Wagoner's betting on five product-related goals
Discussions about the role of product in GM's recovery plan have been about as rare as Corvette sightings on Michigan's wintery streets, and so Rick Wagoner has decided to share his five big "bets" related to the stuff that GM, you know, actually sells.
First, the company's new full-size trucks and SUVs must sell. Given the fact that the pickup truck market has been going strong in the US for decades, and that GM has been producing some extremely competitive product, half of this equation should be no problem. The SUV side of things, however, would appear not to be as sure of a bet, simply due to market conditions. I'm still not looking at $2.05 gas as being "cheap."
Second, Saturn will perform well with its growing line-up. Great, but does GM really need yet another brand wedged in between Chevy and Cadillac? The brand's upcoming product looks terrific, but this almost feels like Oldsmobile's venture into Euro-type product just before the plug was pulled. It's a bit difficult to see how this fits with Pontiac's role in the organization.
Third, GM will see big growth in the crossover market. For its sake, I hope that happens, but its going to take something a lot cooler than just a squashed minivan or a tall wagon to make an impact in that market, particularly with the strength and breadth of the competition.
Fourth, GM will fix, rather than drop, its damaged brands, as Bob Lutz called Buick and Pontiac earlier this year. This will be done by - wait for it - bringing in products like the Torrent (a rebadged Equinox) and a version of the Lambda crossover for Buick (which means that just about every GM division might end up getting a version of this platform). Wheres a RWD Pontiac Bonneville, or the Buick Velite convertible?
Finally, Wagoner says that GM must kick the habit of incentives. The Red Tag event should probably be considered Strike One in this attempt; well see how things go in the first half of 06.
Reader Comments (Page 1 of 2)
Joseph Willemssen 10:26PM (12/18/2005)
I'll take that bet. Think Ricky will stake all his current and future compensation on such a "bet"?
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number six 10:26PM (12/18/2005)
Um, Joseph, you know of course that the Brits (at least, a big bank over there) just "bet" even odds that GM would go under within 2 years, right?
The Brits are terrible at a lot of things (although food is not always one of them, it most decidedly CAN be.... but I digress), but one thing they are superlative at, is odds-figuring. Probably because they're such a bunch of big gamblers, as a culture, I mean.
They bet on just about anything (it is legal there). They'll bet in drunken stupors at the pub on whether "Ian" will get a bulls-eye in his next dart-throw, for cryin' out loud.
Some bankers/financiers are going with 6 to 4 odds (against GM surviving). I was surprised to see the even odds by the Brit bank, to be honest.
You should email "The Rickster" and see how much he'll put up....
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dirth 10:26PM (12/18/2005)
Why would I buy at a "red tag" price, when just over a month ago the same vehicle sold for about a grand less with "employee pricing"? Once you sleep with the Devil, you cannot come back and profess religion. GM sold it's own ass down the river, and now they must live with it. The price comparisons will be made, and the sales figures will show, that everyone isn't as stupid as Wagoner and the execs that drempt up this fiasco. At least Bill Ford gives people some credit to be as smart as the typical stump. GM---Bancruptcy,,,,,,,a matter of time.
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Realist 10:26PM (12/18/2005)
Lutz sounds like someone who really knows what he's talking about, doesn't he. I guess the years upon years of correct decision making makes him the authority on intelligent forecasting.
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Craig 10:26PM (12/18/2005)
If you take every screw at every Home Depot location, and added them up, they still wouldn't come close to equalling the one big screw GM is doing to the public and its shareholders.
How else do you have to spell it? Develop compelling, reliable products that get decent MPG and consumers will buy.
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JZeke 10:26PM (12/18/2005)
As usual the General is blowing it with advanced product development. None of these products say anything about what America really wants from GM, which is just simply defined, clear cut brands with unique product and high quality.
A Buick Equinox? Come on! Ive driven a chevy one for a week, I wasnt impressed.
This past holiday, a good friend of mine asked both his grandmother and father seperately about Buick, they both agreed that it should be made into a brand that SUPPORTS the elderly.
When a grandmother who could care less about cars supports that kind of idea, could there be merit to it?
Why is Buick chasing this "younger" dollar? Why cant they accept the truly revolutionary role of being the world's first premium brand for our seniors? Whats so uncomfortable about good design for people with specific needs???
Im sick of GMs terrible product development, I dont like their head of design Mr Ed Welburn (mostly cuz he stiffed me at a Michelin dinner back at the 2004 NAIAS) and im not impressed with Crash-landing Lutz.
IF GM truly wanted to do something good theyd stop badge engineering, TEMPORARILY shut down plants to receive new tooling, and start a clear product plan. GM, here it is, for free:
Chevy: Sedans, trucks, sports cars and wagons
Pontiac: Coupes, sport coupes, convertibles (no trucks or crossovers)
Cadillac: Luxury, Superluxury, MEGA luxury
Buick: Crossovers, tall convertibles... cars for our grandparents
Saab: THE ONLY euro brand you need
Saturn: cheap cars, cheap hatchbacks, cheap coupe convertibles
Platforms:
rwd; Pontiac, Chevy, Cadillac
AWD; Cadillac, Buick, Saab
fwd; Chevy, Saturn
Sizes:
S; Chevy, Saturn
M; Chevy, Pontiac, Cadillac, Buick, Saab
L; Chevy, Pontiac, Cadillac, Buick
XL;Chevy, Cadillac
Prices:
$0-15,000: Saturn, Chevy
$15-25,000: Chevy, Pontiac, Saturn
$25-35,000: Chevy, Pontiac, Buick, Cadillac, Saab
$35-55,000: Buick, Cadillac, Corvette
$55-155,000: Cadillac, Super Vette
Please, feel free to rip this apart, add to it, critique it. Its a rough draft, but I think we the people know better than the General what the General should be fighting for.
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laserwizard 10:26PM (12/18/2005)
I'm sure that $4 million Wagoner thinks he can fool some of us, but I'm not one who believes that any of these 5 items will be accomplished.
First, the GMT-900 program is a fiasco. Too blandly styled - too similar to today's antiques, the GMT-900 program launches at one of the worst times in history for dinosaurs. Just because it is "new" and "improved" doesn't make it a "hit". Yeah, the same idiots who bought the last generation that was blandly styled and too much like the previous generation will go for it, but there will be nearly no conquest sales from other makes. GM needs desperately to expand its buyer base and the GMT-900 program ensures it won't.
Second, Saturn can only go upwards. Big deal. The company that gives us an Ion that still has no interior room and is still butt ugly isn't a company that we can believe will be vastly improved. The Sky isn't going to add to substantial sales or profit volume and the Aura that we will get to buy is a far cry from the bait and switch version Lutz promised us would be ours.
Third, GM can point to its crossover models but let's face it - everybody's got one now (or will have) and nothing in GM's 2006 lineup shows any innovative thinking. Even the models soon to be launched are dull and not captivating to purchase. And with GM's engineering record being tied to its pathetic recall record, we cannot have faith that if GM launches something "new" that it will work. Plus, with GM still badge engineering (despite another one of Lutz's promises not to), we cannot have any reason to believe that anything GM offers as "new" is really "new".
Fourth, if we look at what GM is doing to its damaged brands, then we can only conclude that if this is how they are saving them, they are killing them. Pontiac once meant something - but now it is full of dull, underperforming metrosexual cars which are as performance oriented as a diesel powered vibrator.
Fifth, GM must kick the incentive habit. That is patently funny. The only way GM can sell any other garbage is to discount it.
Maybe Lutz and Wagonner could have a garage sale or a bake sale to cover their costs.
One thing about $4 million Wagoner - his butt is covered. Somewhere along the line he allowed 30,000 loyal GM employees to have a really great holiday season with images of unemployment lines and bill collectors dancing in their heads.
Shove it, GM. We are on to you. Go bankrupt and save us the grief.
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henri 10:26PM (12/18/2005)
what a laugh the american auto industry is. the americans hate their own autos so why should we buy them. america needs the Asians to keep the country going since they cant do it themselves.
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dirth 10:26PM (12/18/2005)
JZeke, you're an ass. What you say makes way, way too much sense. Far beyond GM management comprehension.
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Aaron O. 10:26PM (12/18/2005)
lol henri.. somewhat your right. I think GM just needs to go. DiamlerChrysler needs to stay and that's all. GM just makes the exact same cars... over & over again. IN fact around here all's i c is chrysler dodge jeep mb bmw lexus toyota & hondas.. but no GM's... every once in a while..
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Poe 10:26PM (12/18/2005)
Wagoner will be lucky if one of those five hits isn't on HIM after the announcement of his outrageous retirement deal. I haven't seen that kind of greed since the collapse of Enron. Disgusting.
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Doogs 10:26PM (12/18/2005)
Something I've been wondering about more and more recently.
Why doesn't GM take the sexy Opel designs and give them to Chevrolet instead of Saturn? This would:
1) Allow them to sell U.S. spec Vectras, Astras, roadsters, etc, in far greater numbers (due to dealer reach alone).
2) Allow them to either turn Saturn into the youth-oriented Scion figher it should be, or kill it.
And besides...just take a look at the Aura...I for one think it would work just fine with a bowtie on the grille.
http://automobilemag.com/auto_shows/naias_2005/0501_saturn_aura_front_445.jpg
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Matt Keegan 10:26PM (12/18/2005)
GM is smart for holding onto Saturn. Why is that? The dealer network. Don't think for a moment that this doesn't factor into the equation of who GM keeps and who GM dumps.
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starlightmica 10:26PM (12/18/2005)
> Third, GM will see big growth in the crossover market.
Is this an admission they can't and won't make money on cars? I saw an article from 5 years ago how GM was going to sell fewer cars and more trucks due to the minimal profit margin.
http://www.mindfully.org/Industry/GM-Goal-More-SUVs.htm
This looks like the same thing all over again that GM has been saying - "Just wait 'till next year!" Sorry, Rick! don't call us, we'll call you...
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Lotsofanger 10:26PM (12/18/2005)
Wow. Not surprised all the GM bashers jumped on this one. Not surprised one bit and of course their comments are entirely stupid and childish.
GM has a crap load of problems and the only way they can get rid of them is cutting some brands. We don't need GMC. Keep it alive but only produce industrial vehicles. We don't need Buick. Why have a mid-lux company when Saturn is doing the same exact thing?
Pontiac needs some serious muscle. Not one roadster, one minivan, one equinox, and an outdated RWD car from Oz.
Cadillac, Saturn, and Chevy seem to be the only products in America with any direction. If GM cut every NA brand but these three, they can get their S$*% into order much quicker and much more efficiently.
Sure, it would mean a ton of layoffs and plant closings and a lot of angry dealers but in the long run GM would be a much sleaker and better company because they only need to devote money to three brands.
Then, take all the good cars from the cut brands and send them to the ones kept alive.
Turn the reported "stunning" '07 Buick Enclave lambda SUV into a Saab and give the brand a final push into the black.
Make the Solstice a Chevy and give the next Malibu a two door coupe and hardtop convertable variation.
Make the Impala as nice as the Lucerne and maybe throw in AWD to sweeten the deal.
I have plenty of other ideas but I'll spare all of you.
Oh and Hummer could stay as the Jeep/Land Rover brand.
Wagoner... Grow some freakin balls and do something. When the contract with the UAW ends in 2007, start cutting away like there is no tomorrow. Continue offering hot sedans as well as SUVs.
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Driver of a Sleak Convertable 10:26PM (12/18/2005)
Your a bunch of ideots.
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TrollHouseCookie 10:26PM (12/18/2005)
"Driver of a Sleak Convertable
Your a bunch of ideots."
Good spelling there, Sleak!
Now what's worse: GM's management, or what the teacher unions are doing to education?
I say they both suck.
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Driver of a Sleak Convertable 10:26PM (12/18/2005)
"Good spelling there, Sleak!"
I dont make speling misstakes. I have fat finggers.
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Andy 10:26PM (12/18/2005)
Wagoner and Lutz need to get their heads out of Alfred Sloan's ass. No car company needs so many brands and models. Just look at 4-door sedans - here are all the ones they offer:
Buick Century
Buick LaCrosse
Buick Lucerne
Buick Lesabre
Buick Park Avenue
Cadillac CTS
Cadillac STS
Cadillac DTS
Cadillac DeVille
Chevy Aveo
Chevy Cobalt
Chevy Malibu
Chevy Impala
Pontiac Vibe
Pontiac G6
Pontiac Grand Prix
Pontiac Bonneville
Saab 9-2x
Saab 9-3
Saab 9-5
Saturn ION
When you have this many brands and models to support you have to split all your resources across all of them. This is incredibly expensive, and on top of that you're not going to do a good job when you're so fragmented.
I would cut it down to three brands: Cadillac, Chevrolet and Saturn. Cadillac is your luxury brand, Chevrolet is bread and butter cars and trucks, and Saturn is the entry level brand. Sell or shut down everything else.
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Tom Parris 10:26PM (12/18/2005)
GM should never get rid of Saturn. Why? Customer loyalty! More Saturn owners are repeat buyers than most other small brands (not counting the Ford/Chevy/Dodge truck crowd.) Also, when Saturn buyers do leave "the family"they mostly go Honda or Toyota. GM can't afford to lose ANY customers.
We can all say this is what GM should do, this is what they shouldn't. We are the customers... they won't listen to us.
That being said:
Chevy: safe, economical, durable sedans, all of the real SUVs
Pontiac: PERFORMANCE coupes and sedans. No minivans or SUVs
SAAB: European import sedans and coupes, no SUVs (especially re-badged Trailblazers.)
Cadilac: Stay the course. However, do we really need a luxury Suburban and a luxury Avalanche?
GMC: all the trucks, commercial and consumer, all types: small, medium and large!
Saturn: continue to be the import fighter. Keep the VUE, get rid of ION, give Saturn it's own unique mini-van capable of competing with Honda and Toyota. Bring on the SKY and give us the good AURA. Develop another, great small car like the S series was.
Buick: aim for the over 50 crowd.
HUMMER: get rid of the H2, give the H3 some b@!!s.
Dealerships: combine Chevy & GMC dealerships, combine Pontiac, Buick and Cadilac, keep Saturn seperate, combine SAAB and HUMMER
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