General Motors Deathwatch 186 – The Return of the Cannibals

Justin Berkowitz
by Justin Berkowitz
general motors deathwatch 186 8211 the return of the cannibals

The Wall Street Journal put itself in the headlines this week. The august paper reported that General Motors may be considering (i.e. thinking about thinking about) shedding brands. While some of us have been saying– for years– that GM should refine, resell and/or retire it's octo-branded U.S. portfolio, this is the first time the mainstream media covered the issue since Oldsmobile was bricked-over in 2002. Not surprisingly, GM issued a flat-out denial, followed by a little deal hand-holding. Apparently, The General won’t shutter brands, only “reduce overlapping models.” Yes, it's the same old song, with a different Beat since you've been gone.

On May 1, 2008, GM Car Czar Bob Lutz claimed GM was moving “beyond brand engineering.” Writing on his ironically named Fast Lane Blog, Maximum Bob crowed that “The progress we’re making is real. It’s not just chest thumping talk. We have a ways to go yet, but we’re getting there.”

October 30, 2006: John Larson, General Manager of the newly-formed Pontiac-Buick-GMC "sales channel" tells Automotive News that consolidating those three brands in dealerships will “allow General Motors to eliminate badge engineering.”

March 5, 2006: Bob Lutz tells the Washington Post bluntly “We've put an end to badge engineering." Maximum Bob's mea culpa: “I can’t believe we were so stupid.”

October 16, 2005, in an interview with The New York Times, Lutz declares “We're definitely not going to badge-engineer Saab.”

Since 2005, GM has killed some of its badge engineering disasters. The TTAC Ten Worst-winning “Crossover Utility Vans”– the Buick Terraza, Chevy Uplander, Saturn Relay and Pontiac Montana SV6– were terminated. And yet… GM replaced these models with the badge-engineered Lambda-platform CUVs: the Buick Enclave, Chevy Traverse, Saturn Outlook and GMC Acadia. The Buick and GMC share showroom space, and Chevy’s Traverse (a.k.a. Maliclave) competes on the floor with the Tahoe, Suburban, and Trailblazer SUVs.

While Pontiac missed the big CUV badge-engineering debacle, they experienced cannibalism elsewhere. For 2006, GM rebadged the not-so-hot Chevy Equinox SUV as a Pontiac Torrent. Difference? Logos and Pontiac's raging bull nostrils. In 2007, GM rebadged the Chevy Cobalt as a Pontiac G5 for the American market. Difference? Ditto. Last month, we discovered that GM was planning to rebadge the Chevy Aveo as a Pontiac G3 in the US. Difference? You got it.

In 2006, Pontiac also rolled out the Solstice roadster. Lutz’s “baby”– a two-seat roadster with a top that would confound an MG owner– began competing with its fraternal twin, the Saturn Sky. Different front ends, different rears, mostly different interiors. And yet how big is the market for two-seat roadsters? Not so big, Mr. Bond.

Also this year, GM introduced the new Chevy Malibu. Great car. Seems a lot like the Saturn Aura. Alike as in engine, transmissions, platform, interior components, size, shape, and price. These couldn’t be more directly overlapping products if they tried. And it looks like they did.

Of course, the badge-engineered and exceptionally slow-selling GMT-900 trucks are still competing for the same handful of buyers: the Cadillac Escalade vs. the Chevy Suburban, Tahoe, and Avalance vs. the GMC Yukon and XL.

More badge engineering is on its way. Saab is testing its 9-4x crossover SUV, which will be closely related the SRX-replacement from Cadillac (and both are in GM’s premium sales channel). The 2010 Equinox looks to be competing directly with its sibling, the upcoming 2010 GMC Terrain SUV.

These aren’t products that were in the pipeline before Maximum Bob joined GM. So now, when MB says GM's “not killing brands, only killing overlap,” there's no reason to believe him. Although GM's corporate structure has been consolidated into four sales channels– Buick, Pontiac, GMC; HUMMER, Cadillac, Saab; Saturn and Chevrolet– it's clear GM doesn't have enough distinctive, desirable products to feed even four hungry mouths.

Did I say HUMMER? HUMMER's dead. Or is it? It's been cut-off from all product development and promotional spending while it's under "strategic review." It's a perfect example of the mixed messages and lack of clarity coming from Rick Wagoner's administration at RenCen. The "sense of urgency" urged by analyst Maryanne Keller MAY have arrived, but it hasn't created the necessary decisiveness. At the very least, GM should cut Daewoo a blank check to build them a small car they can sell. And sell and sell.

This past week, GM made announcements about both the Beat concept car and some product called the Cruze. And for both stories, GM used a bureaucratic passive voice to vaguely imply that they were looking into maybe speeding-up their development. Small cars are the next boom; every engineer should be on them. As President Bush said, “Fool me once, shame on you. Fool me – you can’t get fooled again.”

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2 of 38 comments
  • DearS DearS on Jul 11, 2008

    I can care less if a car is badge engineered or not. A G5 or Cobalt, same car ok, I can pick one grill over the over. Aura is a litte different than Malibu, subtle but I have a choice on again looks. Either way I really just need a good car. Make the fucking cars better is what I'm saying. I do not care if 5 Cobalts exists but make them better than a Mazda3, please. Oh well. whatever. I'll buy a used car anyhow.

  • Justin Berkowitz Justin Berkowitz on Jul 15, 2008

    @DearS: But this isn't about overlapping or about rebadging. I think those are bad, but even if they aren't... It's about Bob Lutz lying regularly. He comes out and says "No X" and then GM does X. Many times over.

  • Arthur Dailey So they cut the roof off the hatch area of a Dodge Journey?
  • Desertwanderer Across Australia, from Sydney to Perth, via the Nullarbor Highway. Desolate, very impressed to pass a bicycle tourist somewhere in the middle, I think he'd have a story to tell. Oh, and the Cabot Trail, Cape Breton, NS, in my S4.
  • Cprescott Please stop production of all Camry's - they are hideous and vomit inducing ugly.
  • Cprescott Excellent! Complete garbage.
  • Kos65701744 A lot of people back then didn't like the downsizing idea, which is why some didn't sell better than before. Which is why in final gen sales were record high in sales. My own father wouldn't buy a downsized GM car, he switched to a Ford LTD, a nice car but he hated it but wanted a big car