Job and brand cuts from GM on the horizon
by Damon Lavrinc on Jul 7th 2008 at 8:26AM 
FOLLOW UP: Tony Cervone, a GM spokesperson, has told Bloomberg that HUMMER is the only brand the General is considering selling or closing.The Wall Street Journal is reporting that General Motors is looking to cut thousands of white-collar jobs and sell, or stop production, of some if its brands. The General has supposedly set 2010 as a target for its return to profitability, but the automaker has never announced any details on how it plans to achieve that goal.
GM's management team will be meeting with the board early next month to discuss raising additional cash, and that could mean seriously pruning GM's bloated brand portfolio. HUMMER is supposedly already on the block, but Chevrolet and Cadillac – brands at the core of GM's business – are likely safe from the ax. However, Buick, Pontiac, Saab and Saturn, which haven't fared well during the biggest U.S. sales slump in 15 years, could possibly be sold or killed completely.
While it deserves note that all of this information comes from unnamed WSJ sources, GM's recent stock plunge and abysmal June sales numbers means something has to be done, and quick. If that entails cutting underperforming brands, so be it -- nostalgia be damned.
[Source: WSJ (Sub. Req.) via Reuters]
Reader Comments (Page 1 of 4)
shethj 8:35AM (7/07/2008)
actually Saturn's sales arent doing too bad so far this year. Does anyone do any research before posting? Other sites have said either Buick or GMC could be cut and my money would be on GMC since they sell nothing but trucks. Cutting Saturn or evern Buick/Pontiac would be stupid since they focuse primarily on cars. Since Saturn has two hybrids already and a two mode Vue coming out I cant see GM cutting them and retaining GMC or Saab.
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RedLineTire 9:13AM (7/07/2008)
Why don't you read the article before complaining about people doing research...
It says that most analysts indicate Saturn hasn't made money in the 20 years of it's existence.
rar 9:21AM (7/07/2008)
I don't think they would kill GMC. What about their medium duty trucks? They can't just turn them into Chevys. These trucks are sold and serviced at truck dealers along with Internationals, Mack, Freightliners etc. Maybe they could end the light duty GMC trucks and suv's and sell them as Chevy's. I don't think they should kill of the medium duty trucks. They make good trucks.
Jvijil 9:40AM (7/07/2008)
i think saab should be eliminated right away....they had a chance to compete with volvo but GM kinda blew it :(. hummer could have had a chance at being an offroad truck maker like jeep but i think it may be too late for that. GMC is basically selling rebranded chevys so that never made sense to begin with. GM has put alot of money recently into Pontiac and Saturn and even buick so i think they may be safe. it will probably be GMC, Saab, and Hummer on the auction blocks.
Lithous 11:02AM (7/07/2008)
SAAB has some good engineering that it would be dumb to let go unless they do with it like they did with Alison Transmission. They kept the rights and group that came up with the two mode hybrid and sold everything else. They should keep SAAB Engineering (fictional division) and sell SAAB name, production and dealerships if they must.
GMC should only be kept if they plan to stay in the commercial truck business. Chevy should sell all their light duty trucks. I would have suggested that Chevy sell no trucks and GMC sell all GM's trucks except there are way more Chevy dealers and Chevy faithfuls for that.
Saturn should sell all three of the small cars they have been talking about (Beat, Trax and whatever the third one is) Add some others or variations but don't go crazy with all too many models or get to big in size of cars.
Buick needs to live for no other reason than the second largest world market seems to like them. Maybe just Chevy and Buick in China. Not really needed in the U.S.
Pontiac should go.
Now the only question is how much will it cost to get rid of BPG in America.
Maybe any GM dealer should be able to import select (i.e. any that meet U.S. regulations) Opel/Holden vehicles. And keep the name (Opel or Holden and not rebadge them a different name) Those millions of people coming to America every year will have something familiar to buy. Make sure the Opel and Holden signs are viewable at every GM dealer. It is a global market now and people like what they are familiar with. Plus it may intrigue enough import oriented buyers to stop in and shop for GM's imports.
Chrono-tron 5:31PM (7/09/2008)
I won't give my opinion in ways of who should get axed/sold. However let's stick with the facts. 1) GM bites off more than it could chew due to mismanagement. Someone on the inside is messin' up BIG TYME!!! 2) Most of GM's everyday, practical, affordable products are lack-luster and don't deliver anything that's innovative (this of course excludes Cadillac, Hummer, the Corvette, etc.). 3) Build quality! As a whole Consumer's Report stated Japanese build the most reliable automobiles. And from there it just gets ugly. It then goes to US auto manufacturers, then the Germans. For the most part, all you really see on the road are Toyotas and Hondas (Lexus and Acuras respectively) along with other foreign brands and let's not forget about Hyndai. They've stepped up and are are still steppin'! 4) There can only be one alpha-male. In the US economy none of Detroit's big three are it (sad to say)! Not all, but some people settled for domestic cars 'cause of there special pricing or rebates that Japanese companies would never be caught dead at selling their cars!!! Some others just like "good ol' American engineering"! GM cuts corners to stay in the game. Performance, tech-wise, reliability and innovation wrapped into a single car or truck. GM will never be able to hang. Maybe one day they can prove me wrong!!!!!
mike 8:36AM (7/07/2008)
LOL, who would buy Saturn or Buick? Or the performance driven Pontiac....Pontiac Montana that is.
And the sad part is, as soon as Volt will go on sale GM will start losing even more money.....because it will be a money losing vehicle for the first few years (according to GM not me)
I said all along that Rick Wagoner was the problem, he has no vision and frankly shows zero knowledge of the auto industry. Example....just yesterday there was an article here on Autoblog saying that GM will soon (2012) build a small car...................that car should have been here 2 years ago...it will come in 4 years from now. By the time that car will come gas may fall and GM will be stuck with a car that is here at the wrong time....much like GM's SUVs are now.
Fire Rick.
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Mike Meyer 10:37AM (7/07/2008)
The Pontiac Minivan hasn't been built for over 3 years now. And go drive a G8. Holy Sh!t thats a great car. Better yet, drive a Soltice GXP Turbo, it will blow the doors off of a BMW Z4. before you start ranting about how bad a product is... DRIVE IT then you can make a educated decision.
Saturn is already bringing in Small European cars to fill its market. The down side... The dollar is so weak that it takes all the profitability out of everything.
By the way, why doesn't any one mention that Buick is the number 1 selling brand in China.
Rick won't lose his job, he's making money everywhere but at home and GM's loss still isn't as big as the almight Toyota's loss (which is actually a huge loss when you rely on child labor to put your darling Prius batteries together in China.)
Blake Luttrell 8:41AM (7/07/2008)
Kill GMC. Sell Saab. Kill/Sell Hummer.
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BLS 8:52AM (7/07/2008)
People still will need work trucks. I could see GMC dropping the SUVs and focussing on work trucks beyond just the Sierra and leave the passenger CUVs to Buick at the PBG dealerships. The Denali concept would be a nice addition to GMC while shedding the Acadia, Envoy, and Yukon.
I also don't see the value of selling Saab unless they need a cash injection, because they primarily sell cars and have brand cache (not only in the US like Caddy).
Buick has loyal customers and sells mostly cars. Also, I don't think that people expect their Buick to go 0-60 in 5 seconds, so perhaps GM can cut the power and make them fuel efficient without the backlash they may get at Caddy. Yes they are generally pretty big but old people only drive a couple thousand miles a year (or 300 in the case of my wife's grandmother... she has the nicest 1990 Eagle Summit in the country) so gas prices may not affect Buick as much.
This commentary is complete opinion and I didn't look at the sales numbers. I am merely assuming that car sales slid due to the economy and truck sales slid in excess due to high gas prices.
Jared 9:26AM (7/07/2008)
"People still will need work trucks."
Indeed. And they buy them at the Chevy store. There is no need to make both Chevy and GM versions of a work truck.
Kill GMC. It serves no purpose.
geo.stewart 8:52AM (7/07/2008)
Saab is a one-trick pony. IF you want to keep selling the Saab 9-3 and I'm not sure there is a compelling reason to, sell it as the Saturn Saab.
Kill Saab and GMC, or kill Chevy trucks and make all trucks GMC though that doesnt make a lot of sense.
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AngeloD 8:52AM (7/07/2008)
Saab needs to be sold fast, it brings nothing to GM and is a constant money pit.
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Shiftright 12:24PM (7/07/2008)
SAAB has a rich and long engineering lineage. They were pioneers in the development of turbocharging and sophisticated engine managements systems, not to mention aerodynamics. Saab was doing fine before GM bought it and quickly diluted its engineering by reskinning subpar Opel Vectra platforms and slapping a Saab badge on it. You can't take an individualistic and engineering driven company like Saab, make it into another GM badge engineered brand and expect it to work. I hope GM sells it to a company that understands Saab's strengths and and lets it design and build great cars again. I miss my '90 900...
AkulaX1 12:46PM (7/07/2008)
Saabs were ugly and slow and lame. If anything GM made them look better than they ever were. There is nothing sophisticated about saab.
Alex 8:59AM (7/07/2008)
Kill GMC, Saab and Buick (but keep the Buick name in China, where they like it).
Make Saturn sell Opel models exclusively.
If after that still need cuts, kill Pontiac.
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Steve_S 8:59AM (7/07/2008)
I thought the whole reason GM didn’t cut brands is they couldn’t afford to buy out the dealers, what has changed that would allow them to do that now other than Chapter 11?
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RedLineTire 9:16AM (7/07/2008)
I was wondering the exact same thing. Everytime this discussion happened before, it was said that the dealer franchise agreement prevented wholesale selloffs of GMC, etc. (Evidently the Olds shutdown cost them a bundle).
I don't see what's different this time around, other than if they do go CH11, it may allow them an way out of the franchise agreements.
motorman 9:20AM (7/07/2008)
you got it as they are still fighting law suits about closing olds
mj 10:02AM (7/07/2008)
Did everyone miss where the article says ' stop production or sell' these brands. Both are legal means of avoiding the costs of dealer disenfranchisement.
So I would try to get Volkwagen to take Saab, they could use Saab for luxury VWs in this country and keep VW a value brand. The Eos, Tuareg, Passat v8 and passat v12 would be easier sells as Saabs, I bet.
A good question to ask these manufacturers is why haven't they found a way to renegotiate with the dealers so they have a legal means to extricate themselves from brands in the future?