General Motors Death Watch 9: A Man, A Plan

Robert Farago
by Robert Farago
general motors death watch 9 a man a plan

Ladies and gentlemen, we have a plan! Post-Fiat payoff, post-financial quarter from Hell, post-Kerkorian, post-junk bond status, pre-stockholder meeting, The Detroit News has finally unearthed GM's strategy to extract itself from the multi-billion dollar hole that threatens to swallow the entire corporation. Step one; stop digging.

According to Mark LaNeve, GM North America's Vice President of Vehicle Sales, Service and Marketing, The General is going to trim overlapping models across all eight domestic brands. We will no longer see re-badged versions of identical vehicles being sold under different GM banners (e.g. the Pontiac, Buick Satrun and Chevrolet minivans). As part of this overlapicide, only Chevrolet and Cadillac will sell a full model range. Everyone else will sell niche-specific vehicles, and nothing else. This leads us to…

Step two; define the niches. Saab will now be restricted to "exclusive, European-styled" sedans, crossovers and SUV's. Hummer will sell "market exclusive, premium" SUV's and trucks. Buick, Pontiac and GMC will join hands in the showroom to sell trucks, SUV's and "premium and near-luxury" vehicles. Saturn will "move upscale" to slot between Chevrolet and Buick, selling "models styled and engineered to European standards".

And there you have it: GM's plan to cut costs, generate sales and build better brands. While all interested parties will be relieved to see someone at GM step up to the plate and aim his bat at the left field stands, LaNeve's grand vision of a tightly knit portfolio of complementary automotive brands is a conundrum wrapped inside an enigma.

For example, LaNeve sees Chevy and Cadillac as "book ends" to the rest of GM's brands. While there's a logical progression from Chevrolet to Buick to Cadillac, where does GMC, Hummer, Pontiac, Saab and Saturn rank within this new world order? Is a Saab sedan now more or less prestigious than a Cadillac sedan? Is a Pontiac GTO above, below or beside a Chevrolet Corvette? As Hummer goes down market, at what point do its products collide with upmarket GMC's? Where does Saturn fit?

The words used by LaNeve in his DTN rundown are doubly troubling. What's the difference between "premium", "near luxury" and "exclusive"? By my reckoning, a Hummer H3 is an exclusive, premium, near luxury truck. As is the way of such things, even if you strip away the genetic doppelgangers, keeping eight brands with similar types of vehicles from filling overlapping niches is just about impossible. I don't foresee a day when GM execs tell Saab to make its top-spec SUV less luxurious so as not to "step on" Cadillac's SRX. Or look at a Buick concept car and says, "Sorry, it's too Euro-styled. That's Saturn's thing."

Even if LaNeve's plan is cunning enough to resolve these issues, it still faces some enormous road blocks. For one thing, it would require all of GM's fiefdoms to rationalize AND harmonize their efforts. That's no small feat for the world's biggest automaker, a company famous for its deeply entrenched bureaucracy. If Mr. Lutz and Mr. Wagoner aren't ready to cut, cauterize and reconstitute the management charged with implementing this brand re-co-ordination plan, it ain't gonna work.

LaNeve's plan also fails to address the UAW's stranglehold on The General. It's highly doubtful that the union would 'let' GM close the necessary factories without a fight. And what about GM's crippling labor costs? Until that little item is resolved, the difference between the company's expenses and its income will continue to be unacceptably narrow, no matter how many of what type of vehicle each brand does or does not offer for sale. And although LaNeve claims to have schmoozed the plan with 2500+ GM dealers (why didn't someone tell us about this sooner?), it's not clear how well the strategy would work at ground level. Can Saturn dealers go upscale? Can Saab, Buick or Saturn dealers survive without rebadged GM trucks?

In short, I'm not convinced. I'm good with the idea of Chevrolet at the bottom and Caddy at the top; it harkens back to the aspirational strategy that made GM into such a successful colossus. But the rest of the brands' positioning strikes me as a vaguely-defined irreconcilable farrago of vehicle types, identities and price points. LaNeve is to be complimented for attempting to bring order to the chaos that is GM's portfolio, but, well, he hasn't.

The more logical answer would be to have Chevy and Caddy sell a full line of cars, station wagons, minivans and crossovers; restrict Pontiac to sports cars, deep-six Buick and Saturn, sell off Saab, combine GMC and Hummer and leave ALL SUV's and trucks to this new, re-jigged division. With this set-up, there would be less product sloshing around and zero brand overlap. As LaNeve of all people should know, when it comes to sales and marketing, confusion is to be avoided at all costs. Clarity is all.

Join the conversation
  • Lou_BC "They are the worst kind of partisan - the kind that loves their team more than they want to know the truth."Ummm...yeah....Kinda like birtherism, 2020 election stolen, vast voter fraud, he can have top secret documents at Mar-lago, he's a savvy business man, and hundreds more.
  • FreedMike This article fails to mention that Toyota is also investing heavily in solid state battery tech - which would solve a lot of inherent EV problems - and plans to deploy it soon. course, Toyota being Toyota, it will use the tech in hybrids first, which is smart - that will give them the chance to iron out the wrinkles, so to speak. But having said that, I’m with Toyota here - I’m not sold on an all EV future happening anytime soon. But clearly the market share for these vehicles has nowhere to go but up; how far up depends mainly on charging availability. And whether Toyota’s competitors are all in is debatable. Plenty of bet-hedging is going on among makers in the North American market.
  • Jeff S I am not against EVs but I completely understand Toyota's position. As for Greenpeace putting Toyota at the bottom of their environmental list is more drama. A good hybrid uses less gas, is cleaner than most other ICE, and is more affordable than most EVs. Prius has proven longevity and low maintenance cost. Having had a hybrid Maverick since April and averaging 40 to 50 mpg in city driving it has been smooth driving and very economical. Ford also has very good hybrids and some of the earlier Escapes are still going strong at 300k miles. The only thing I would have liked in my hybrid Maverick would be a plug in but it didn't come with it. If Toyota made a plug in hybrid compact pickup like the Maverick it would sell well. I would consider an EV in the future but price, battery technology, and infrastructure has to advance and improve. I don't buy a vehicle based on the recommendation of Greenpeace, as a status symbol, or peer pressure. I buy a vehicle on what best needs my needs and that I actually like.
  • Mobes Kind of a weird thing that probably only bothers me, but when you see someone driving a car with ball joints clearly about to fail. I really don't want to be around a car with massive negative camber that's not intentional.
  • Jeff S How reliable are Audi? Seems the Mazda, CRV, and Rav4 in the higher trim would not only be a better value but would be more reliable in the long term. Interior wise and the overall package the Mazda would be the best choice.