GM Says It May Kill Off One of Its Brands (Buick or Pontiac)

[Book Lover]

Forgive the cross-post (and I'm not even the OP!)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1336536&mesg_id=1336536

http://cnn.netscape.cnn.com/ns/news/story.jsp?id=200503...

General Motors Corp., which issued a shock profit warning last week and has been losing market share, may phase out one of its weaker car brands if sales fail to meet projections, company Vice Chairman Bob Lutz said on Wednesday.

GM's Buick and Pontiac are both "damaged brands" due to lack of investment over the years, and GM is working to correct that with an array of new vehicles coming to market, Lutz told a Morgan Stanley automotive conference in New York.

But if some of its brands fail to meet sales projections, "then we would have to take a look at a phase-out. I hope we don't have to do that. What we've got to do is keep the brands we've got."

Financial analysts have said for years that the world's largest automaker has too many brands to support, even with the gradual phase-out of the Oldsmobile brand a few years ago, particularly with its weaker U.S. sales.

Sales for both Pontiac and Buick have lagged in recent years. But GM is in the midst of a $3 billion investment in new vehicles for Buick, and Pontiac showrooms and they will have four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-size coupe.

[Blue_Tires]

1. too many brands as it is...

all they REALLY need is

Chevrolet (bread and butter division)
Cadillac (luxury)
Pontiac (performance)
GMC Trucks (still a promising moneymaker)
Saturn (economy)

[CO Liberal]

2. And Way Too Many Models

40 years ago (the 1965 model year), Chevy had eight passenger car/truck models:

Chevrolet (full-size)
Chevelle
Chevy II
Chevy Van
Corvair
Corvette
Pickup
Suburban

According to their web site (www.chevrolet.com), they now have 21:

Astro (van)
Avalanche (pickup/SUV)
Aveo
Blazer (SUV)
Cavalier (still being sold, though it was supposed to be replaced by the Cobalt)
Cobalt
Colorado (pickup)
Corvette
Equinox (SUV)
Express (van)
Impala
Malibu
Malibu Maxx (different vehicle from the Malibu sedan)
Monte Carlo
Silverado (pickup)
SSR
Suburban (SUV)
Tahoe (SUV)
Trailblazer (SUV)
Uplander (minivan)
Venture (minivan)

And the same model proliferation has extended across the other GM divisions.

[Huckebein the Raven]

3. I'd rather they kill Buick than Pontiac

couldn't Cadillac pick up Buick's slack ?

[Blue_Tires]

4. i'd think so

actually, Cadillac is doing quite well after their turnaround

[Huckebein the Raven]

5. That's true.

Cadillac's model line is better than Buick's by far IMHO. It would be nice if Cadillac would bring the BLS sports sedan that they are offer in Europe here.

[midnight armadillo]

15. It's called the Saab 9-3

Yes, the BLS is a re-badged Saab, will wonders never cease...

[robertarctor]

6. GM's problems are deep

First, GM has allowed the Chevrolet brand to languish, or to become way too top-heavy with trucks and truck-based SUVs. Only now is Chevy beginning to get things right; the new Cobalt is getting very good reviews in the auto press, and the Malibu, while ugly, is based on the GM Epsilon architecture used by overseas divisions Opel, Saab and Vauxhall. But Chevy doesn't nearly have the car lines, with smaller engines and better gas mileage, that domestic competitors like Ford's Ford division and DaimlerChrysler's Dodge division offer. Yes, Chevy seems to be coming around, but for too long the division concentrated on selling high-profit Silverados and Suburbans, while leaving the car-based vehicles to competitors. Now those chickens are coming home to roost.

Second, while Cadillac's offerings are a lot better than they were five years ago, they aren't close to BMW, or Mercedes. And Caddy doesn't have anything as emotional as the Chrysler 300 in its lineup, a car soo cool it's showing up in hip-hop videos. Still, it's a better lineup than Ford's Lincoln brand.

That leaves the middle. With Oldsmobile gone, what will GM kill next: Buick or Pontiac? Buick is the company's oldest brand; GM is built on Buick's back. But that brand's product line, until recently, looked like it was designed by the Batesville Casket Company, and isn't the average age of a Buick buyer something like 74? And what's with Buick's advertising strategy, running ads targeted to aging white golfers?

Still, I'd bet on Buick over Pontiac, a brand whose strongest resonance is in the black community. (When Pontiac wanted to launch its new G6 sedan, it gave away a bunch of them on Oprah Winfrey's show.) Pontiacs for years have been butt-ugly, with loads of cheap-looking plastic cladding on the sides. Then Pontiac birthed the Aztek, perhaps the ugliest production automobile since the Edsel. Yes, Pontiac has the G6, and the Torrent, and the Solstice, but Saturn has a version of the latter, too.

Which leads to Saturn, the only domestic GM division with a well-positioned car line. Not going away.

But too other domestic brands should. What's the use of GMC, whose product line is virtually identical (except for that Yukon roll-top Studebaker Lark ripoff) to Chevrolet's? And then there's Hummer, a gas-guzzling, seriously ugly division whose appeal to "Fuck You Republicans" appears to be waning with rising gas prices and Karl Rove Trojan horse Arnold Schwarzenegger's slipping fortunes.

Overseas, it isn't much better. Compare GM's Saab to Ford's Volvo: Saab has like four models. Two (9.3, 9.5) are rebadged Opels, one (9.2) is a rebadged Subaru and the other (9.7) is a redesigned version of GM's Chevrolet Trail Blazer SUV. Volvo, on the other hand, is developing vehicles; the new Ford Five Hundred and Mercury Montego sedans are based on Volvo cars, and Ford's new Freestyle wagon is based on the Volvo XC90.

Of GM's Japan holdings, Isuzu got out of cars and makes nothing but ugly SUVs. Suzuki specializes in small cars, but now many of those will be sold as Chevrolets and will be manufactured by new GM acquisition Daewoo in Korea. Only Subaru is a strong brand, and it recently designed a new front end, which all its future cars will share, that looks uncannily like a Saab from the late 1950s. Not good.

If I was a GM stockholder, I'd be pissed.

[Book Lover]

7. Bob Lutz replies

on the company "blog":

http://fastlane.gmblogs.com/archives/2005/03/context_is_ever.html

<snip to money quote>

But, if you are interested, here are the facts. Buick and Pontiac, the two brands most often cited in these press reports, will be around for a long time, refreshed every year with strong new products. Just look at the G6, the Torrent, Lacrosse and Lucerne. Look no further than Cadillac, GMC and Chevrolet, and soon, Saturn, to see what our brand commitment is all about.

<snip>

We'll see...

[robertarctor]

8. That Bob Lutz "blog" is pretty laughable

And, being a Mopar man, I'm a fan of Lutz. I think he understands that the way you sell lots of cars is by designing and building great cars. Still, he's jerking off the dealers there, and the General's problems remain.

OK, so what to do: First, euthanize Pontiac and roll its product line into Chevrolet. Pontiac does have a passenger car line, which Chevy really doesn't. Make the newly expanded Chevy a brand with the widest range of bread and butter vehicles in the GM lineup, from economy cars to sports sedans. Position it hard against Ford and Dodge. Scuttle the current mediocre versions, like the weird-looking Impala and the ugly Epsilon-derived Malibu, and launch redesigned sedans and coupes with names that evoke Chevy's 1950s and 1960s glory years: Impala, Malibu, Bel Air. Remember when Chevrolet had the prettiest production cars in the GM lineup, and find a designer who can develop and articulate a coherent modern version of that. And get rid of that stupid crossbar grille, along with the lame ads campaigns. American Revolution? A non-starter. You can do better.

While you're at it, bring back the Camaro, design one that beats the shit out ot Ford's Mustang, and launch it with a kick-ass ad campaign featuring a Camaro shooting over the hill to the tune of Montrose's 1973 hit "Rock the Nation."

Second, get rid of GMC trucks, and strengthen Chevy Trucks as a brand.

Third, position Buick against Chrysler, and to a lesser extent Mercury. Make the car look like the Buicks of old: rounded, elegant, comfortable, like the Buick show cars from the late 1940s and early 1950s, or sleek versions of Robert Crumb sofas. If Cadillac is the edgy performance brand that competes with BMW and Lexus, and Chevy competes with Ford and Dodge, and Saturn is the General's Toyota and Volkswagen fighter, then paint a big target for Buick with a Chrysler etscutcheon in the middle and aim for it: The upscale American family car line. Oh, and don't forget the portholes and the Coca-Cola curves. Buick once built really pretty cars. Build some head turners again, instead of Batesville caskets with wheels or claptrap that looks like it was cobbed together from the GM parts bin, and buyers will come.

Fourth, if Saturn is the import fighter, then strengthen it with the best that Opel, Vauxhall and Holden have to offer. Also, dince the reality of peak oil has begun to hit us, Saturn is the logical point of entry for GM's hybrid and fuel-cell designs.

As for GM's imports: Make sure that Daewoo junk is competitive, quality-wise, with Hyundai/Kia befure you slap a bowtie on them and sell them as entry-level Chevys. Get rid of Isuzu. Retire the Suzuki brand in the US, and sell them as Chevys instead. And combine your two stongest imported brands into one dealer organization. Whether you want to call it SAAB-Subaru, or Subaru-SAAB, or SAABaru, ot doesn't matter; those two marques combined would make for a strong dealer network.

As for the aborted takeover of FIAT, dunno where that stands, but there was a plan to re-introduce FIAT's ALFA-Romeo brand into the U.S. through Cadillac dealerships. Don't wait. Just do it.

Anyway, that's my $.02, Mr. Lutz. Not that any of the rabid conservatives who run GM will bother to read it here at DU.

[benEzra]

19. Best post I've read on the topic (n/t)

[LTR]

9. They should keep their lines as is

And it sounds like they'll keep Buick and Pontiac around a while.

Both are the better GM brands (Chevy, apart from the Corvette, has really gone down the crapper). Pontiac and Buick are the best things they've got.

Here's a few suggestions:

1. Sure, GM is looking to take Buick into a younger segment. But the LaCrosse won't do it. It's not a really good car. It's pretty boring, and the seats are these horrible bucket seats with no comfort whatsoever. Buick is probably best known for having very comfortable seats in it.

2. Pontiac looks to be ditching the over-the-top body cladding found on recent models. Good move. They also need to spice up the cars, instead of making wanna-be sports cars. They need to make better performance vehicles.

3. Get rid of that loud, obnoxious 2.2 motor. Sure, it's confined to Chevy now (in the Cobalt and Malibu (another story)), but it's a horrible engine. If they replace the Sunfire, get a different motor.

4. Cadillac? Keep doing what they do. Caddy is really making strides.

5. A recycled Australian sedan with a big motor does not a GTO make.

6. The delayed door locks are obnoxious!

7. Make the keys bigger! Do tiny car keys inspire confidence? Hell no!

Those are a few. I could come up with even more as time passes.

[robertarctor]

10. After some reflection, I think you're partially right.

And after seeing the Pontiac ad blitz during the NCAA basketball tournament, it's apparent that GM (specifically, Bob Lutz) is putting a lot of branding effort into revitalizing Pontiac. The Solstice and the two G6 models are much cleaner looking that the plastic-cladding-laden Grand Am/Grand Prix/Bonneville models that made Pontiac synonomous with buttuglymobile. Now, if they can bring the powertrains up to a competitive level, Pontiac could kick some ass. (Although the Holden Monaro-sourced GTO is a real non-starter.) At least the new Pontiac models are attractive, probably the best-looking vehicles in the GM fleet.

Pontiac is certainly farther along in its rebranding program than Buick, which is about as clueless as Chevrolet. Hint: If you're going to refashion your luxury marque into edgy, angular designs and high performance, why not fashion a nice upscale car line for people who find Cadillac's angularity to be ugly? Buick certainly has the styling cues in its design heritage to make pretty cars (that don't look like rolling caskets). Go back to the late '40s and early '50s, look at those Buicks, and design something that looks like a collaboration between George Barris and Robert Crumb, rounded, with portholes and a nice toothy grille.

As you pointed out, there's nothing wrong with Cadillac, but the real problem is Chevrolet, which has been turned into an American version of Isuzu--all trucks, and no real cars. Yes, Chevy has the Cobalt, and the Epsilon-platform Malibu could be a gem after a bumper-to-bumper redesign. But Chevy has nothing to go head to head with the Camry, Accord, Sonata or Mazda 6, and with gas prices going through the roof, a division whose prime movers on the lot are Suburbans, Tahoes, Silverados and Avalanches isn't going to be posting record sales figures. Even Ford, with its Freestyle and Five Hundred, is much better positioned than Chevy for the coming switch from trucks to smaller cars. And where's the Solstice's show-car sister, the Nomad sport wagon? I might buy one of those ...

[robertarctor]

11. Uh-oh ...

From this link:

http://www.nypost.com/business/43849.htm

April 5, 2005 -- Facing a debt powder keg and deepening losses, General Motors chief Rick Wagoner stripped control from his two top executives to take the helm himself.

Wagoner put his career on the line yesterday when he relieved the legendary GM honcho Bob Lutz of his duties as chairman of North American operations, and pushed aside North American president Gary Cowger to work on global affairs.

If Wagoner ousted Lutz at GM, then it's over. GM is toast. Lutz is a real car guy, as the automobile press would say, and he's probably more responsible than anyone else at the General for some of the cooler cars coming out of GM these days. And Wagoner is the guy who fucked up Chevrolet and turned it into a truckmaker before they kicked him upstairs.

The only salvation here would be if General Motors' board of directors convenes immediately and gives Wagoner his walking papers. Which should happen, given Wagoner's hissy fit this week when he ordered GM to pull all its advertising from the Los Angeles Times because he didn't like the things the Times was writing about GM and its products.

Pass the popcorn.

[robertarctor]

12. Found this bit of nonsense from Genius Motors in LBN

http://money.cnn.com/2005/04/12/Autos/bc.autos.gm.badge.reut/index.htm

GM to put 'GM' on all cars

Yeah, that's a great idea. Here's a quote from a GM suit:

"The name General Motors speaks to people," Mark LaNeve, who took over as head of GM's North America vehicle sales and marketing last month, said. "Research tells us that many of our most outstanding segment-leading vehicles are not associated by the customer to be part of the GM portfolio."

Yeah, "GM" speaks to me, too. It says "buy a Toyota, or a Nissan, or a Ford or DaimlerChrysler or Volkswagen product."

[Book Lover]

13. Yeah, *great* idea...

If GM were so proud of its quality, why not put the badge on the non-NA brands...

[SpeedwayDemocrat]

14. Sit tight, as Buick's market will be dead in 15 years...

Around here (Midwest) Buick's main customer is 60+ years old. Unless they can reach out to the next generation of car buyer, they might as well call it quits right now. Whenever I'm behind a slow moving Buick, I can pretty much bet that it's a blue hair behind the wheel.
R.I.P., Buick.

[benEzra]

20. Buick has had a lot of chances to correct this...

and blew it each time.

When I was a teenager, I LUSTED after a Regal Grand National. Everyone I knew thought the GN was the coolest car ever, and we all wanted one as soon as we had jobs. Car magazines regularly ran comparos of Grand Nationals versus Mustangs, Grand Nationals versus Corvettes, and the kindling was there to make Buick a brand that twentysomething and thirtysomething car enthusiasts might be interested in. unfortunately, as I recall, Buick pigeonholed it, purposely made only a few thousand at most per year, because it didn't fit their perception of their "brand"--i.e., making oldfogeymobiles. Their dealer network added outrageous markups, they didn't know how to advertise it, and they killed it after only a few years.

FWIW, I just got a Buick about a month ago--my Camry got totaled, my father was selling his Park Avenue Ultra, and I needed wheels in a bad way, so I bought it--and I am really impressed with the car. But I never would have bought it new, not because it's not a good car (and fun to drive, believe it or not), but because Buick wasn't even on my radar screen as a brand. GM really needs to change that if Buick is to have a future--maybe in addition to the golf set, they could make a hi-po version of the Lacrosse or Lucerne (with a stick shift! please!) and market it to Gen-Y'ers.

Cadillac has done a fantastic job of going after the younger enthusiast market, and their products are now showing up in everything from action movies to hip-hop videos. Pontiac hasn't done so well; my mental picture of "Pontiac" is cheap plastic interiors, adolescent styling, and Yugo-level performance (coughSunfirecough); the supercharged Bonnevilles of the last decade were probably great cars, but their brand image was dominated by the cheap plasticky econoboxes, cars you might buy if you were a teenager working at Wal-Mart. Buick doesn't seem to have tried much, yet.

I hope GM turns it around.



(Hope I didn't resurrect too old a thread here...)

[MemphisTiger]

16. They have been talking about this for 10 years. Each

time they have a lean year, it comes up. Ford does the same thing with mercury.

[AndyA]

17. GM should ditch Buick AND Pontiac - and bring back Oldsmobile!

Oldsmobile was always the middle of the road division, the place where new technology and trends were tested before other divisions received them. Olds was more luxurious than Buick, the Olds 98 was usually considered closer to a Cadillac than Buick's top of the line, the Electra/Park Avenue. Olds offered leather upholstery and pillowed velour when Buick just had vinyl and cloth seats.

Olds also had the performance enthusiasts with the 442, was the first (since Cord) with a front wheel drive production car in 1966 with the Toronado, which was Car of the Year for 1966.

I think it should be Cadillac, Oldsmobile, Chevrolet, GMC, Saturn.

Oldsmobile suffered because nobody knew what it stood for anymore. They changed all the names of the cars, and basically failed to put money in the division, which was at the top in GM sales in the 1970s. GM almost lost Cadillac in the mid-eighties, and apparently learned nothing from the experience, as they allowed Oldsmobile to languish and die a decade later.

Now all the American automakers are giving away their market to the imports. And stupid Americans go out and buy Toyotas, Nissans, and the other imports without one thought as to what it's doing to America. Just because they're made here doesn't mean the profits stay here. They don't. They go overseas.

Support America = buy American.

[robertarctor]

18. Yep. Bring back Olds

I agree. Kill Pontiac and Buick, bring back Olds, and try to recapture the magic of the Olds Rocket 88, circa 1950.

The weird thing about Saturn is that it looked like GM was hedging its bets with that marque when GM launched it, like its small car line could be rebranded as Oldsmobiles if the idea didn't fly. Now Saturns will be rebadged Opels and Vauxhalls. Not like that's a bad idea.