GM Denies WSJ Brand Termination Story

Robert Farago
by Robert Farago

Huh. There can only be three explanations. One: The Wall Street Journal was seriously duped by a stock manipulator or a member of one of GM's warring factions. Two: The Wall Street Journal made shit up– there are no "these people" or "people familiar with the matter" or "people close to senior leadership." Or three: GM is lying; they are considering terminating/selling Buick, GMC, Pontiac, Saab and/or Saturn. Bloomberg ignores the implications and reports the refutation: "GM spokesman Tony Cervone… said no brands are under 'strategic review' beyond Hummer." Well, that's unequivocal. Then again, we know for a fact that GM's use of the term 'strategic review' is misleading; the automaker has shut off all HUMMER's dealer support and new product development. Anyway, the denial puts paid to my theory that GM PR planted the story to bolster the ailing automaker's sagging stock price and help it raise a little money (as in $15b). I mean, GM PR wouldn't purposely plant a story and then deny it, would they? Nah. It's probably one more example of the panic and confusion aboard the holed, listing ship that is General Motors.

Robert Farago
Robert Farago

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  • John Horner John Horner on Jul 08, 2008

    "They don’t have the money to kill the brands." Nobody has ever answered this question: Why can't GM kill off brands through starving them to death just like Isuzu did in the US?

  • Geotpf Geotpf on Jul 08, 2008
    roar1 Says: July 7th, 2008 at 10:05 pm Every model Saturn currently offers is selling better than last year. The loss of the Ion compact sedan is dropping Saturn’s volume. Poor timing by GM. You know, the sales figures are right on GM's website. Before saying things like this, you should check them, to see if what you are saying is actually accurate. You are right that the reason for Saturn's overall sales losses are due to replacing a car that sold five to ten thousand units a month (the Ion) with one that struggles to sell a thousand units a month (the Astra). However, sales of the Outlook, Vue, and Sky are also all down (comparing Jan-June 2008 with Jan-June 2007). The only Saturn model with higher sales during that time period is the Aura.
  • Beelzebubba Beelzebubba on Jul 08, 2008
    roar1 Says: July 7th, 2008 at 10:05 pm Every model Saturn currently offers is selling better than last year. The loss of the Ion compact sedan is dropping Saturn’s volume. Poor timing by GM. I don't think anyone considers the demise of the Saturn Ion a "loss"! GM simply dropped the most abysmal car that they were manufacturing at the time (excluding the Chevy Aveo made by's a toss up between it and the Ion anyway). The original vision for Saturn seemed promising- 'A Different Kind of Car Company'. GM managed to screw it up in ways that no other company possibly could...BIG surprise! The delay in getting the original SL and SC into prodution, not to mention the astronomical budget overages, left Saturn with a car that was outdated from day one. From there, it just kept going downhill and in just a few years had fallen prey to that plague endemic of all GM brands- BADGE ENGINEERING! Actually, it was badge-engineering with Rubbermaid body panels...eek! GM has so much redundancy and duplication of effort across divisions- their quickly-depleting cash reserves are the only thing that's kept them in the game this long! Trimming the needless fat (brands) is the only chance for mid- to long-term survival. Saturn- kill it! Slide the Astra over to the Chevrolet lineup to replace the Aveo. Also, take some of the Aura's more attractive styling cues (rear end, especially) and make the Malibu into the stunner that it almost already is! Toss out the rest. Buick- emphasis on the "ICK"! Nobody under 60 wants one of these, the 'elderly' stigma associated with the brand is too much to overcome. The folks who buy Buicks will be content with a Cadillac or large Chevrolet. GMC and Hummer- why have they made it this long??? Buh-bye! Pontiac- seemed viable as the RWD/performance-oriented division before $4.00 gas, but not any more. Chevrolet will gladly absord the G8 into it's model lineup, maybe even call it the Impala? The next FWD Impala could easily be renamed. Cadillac & Saab- integrate Saab into existing Cadillac dealers. The 9-3 slots in well beneath the CTS and the next 9-5 fits in between the CTS and STS. Two luxury brands under one room- one bold American style and the other (northern) European flavored. Just makes sense. Chevrolet- would relate to Caddy/Saab much like Honda/Acura or Nissan/Infiti- an extensive model lineup covering virtually every type of car/truck/SUV/crossover in every size class. GM- pay attention! Inside the baffling GM hierarchy, I can scarcely begin to imagine how much money (not to mention effort and talent) is wasted with the existing, mostly-unfocused brands.
  • Pch101 Pch101 on Jul 08, 2008
    Frankly the banks are in trouble over matters so much greater than GM and it’s suppliers I seriously doubt they will do much of anything. During good times, it wouldn't be a big deal. The market would chock it up to bad management -- easy to do when everyone else is doing well -- and it would be a small blip on Wall Street's balance sheet, as everyone goes on making money. Today, it would be different. GM is a Dow 30 component; a Chapter 7 liquidation or complete failure of GM would be a major psychological blow to the markets, as it would symbolize that the credit crunch had spread from the mortgage markets into commercial lending. It would be perceived as a huge domino falling, that would topple over something else, that being the core blue chips of Wall Street. One thing that you have to keep in mind is that the most informed readers of sites like this know a lot more about GM than does your average investor. A lot of the aspects of GM business failures that are well understood by car industry watchers are a total mystery to your average analyst. When we marvel at Rick Wagoner's smoke and mirrors and ask ourselves how he gets away with it, you have to remember that he can get away with it because most of his audience doesn't really understand the industry that well. They tend to comprehend the expense side of the argument (wages, pensions, plant operations), not so much the product or the branding issues that are really the core problems here. So this whole thing is going to come as a huge shock. While you and I will know that this is decades of incompetent management finally hitting bottom, Wall Street will see this as a massive symbol of something much worse. The US government can't afford this and the banks can't afford this. They bailed out Bear Stearns to prevent a massive chain reaction; I could see GM being bailed out for much the same reasons. It will be bankers' money, but the feds will have to guarantee it if they are going to loan it.