Wild Ass Rumor of the Day: GM to Kill Everything but Caddy and Chevy?

wild ass rumor of the day gm to kill everything but caddy and chevy

Automotive News [sub] has a report on future models coming from Cadillac and it provides a lot of dots just begging to be connected. Among other things, Caddy is planning: a four-cylinder small sedan; an expanded CTS lineup that will include a coupe and sport wagon; and a redesigned SRX that only seats five and is between the Equinox/Vue and the current SRX in size. They've also decided to extend production of the DTS and STS without any further development but will eventually replace both with a single RWD sedan that "will be more competitive with the Mercedes E class and BMW 5 series." It's two other two things AN mentioned that really caught my attention: GM is "studying the possibility of Cadillac's sharing GM's Chevrolet Volt technology" and there's a possibility they'll replace the Escalade with "a model or two developed on GM's fwd Lambda platform" by MY 2013. So let's connect those dots: GM's planning a small Cadillac that will take the brand further down the price scale while Chevy introduces a more expensive small car in their lineup. They're repositioning the SRX as a smaller 5-place CUV, just above the Equinox in size. They're keeping the Lucerne's platform-mate DTS around for a while to hang on to older barge-buyers. They're considering Caddy as the only other American division to share the Volt platform with Chevy. They're looking at a fifth version of the Lambda platform which will essentially overlap the Enclave while the upper trim levels of the Traverse do the same with the Saturn and GMC derivatives. To me all those dots form only one picture: they're aligning Cadillac and Chevy so they could cover the entire market with just those two brands if need be. Once that realignment is complete, it's just a matter of time before they can methodically axe Pontiac, Buick, GMC and Saturn. The question is, can they do it fast enough to salvage what's left of the company? Just sayin'

(The Automotive News article is printed in its entirety here.)

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  • 50merc 50merc on Aug 27, 2008

    Re: the question of division versus subsidiary, this is an issue I've wondered about on occasion. GM became huge by acquiring other firms, such as Oldsmobile and Cadillac. In view of what I know of Durant's empire-building, I'm pretty confident the big acquisitions were generally done by swapping new shares of GM stock for the shares of the acquired company. Some small outfits might have been bought using cash; this would be the case if a sole proprietorship or partnership sold a business to GM. Incidentally, when Ford established manufacturing operations in the UK and Germany back in Model T / A days, the ventures were new corporations in which, if I recall correctly, Ford had less than 100% ownership. I've never heard whether GM retired the stock of acquired companies or held it as an asset. It seems likely the stock was retired, with GM absorbing the assets and liabilities. But apart from the nuisance of continuing to have multiple board of director meetings, etc., taxation and financial reporting (by issuing "consolidated statements") is the same either way. Finally, there'd be no legal obstacle to spinning off Buick, Pontiac, etc., even if those brands are divisions rather than subsidiaries. GM would just have to identify related assets and liabilities, assign those to a new stock, and issue those new shares to GM shareholders as a dividend. In theory the GM shareholders would be just as well off: in sum the two kinds of stock would equal the value of their previous GM-only shares. In reality, I would expect a torrent of lawsuits from quarters.

  • Durask Durask on Aug 27, 2008

    Re: chapter 11 Autos are not airlines. No one will buy a car from a company in Chapter 11 for a price comparable to a car from other companies. If GM would go Ch 11, even their best cars (the CTS and the Malibu) will have to be sold at half price to attract potential Camry/German buyers. Would I buy a CTS for half the price of Audi A6? Hell, yeah, even 2/3 of the price. Would I buy it for the same price as the new A6? Hell, no. So, IMHO, they are kinda screwed.

  • Johnster Not feelin' it. The traditional unreliability of turbo engines is a big turn-off, especially in a work truck that (I hope) you'd want to keep on the road for 200,000 miles or more without having major repairs.
  • ToolGuy Car audio is way overpriced.
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  • Master Baiter The D-bag elites like Al Gore demanding that we all switch to EVs are the type of people who don't actually drive. They get chauffeured around in black Yukon Denalis. Tesla does have a good charging network--maybe someday they will produce a car that doesn't suck.
  • MRF 95 T-Bird As a Challenger GT awd owner I lIke it’s heritage inspired styling a lot. There’s a lot of 66-67 as well as 68-70 Charger in there. It’s refreshing that it doesn’t look like a blob like Tesla, Volt/Bolt, Mach-e BMW I whatever etc. The fact that it’s a hatch makes it even better as a everyday driver thus eliminating the need for a CUV. If it’s well built and has a reliable track record I can see trading up to it in a few years.