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.
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