Would GM shed Saab, Saturn and Pontiac to secure gov't aid?
When ants need to cross some dangerous span in order to get to the thing they want, certain ants in the colony will sacrifice themselves to build a bridge that other ants can cross. That's how you get the honey. In GM's case, the honey is a $12 billion government lifeline. The dangerous span is, well, extinction. And the sacrificial ants in this case could be Pontiac, Saturn, and Saab.
Before the government would start writing checks (to the automakers, at least), Congress told GM (and Ford and Chrysler) to come back with a plan that gave some indication of long-term viability and a return to financial health. Supposedly, as part of such a plan, GM has looked at "shedding" the three brands in question, which would eliminate the massive costs associated with production, marketing and sales. But that would happen after massive payouts, some serious upheaval and tens of thousands of job losses. It would leave GM with Chevrolet, GMC, Buick, and Cadillac... which, since it's in ruthless survival mode, makes us wonder what kind of crush GM has on GMC. GM will release a 10-to-12 page plan to the public making its case and Congress has scheduled a hearing on the matter for December 5th.
In the article, the word "shedding" is used to describe what GM would do with Saturn, Pontiac, and Saab. But we don't know where and how they would shed them. Saturn is a misfit child (not really Saturn's fault), Pontiac is unsure of itself (except when it comes to the G8 triplets and the Solstice), and Saab sold about 33,000 cars in America last year and 125,000 around the world. With the state of lending and credit markets, it would probably be easier to buy a pterodactyl than get a loan to buy one of GM's brands. HUMMER's already been on the block so long it's about to get arrested for loitering. So is "shedding" a euphemism for "bye-bye..."? We'll know soon enough. Thanks to all who tipped in.
[Source: Bloomberg]
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Reader Comments (Page 1 of 6)
Eddie 10:22AM (11/28/2008)
Keep Saturn, because people actually buy Saturns, plus they have some decent cars. Get rid of Buick, they haven't had a decent car since the GNX. Get rid of Pontiac because Saturn sells the sky (no need for Solstice) and make the G8 a Chevy like it is in the middle east (Lumina). Saab should have been gone years ago.
Reply
MemphisNET 10:28AM (11/28/2008)
To say they haven't had a decent car since the GNX is a little short-sighted. Not every car in the lineup has to be, or should be, a performance car. We need every day stuff with a few toys thrown in for good measure.
3cubed 10:30AM (11/28/2008)
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=50002
Actually Pontiac sells more than Saturn. Just so you know.
happy_penguin 10:33AM (11/28/2008)
Over 7,500 Buicks sold in October 2008. That hardly seems like "cars nobody wants".
MemphisNET 10:35AM (11/28/2008)
I'm going to miss the G8 - that is a truly excellent sedan. The Sol/Sky twins are awesome but they are likely to disappear regardless, or become a Chev. Beyond that, there isn't much in the lineup that can't go away all together or become Chev's.
Tim 10:41AM (11/28/2008)
Saturn Sales peaked in 93' and they only had 2 cars back then.
Astra is a money loser, Sky a money looser and the Aura has too much overlap with the Malibu.
Kill it
ronnie schreiber 10:46AM (11/28/2008)
"cars nobody wants"
The American car companies had a 55% market share in October.
If Apple was judged by the same conventional "wisdom" that's applied to the Detroit auto companies, people would say that "nobody" wants or buys Apple products.
Apple's market share of the personal computer market has dropped from 15% to under 3%. They've lost market share in the MP3 player market as well. When 45% of car buyers buy foreign brands, we're supposed to believe that "nobody" buys American cars but when 97% of computer buyers avoid Apple, if you say nobody buys Macs you'll get all sorts of hostile reactions from Apple cultists. Apple has some serious consumer issues as well, forcing iPod owners to use Apples own iTunes store and forcing iPhone owners to use 3rd party software and cellphone service from companies that give Apple a cut.
When Detroit had frequent model updates and changeovers they were accused of "planned obsolescence". When Apple does it, the reaction is, "cool, my new iPod plays videos and comes in cool colors - it's much cooler than my old one."
Ronnie Schreiber
Ronnie Schreiber
Motorobilia
ronnie schreiber 10:47AM (11/28/2008)
The link didn't work, but here's an expanded take on comparing Apples not to oranges, but automobiles:
http://www.motorobilia.com/2008/11/of-apples-and-automobiles.html
Tim 10:50AM (11/28/2008)
Ronnie are you saying Steve Jobs should take over GM?
Flashpoint 10:58AM (11/28/2008)
GET RID OF SATURN AND PONTIAC and refocus your efforts into making better CHEVY's and better GMC's.
As for Saab, they are too expensive and not alot of Americans buy em. I'd take a Cadillac over a Saab any day.
Jim 4:58AM (11/29/2008)
Tim how can you have overlap with a car thats BASED on the Aura.
The new Malibu is a rebadged Aura, which is a upscaled G6, not the other way around. And having test driven the Aura and the Malibu I can tell you flat out the Aura is the better of the two and the Mal is a typical Chevy low end piece of shit, especially compared to the XR version which is a HOT car and neither Pontiac nor Chevy has any version of theirs that comes close
If your going to do anything, dump all of Pontiac's rebadges (which is basically everything but the G8), move the whole Saturn line over to it and keep the G8. Saturn is the only brand that GM has that for the most part DOESNT look like GM, which honestly style wise has been stale as hell for years and years now. Not to mention that up till the recent vehicles, saturn has trumped Pontiac with performance cars, the G8 being the only car of note from Pontiac in years while Saturn has had the whole redline performance line.
Lets also not forget how freaking stupid it would be for GM to can saturn after investing millions in a redesigned for US Astra for 2010.
Seriously people need to stop having this love affair with the Chevy because of the Corvette and the coming Camaro. Other than those two cars NOTHING they put out is any good. The worst car I have ever owned since I started driving was a brand new Cobalt. Brand new the piece of shit was falling apart. If it wasn't for Saturn I'd have gone to Honda years ago because GMs other lines not counting the luxury brands are garbage.
jv2k 11:51AM (11/28/2008)
I really don't get this love affair with GMC. Does GMC even have a single vehicle that doesn't have a chevy counterpart? GMC is entirely rebadged vehicles. Honestly if any brand is useless it is GMC.
As for getting rid of pontiac, even if we ignore all the money GM is going to lose by killing the three brands, we have to consider that pontiacs actually sell quite a bit compared to the other brands. It's kind of stupid to sell a brand that is making you money.
Yea the Solstice and g8 are a bust, but the g6 is one of the top selling american midsized cars.
Andrew L 12:08PM (11/28/2008)
@jv2k, I feel the same way about GMC... the only way how I would want to see them around is if they stuck to medium to commercial duty trucks. And if they did that then they should kill the Chevy versions, Chevy should be strictly light duty while GMC is Medium to Commercial...
That being said, it would be a shame to see Pontiac go but they have had no clear direction and they pretty much have been nothing but a re-badge for the past few years minus a few cars.
As for the others... let them go, they are nothing except a money pit
happy_penguin 12:15PM (11/28/2008)
Ford F series trucks are the number one selling brand of full sized trucks. But with Chevrolet and GMC brand together, General Motors sells more full sized trucks than any other company. GMC offers some trim differences and options and the trucks are built in the same plants as Chevrolet. General Motors has alienated enough of their loyal Oldsmobile customers by eliminating that brand so why eliminate GMC for such a minimal savings? Keep GMC and sell Saab and Hummer and perhaps Saturn. All other brands are needed.
R Wiggler 12:17PM (11/28/2008)
I agree one hundred percent. If any brand should be eliminated it is Buick. Tiger Woods was there last chance of getting someone younger than 60 into these vehicles and now he is gone. The added benefit to selling Buick is that there is a market for them in China. Perhaps some chinese company would be willing to buy them.
adrian 12:19PM (11/28/2008)
I think it's a shame that GM may get rid of Saturn. The Astra based model is a good car that sells well in Europe. GM should bring more versions of this car over to the US and Americans should give it a chance.
happy_penguin 12:22PM (11/28/2008)
Only real car enthusiasts push for proliferation of Euro model, domestic branded vehicles. Nobody else cares and it shows in the sales. That's why despite the urging of the automotive press, they don't sell them here. THEY DON'T SELL.
Brian 1:58PM (11/28/2008)
Do you guys realize that GMC outsells 1/2 of the automotive world?
If anything, for GM, GMC is more than likely the most profitable division since it costs so little to create, sells decently well and is on higher profit vehicles.
GM Should move GMC to Saturn and close down Buick, Pontiac. This eliminates thousands of dealers and costs.
Nightcrawler 2:08PM (11/28/2008)
@Happy Penguin
'Over 7,500 Buicks sold in October 2008. That hardly seems like "cars nobody wants".'
Yeah, but by that logic you have to keep Pontiac too, because they sold almost 13,000 in October. Saturn sold over 8500 vehicles, so they can't go either. And GMC sold over 21,000.
The only divisions with worse sales than Buick are Saab, Hummer, and Cadillac. And all three are sort of specialized niche products, so sales don't tell the whole story. No one thinks Caddy is a failure.
The only reason I can think that they are keeping Buick is so they can have three levels of sales, mass market at the Chevy dealer, upscale at the Buick/GMC dealer, and luxury at the Cadillac dealer. But that's more or less what they've been trying to do for years now.
happy_penguin 4:16PM (11/28/2008)
Yes, Nightcrawler. I am in fact saying that getting rid of brands is a potential recipe for disaster. If General Motors alienates loyal brand customers they run risk of losing them to the competition. The core brands need to stay. GMC must involve little cost as it's little more than a Chevy truck. Pontiac is popular and the sales numbers demonstrate this. On the other hand, GM needs to concentrate on improving the image and in some cases the quality of it's brands. Get Chevy and Pontiac above average in quality by reducing redundancy in the models rather than eliminating the brands. Two or three models average for each brand should suffice, such as Buick has done. Impala, Malibu and Cobalt/Cruze for Chevy. Naturally, the Corvette stays as a small volume halo product. Does Pontiac really need the Torrent, G5 or even the Solstace? Perhaps only Saab, Hummer and Saturn need to go.