By on May 7, 2008

autoextremist1.jpgPeter DeLorenzo, the TTAC-aversive self-styled Autoextremist, has posted his Wednesday rant. Sweet Pete begins by claiming "It's all over but the hand-wringing for Pontiac." We would have gone with "bar the shouting," but true dat. DeLorenzo blames Pontiac's problems on GM's divisional confusion, it's lack of car culture and a dearth of Pontiac advertising. "Unless they can back those products with enough marketing and advertising horsepower," the former ad man insists, "It ultimately doesn't matter." Meanwhile, the Autoextremist's extreme adoration of GM Car Czar Bob Lutz shows incipient affection alienation. "The one thing that Lutz has misjudged since he began his tenure at GM is that he never did 'get' Pontiac. His idea that Pontiac should be the "affordable BMW" is flat-out wrong… Pontiacs should be raucous, distinctly American cars with real attitude, appealing to people who enjoy marching to a different drummer and who like to go their own way." Even so, DeLorenzo takes GM's beancounters to task for failing to follow the Motown Messiah. Sweet Pete says Maximum Bob has only succeeded in energizing a "network of True Believers." From there, it's the usual GM product renaissance shtick, DeLorenzo's potted version of Pontiac's history (so to speak) and a plea for restoring the former Excitement Division to it's imagined former glory. You know, GM should put DeLorenzo in charge of Pontiac. No, really. Why the Hell not?

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41 Comments on “Autextremist Posts on Autoextremist.com: Pontiac Is Toast...”


  • avatar
    oboylepr

    Pontiac needs a humane killer to put it out of it’s misery. AE might be a candidate for that also. Boy am I glad PDL won’t be lurking around here much.

  • avatar
    mxfive4

    The problem GM has is that they cannot intelligently stick to their branding and image.

    – Why does every brand needs an SUV
    – Why is the best sports car that GM makes is not from their “Excitement” division it is from Chevy.
    – Why do Chevy & GM sells the same damn truck?

    The problems at GM are evidenced very clearly in one model: The Saab 9-7x.

    Pontiac doesn’t need a Kool-Aid guzzling marketing guy who would put more “Born from Jets” posters up. Because I am certain that even Crispin Porter + Bogusky can’t put enough lipstick on this schizophrenic pig.

    They need a butcher with common sense.

  • avatar
    raast

    Born from Jets?
    How about …
    “From the same folks who brought you the Aztec”???

  • avatar
    Mj0lnir

    mxfive4 :
    May 7th, 2008 at 11:22 am

    The problem GM has is that they cannot intelligently stick to their branding and image.

    That sentence encapsulates the entirety of GM’s problem.

    Bad management and confusion in the upper ranks of one of the worlds largest firms.

  • avatar
    jthorner

    Pontiac’s real money was never made from the high-performance segment DeLorenzo pines for, it was family cars offered as one of the steps up from Chevrolet. The only real performance brand GM has ever had for any period of time is Corvette.

    Bonevilles, Catalinas and the like were the core of Pontiac’s business. GM’s US market share peaked at just over 48% in the 1960s. Influence wise, GM’s mind-share was even higher as GM set the styling, engineering, manufacturing and advertising pace for the entire industry. A Ford executive once quipped: “Sure GM executives get paid more, they make decisions for the whole industry.” GM made good use of a multitude of brands to get customers focused on it’s products. When people were arguing the merits of Pontiac vs. Oldsmobile vs. Buick it took oxygen away from Ford and Chrysler products. GM is the only company which really pulled this off. Ford never really made the Mercury and Lincoln brands work. Chrsyler never got much leverage out of Plymouth, Dodge, Desoto and Chrysler. Only GM really pulled it off, and they did so because they had that huge market share. Nobody under the 30% market share hurdle ever made good use from the multi-brand mid range car strategy.

    Today, things are different. GM’s US market share is less than half of what it used to be and well under that magic 30% level. The world is chock full of vigorous, independent competitors who not only don’t follow GM, they simply ignore her. There is no amount of advertising or new products which can change the basic calculus of the situation. In today’s world GM will be lucky to keep Chevrolet and Cadillac in the game, and no wunderkind can change that.

  • avatar
    SherbornSean

    If DeLorenzo won’t come to TTAC, perhaps we can still comment on his rant here.

    Pete’s contention that Pontiac is doomed is logical, if you accept the notion that Pontiac is the ‘Pirate’ brand within GM. If all vehilces are built off a set of platforms, then how different can the Pontiac version be?

    Certainly the G6, Sunfire and Torrent are not different from their Chevy versions, at least not in a good way. Nor do they stand out from a croud of more competent Toyotas, Hondas and even Fords.

    But given how expensive it is to close a division, GM might be wise to skinny down the product portfolio to a small set they can win with. The Vibe is competent, maybe sell it as the “Pirate” Corolla. The G8 is very nice; it needs to be manufactured in low cost North America, next to the Camaro. And a small RWD coupe/convertible would be fine. The Solstice is a decent proxy, although GM needs to follow Mazda in getting the weight down.

    Granted, my proposal is a limited vision, but probably requires the least investment or guts. Would you expect GM to do anything different?

  • avatar
    Geotpf

    At this point, all Pontiac can be is Chevy Part Deux. It’s a sideline, allowing profitable GMC truck dealers to have some cars on the side to sell. It only works, from a profit standpoint, if most of their product is clones of products from other GM divisions, allowing them to share engineering costs and be built on the same production lines. GM can’t afford to give them all unique product, because it won’t sell in numbers large enough to pay for the engineering and tooling costs. Plus, GMC/Pontiac dealers want to have some plain, pedestrian cars to sell. That is, when a long time GMC Sierra customer comes in to the dealer looking for an inexpensive car for his wife or child, that dealer wants to have something to be able to sell him. If all he has is muscle cars, the customer will likely buy a Corolla at the Toyota dealer down the steet.

  • avatar

    jhorner:
    When people were arguing the merits of Pontiac vs. Oldsmobile vs. Buick it took oxygen away from Ford and Chrysler products. GM is the only company which really pulled this off. Ford never really made the Mercury and Lincoln brands work. Chrsyler never got much leverage out of Plymouth, Dodge, Desoto and Chrysler.

    Don’t forget that at one time, while BOP shared platforms, each division had its own drivetrains. That was a major contributor in making each brand different from the other. Forget Ford vs. Chevy vs. Plymouth– what a lot of folks wanted to know was if a Chevy Impala 409 is superior to a Pontiac Catalina 421? And is the Buick Wildcat with the Nailhead superior to either of them? Now the cars GM builds are so homogeneous that street creds and braggin’ rights no longer matter. Now it’s whether I can get this Acadia cheaper than that Outlook or if Pontiac offers a better deal on a G5 than Chevy does on a Cobalt. As long as that’s the way people feel about GM’s products, they have no need for anything other than Chevy, Buick (maybe), and Cadillac.

    sherbornsean:
    Pete’s contention that Pontiac is doomed is logical, if you accept the notion that Pontiac is the ‘Pirate’ brand within GM. If all vehilces are built off a set of platforms, then how different can the Pontiac version be?

    Platform sharing isn’t what’s killing them so much as it is market sharing. GM’s divisions were set up to be marketed to specific economic and social strata. Once they started blurring the lines between those strata, the company started its long, slow downward spiral. Now there’s so much market overlap between what the divisions offer, GM will never relive those days no matter what they do.

    Way back when, Pontiac was marketed as the “wide track” division and the letters GTO really meant something (Pontiac actually broke several corporate rules when they built the first GTO). They offered vehicles that were just different enough from what other GM brands offered that they could be marketed as something special — even though they were still built on platforms shared with Chevy and Buick/Olds. Now there’s nothing special about any of the GM divisions so why even bother to have divisions? Just build cars and trucks and sell them under the GM badge.

  • avatar
    Geotpf

    Frank Williams :
    May 7th, 2008 at 12:19 pm

    Now there’s nothing special about any of the GM divisions so why even bother to have divisions? Just build cars and trucks and sell them under the GM badge.

    If GM was a new company, they would do this. (Or more precisely, they would sell Chevys and Caddys, like Toyota sells Toyotas and Lexuses.)

    But they aren’t a new company. They have a bunch of brands that have existed for decades, and a bunch of dealers that would require billions of dollars worth of bribes to get rid of.

    It’s not going to happen, at least not before the company completely collapses.

  • avatar
    ande5000

    The reality is Pontiac is a dead brand/division just as Lutz himself let slip. So is Buick for that matter (at least in NA, if not China). 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. Oops…..forgot about Hummer….Okay, so buy Jeep from Chryslerberus (assuming there is cash to do so, whilst not negatively impacting operating cash needs) when Cerburus kicks off their Chrysler corporate garage sale, and fold it into Hummer, reinvent the combined HumJeep brand by innovating new “green” (e.g., Volt) powertrain technology into theproducts and “own” the off road/tree hugger segment. Beyond that GM will need to figure out how to tie together their NA and non-NA platform and branding mess as well (similar to what Ford is in the process of doing) to gain the true global platform focus that propels the Toyhondissan juggernaut. Whew!….That’s seems almost too much for one management team to pull off, while simultaneously avoiding the grim reaper of chapter 11.

  • avatar
    gawdodirt

    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.

  • avatar
    Domestic Hearse

    jthorner nails it.

    DeLorenzo pines for the days when Bill Mitchell would pull into his driveway with some firesnorting, ground-shaking Pontiac test car. Li’l Pete would jump off his bike, run over, and bask in the heat roiling off the side-pipes and deeply inhale leaded gas exhaust fumes.

    And for awhile in GM’s history, Pontiac did fly a pirate flag; street racers would chant, “Here come da Judge,” and Smokey would chase Bandit right up to the mailaise era.

    But, in the whole of Pontiac’s history, the bad-boy, bad-ass performance era was a mere blip. A micro-era. An abberation.

    Historically, for the most part, Pontiacs were nothing but Chevys with more chrome. And recently (and today), Pontiacs were/are nothing but Chevys (and an occasional Toyota) with more plastic.

    Pontiac is simply back to being Pontiac. Yawn.

    It’s just that the sleepy little afterthought division cannot exist in today’s marketplace like it did in 1950. Or 1970. Even 1980.

    It’s over.

    O-V-E-R.

    There’s no resurrecting the brand. It was a mish-mash to begin with. The only place where Pontiac means anything to anybody is in DeLorenzo’s mind, now addled by too many of Mitchell’s exhaust fumes.

  • avatar
    geeber

    An interesting article…his analysis of why the reborn GTO failed is on target.

    Moving beyond the fate of Pontiac, Mr. DeLorenzo condemns GM’s corporate culture, and says that when Bob Lutz leaves, it will be back to business-as-usual for new model development. His criticism of GM’s bean-counter-driven, out-of-touch management culture certainly hits the mark.

    Mr. Lutz HAS done good things for GM’s new model development process. The new cars are much better than what went before. Unfortunately, he also has a tendency to shoot from the hip on subjects he shouldn’t be talking about (global warming, etc). And he is following the corporate line when it comes to eliminating divisions and nameplates. Which means that his contributions to the corporation’s eventual success or failure have been seriously limited.

    In other words, GM settled for a Bob Lutz when it needed an Alan Mullaly. Because GM, when push comes to shove, really doesn’t want to change.

    Considering that Mr. DeLorenzo has been one of the main cheerleaders for GM’s “turnaround,” this rant is significant and a bad omen for GM. If HE believes that things are this bad, and GM is this unprepared for what is coming down the pike, then GM is really in serious trouble.

  • avatar
    sean362880

    gawdodirt-
    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?

    No, but it’s more fun this way.

    I think Pontiac has some life left in it. I think it will find its way back the way that Vauxhall has done in the UK: by adopting and adapting desirable products and then selling them at a competitive price.

    The Solstice is a desirable car (if flawed), and the G8 is probably the best of the NASCAR-dad-mobiles that have cropped up in the last few years. I think this could be a start.

    The challenge will be to keep the lineup small. Convince the bean counters to ax the gangrenous deadweight of Torrents/G5s/Grandprixs.

  • avatar

    Sorry, I’m in a fit and headed for catatonia, I’m laughing so hard.

    “The one thing that Lutz has misjudged since he began his tenure at GM is that he never did ‘get’ Pontiac.”

    He-he. No, seriously. He-he. The one thing … One? Please, stop!

  • avatar
    mel23

    In other words, GM settled for a Bob Lutz when it needed an Alan Mullaly. Because GM, when push comes to shove, really doesn’t want to change.

    I think this sentence might well be the last in the definitive book on why GM failed.

  • avatar
    Geotpf

    ande5000 :
    May 7th, 2008 at 12:40 pm

    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).

  • avatar

    Pete is right on as usual.

    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.

  • avatar
    Gardiner Westbound

    GM is in big trouble because there are a multitude of superior alternatives.

  • avatar
    mxfive4

    # 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.

  • avatar
    jerseydevil

    the only pontiac that i’ve even noticed in years is the solstace, i’d buy one in a second if it had a trunk – dammit the miata has one – whats the problem? the new coupe has a targa that can’t be stored in the car!!!! I had a fiat x1/9 in the 70’s that was even smaller – could store the targa top on board, and had TWO trunks.

    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.

  • avatar
    SherbornSean

    Frank,
    I completely agree with your assessment that Pontiac is dying from market sharing. My hope is that by consolidating dealerships with Buick and GMC, Pontiac can go back to being a very concentrated brand, without the need to appease dealers who want every kind of product.

    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.

  • avatar

    Domestic Hearse, you might be right about most of the time in Pontiac’s existence.

    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.

  • avatar
    Geotpf

    SherbornSean :
    May 7th, 2008 at 2:01 pm

    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.

    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.

  • avatar
    mlbrown

    “Pontiacs should be raucous, distinctly American cars with real attitude, appealing to people who enjoy marching to a different drummer and who like to go their own way.”

    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

  • avatar
    seoultrain

    I lol’d at putting an all-aluminum 2.5L V8 in a 2800lb car and selling it for $20k.

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

  • avatar
    Domestic Hearse

    My point is, TriShield, when Pontiac rose to its zenith as the excitement division in the 60s-70s, the stars aligned.

    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.

  • avatar
    eggsalad

    Here’s an interesting concept for Pontiac…

    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.

  • avatar
    jthorner

    Trishield said: “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.”

    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 :).

  • avatar
    Rday

    GM is stuck on the downward spiraling highway to hell. They have too many lines and way to many dealers and they can’t easily cancel the dealers. They have the UAW that is bound and determined to take every dollar GM has left to pay for its’ outrageous benefits programs. GM is stuck with these two major problems that will take some time to work out. And I don’t think that they have that much time and that much money ‘any more’. Adding in the gross mismanagement to the above recipe, and you have the perfect storm for a Chapter 11. And I didn’t even bring in GMAC and its’ bottomless pit requirements for constant bailouts/additional funds. I do think that management has managed to keep the ship afloat longer than I anticipated. I just wonder how much longer these cash cows can be fed?

  • avatar
    CarShark

    But it will never be sports/sporty cars-only.

    @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.

  • avatar
    Dynamic88

    jthorner and Geotpf made some good comments. I’d like to just kinda run with what they were talking about.

    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?

  • avatar
    starlightmica

    @jthorner: although GE and IBM (cough, Lenovo) are still doing okay, AT&T was broken up in 1984 into the long distance company + the Baby Bells, the former company withering to the point it got bought out by a group of merged Baby Bells (the former SBC) in 2005.

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

  • avatar
    SherbornSean

    This idea that there are lots of GMC truck loyalists who go back to their favorite dealer to get a small Pontiac sedan sounds like a stretch to me.

    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?

  • avatar

    Domestic Hearse, I agree with you. Pontiac is a dead brand walking or a Detroit Zombie as coined by this website.

    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.

  • avatar
    jthorner

    “One and Five? Does that really make any sense?”

    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.

  • avatar
    guyincognito

    I think DeLorenzo should annex Pontiac from GM and run that company. I like his vision of what it was and should be.

  • avatar
    CarShark

    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.

    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.

  • avatar
    Rix

    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.

  • avatar
    KnightRT

    Pontiac isn’t an “affordable” BMW because it was never cut out to play that role. Pontiacs should be raucous, distinctly American cars with real attitude, appealing to people who enjoy marching to a different drummer and who like to go their own way.

    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.

  • avatar
    Geotpf

    Rix :
    May 7th, 2008 at 10:53 pm

    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.

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