News, GM Said to Study Shedding Saab, Saturn, Pontiac to Win U.S. Aid. (lender, loans)

[John1960]

Nov. 26 (Bloomberg) -- General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer, people familiar with the matter said.

Selling or dropping brands would save money and reduce overlap as the biggest U.S. automaker struggles to avoid running out of operating cash by year’s end, said the people, who didn’t want to be identified because no decision has been made. GM’s other U.S. brands are Chevrolet, GMC, Buick and Cadillac.

Bloomberg.com: Worldwide

[Dexterguy]

Originally Posted by John1960

Nov. 26 (Bloomberg) -- General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer, people familiar with the matter said.

Selling or dropping brands would save money and reduce overlap as the biggest U.S. automaker struggles to avoid running out of operating cash by year’s end, said the people, who didn’t want to be identified because no decision has been made. GM’s other U.S. brands are Chevrolet, GMC, Buick and Cadillac.

GM would be dropping the wrong brands, drop Saturn?? That does not make any sense at all! If GM is thinking about dropping brands, its should be #1 - Hummer #2 - Saab (sell off) and #3 - Buick, and if they want a fourth, GMC. Saturn, as I recall is GM's third strongest brand. Pontiac is not very strong, but it would be very unsmart to cut is first from GM's line-ups.

[Stratford, Ct. Resident]

There was a thread started yesterday, discussing the Bloomberg article.
http://www.city-data.com/forum/autom...divisions.html

[chet everett]

Part of the "show Pelosi SOMETHING that she can use turn the hordes of angry constituents away from the phone lines so that she can sneak this in instead of watching it go down in flames like the first TARP vote"????

I mean come ON, who is this going to fool? They have too many cars that no one wants to buy, and too few cars that people want? How does killing off brand plates change that? Who the HECK would buy any part of a car company right now?

This is all smoke and mirrors and the magic is not working!


BTW Buick is like THE brand is CHINA?!? Imagine that!

[trishguard]

They had no problem bailing out money to the financial sector, I don't see why they wouldn't do the same for GM if they wanted too. Maybe they don't have the lobbying power anymore to get any help.

Part of me hopes they just file for Chapter 7 bankruptcy and tell their employees not to show up for work. Not that I want people unemployeed or that I agree with this bailout business, I just think something stinks in who they decide to help and what they require for it. Maybe they'll stop playing games when thousands of people are put out of work.

But I'm sure they don't care.

[chet everett]

They are NOT going to liquidate GM (or Ford, or not even Chrysler), and they will not do a reorg either. The auto guys truly do need cash, and they'll use a big pile of it fund continuing operations -- but they are not JUST going to be happy with cash -- they want /need some help pushing against parts of their business model that is unsustainable. Part of that includes the defined benefit programs, part is the dealer franchise agreements.

Similarly Pelosi (and the rest of the Congresscritter for that matter) don't want to take the grief from Union workers or the guys that 'own' franchises - one group represents BIG voting bloc and campaign cash -- the group represents BIG pool of campaign donors...

I'm predicting Bush will "do what nobody else can stand to do" and shove both both of 'em -- he will go home to Crawford and he really doesn't need either group ever again.

Let's see how this plays out.

[jimmyP]

GMC is senseless waste of money
SAAB - sell it back to the Swedes
Hummer - Maybe Arnold will buy it
Pontiac - roll into Chevrolet
Buick - History

Keep Chevrolet, Saturn, and Cadillac and have a decent size company with controllable costs. Chevy has trucks and basic cars, make Saturn the sporty division, and Cadillac the luxury car.

[Dexterguy]

Originally Posted by jimmyP

GMC is senseless waste of money
SAAB - sell it back to the Swedes
Hummer - Maybe Arnold will buy it
Pontiac - roll into Chevrolet
Buick - History

Keep Chevrolet, Saturn, and Cadillac and have a decent size company with controllable costs. Chevy has trucks and basic cars, make Saturn the sporty division, and Cadillac the luxury car.

You got it! I liked your little comment on Arnold also!

[Huckleberry3911948]

Originally Posted by Dexterguy

You got it! I liked your little comment on Arnold also!

ditto. when you gota beat a pig with a stick to make him be diet conscious its not going to be a slender health conscious good marriage.

[chet everett]

Makes NO sense at all -- honestly. If I told P&G that they would have to kill the "Joy" brand before I would loan 'em money, but they continues to make the formula and put it in bottles that said "Dawn Extra Value Invigorating Scent Formula, compare to Joy" how the heck is that a win? http://www.pg.com/product_card/prod_...ish_care.shtml

The thing that will help GM become more profitable is getting out from under its retiree obligations and telling dealers that still have not consolidated Pontiac-GMC-Buick stores onto one lot that they HAVE to, becuase those stores will look much more a Honda or Toyota lot AND those guys make money.

Buick is THE brand in China, and will have the "premium" image conscious but not ostentatious (like Cadillac) buyer, along side the premium truck buyer from GMC, along side the premium sporty buyer from Pontiac. Makes perfect sense, and those stores will have a "full line" like the Chevy dealers. If they can get OWNERS of Cadillac franchises to run their stores to compete with the top-of-line luxury brands they do fine with the right product, and if those owners invest in the real-deal of European technology/performance/effiicency they can also make money with a Saab lot.

Believe it or not, there is a place for Hummer, just take a look at the "husky styling" of Toyota FJ's, Jeeps, even Honda is making its Ridgeline and Pilot more "blocky". The utility of a real H1 is the kind of legendary performance that people with demanding needs for rugged transportation have always wanted -- IH Scouts and old full frame Grand Wagooners are still coveted by some. The sales volume will never be as big as GM planned for, but it is a GREAT brand. If they can get diesels in the H2 & H3 the MPG could skyrocket, and the "big rig" factor is huge -- if they do an H4 it could really battle Jeep, maybe even move both more rapidly toward some kind of hybrid, as GM has way more technology staff than Chrysler...

Saturn is a neat idea, but GM has not worked it hard enough. The products were never as well thought out and some of the competition, I think that is because for GM it was an afterthought , but for Honda or Toyota a Civic or Corolla has ALWAYS gotten "do or die" attention from the whole organization. Once they got those right they grew the line with CRV or RAV4, I honestly do not even know if that philosophy is still in play at Saturn -- their big new crossover is shared with Chevy, GMC and Buick -- too redundant and does not force the engineers to be as efficient as they are with the other crossovers...

Lots of bad decisions are made worse by the burden of UAW benefits to huge retired families and the stubbornness of the dealers that feel like they have a right (and some cases the law is on their side, because they got state legislators to write 'em) to have a store where they want, instead of where is makes sense for the sake of competition. But they need money to keep the product moving, and that is what must happen.