-27 -- debuted in 1926 at the New York Auto Show, according to GM. Pontiac -- GM's affordable performance brand -- created icons like the Firebird and GTO. Sales have fallen for years, and Pontiac now shares all its dealerships with Buick and GMC. The brand has seen its U.S. sales drop 20.9% so far this year, according to Autodata Corp. |
