Filed under: GM, HUMMER, Saab, Earnings/Financials
GM defends HUMMER, Saab brands
In its report on
first-quarter worldwide sales, General Motors made a point of highlighting the success of HUMMER and Saab as part
of its 4.4 percent growth overall. The two brands have attracted criticism in recent months, notably from board
member Jerry York who suggested in January that the company dump both marques.HUMMER sales grew 202 percent over last year, largely on the strength of the new H3. While most of the growth occurred in the U.S., the company reported strong results in Canada and the Middle East, with further growth in overseas sales expected with the availability of a right-hand drive H3 later this year.
Saab sales set an all-time record, up 23.2 percent worldwide over last year, boosted by the launch of its 2.8-liter V6 turbo powerplant and its 9-5 BioPower (Sweden's best-selling ethanol vehicle). With its model lineup undergoing expansion over the last couple of years (9-7x, 9-2x, etc.) that's somewhat predictable, but still welcome news. Now, if they could just make a profit.
[Sources:Tradingmarkets.com, GM]
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Reader Comments (Page 1 of 1)
Kowell 10:26AM (4/21/2006)
Quebec is the north american top market for compacts and sub-compacts and even here the H3 has performed an undeniable breaktrough. The car sucks, it badly needs an engine change...but there are more and more of it and more Hummer salepoints are to open scattered across the province.
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David 10:45AM (4/21/2006)
I don't understand why Saturn is getting better cars than Saab now. Why are they stuffing GMC's down Saab's throat? I'm sure things will change, but for now that remains the status quo for new vehicles...
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Corey W. 10:48AM (4/21/2006)
Hurry... Fire Jerry York before it too late!!!
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James Sonne 11:09AM (4/21/2006)
The 9-3 SportCombi is the best thing that has happened to Saab in 15 years. The 9-2x is a joke, although I love the Subaru it's based on it's not a Saab. Similar situation with the 9-7. The Ethanol fuel drive is a very apt Saabian invention
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jamie 11:45AM (4/21/2006)
Oh, come on now. This is old news.
Jerry York retracted his statement regarding Hummer and Saab. Afterall he was looking at it from a moneyman perspective like CEO Rick Wagoner. But once he got the car guy (viz. Bob Lutz) viewpoint on how Hummer and Saab fit into the overall GM plan, it was a no brainer.
Each of those brands occupies a uniquely profitable niche that just needs a little TLC to blossom outrageously. H3 has shown what is possible...+202%. Aero-X shows the new direction for Saab. Fasten your seat belts, please!
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emor8t 12:00PM (4/21/2006)
The fact that Jerry York ever said that in the first place shows he is a complete moron.
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Travis Ayres 12:42PM (4/21/2006)
Jerry York was probably right about Hummer and Saab. First off, a 202% increase says just that. It doesn't say a 202% profit. And of course you're going to increase Hummer's sales - you are selling another model (the H3). Compare the H1 and H2 sales from before and after the H3 was released to see if Hummer is doing well.
And Saab... Saab hasn't turned a profit. It needs to start. Bastardizing it with Subaru's definitely wasn't a good idea.
All of you self-styled 'car guys' who think York was a fool - he's not. Think about it from not a 'car guy' perspective for half a second.
Lets be critical thinkers here people, instead of just being stupid. GM didn't dump Buick because they are GM's number one division in China. So lets talk about Saab and Hummer.
Lutz didn't convince York with some stupid 'car guy' look on things. This is a business - and with gas prices the way they are, Hummer is suffering, or will suffer.
if you reinvented Saab as not only eco-friendly, but practical, and miserly on gas, you might have something. You could have a halo fun vehicle to save the image from dowdiness, they already have the 'bio power' label and its known, they need to do OK on safety, and then get designs that aren't 'badge engineered'. More AWD, too. If GM can't sink the money for it, they should do the smart thing - kill Saab, rather than have it struggle on.
But again - Saab turns no PROFIT. York is right, and what he MEANS to say, but hasn't come right out and full articulated, is that unless GM can afford to keep the company current and reinvent it as something wonderful and PROFITABLE, it should be jettisoned.
He was right about hummer too. Throw it out the window. But they've just sunk a bunch of money into the brand - so it might make more sense to keep it for a while and see if it can pay for itself. THATs why he wouldn't sell it now. It wasn't a 'car guy vs. bean counter' thing. These are super-professionals, excellently educated - their business relationships are not like those in your piss poor stupid dead end jobs down at the restarant or the plant. They're a little more complicated than that. So before you call them stupid.... heh.
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Corey W. 2:27PM (4/21/2006)
"These are super-professionals, excellently educated - their business relationships are not like those in your piss poor stupid dead end jobs down at the restarant or the plant."
Which is why they're in such a good position right now.... Oh, wait.... they're not!!
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Mike 3:32PM (4/21/2006)
whether you sell 10 popsicles or 10 billion popsicles for a 5 cents when they cost you 50 cents to sell them... you are still in the hole.
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emor8t 3:56PM (4/21/2006)
You don't junk a brand that sells, period!
If it sells thats 90% of GM's problems, you find a way to make it profitable!
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Paul 4:45PM (4/21/2006)
GM should tank all of the american divisions and keep Opal, DaeWoo and Saab. At least these are profitable and turn out some quality product. the products the american divisions are a joke and confirm the theory that american manufacturing as a whole is obsolete.
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alex 4:55PM (4/21/2006)
Jerry York is right- and Lutz's claim that he recinded those comments were actually false- Lutz put words in Jerry's mouth.
SAAB and Hummer need to go- they dont make a profit, and consume GM's resources that need to be applied elsewhere.
If you want to see the damage done by the H3- look at GM's outdated bottlenose worst in class minivan portfolio. The minivan is a segment that GM strategically took resources away from to make the H3, and it is the same segment that took the Japanese until 2001 to really offer a competitive product. GM had a golden opportunity.
Then you got to look at product succession- can the Hummer brand carry on like the Jeep Wrangler for decades with minor cosmetic changes? Eventually the H2 will wear down in the marketplace, and what comes after it. Another box?
Profitability (sharholder value) should be GM's number one priority- regardless of sales and marketshare. Having high sales numbers and no profits is screwing GM shareholders. By thinking in terms of market share (which has been quietly eroding)they have done their shareholders a disservice.
Although it is not said outright, GM insiders have a very tough time accepting they need to be a smaller car company. Being the largest automaker is a source of pride, and its more of a corporate egotrip.
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Spear 4:34PM (4/22/2006)
"GM should tank all of the american divisions and keep Opal, DaeWoo and Saab. At least these are profitable and turn out some quality product. the products the american divisions are a joke and confirm the theory that american manufacturing as a whole is obsolete."
WTF is an Opal?
learn to spell, doushebag
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alex 6:00PM (4/22/2006)
Spear- WTF is a doushebag? douchebag?
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SAAB DADDY 1:06PM (4/27/2006)
wtf??? the Subaru 92-X was definitely a needed addition to SAAB because SAAB hasn't done anything in the AWD department. I guess that center console ignition is such a bid deal for all you folks.
I would have gotten the turbo version if I was in the market when GM had their employee discount. a turbo subaru with their balanced engine and AWD layout, upscaled slightly interior with a saab front end look for 19K??? 227 HP... fastest SAAB available at the time....PRICELESS
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Fishermanjuice 9:55PM (6/13/2006)
SAAB DADDY
I just got a new 2006 SAAB 92-x aero last month. 2006 has 230 HP and an extra 15 ft/lbs. torque over 2005. I test drove an automatic but bought the manual. The manual is FASTER! WAYYY FASTER! The AWD makes it handle great and little if any tire spin off the line. GM just started a $4,000 rebate offer on them and I got the dealer down below the supplier discount price on one. Sticker was $28,xxx and I paid like $22K. I understand that that is why GM can't make a profit on it and all but it was a GREAT DEAL for me! Get out and buy one, it ROCKS!
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N 11:20PM (6/13/2006)
SUVs have taken money not only from minivan development at both GM and Ford, but destroyed their positions in RWD sedans, as well.
GM unwisely dumped the Caprice and its counterparts at Buick, Olds, and Cadillac after the 1996 model year to convert Arlington, TX plant to Tahoes and Suburbans.
The very lucrative niche markets in stretch limos, police cars, and taxis were lost to them.
Just months before the discontinuation of the Caprice wagon that it was based upon, the concept car boys, who evidently never met the production-planning guys, took a new el Camino to the car shows.
In Omaha and in all other cities they took it to, according to the GM people at the exhibit, the vehicle was a huge hit!
Bonehead GM product mis-handlers messed up yet another niche market!
Ford spent so much money on SUV development--conversion to independent rear suspension, air suspension, etc., that should have gone into the Crown Vic, Marquis and Town Car that Chrysler is about to take over their market in those highly-profitable niches where they've gone complacent.
GM and Ford need to abandon all hope that ethanol and hybrid SUVs will save them.
Decent big sedans, wagons ( and wagon-based "pickup cars")as well as desirable minivans are their future.
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chemp 7:47PM (7/28/2006)
sad news
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