Interesting way of putting it "re-evaluate Pontiac as a kind of "Scion-esque" or "Mazda-esque" brand"
http://www.gminsidenews.com/forums/f70/ ... lio-77717/
http://www.gminsidenews.com/forums/f70/ ... lio-77717/
Originally posted by www.gminsidenews.com
Every single automaker is feeling the affects of the current financial crisis. However, the general focus has been almost entirely centered on the negative news at GM and Chrysler.
In recent weeks, the story has shifted as the Obama Administration rejected the viability plans at GM and Chrysler. The result was very swift: The White House essentially fired Rick Wagoner and basically told Chrysler it must make a deal with Fiat.
While many of us can endlessly argue if it was right for the Administration to do this - and what kind of precedence this will set for all businesses - the most important element was that the Automotive Task Force was NOT happy with the work that GM has done up to this point. In fact, the Task Force and the President have stated that the plans laid out were inadequate - especially in the area of dealership count, brand retention, and product mix.
Many of us would contend that GM HAS done a good deal since December to right the ship. But facts don't make a difference in this case. Regardless of who's in the White House or who rules in Congress, at the end of the day, it's all about perception.
Even as all signs say the new GM management team and/or the Obama Administration are keen to steer GM toward a pre-packaged bankruptcy restructuring, the General will need funds to survive through this ordeal. Administration officials have said that aid will be available, but any funding will ultimately come with strings attached.
Of course, the obvious problem with deals like this is that monetary means will almost certainly serve political ends, as GM will need to stay in Washington's good graces. Whether it was GM's fault or not is beside the point - it is now a very real reality. And that reality will mean that the "Overlords on the Potomac" may strive for what is "politically correct" or "politically expedient" rather than what is truly good for GM. I have yet to see any politician - regardless of party or ideology - who wouldn't politicize an idea if it helped them obtain a goal or get them publicity. This situation is no different.
Washington says it wants a stronger GM to emerge that is able to pay off its debt to the taxpayers and compete with the best. That's fine -- but what else does D.C. want?
Even as GM pushes for new, environmentally sensitive technologies tomorrow, environmental concerns are all the rage today. Whether politicos cite increasing emissions or the need to reduce oil consumption, Washington may force GM to pursue that "greener" path more quickly and demand drastic action.
The auto Task Force has stated that GM's future product portfolio is "still too dependent on trucks and SUVs" for their liking and that their planned mix of trucks/SUVs is not sustainable in their estimation. They contend that the "new GM" will earn a large portion of its profits from high-margin trucks and SUVs, “which are vulnerable to a continuing shift in consumer preference to smaller vehicles.”
So what does that do to GM's proclaimed "core brands" in Chevrolet, Cadillac, Buick, and GMC? To placate the green-movement that holds considerable sway in Washington, could GM be forced to shutter GMC altogether to get Washington's support?
After all, GMC is purely a truck brand - which registers as "obscene-gas-guzzler" to the eyes of politicos in D.C. The political appointees on the Task Force who find that "GM's plan to sell X number of truck and SUV models unacceptable" may decide that cutting that number IN HALF by eliminating GMC will guarantee the President's blessing.
And to a politician and an un-informed public, that would also give Washington the political coverage they need. You can almost see the sound-bites now: "In exchange for taxpayer help, we made GM kill half their SUV offerings and shutter an all-Truck brand because we care about the American public and want to reduce our dependence of foreign oil, etc".
Will the public buy it? They constanly are bombarded by endless politicial criticism on how Detroit needs to "build fuel-conscious products that consumers want" and "finally produce vehicles that are competitive" -- as if the last 5-10 years of improvements never happend.
Peolpe in the know understand that GM would essentially lose nothing -- all those GMC products are already sold at Chevy stores, albeit at a slightly smaller price tag. But politically, it would look great for those politicans who want to "stand up to Big Business" or for the White House which seeks "a more environmentally aware US auto industry".
Could GMC become the final sacrificial lamb to get government approval and/or funds for a planned bankruptcy?
The administration claims that GM's new CEO Henderson has embraced change. Could the government - and GM - agree to shutter the brand altogether in exchange for some extra stimulus money? Could both parties claim to want to "help the environment" by just letting it die a slow death and disappear from the automotive landscape?
Keep in mind that nsap has already reported that GM has virtually NO truck/SUV products launching in the next 3 years (the Terrain/Equinox/etc are really crossovers in this sense). Most of the new coming products are small and mid-sized, fuel-conscious vehicles. But does it matter? Will the government not "waste this opportunity" to reshape the landscape to their liking?
Lending credibility to much of this is the fact that nsap has learned from sources close to GM's brass that the ONLY 100% SAFE BRANDS for North America in any kind of bankruptcy restructuring are Chevrolet, Buick and Cadillac. That's it. GM's European and international brands and holdings won't be affected by this directly. Sources say there is a slight potential that GMC could come out of it as well, but such decision would likely fall on the Automotive Task Force. So in other words, it would come down to political appointees who don't know the auto-industry. Which way do you think they'll come down on the survival of GMC with Washington pulling the strings?
To add to this mix, the Administration has already stated that some of GM's board members will go. Since all product decisions and the survival of the various brands will undoubtedly have to go through the Board, how will these "Administration approved" board members come down on the survival of GMC? How will they affect other strategic and project decisions?
All of this will leave GM with Chevy, Caddy, and Buick as core brands. What could this mean for the rest? We know the fates of Saturn, Saab, and Hummer are sealed, but what about Pontiac?
A few years back, before the current economic mess, GM's Board made a conscious decision to eventually phase out the Pontiac brand by 2015. One of the most vocally opposed to closing the Poncho brand was Rick Wagoner. However, the automotive world has been incredibly shaken up since then - and the board will soon see new members who could reverse that decision. In addition to that, the green-movement, fuel-economy standards, and public perception now count for more than they ever have.
In a market environment where such factors are deemed important, does a renewed/"fuel-conscious" Pontiac win out over GMC's truck-ruggedness image? Is that enough to keep Pontiac and reshape it? If GMC has an "environmental image problem" to the politicos that control the purse-strings, would keeping Pontiac make sense?
If Pontiac or GMC survives at all it will be to support the expansive dealer network. GM has stated that they wanted to cut their dealership count down by 1/3rd to roughly 4100 locations. But the Task Force has said that this isn't enough and they aren't doing it fast enough. They want a quicker, deeper cut to prove GM will stay solvent. And to do this affectively, GM needs to not only shrink its dealer footprint, but rationalize their sales channel strategy.
We all acknowledge that GM's channel strategy will shrink from 4-channels to 3-channels with the elimination of Saturn from the GM fold. But even with more fresh products coming, can Buick franchises survive alone without GMC and Pontiac? To placate regulators who hold "environmental awareness" in such esteem, could GM re-evaluate Pontiac as a kind of "Scion-esque" or "Mazda-esque" brand to anchor what is left of BPG showrooms? Keep in mind that any "brand solution" won't affect just US dealers, but all of North America -- and Pontiac is viewed favorably in Canada, where it makes up roughly half of GM's dealerships.
This is the tiny window that exists in which Pontiac may be able to survive as a viable brand in the "new" General Motors.
And STILL, it may NOT be enough for Poncho lovers.
More realistically, if Pontiac were to die alongside GMC, GM could consolidate the franchises down to Chevrolet (mainstream) and Buick/Cadillac (near-luxury/luxury). Or perhaps Chevrolet/Buick and Cadillac. And if Pontiac were to survive, and franchises were re-negotiated under bankruptcy protection, perhaps we'll see a version of our Chevy/Pontiac and Caddy/Buick/GMC scenario (minus GMC) from January. Either would eliminate another sales channel to survive long term and create a healthier dealer network.
But what if Washington gets more involved? Could we an over-zealous group in D.C. try and force GM to consolidate all three remaining North American brands into a single-sales channel strategy much like Chrysler has done with Chrysler-Dodge-Jeep? Doing so would disasterously end Caddy's reign as a "true luxury brand", but could the Administration look to force such a merger to release funds to GM?
Every GMI member knows that GM needs drastic reform. GM's incredible product progress over the last decade is laudable and noteworthy. They've come a long way and deserve more positive attention from the public than they've received. But the current crisis only underlines that structural and institutional changes weren't coming fast enough. Additional government regulation that hampered product planning (higher CAFE standards which lead to platform/product cancellations, etc) and a rapid shift in the market (gasoline prices, economic down turn, etc) have only sped up this process.
In a very real way, the crisis is a "blessing" since they can finally get a chance to clean-house and dump the dead wood. We know brands have to go, operation must be streamlined, contracts re-negotiated and more.
Yet who should drive this process? Is it fair for reforms to be "mandated" by those who don't fully understand the industry or the market? This isn't about poltical party or flaming one group over other -- Its about government determining what's best for GM and how those waters may get clouded.
We won't know the end result for awhile yet, but one thing is certain: the General Motors that emerges on the other side of any kind of restructuring will not look like the company we know today. It will be a drastically different company, with a much different business model and approach to the market.
That's potentially a very-good-thing, but let's hope that Uncle Sam leaves enough of these key decisions to people who actually KNOW the industry rather than bureaucrats who may hinder GM further.
Stay tuned
In recent weeks, the story has shifted as the Obama Administration rejected the viability plans at GM and Chrysler. The result was very swift: The White House essentially fired Rick Wagoner and basically told Chrysler it must make a deal with Fiat.
While many of us can endlessly argue if it was right for the Administration to do this - and what kind of precedence this will set for all businesses - the most important element was that the Automotive Task Force was NOT happy with the work that GM has done up to this point. In fact, the Task Force and the President have stated that the plans laid out were inadequate - especially in the area of dealership count, brand retention, and product mix.
Many of us would contend that GM HAS done a good deal since December to right the ship. But facts don't make a difference in this case. Regardless of who's in the White House or who rules in Congress, at the end of the day, it's all about perception.
Even as all signs say the new GM management team and/or the Obama Administration are keen to steer GM toward a pre-packaged bankruptcy restructuring, the General will need funds to survive through this ordeal. Administration officials have said that aid will be available, but any funding will ultimately come with strings attached.
Of course, the obvious problem with deals like this is that monetary means will almost certainly serve political ends, as GM will need to stay in Washington's good graces. Whether it was GM's fault or not is beside the point - it is now a very real reality. And that reality will mean that the "Overlords on the Potomac" may strive for what is "politically correct" or "politically expedient" rather than what is truly good for GM. I have yet to see any politician - regardless of party or ideology - who wouldn't politicize an idea if it helped them obtain a goal or get them publicity. This situation is no different.
Washington says it wants a stronger GM to emerge that is able to pay off its debt to the taxpayers and compete with the best. That's fine -- but what else does D.C. want?
Even as GM pushes for new, environmentally sensitive technologies tomorrow, environmental concerns are all the rage today. Whether politicos cite increasing emissions or the need to reduce oil consumption, Washington may force GM to pursue that "greener" path more quickly and demand drastic action.
The auto Task Force has stated that GM's future product portfolio is "still too dependent on trucks and SUVs" for their liking and that their planned mix of trucks/SUVs is not sustainable in their estimation. They contend that the "new GM" will earn a large portion of its profits from high-margin trucks and SUVs, “which are vulnerable to a continuing shift in consumer preference to smaller vehicles.”
So what does that do to GM's proclaimed "core brands" in Chevrolet, Cadillac, Buick, and GMC? To placate the green-movement that holds considerable sway in Washington, could GM be forced to shutter GMC altogether to get Washington's support?
After all, GMC is purely a truck brand - which registers as "obscene-gas-guzzler" to the eyes of politicos in D.C. The political appointees on the Task Force who find that "GM's plan to sell X number of truck and SUV models unacceptable" may decide that cutting that number IN HALF by eliminating GMC will guarantee the President's blessing.
And to a politician and an un-informed public, that would also give Washington the political coverage they need. You can almost see the sound-bites now: "In exchange for taxpayer help, we made GM kill half their SUV offerings and shutter an all-Truck brand because we care about the American public and want to reduce our dependence of foreign oil, etc".
Will the public buy it? They constanly are bombarded by endless politicial criticism on how Detroit needs to "build fuel-conscious products that consumers want" and "finally produce vehicles that are competitive" -- as if the last 5-10 years of improvements never happend.
Peolpe in the know understand that GM would essentially lose nothing -- all those GMC products are already sold at Chevy stores, albeit at a slightly smaller price tag. But politically, it would look great for those politicans who want to "stand up to Big Business" or for the White House which seeks "a more environmentally aware US auto industry".
Could GMC become the final sacrificial lamb to get government approval and/or funds for a planned bankruptcy?
The administration claims that GM's new CEO Henderson has embraced change. Could the government - and GM - agree to shutter the brand altogether in exchange for some extra stimulus money? Could both parties claim to want to "help the environment" by just letting it die a slow death and disappear from the automotive landscape?
Keep in mind that nsap has already reported that GM has virtually NO truck/SUV products launching in the next 3 years (the Terrain/Equinox/etc are really crossovers in this sense). Most of the new coming products are small and mid-sized, fuel-conscious vehicles. But does it matter? Will the government not "waste this opportunity" to reshape the landscape to their liking?
Lending credibility to much of this is the fact that nsap has learned from sources close to GM's brass that the ONLY 100% SAFE BRANDS for North America in any kind of bankruptcy restructuring are Chevrolet, Buick and Cadillac. That's it. GM's European and international brands and holdings won't be affected by this directly. Sources say there is a slight potential that GMC could come out of it as well, but such decision would likely fall on the Automotive Task Force. So in other words, it would come down to political appointees who don't know the auto-industry. Which way do you think they'll come down on the survival of GMC with Washington pulling the strings?
To add to this mix, the Administration has already stated that some of GM's board members will go. Since all product decisions and the survival of the various brands will undoubtedly have to go through the Board, how will these "Administration approved" board members come down on the survival of GMC? How will they affect other strategic and project decisions?
All of this will leave GM with Chevy, Caddy, and Buick as core brands. What could this mean for the rest? We know the fates of Saturn, Saab, and Hummer are sealed, but what about Pontiac?
A few years back, before the current economic mess, GM's Board made a conscious decision to eventually phase out the Pontiac brand by 2015. One of the most vocally opposed to closing the Poncho brand was Rick Wagoner. However, the automotive world has been incredibly shaken up since then - and the board will soon see new members who could reverse that decision. In addition to that, the green-movement, fuel-economy standards, and public perception now count for more than they ever have.
In a market environment where such factors are deemed important, does a renewed/"fuel-conscious" Pontiac win out over GMC's truck-ruggedness image? Is that enough to keep Pontiac and reshape it? If GMC has an "environmental image problem" to the politicos that control the purse-strings, would keeping Pontiac make sense?
If Pontiac or GMC survives at all it will be to support the expansive dealer network. GM has stated that they wanted to cut their dealership count down by 1/3rd to roughly 4100 locations. But the Task Force has said that this isn't enough and they aren't doing it fast enough. They want a quicker, deeper cut to prove GM will stay solvent. And to do this affectively, GM needs to not only shrink its dealer footprint, but rationalize their sales channel strategy.
We all acknowledge that GM's channel strategy will shrink from 4-channels to 3-channels with the elimination of Saturn from the GM fold. But even with more fresh products coming, can Buick franchises survive alone without GMC and Pontiac? To placate regulators who hold "environmental awareness" in such esteem, could GM re-evaluate Pontiac as a kind of "Scion-esque" or "Mazda-esque" brand to anchor what is left of BPG showrooms? Keep in mind that any "brand solution" won't affect just US dealers, but all of North America -- and Pontiac is viewed favorably in Canada, where it makes up roughly half of GM's dealerships.
This is the tiny window that exists in which Pontiac may be able to survive as a viable brand in the "new" General Motors.
And STILL, it may NOT be enough for Poncho lovers.
More realistically, if Pontiac were to die alongside GMC, GM could consolidate the franchises down to Chevrolet (mainstream) and Buick/Cadillac (near-luxury/luxury). Or perhaps Chevrolet/Buick and Cadillac. And if Pontiac were to survive, and franchises were re-negotiated under bankruptcy protection, perhaps we'll see a version of our Chevy/Pontiac and Caddy/Buick/GMC scenario (minus GMC) from January. Either would eliminate another sales channel to survive long term and create a healthier dealer network.
But what if Washington gets more involved? Could we an over-zealous group in D.C. try and force GM to consolidate all three remaining North American brands into a single-sales channel strategy much like Chrysler has done with Chrysler-Dodge-Jeep? Doing so would disasterously end Caddy's reign as a "true luxury brand", but could the Administration look to force such a merger to release funds to GM?
Every GMI member knows that GM needs drastic reform. GM's incredible product progress over the last decade is laudable and noteworthy. They've come a long way and deserve more positive attention from the public than they've received. But the current crisis only underlines that structural and institutional changes weren't coming fast enough. Additional government regulation that hampered product planning (higher CAFE standards which lead to platform/product cancellations, etc) and a rapid shift in the market (gasoline prices, economic down turn, etc) have only sped up this process.
In a very real way, the crisis is a "blessing" since they can finally get a chance to clean-house and dump the dead wood. We know brands have to go, operation must be streamlined, contracts re-negotiated and more.
Yet who should drive this process? Is it fair for reforms to be "mandated" by those who don't fully understand the industry or the market? This isn't about poltical party or flaming one group over other -- Its about government determining what's best for GM and how those waters may get clouded.
We won't know the end result for awhile yet, but one thing is certain: the General Motors that emerges on the other side of any kind of restructuring will not look like the company we know today. It will be a drastically different company, with a much different business model and approach to the market.
That's potentially a very-good-thing, but let's hope that Uncle Sam leaves enough of these key decisions to people who actually KNOW the industry rather than bureaucrats who may hinder GM further.
Stay tuned
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