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Now that GM is officially Number Two, many Monday morning quarterbacks are popping up to "help" the general right the ship. Count Alex Taylor III, Fortune's senior writer, among them. In an interesting article, Taylor outlines reasons why GM should cut loose the anchors of Buick, Pontiac, HUMMER, GMC and Saab in order to move forward and prosper. Reckoning that GM is too bloated with brands and capacity that were fine 50 years ago, Fortune says it's time to move on.
Where GM has 7 brands, new Number One, Toyota, has just three. Toyota, Lexus and Scion seem to be good enough to cover most buyers' needs, argues Taylor. But GM maintains that cutting brands would be cutting buyers since there are too many loyalists in the fold. The argument is that people want choice and more brands allows more specific targeting of the audience. But Fortune argues that the cost of that level of specification is too high. Taylor proposes keeping Chevy as the Toyota-equivalent volume brand, expanding Cadillac's offerings to go head-to-head with Lexus, and keeping Saturn to compete with Scion in the import-minded segment.

GMC can go completely commercial, but the author sees no redeeming qualities in HUMMER, Pontiac, Buick, or Saab (he might want to check out Buick's prospects in other regions like China before he shrugs it off so easily). It seems like a pretty logical plan that just makes too much sense in an industry fueled by passion and huge egos. It miight make good business sense on the surface, but these are emotional decisions, too. Nobody likes seeing a brand die, especially ones with such heritage. Chrysler has had to do it a lot over the years and GM has had to do it recently with Oldsmobile, but killing off a brand does come with considerable expense, as well. Buying out dealers, losing brand loyalists, and shuffling/reducing your workforce will hit the bottom line hard, too. .

Click through the Read link for Taylor's argument in full.

[Source: Fortune]

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    • 1 Second Ago
      • 7 Years Ago
      I kinda agree with the arguement posted here alittle GM should axe a brand and I'm not talking about buick pontiac or even Hummer, No I'm talking about Saab. Why Saab? well guys have you noticed that their more recent models do not reflect the same spirit that older Saab models once did and also that Saab heritage has died and the 9-7x SUV is obvious proof of that. It's nothing more than a deformed trailblazer with an igntion key between the seats. The 9 3 is a good seller but Saabs other models do not have he same inspiration as that car.

      Back to the other three brands Pontiac has greatly improved and the G6 line has proven to be very popular. Buick also has improved. remeber back in the day when both Buick and its big brother cadillac had Luxury cars with the styling and performance to attract 80 year olds. Comapred with what we have now I say that buick has improved over the past 10 to 12 years. Hummer while faithfully making Greenpeace kiss its Giant butt for a long time it is starting to show its true colors as a gas hog. put a diesal in the H2 and H3, come out with the H4 and the Hummer brand will be profitable again
      Jonathan Hicks
      • 7 Years Ago
      Oh No! GM SHOULD NOT kill The Pontiac, Buick, GMC, Hummer, & Saab brands. I always liked those brands. Furthermore, they launched many new products in the US recently.
      • 7 Years Ago
      This is about the most ignorant thing I have heard all day.
      • 7 Years Ago
      Radical surgery. If GM is ever going to do it, it would be now.

      A response of this magnitude would be met positively both on Main Street and Wall Street, but it would need to be done very carefully because GM can not afford to lose further market share.

      Could they successfully move Pontiac customers into the Chevy column, GMC customers to Chevy Truck and Buick to Cadillac? Because if you are talking about doing this, you are talking about 1 million units and 5-6 pts of share.

      I don't disagree with it, but it would be a huge gamble that would hinge big time on solid execution. And believe me, this HAS been discussed at GM.
      • 7 Years Ago
      If GM wants to make it back to number 1 the need to stop canabalizing sales of one company with another.

      Buick-leave the US

      Pontiac-A performance based company

      Hummer-build smaller models to compete with Jeep

      GMC-because they are just rebaged Chevys, try to put some distance between them or kill them off

      Saab-sell euro-style cars here unlike anything else

      Chevy-keep making cars that everyone can afford

      Cadillac-make luxury, high tech, performance cars

      This is my idea of what would work for GM.
      • 7 Years Ago
      If anything GM should axe Izuzu. We did not hear anyhting from them at the new york auto show (they did not even have a display) they only have 2 models a chevy colorado GMC canyon ripoff and the Izuzu Ascender a pathetic Trailblazer clone. Iuzuzu's only strength is their diesel engines but other than that they are nothing.
      • 7 Years Ago
      This guy is a complete idiot! First he blanket bashes all European car in February (link below) but now he suggests cutting down GM?? GM's product diversity is what makes the company so appealing. I hate when "automotive journalists" write just cuz they can (cough cough... Dutch Mandel).

      CNN Money article from 2-6-07 http://money.cnn.com/2007/02/02/news/companies/pluggedin_taylor_orphans.fortune/index.htm
      • 7 Years Ago
      I don't think GM will ever retake the lead in worldwide sales ever again.

      As for dumping Buick, Hummer, and Pontiac...I agree with all but Hummer. Sure, Hummers are huge and not exactly greenhouse friendly...but they're selling well. You want to dump a division that's selling well? Yeah, me neither.
      • 7 Years Ago
      Cadillac go head-to-head with Lexus?? You must be kidding. I have been a Cadillac enthusiast since childhood but I can see the war is lost. Having owned Cadillacs from 1963 vintage to present and car shoping the past couple of months; I see an entry level Lexus has better fit and finish than the flagship Cadillac. I have been a Lexus driver since 2004 and I am not looking back. What Cadillac was is just a memory today.
      GM has lost the war because they are making junk.
      • 7 Years Ago
      This guy is a complete idiot. Hummer sells in very good numbers for a niche brand. Cadillac is luxury. Buick is near luxury. Chevy is everyman's brand. GMC is more of the same as Chevy but with a few more upscale touches here and there and with a distinct style differences. Pontiac should be the entry level performance brand. Saturn is Euro-flavored cars focused on friendly service unlike any other. Saab is entry level European luxury brand.

      To quote CNN Autos "General Motors has finally realized that, while people will happily buy boring sedans from Toyota, they will not buy them from GM. So GM has worked hard to improve the quality as well as the emotional appeal of its cars and trucks. The improved designs give you a reason to look and improved quality gives you no reason to turn away."
      • 7 Years Ago

      He states the obvious: that this year's UAW negotiations and the healthcare issue are crucial.

      Ideally, the President of the United States would step in, and tell all the parties to get it fixed -- that is a perfect example of the leadership of the office. I suggest all car fans write to him and your Congresspeople now.

      The obstacle: Union members vote, pharmaceutical companies, doctors, etc are big contributors. In other words, there is no reasonable obstacle, only a political one.

      • 7 Years Ago
      Also they left out a brand, Isuzu.

      I had this idea years ago. I even talked about it on my radio show when I still did that. My plan was:

      Negotiate with the Unions: Flat out tell them, "We work together or this entire ship sinks."

      Design: More platforms less rebadging. I dont care that pontiac has an SUV. Make it a drivers car and not the same car with different plastic and it is justified. GM needs to learn that no one in their right mind will buy a canyon for $3k more when the Isuzu is down the street with even the same clips to mount the plastic. I could go company by company but other people have done this.

      GM needs to dump money into R&D. Less concept cars, "more this is a preview".
      GM's real killer is relability. I would never buy a GM because I see GM cars and trucks less than a year old with tail lights burned out. I had a toyota for 11 years and only replaced 1 bulb because I hit the fixture and broke it. It still worked but the mount was broken.

      GM has lived in the era that if you build it they will buy it. This idea is dead. Make people want your car not settle for it.

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