Jerry Flint: Killing brands not the answer for GM
They're all wrong, he says, even Jerry York. Jerry Flint, The Car Connection's cynical but insightful auto
industry commentator, has tapped out a little piece that goes against the grain of popular opinion when it comes to
GM's woes. Kill of brands? Heck no, Flint says.
First is Saab. As GM works to align Saab with Opel, it is already putting drastic cost-cutting measures into effect. As for Saturn, the brand has some very good looking vehicles coming out of the pipeline soon. Timing would be bad. And Pontiac? Why would GM get rid of business that accounts for 10 percent of its sales? Then there's Buick. Getting rid of Buick might sound nice, but killing off vehicles that share platforms with other brands makes no sense.
What makes sense, then? Flint says Chrysler has it right -- build multiple vehicles off the same platform, but quit with the badge engineering.
Like GM or not, Flint has some good points. Take that, Jerry York.
Reader Comments (Page 1 of 1)
John 12:24PM (1/18/2006)
I think he's misssing the fact that GM's marketing, R&D and product development, dealer support budgets are spread too thin with so many brands and models. Why not focus those resources on building a few great Chevys, Caddys, Hummers, etc. (I think Saab has a place but question Pontiac/Buick)...yes, I know the exit costs are huge(Olds)
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Fred 12:31PM (1/18/2006)
Flint may have an argument vis-a-vis Saab - that it is being wound into Opel as Opel/Vauxhall moves upmarket.
His arguments about Buick, Saturn and Pontiac make little or no sense, however.
His one argument in favor of Buick is that GM shouldn't kill a "famous name". But as everyone (unlike Flint) under 80 knows, the Buick brand has "negative value". Sure, if you're at a classic car auction, it may be a plus. If you want a car built in the last 40 years, it's bad news.
Similarly, his argument for Saturn is that it has new product. Well, that doesn't mean the brand has a reason to continue existing. Sticking a loser badge on new metal doesn't confer value on that brand - it might just devalue your investment in the new product, however.
His volume argument for Pontiac also makes no sense: the question is not whether to reduce volumee (although that might be an excellent idea), but whether GM should stick with its plethora of brands. If that 10% is losing me money on every sale and diluting my other brands, it's 10% that isn't doing any good. The question is, what's the value of the Pontiac brand? "It's 10% of our sales volume" is not an answer to that question.
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realhawker 12:43PM (1/18/2006)
There's hardly a need to shut down Buick, I have seen 3 buick dealers close in NJ in the last 3 years. Maybe they'll take themselves out.
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Joshi 12:57PM (1/18/2006)
I agree with him, for the most part.
I just think each brand needs to find its niche, and with a few of GM's brands, that's not exactly happening.
Chevy is the "normal" everyman division.
Pontiac is the "performance" division.
Buick is the "low luxury" division.
Cadillac is the "high luxury" division.
Hummer is the "big SUV" division.
Saab is...?
Saturn is...?
They were right to get rid of Oldsmobile.
As a bit of a Saturnling, I'm trying to figure out what the point of Saturn is right now. They have some great cars coming - the Sky looks nice, and I dig the Outlook/Enclave - but I just can't exactly tell what they're trying to be. Many are predicting that more aspirational small cars, like Mini and Scion, will be the next big automotive trend, and Saturn would be an ideal brand to focus on this area. Saturn is definitely trying to move upmarket - I think they're using VW as their example - but, um, VW might not be the best example. What was once GM's quirky un-brand is now exactly the opposite: The home of little more than badge-engineered versions of other cars. What is with the Relay? Honestly - GM's "SUV-ish van" thing was weird enough, but did we really need FOUR badge-engineered versions of the same van? I love the Sky and the Enclave/Outlook, but Saturn needs their own cars - or else they really don't have a point.
Saturn needs to focus - let's say, on the "aspirational small car" segment. They need to get rid of the Relay, and (as much as I hate to say it) probably the Sky, too. They need to basically re-launch the brand, because right now, it's a muddled mess with no clear sense of direction or purpose.
Saturn could be GM's answer to Scion, Mini, the low-end Volkswagen set - but they're not. They're not really anything right now, and that makes me sad.
GM really needs to stop badge-engineering. Platform-sharing is okay, but if a brand has nothing more than rebadged cars with rushuffled options, what is the point?
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jojo 1:05PM (1/18/2006)
Saab and Saturn may end up being very important to GM, as Caddy is not really a brand for upmarket compact cars.
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Remy Martin 2:14PM (1/18/2006)
Multiple brands were an idea decades ago, but they don't make sense like they used to. When people look at a Chevy and think about going upmarket a bit, they don't just look at other GM products. If they are looking quality and are willing to pay, they are going to seek out Honda and Toyota, not Buick. If they are willing to spend extra seeking performance, they might look at Nissan and Mazda, not Pontiac. If they want High Luxury, they do have Cadillac in their sights, but they are also sniffing around Audi, BMW, and Mercedes.
I would agree Saturn might be salvageable when it comes to fighting Scion or Mini, but I don't think there is a need for Pontiac, Buick, or GMC. Hummer is a marketable brand, but only as long as huge SUVs are in vogue, and we already see the end of that phase. Saab has plenty of great engineering left in it, but if it continues only to offer up more of the 9-7x or the 9-2x, why even bother?
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CE 2:24PM (1/18/2006)
Agree with No. 4. Share platforms, but stop badge engineering.
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Steve LaBonne 3:57PM (1/18/2006)
Both Flint and some of the commenters above are simply not dealing with reality. GM, even if it survives, will never again be big enough to carry so many different brands successfully. That antiquated divisional structure, designed for a very different time, spreads its design, engineering and marketing resources far too thinly relative to its present and future market share.
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Ed 4:36PM (1/18/2006)
Agree with #8. Times have simply changed. When American auto manufacturers had a monopoly on the domestic market, people followed the "chain" of brands. Chevy, then maybe a Buick, then a Cadillac. Today they still get a lot of entry-level buyers to buy a Chevy, but the "corporate ladder" has fallen apart. When a Chevy owner decides to get a more expensive vehicle, he or she has 30 choices. That same person in 1955 would have had about 4 options.
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Cray 4:40PM (1/18/2006)
I agree with poster #6, the age of branding is long past dead. Consumers are smarter these days and are more inclined to shop for their needs as opposed to brand loyalty.
GM would do well streamlining their brands and furthermore structure their lines so that even a casual consumer knows what to expect from each GM brand.
Each line should focus on two or three types of classes of vehicles, for example...
GMC - Should be all about trucks, (mini)vans and SUVs. They should only come 2 ways, standard (economical) or fully-loaded.
Chevy - Should be all about sedans, wagons, compacts and coupes. Offered in two different packages, standard (economy class) or sports package. The latter shouldn't be confused with Pontiac's performance packaging. The sports packaging would have to be more cosmetic than actual performance changes. Point is that Chevy cars should appeal to everyone.
Pontiac - should be all about performance, they shouldn't comer any other way but fully loaded and geared toward high performance and hint of luxury. They could sell trucks, (mini)vans, SUVs, sedans, compacts and coupes all aimed at high performance. Their trucks should be suped up for street-performance as oppsed to GMC's packaging.
Cadillac - Luxury division of both cars and trucks, including vans and compacts. This badge should be making a luxury version of just about everything GM makes. They shouldn't come any other way but fully-loaded.
I see no point in keeping Buick and Oldsmobile. Leave Saturn and Saab alone. Its too soon to know what will become of both these brands.
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iQuack 4:56PM (1/18/2006)
I don't car what GM does except one thing: stop the stupid, badge engineering. Whoever thought of badge engineering in the first place ought to be shot.
Badge engineering blurs any distinction among brands and ruins the integrity of all brands involved IMO.
Platform sharing is a different matter; so long as the cars sharing a platform are clearly differentiated, it's no problem.
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Jonathan 7:05PM (1/18/2006)
I saw a commercial the other day with a father talking about his son and his family and concerns for them and their safety or whatever. Anyway at the end he said, "That's why I bought a Saturn" and we're shown his Relay minivan.
This new campaign is silly because I'm left wondering "Why not a Chevy, Buick, or Pontiac?" And since all 4 minivans look identical and have essentially the same features, any consumer with half a brain isn't going to be fooled by this campaign either. Nevermind the options from Chrysler, Mazda, Honda, Nissan, Ford, Kia, and Toyota.
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dude 11:23PM (1/18/2006)
Once again, I continue to be fascinated by how bigwig executives and former executives and investors (and GM fanbois for that matter) have a million ideas for turning around GM--none of which ever seem to involve IMPROVING THE RELIABILITY of their product!
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Steve LaBonne 8:44AM (1/19/2006)
Dude, that's because their products are pretty good already in terms of reliability. (Since everybody is so fond of anecdotal "evidence" around here, I drive a 2000 Saturn with over 100,000 miles on it which has yet to give me any trouble at all.) The real lag is in design (especially interior) and engineering- their cars always seem to be one generation behind the competition- and marketing, which is where the excessive number of brands really hurts.
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digger 2:19PM (1/19/2006)
It astounds me that GM are underusing and ignoring their most successful and best cars: those of Opel/Vauxhall. While in North America, GM is getting stuffed by the Japanese in all areas, it's the other way around in Europe.
GM rewards its most successful division by importing poor Daewoos and re-badging them as Chevy's in Europe and having them compete with the excellently-engineered Opels.
It's time GM closed down or scaled back its studios in North America and started importing or building Opels.
It beggars belief that GM ignores its most profitable and popular division.
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Newt 6:55PM (1/19/2006)
I couldn't possibly disagree with #10 more. Toyota sells Trucks, SUVs, the Camry, the Celica, the Prius, the Corolla, etc. all under one brand... TOYOTA. Who cares what the brand is. Rename the whole darn company if you are worried about perceptions.
And this idea that cars should be fully loaded or stripped to the bones is crazy. People want choices. Just because I don't want a Navigation system and rear DVD player means I can't have leather seats and a sunroof?
And #14 hits it spot-on. I sit inside of a Trailblazer or and Explorer (especially if its over 2 years old) and think "Why would I buy this hunk o' junk when I can have a 4Runner?"
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Newt 7:01PM (1/19/2006)
I couldn't possibly disagree with #10 more. Toyota sells Trucks, SUVs, the Camry, the Celica, the Prius, the Corolla, etc. all under one brand... TOYOTA. Who cares what the brand is. Rename the whole darn company if you are worried about perceptions.
And this idea that cars should be fully loaded or stripped to the bones is crazy. People want choices. Just because I don't want a Navigation system and rear DVD player means I can't have leather seats and a sunroof?
And #14 hits it spot-on. I sit inside of a Trailblazer or and Explorer (especially if its over 2 years old) and think "Why would I buy this hunk o' junk when I can have a 4Runner?"
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