USA Today reports that Tennessee’s 2 Republican Senators, Bob Corker and Lamar Alexander and GOP congresswoman Marsha Blackburn received a rather frosty reception when they went to Spring Hill on Friday to toast GM bringing jobs back to the Ex-Saturn plant. They got booed and heckled. Why the frosty reception? Well, if you remember, Lamar Alexander and Bob Corker (along with the unnamed Congresswoman) were very vocal opponents against the bailout of GM and Chrysler. So, for 3 politicians to come back to their state and welcome back the very jobs which they would have been quite happy to see lost in the name of free market economics, probably stuck in the craw of the electorate. Namely, the UAW. (Read More…)
When GM went into bankruptcy, people had their money on Saturn going to die. The odds changed a bit when Roger Penske was in talks to buy Saturn. But, in a cruel twist of fate, Saturn was condemned to death by a bunch of executives in France. They vetoed Carlos Ghosn’s idea of supplying Penske with Renault cars for the Saturn brand. The death of Saturn meant that its manufacturing plant in Spring Hill, Tennessee, would join Saturn in the grave. And so it did, along with 800 people who lost their jobs. Suddenly, there is the proverbial glimmer of hope for those 800 workers and the economy of Spring Hill. (Read More…)
According to Reuters, GM has sent a letter to its dealers offering $7,000 for every new Saturn or Pontiac they can move to a rental or service fleet between now and January 4. The plan would essentially make dealers the first buyer of the remaining Pontiacs and Saturns, which would then be operated as fleet vehicles or be sold as low-mileage used cars. In any case, the single objective is clear: get those dead brands off the books at all costs. With 7,900 vehicles left at Pontiac as of the 14th of December and upward of 5,000 left at Saturn as of the beginning of the month, the cost to GM could easily approach $100m. But as they say in the advertisements, their loss is your gain…. as long as you’re interested in one of the G6s or Auras that dominate the dead-brand straggler inventory. Where’s Oprah when you need her?
GM’s sales fell by only two percent in November, showing that, unlike Chrysler, its sales are fairly well tied to the overall health of the market. All four of GM’s “core brands” posted month-on-month increases, with Buick up 14.8 percent, Cadillac up 10.3 percent, Chevrolet up 4.5 percent and GMC up 5.4 percent. Non-core brands including Hummer, Pontiac, Saab and Saturn combined for a 47.9 percent decline, to 11,755 units. Cars fell by 1.3 percent, while Trucks were down by 2.8 percent, leaving GM with total deliveries of 151,427 units.
The Saab deal’s death today marked the third attempted brand sale by GM to go down in flames since exiting bankruptcy. Whether the decision not to sell Opel was a good one remains to be seen (big time!), but at Saturn’s Spring Hill, Tennessee plant, which goes on standby this week, there’s less ambiguity about the situation. Meanwhile, Wild-Ass Rumors that Brilliance will rescue the Saturn brand have been chased by MSM scaremongering about a Chinese-owned GM, lending special irony to the fact that GM’s only brand-divestment success is the $150m Hummer-to-Tengzhong deal which is still pending approval by the Chinese government. Volvo nearly found a home in the Middle Kingdom with Geely, but things are crumbling and new bids are expected. Which means all of Detroit’s orphaned brands are still up in the air, at best. Long-term worries about the strength of the US market may be to blame, although the advanced state of the Hummer deal works against that theory (as Hummer’s viability lives and dies in the US market). Maybe the Chinese mandate for auto sector consolidation has potential Chinese buyers focusing on shoring up their domestic status. Or maybe the Chinese realize that brand equity must be earned, not bought. That appears to be the lesson to be learned from the rise of Hyundai and Kia. Fueled by mainstream design a true compact-to-luxury product range, and a relentless focus on product, they may well herald a decline in the importance of brand strategy. For an industry that practically invented the idea of selling a product without actually mentioning the product, this could be an interesting adjustment.
The long-rumored Chinese invasion may be coming sooner than we expected. Automotive World reports that Chinese automaker Brilliance has signed letters of intent with 36 US dealers in preparation for a US market launch. According to the report, Brilliance intends to launch products in the US as soon as it acquires 100 dealers. Apparently Brilliance’s US distributor is targeting former Saturn dealers, Roger Penske’s US network, Hummer dealers and the Galpin group. Rumors are even swirling that Brilliance could buy the Saturn name to re-brand its US-market products.
OK, so the latest GM Fastlane PR exercise is actually entitled “What Is GM Doing With The Money?” Defensive much? Anyway, coming from Fastlane, there’s obviously no mention of giving Cadillacs away. Or throwing cash down the Delphi hole. Or paying Brazilian workers to sit on their hands. No, having received $13.4b, GM’s Steve Harris reveals that GM’s plan is to (wait for it) comply with the terms of the loan! In other words, “prove that we can repay the loan, achieve a positive net present value, and meet federal fuel efficiency and emission requirements, and manufacture advanced technology vehicles in the U.S. ” And with the federal money, GM is “making progress,” says Harris. How? By building concepts like the Cadillac Converj. And announcing vehicles like the 2010 Equinox (Saturn Vue cannibalism!) and the 2012 Spark and Orlando (which debut after the loan is due). Hallelujah! And though Harris mentions the UAW Job Bank shutdown and “discussion” of plans to reduce dealers by 400 per year, his effort to “do a better job of communicating our successes (and) how we will be changing going forward” leaves out all the interesting bits.