By Deep Throat
May 9, 2008 -
If GM keeps all its brands and most of its vehicles, there is no road map to longer term success. In the end, there just isn't enough money or market share to justify or support The General's North American operations as they exist today– even in their downsized, strike-afflicted form. At some point, preferably ten years ago, GM needs wholesale consolidation to focus on three brands: Chevy, Caddy, and Saturn. Everything else is superfluous. The problem at the RenCen: they can't figure out how to shed brands/products. Alan Mulally has shown the way Fordward, but he's dismembering recently purchased assets. GM's decades old "damaged" brands can't be sold individually, and can't be terminated. Short of C11, GM's going to have to bite the bullet and tell its BPG (Buick, Pontiac, GMC) AND Saab and Hummer dealers that the corporate mothership will honor existing franchise agreements until they expire, but they will not be renewed. Sure, it'll be the letter that'll launch a thousand lawsuits. But there's no other way for GM to survive in NA. None.
Subscribe to Newsletter51 Responses to “ Wild Ass Rumor of the Day: GM to Shutter BPG? ”
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May 9th, 2008 at 12:51 pm
W.A.R. = B.S.
Admit it there are no sources.
Just stirring the pot. Keep people hitting the banners…
May 9th, 2008 at 12:57 pm
I’m curious—people often talk about how killing Oldsmobile cost GM a billion dollars, but what did it cost Chrysler to close down Eagle and Plymouth? And what happened to Chrysler Groups overall sales after those closures?
May 9th, 2008 at 1:14 pm
I have got to believe that somebody in RenCen has a notion on what to do. This BPG death rumour may be just that but it is a close approximation to what GM needs to do to survive. The only problem as the Oldsmobile debacle shows is that it’s too expensive and GM cannot afford it. I have read hundreds of comments on TTAC on how GM should re-organise itself, which divisions should die and which should be the green division, the luxury division yada yada yada! Usually good ideas and most do make sense but the problem is that GM cannot afford to do it, I mean at all! Allowing the divisions to die by slow starvation is not a runner either because GM will die from it’s cash bleed long before that happens. What to do, what to do! I would really hate to be in RW’s shoes right now, he has an unenvyable job. Given that gas is going up (when has it ever gone down) and the economy is soft and that GM’s vital signs are deteriorating and most if not all the family silver has been hocked, what option(s) are left?
There is only one if you don’t include Divine Intervention. So all you believers out there (believers in God, not GM) had better get on your knees double quick because otherwise GM’s legal department will shortly be working overtime and weekends.
May 9th, 2008 at 1:20 pm
I still think that Pontiac and Buick could still exist as packages for other cars.
A Cadillac CTS with a Pontiac sports upgrade
or
A Chevrolet Malibu with a Buick luxury package.
Sounds good to me! You could do away with the “V -Series”.
May 9th, 2008 at 1:26 pm
Jonathan, Oldsmobile had their own dealer network, which was as often as not, “dualled” with another GM brand, especially in smaller towns. Our local dealer was once an Oldsmobile-Cadillac-Renault and Kaiser Jeep dealer. When AMC bought Jeep off of Kaiser Industries in 1970, he fought tooth & nail to keep Jeep, so for 20 years, our town of 12,000 actually had TWO Jeep dealers - one was the AMC store, one was his.
Eagle was co-branded at dealers with Jeep, because the Eagle brand replaced AMC and AMC badged Renaults. Kind of like Lincoln and Mercury are always co-branded at dealers now. So, it was easy for Chrysler to say “buh-buy” to the Eagle brand. Likewise, Chrysler-Plymouth dealers were always co-branded, therefore it was easy to dump Plymouth.
Eagle was a dead brand walking since Chrysler only wanted Jeep, but Renault would only sell their 50% share of both, would not split it up.
The little remembered Eagle Premier was brand new for 1988 when Chrysler took over, and in fact, a few got out of the brand new Bramalea (Brampton Ontario) factory with AMC Renault badges. This factory was ultra modern and set up the way the later Spring Hill Saturn factory was - with supplier plants surrounding it - and beat Saturn to the punch. It is also the jewel of the Chrysler production facilities to this day, and turns out the Chrysler 300 and related vehicles.
Had the Eagle Premier had a Chevrolet or Oldsmobile or Toyota or Ford badge and grill, it would have been a world beater. Being a new brand in a portfolio “just bought out” and not marketed with any force, it flew under the radar and was largely ignored. Chrysler WAS PO’d that part of the purchase deal meant they had to buy the all alloy, overhead cam V6’s from Renault for this car instead of using a cheap-ass lump of overhead valve iron, but AMC engineers were ahead of the game and given a bit of money, they truly could (and did) develop a nice car.
May 9th, 2008 at 1:34 pm
Geesh, I just realized why I like my wife’s 2007 Hyundai Sonata so much. It’s virtually a clone of a 1988 Eagle Premier (never managed to buy one, but have driven several). Only Hyundai managed to keep the price down, build in better reliability, add about 30% MPG, air bags, ABS, and can get virtually identical performance out of 2.4 litres (four cylinder) compared to the 3.0 litre (V6) Renault motor. But then again, this IS 20 years later.
If only the GM cars of today were that much better than GM cars of 20 years ago!
May 9th, 2008 at 1:47 pm
“..purchase deal meant they had to buy the all alloy, overhead cam V6’s from Renault for this car instead of using a cheap-ass lump of overhead valve iron”
That and the fact that the “PRV” Peugot-Renault-Volvo joint venture V-6 was a reliability nightmare. Volvo lost a lot of customers over that fiasco. More trivia … the same engine powered the Delorean.
May 9th, 2008 at 1:54 pm
Okay, I think you’re dead wrong in placing the future of GM in the hands of Saturn. But there’s some truth to be had here:
Both Pontiac and GMC steal sales from Chevy. But so does Saturn, and at a larger scale. Though they’ve been mismanaged, Pontiac and GMC both have their own identities that could be resurected through less badge-engineering and more consistant products.
What’s Saturn’s identity? The discount Chevy? The American Opel? Not exactly demanding markets for either. And last I checked, Saturn’s dealer network was smaller and had less history. Gotta think that would be easier to ditch than BPG.
On the other hand: Buick IS dead as a doornail in the US, without some serious redefinition.
May 9th, 2008 at 2:07 pm
Hard to believe this site would float a rumor detrimental to GM!
May 9th, 2008 at 2:32 pm
They should kill Saturn, not BPG. Shut down costs for Saturn would be much lower than for BPG (fewer dealers), and the drop of sales would be less (much fewer sales). Timing would be easier, too-since all their product is new (and it all bombed in the marketplace), just wait three or four years when it would all be due to be replaced and shut it down all at once-no need for a draw-out shut down like happened with Oldsmobile. Saturn doesn’t make a profit and never will; BPG probably does, or it did at least until recently (GMC was a cash cow before sales of SUVs and pickups collapsed).
I would also kill Saab (in North America; keep it in Europe probably) and Hummer (both have minimal and falling sales, with Saab being more minimal and Hummer being more falling). But killing BPG would be too much, and would spell the death of GM, because fixed costs can be spread over more sales if they continue to exist.