Thoughts from the Curb

Nov 17, 2008 - The Rant: For GM, One Answer is Obvious

I don't pretend to understand the business side of the car business. I'm a writer mostly because my father's business talk when I was a kid made me go cross-eyed with confusion. I barely got a B- in high school macroeconomics. The stock market makes less sense to me than the popularity of "High School Musical."

Having said that, I don't completely understand the myriad creeks of excrement General Motors presently finds itself paddling up with a rotted oar. But whether they end up in backruptsy or bailed out by the government, one answer is abundant to me: GM must cut brands immediately, and focus instead on Chevrolet and Cadillac.

This is not a new idea, I admit, but Pontiac, Buick and GMC are all redundant brands. Almost every car they make has a Chevrolet twin (or at least kissing cousin), while any unique products would either not be missed, or could easily be transformed into Chevy products. There's no reason to buy a G6 instead of the superior Malibu, nor a G5 instead of the identical Cobalt. As much as we like the Enclave and Acadia, the Chevrolet Traverse satisfies the needs of most buyers in this segment and it could be pumped up with more equipment. The rumor of the next generation Escalade being a Lambda would satisfy the need for a luxury version. The Pontiac G8 is excellent, but its already sold as the Chevrolet Caprice/Lumina in the Middle East, so that would be an easy change-over.

The biggest problem with cutting brands (as I see it) is the dealers and the many problems experienced by GM when Oldsmobile closed shop. But it still needs to be done, and the fact that so many Pontiac, Buick and GMC dealers are packaged together, the toll would be significantly less. Hummer also obviously needs to be jettisoned, and Saturn should probably die as well. The idea of it being the European-ish division was ultimately stupid (even though I initially thought it was cool) -- it's hard for people to think of Saturn as anything other than a weird and inexpensive car belonging to co-eds or senior citizens. If car development between GM USA and GM Europe is to be more closely shared (which like Ford, it must), it should be Chevy that sees the fruit of Opel's engineering efforts.

GM is in critical condition and immediately needs multiple amputations. It doesn't take an economics major to see that maintaining brands because of traditions, dealers or simply to build cars to keep workers employed isn't a very sound business model.

- James Riswick

4:26 pm | Categories: the rant Permalink | Alert Administrator

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