There is also the question of whether you can profitably make Chevy without the Pontiac fleet volume. In business school, we learned about the ‘death spiral’ where you cut the unprofitable products…which spreads your overhead over a smaller base… which makes more products unprofitable…repeat until bankruptcy.

Exactly my point. The Pontiac clones of Chevys (and Saturns and Holdens and…) help spread out the fixed costs to develop those models (tooling, engineering, overhead on the factory), as well as overall GM fixed costs.

That is all Pontiac can do at this point-spread out fixed costs, and give GMC dealers some cars to sell. It’s not going to be a pure sports brand, although GM is smart to give it some sporty cars.

CarShark-Buick is still a “premium” brand. It’s not going to get a compact car (well, it better not-GM gave Cadillac one at one point, so they might be that stupid). Pontiac has sold compact cars for years (Sunfire, Sunbird, T-1000, etc.). The G5 fits in that traditional pattern.

Doing some searching, it looks like the Grand Prix has stopped production, and the Pontiac Torrent with become a GMC Terrain in MY 2010. That leaves Pontiac with the following:

Pontiac G5
Pontiac Vibe
Pontiac G6
Pontiac G8
Pontiac G8 ST (or whatever they end up calling it)
Pontiac Solstice

The only thing that is stupid here is the G# naming system, and the G8 ST car/pickup thing, which really should be a Chevy El Camino (or a GMC Caballero) and not a Pontiac. Two of six vehicles (the G8 and the Solstice) can properly be considered “sporty” even in base trim (and maybe the G8 ST, although a “sporty” pickup is kind of stupid), and there are “sporty” GT versions, with bigger engines than standard, on the rest of the models.

I don’t care what Pontiac was. In Pontiac’s heyday, BMW had an audience of ten people. Right now, I want an affordable BMW, not some overpowered, “raucous,” garishly styled attempt to recreate what’s no longer relevant. Pontiac is the performance brand. Performance today means more than pin strips and displacement.

People can argue until they’re blue in the face about the extent to which the 135i is a perversion of the BMW tradition that arose with the 2002, but BMW can’t sell that car anymore. People expect more of the brand, and so it is with Pontiac.

But you can’t assume that the sales were profitable. Pontiacs move because of incentives and lease deals and fleet orders. Like jthorner said, retail sales are what matters.

As for the Oldsmobile Dilemma, I think this question should be answered first: Was the loss of sales after the shuttering of Olds truly because irritated brand loyalists wouldn’t buy another GM OR was it that GM just assumed that they would move up to Buick or down to Pontiac without making a concerted effort to keep them in the fold? If it was the latter, then I think that example is wrongly overused. It’s in actuality just another case of GM taking its customers for granted.

At the end of the day, I refuse to be content with a brand whose sole purpose is to keep dealers and the terminally stubborn happy.

Yes, a mass market brand and a luxury brand makes plenty of sense. Think Toyota-Lexus, Honda-Acura, Nissan-Infinity and VW-Audi.

The luxury brands are never where the big volumes are, but done right the profits per vehicle are terrific and they provide a place to introduce expensive new technology prior to trickle-down.

As far as Pontiac’s #3 sales position … would you care to back fleet sales out of that number? GM routinely uses whichever part of it’s stable isn’t selling very well as fleet-fodder.

GM completely squandered every chance to bring it back and continues to do so. It simply exists as a rebadge brand and yet another GM line cannabalizing sales from other GM lines like Chevrolet.

First of all, the idea of a favorite dealer is a rarity. Most people I know would do anything to avoid talking to car dealers. Secondly, I’m not convinced that people are all that loyal to GM anymore.

Why would someone buy a G5 when the 3, Civic and Corolla are so obviously superior? No to mention the Lancer, Focus, Rabbit, SX4, Astra, and even the Caliber.

Remind me again how many G5’s Pontiac sold to satisfied GMC customers last year?

Chart here: http://longorshortcapital.com/wp-content/att_history_chart.jpg

When you contemplate killing Pontiac you’re talking about killing GM’s #3 division. You’re talking about 358K sales in 2007. Assuming most of those sales were profitable, it becomes necessary to plan how to make up those lost sales.
Anyone got a plan? Me neither. I have no clue why anyone buys a Ponitac, but they do. So where do these customers go when Pontiac is no longer? If you’re thinking they go to Chevy, or Saturn, or even in a few cases Caddy, then my question is why aren’t these people already drivng Chevies or Saturns? IOW, I suspect these sales will mostly be lost to GM altogether. Market share is low enough as it is without throwing away another 358K sales.

Pontiac, as mentioned, was for most of it’s life just a slightly tarted up Chevy. It was a small step up from Chevrolet. That worked when the market share of each division was bigger than it is now. Today, well, I don’t know. It probably won’t work. But since most Pontiacs are now sold at BPG dealers, there’s nothing stopping GM from making it “truely” the excitement division. These dealers do NOT need a Cobalt clone with a Pontiac badge on it. Let Chevy sell that kind of thing. BPG dealers have trucks, near luxury, and excitement to sell. That should be enough. You want the kind of sales a Chevy dealer makes – become a Chevy dealer. You want to sell BPGs, that’s what you sell. I’m hopeful that the combined sales channel will give GM the courage to define brands and stick to the definitions. No evidence of that so far.

One last thing. If you advocate killing off all the brands except Chevy and Caddy, try rephrasing it using their sales position instead of the brand name. Then it sounds like this – “Let’s kill everything but our number one brand, and our number 5 brand”.

One and Five? Does that really make any sense?

@geotpf:

Then what’s the point of it? Buick has cars, too. This and your earlier post are indicative of the typical GM-booster think that the multitude of brands are a benefit, rather than the detraction they obviously are, and that the company will collapse if they finally cut one of their (to use Lutz’s words) damaged brands. Why couldn’t it be worth the what…5 or 6 billion to cut three brands if it led to a more profitable future? Any money spent on the G6 or Lucerne is money not spent on the Cobalt and CTS, both of which are in fiercely competitive segments.

I’ll say what I said once on a message board: GM spent untold amounts of money on making Cadillac relevant, and what do they have to show for it? The CTS is good, but not held in the same regard the same as the Germans. The STS is dead on the water. The SRX is a failure. The XLR hasn’t done that well since it was launched. The aged DTS/Deville is still holding the brand up after the facelift. The Escalade, while still somewhat popular, has to swim against the tide of ever-climbing gas prices. Not a big result after spending 5 years with all guns blazing.

Then they did Buick next. Spent $3 billion and came up with the Lacrosse, Lucerne and Enclave. 1 out of 3. I figured that the effort to fix Pontiac would be closer to Buick’s than Cadillac’s, and therefore would fail. I did get my hopes up when I learned about Alpha. I figured that between that and Kappa, Pontiac could have something truly different from its sisters. But alas, CAFE may very well have beaten that idea so badly, it went on life support. When GM said that Pontiac “might not end up as GM’s performance division”, I knew it was all over but the crying.

I couldn’t agree more. In the 1960s GM, AT&T, General Electric and IBM dominated their respective industries in North America and most of the world. Today things are different and only GM has failed to adapt.

Like I keep saying: Chevrolet & Cadillac, everything else is noise. Noise is something smart executives manage, only fools turn up the volume. The firing squad needs to start with Saturn and Saab. Over ten years ago I wrote a “customer feedback” input to GM saying that they should combine Saab and Saturn into one channel. At that time Saturn had a great dealer reputation but no move-up products. Saab had some good products but horrible dealers. Nothing happened of course :).

How about merging SAAB, Pontiac & Saturn?

It then becomes what the Geo brand should have been – to wit, interesting GM cars, in all sorts of ranges, from all over the world. Opels and Holdens and Daewoos and SAABs and Vibes and all those good cars GM really DOES build, but mostly doesn’t sell here.

In a fleeting, glorious moment, GM’s structure and talent aligned itself perfectly with American culture and technology and you had fast, fun, and furious cars wearing the arrowhead logo.

Then GM centralized its design, management and marketing functions, the government mandated safety and smog equipment, OPEC started throwing its weight around, and Pontiac went back to being…(say it with me everyone) meh.

Or, what it used to be. And is now.

It ain’t never coming back to its glory days (rebadged G8s and GTOs just aren’t “it”). Pontiac had a good run, and it was over all too quickly. But there’s too much standing in the way of Pontiac every becoming that (momentary) excitement division again. Namely, GM itself.

Bunkys don’t roam the halls anymore. Nor do Bill Mitchells. Rebels, renegades, visionaries need not apply. The tall nail gets hammered down inside the RenCen. The best and brightest have to dumb down or leave. Today’s GM exec learns to tap-dance along with Korporate Koolaide Powerpoint Presentations and push paper down the hall to the next inbox. Period. Go along to get along.

Lutz? He’s your lone throwback car exec. A cigar chomping, swaggering, blustering, maniacal car guy. The last of the Mohicans. A self-proclaimed and anointed Bunky or Bill, but a senile past-his-prime shell of the original. Maximum Bob still makes all the old Detroit Dinosaur noises — he shouts at the troops, insults journalists, storms in and out of meetings, makes 1960’s-sized GM prognostications and predictions (only to recant the next day)….

All the old GMers hanging on till their pensions kick in reminisce, “Lookit Bob go! Yes sirree, remember when it used to be like that around here all the time?”

But in the end, it’s all noise. Barking at the moon and passing fire truck sirens.

None if it is bringing back Pontiac. Or GM for that matter. The business has past it by and is too far gone to catch, even for Burt Reynolds in a Screaming Chicken Trans Am.

DeLorenzo had a front-row seat to the good ol’ days. The great muscle cars. Bigger than life personalities. Wishes he could bring those over-too-fast days back, and is coming to around that he can’t. Nobody can.

Too bad GM couldn’t bottle those times, those people, those cars….

Cuz it’s over and it’s just a damn shame. It ain’t coming back. Not now. Not ever. Pontiac, R.I.P. The world doesn’t need you or what you represent…another soft, watered-down, rebadged, brand that’s way past its prime.

The Solstice: 2-seat roadster weighing 2860lbs with a 2.4L 4-cylinder costing $22k+.

Barf.

As a journalist, I can tell you PR and advertising BS doesn’t get much more trite than that. If that’s the best he thinks Pontiac could’ve done, they were doomed anyway.

-Matt

No more Torrents, Sunfires, and 6000’s chasing volume that is empty of profits and dilluting of brand.

Nope. Pontiac needs a small car. More precisely, Pontiac/GMC/Buick dealers need a small car to sell. It ain’t going to be badged as a Buick. Now, while Pontiac moves a fair amount of product, it doesn’t move enough to design a totally new small car for it. Volia! The clone-of-a-Cobalt G5.

GM didn’t want to build the G5. They only did so because PBG dealers were screaming for one. With sky high gas prices, that move isn’t going to be rescinded.

Now, the Torrent will be killed when the Equinox is. And they did kill the Montana minivan (GM told the dealers they weren’t getting both a minivan and a compact car).

It makes sense to make Pontiac cars-only (no minivans, no SUVs, and, please, no G8-based El Camino-like thing), since you can always give the vans and SUVs to GMC. But it will never be sports/sporty cars-only.

But when a brand does something that makes it a household name, a bonafide hit and defines that brand’s image that is what people expect from that brand. Nobody really desires to buy a bland FWD appliance from Pontiac. People want a balls-out, rebellious car from Pontiac. That’s what made and defined the brand as Peter pointed out.

When Pontiac products lost that sparkle it lost customers and aside from the Firebird which solely carried it through the years those customers never came back and as excellent as the Firebird was one product can’t carry the brand’s mantra on it’s own. All BMWs are ultimate driving machines, all Pontiacs should have been as outrageous and thrilling as the Firebird.

If all Pontiac products adopted the mojo the brand is known for, or had never lost it in the first place things would likely be different.

If the BPG dealer already sells Buick sedans and crossovers and GMC trucks, then Pontiac should be left free to focus on sports sedans and coupes. And if they sell 50K copies each of 3 car lines, that’s enough.

No more Torrents, Sunfires, and 6000’s chasing volume that is empty of profits and dilluting of brand.

Whats the problem with these people? They produce (import) a wonderful V8 just in time for gas to hit 4 bucks a gallon! Swell! Any other bright ideas? Perhaps a new way to shoe horses?

i cannot imagine whats wrong with american car companies. They have had their lunch eaten by competitors for 20 years now, and refused to do anything about it.

I’m going to go look at a Mini Cooper ragtop. 40 mpg, upscale and fun. Where are the american competitors? PLEASE give me soemthing to buy!

A very sad end, indeed. I used to lust over Pontiacs.

# gawdodirt :
May 7th, 2008 at 12:56 pm

Have any of the arm chair quaterbacks here actually owned both a Chev and a Pontiac to see if there’s any difference at all? Probably not.

Sure, in the latest years they suffer a bad case of “same parts bin’ a phobia. Thanks to the new managemnent team. but it wasn’t always like that. I would’ve gladly taken a Trans-Am over a Camaro any day. If you’ve drive on, you know why.
Wonder how the Lexus gets away with selling their high price spread on the cheaper Toyota platforms?

They don’t seem to get anywhere NEAR as flogged on thses web thingys. Even though they still share the thin gauge metal.
Just have thicker carpet.

I have driven ChevyAcs for decades. 2008 it is the g5 that sucks. 1998 it was the Sunfire that sucked. In 1988 it was the Sunbird that sucked. In 1978 it was Astre that sucked.

You can argue that there were diamonds in the rough but for every WS6 that you love there were a lot full of dogs.

While the Camry and the ES may share a lot, they are fairly different in styling and subtly in demeanor. If in no other way the dealership experience is miles apart.

Then step up to the GS or LS lines – what in Toyota’s fleet compares with the LS?

While you can bash Lexus for doing the same thing – there is one remarkable difference. Lexuses (Lexi?) sell well and they do not cannibalize sales from their own brands.

The brand has effectively been run into the ground by GM’s mismanagement since the early 1990s

You can tell from their spastic product offerings from their little Miata wannabe roadster to their bland FWD mainstream car to the rebadged Toyota hatchback to tacking their 1980s Grand Am styling them on Australia muscle cars that nobody in GM really has a clue what to do with Pontiac.

I feel especially bad for Holden, they make great muscle cars and it’s beneficial to sell them here to a market that wants them but GM ruins most of their appeal by restyling them like every Pontiac from the last 20 years.

If the Commodore (G8) and Ute (G8 ST) were sold by Chevrolet here just as they are in the rest of the world they would sell much better.

If GM was only two brands, Chevrolet and Cadillac things would probably be much better for the company overall as well.

GM needs to find a way, 50 separate dealer franchise laws nonwithstanding, to just kill off Pontiac, Buick, GMC and Saturn. Keep Chevy and Caddy as the two main focus brands and pour all GM corporate resources behind those franchises.

Nope, that won’t work either. Eliminating all of GM’s brands other than Chevy and Caddy would result in a significant sales drop (most of those sales would go to the competition) as well as extremely large short term costs.

Now, I can see shutting down Saturn. It’s a seperate dealer network, with all-new product that is mostly reviewed well, but isn’t selling. There’s no way that their sales will improve; in fact, the only way for them is down. I say shut them down when it would be time to give them new product again, in three or four years.

I can also see shutting down Saab (in the US at least) and/or Hummer. Both are niche products with falling sales (in the case of Hummer, they are falling off a cliff, down 29.6% YTD and 45.6% in April alone).

But GMC/Pontiac/Buick is almost certainly too big to shut down, with quadruple the sales as well as having many more dealers than Saturn, not to mention Hummer or Saab, which each have incredibily microscopic sales (although GMC/Pontiac/Buick’s sales are less than half of Chevy’s). And it doesn’t make sense to shut down Pontiac if you are keeping GMC.

Also, look at Pontiac’s current sales. They are down the second least YTD of all of GM’s brands (”only” down 8.6%, with Caddy doing the best, down “only” 4.1%). In fact, Buick, GMC, and Pontiac each have smaller sales drops YTD than Chevy does.

So, my verdict:

Shut down Saturn and Hummer.
Shut down Saab in America, probably keep it in Europe.
Keep Pontiac, GMC, and Buick (and Chevy and Caddy).