Rumormill: GMC brand getting the axe?
This has been a big year for GM's organization alignment, with President Fritz Henderson opening up about the brand issue snafu and the appointment of four brand czars. HUMMER was meant to join forces with Cadillac and Saab in a premium channel, but while HUMMER is still in the family, it's apparently been put out on the lawn. GM Inside News (GMI) reports that GM is treating HUMMER as a goner, saying that the H4 program is on life support for handover to the next buyer, and the H3 GMT-700 program is kaput.The bigger hearsay is that GM's board is considering euthanizing GMC or Pontiac. Those two brands were to be aligned in a brand channel with Buick (PBG). Getting rid of GMC could make some kind of sense, since it's entirely brand-engineered vehicles with some of the worst mileage numbers in the fleet. Shunning Pontiac would be a surprise to us since the Solstice and G8 have given it a nice brand awareness boost and it's got some products in the pipeline. If GMC or Pontiac did go, the GM board would consider folding Saturn into the PBG channel to maintain sales volume. In corporate-speak, we believe this is called GM's "gloves off" phase. Thanks for the tip, Dan!
[Source: GM Inside News]
Reader Comments (Page 1 of 5)
srivendel 1:36PM (6/20/2008)
Why wouldn't they kill GMC? What conceivable purpose does it serve? Hummer makes more sense than GMC, and that's not saying much.
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Aprime 2:06PM (6/20/2008)
Hummer makes more sense than GMC? Do some research, please.
GMC has about as much brand equity as Chevy among the buying US public, while Hummer's image has been negative from the START.
You can turn GMC into something else without killing the truck background, making it the source for utility vehicles for instance (I'm talking about giving them vehicles in the likes of the Fit, Vibe, along with the ol' SUVs and so forth).
Alex 3:10PM (6/20/2008)
I agree with you at least in terms of brand Image, from serious military vehicle to official D-bag transport Hummer at least has an image. To me at the very least GMC offers nothing that you can't get at chevy with a slightly different front end. The company seems like just more lame GM badge engineering.
geo.stewart 5:20PM (6/20/2008)
use GMC for real trucks since it has the ties to TopKick and such and use chevy for CUVs and such. keep the base truck in the chevy since they will not accept having all trucks removed.
JZeke 10:18AM (6/21/2008)
I agree, keeping Hummer does make more sense.
Why? It has more appeal to future buyers (read: children) than the staid GMC moniker does. A Denali might be a fine vehicle, but why can't they just limit it to an upgrade package on the Suburban? Why must there be all these slightly different versions of the same vehicle?
What I dont understand is how a brand named after an Indian Chief that was resented by other Native Americans makes for a viable contender in a post-globalization society. Its an archaic moniker best associated with Goats, Screaming Chickens and the Mullet rather than a purveyor of relevant automobiles in a rapidly evolving vehicle landscape. If the product had been consistent and unique over the past couple decades I could see an argument for its existence. Staunchly holding onto the past for sentimental reasons is bad business.
kballs 2:31PM (6/22/2008)
The only really unique brands in GM are:
Chevrolet
Cadillac
Saturn
Hummer
The rest are just rebadges and/or could easily be moved to the other brands without anybody noticing.
why not the LS2LS7? 1:36PM (6/20/2008)
It's unlikely either brand will get the axe.
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Dude 1:41PM (6/20/2008)
I Agree.
I'll file this story under slow news day.
Tool 2:26PM (6/20/2008)
If GM was ever going to make some serious structural alignments, now would be the time.
I'm not sure if they would ever cut Pontiac and GMC, because they would have to cut Buick, too. Buick dealers can't survive on the three vehicle line-up and would need to be dualed with another GM brand . . . at least that was the rationale for the B-P-G channel.
Ultimately I don't think that GM will cut B-P-G because they account for over 1 million units in 2007. It is not entirely clear that these customers would migrate to another GM product and the General can't afford to lose any more customers right now.
Johnny 2:35PM (6/20/2008)
LS2/LS7
you remember you said it costs billions and billions to turn a Ridgeline to Civic? You said how domestic plants are 80 years old so its impossible to be flex and its all ok that they are not flex?
Well Detroit Free Press just did a writeup about Honda. Its a good read. A ridgeline and a civic and an Odyssey can be back to back to back! All I said before was it takes 2 days to go from Odyssey to Civic and you said months. I guess it takes minutes.
http://www.freep.com/apps/pbcs.dll/article?AID=/20080620/BUSINESS01/806200349/1014/BUSINESS01
Steve 2:40PM (6/20/2008)
The only thing that is 80 years old are the walls. Ford under Nasser could have spent money on making plants Flex but instead he bought Aston Martin, Volvo and Land Rover. Same with the other Detroit 2.
As for GMC dump it. And it should cost less than Oldsmobile because all GMC plants are chevy plants. Back then a couple plants like the Aurora and intrigue were Olds only plants. Same with their V8 4.0 engines used only in Olds.
why not the LS2LS7? 4:49PM (6/20/2008)
I didn't say domestic plants couldn't be flex. I specifically said they can, and many are, and in fact the pics of the F-150 line on this site were of a flex line.
I spoke of how difficult changeover is. And it is difficult. Honda cannot do it in 2 days or 2 minutes.
Changing a plant which is producing one car to produce another takes a fair amount of time, for everyone. However, that doesn't mean you can't make multiple cars on the same line after the changeover. It just means you cannot take a plant which right now was not previously set up to build Civics and build Civics in it on Monday. It takes time to make the changes.
Jared 1:38PM (6/20/2008)
It is not going to happen. It should happen, but it won't. Pontiac is a lost cause and GMC needlessly duplicates Chevy.
It cost GM more than $1 Billion to close Oldsmobile, due to the costs to buy out dealers. GM doesn't have that kind of money.
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henrykrinkle 2:01PM (6/20/2008)
That sounds like a drop in the bucket considering all the other "one-time losses" that never seem to end.
Johnny 2:24PM (6/20/2008)
GM had revenue of 181 billion last year.
do you see a difference between 181 billion and 180 billion?
If it costs 1 billion to dump GMC do it.
http://www.autoobserver.com/2008/02/gm-reports-loss-for-2007-and-fourth-quarter.html
Jared 3:01PM (6/20/2008)
Johnny:
You need to look at GM's financial information in a lot more detail Specifically at 1) net income and 2) cash on hand.
GM lost $10.6 billion in 2005, $2 billion in 2006, and $39 billion in 2007. In the first three months of this year, their cash dropped from $24.5 billion to $21.5 billion. At that rate burn rate, they'll be out of cash in two years.
They don't have a spare billion to close a brand.
johnny 3:07PM (6/20/2008)
Jared you dont seem to get what I am saying. I agree with you as well but also try and understand that when your in it for an inch another inch doesnt make a difference.
Look at your numbers. 2 billion loss, 39 billion loss, 10.6 billion loss. A billion makes no difference. They went from 2 billion to 39 billion and GM is still here. 39 and 38 is miniscule if the end result of consolidation is a good one.
Jared 1:41PM (6/20/2008)
GM should close both Pontiac and GMC. Pontiac is a lost cause and GMC needlessly duplicates Chevy trucks.
But it is not going to happen because GM simply can't afford it. It cost GM over $1 billion to close Oldsmobile, due to liabilities to dealerships. GM can't afford to buy out the GMC and Pontiac dealers.
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MemphisNET 1:42PM (6/20/2008)
GMC would make the most sense.... but seeing either go would be sad. I think I read somewhere (maybe it was here on AB!) that most Canadian's buy the GMC version of the trucks, yet American's buy the Chev version.
Regardless, they do need to consolidate their brands.
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TJ 1:43PM (6/20/2008)
GM has to be one of the worst run companies ever! And I work for them! They do not have a clue on what is going on. They spend millions on stupid high glossy brochures and useless mailers. Currently if you have a Chrysler lease you may get up to 2,000 off to end your lease and come to GM. But if you pull up in a Lasabre you get nothing more than any other tire kicker. GMC should have been gone before Oldsmobile was. Every GMC is a Cheverolet ........ that is simple. Cutting Hummer loose is only a benfit to the new owner. Someone who knows what Hummer is. Having a GM version of Jeeps is a good thing.......GM just doesn't know how to make it work. Saturn and Buick should have both been killed before Oldsmobile was. Oldsmobile had all new product. Aurora/Intrigue/Alero/Sillioutte and Bravada. Dumb move there......... These high paid white collar GM employees are the one's who are running this company into the ground.
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