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It does not change the fact that the Focus, when introduced to the US market, was a big hit.
Now year 2? That's a big question mark. I don't think the economy will have fully recovered by then. Year 2 could be BIG DISCOUNT/cash on the hood time. It would be good if they had a nice medium-size turbo diesel ready to go under the Camaro's hood for year 2, to really boost the fuel economy numbers.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Wow, a TDI Camaro. With all due respect to Audi, NOT gonna happen. I don't think that would be palateable to the traditional pony-car buyer.
Now if you said the 2.0 liter DI Ecotec out of the Solstice GXP, THAT would be much more palateable to pony-car guy (or gal), while striking a fair balance between performance and fuel economy.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
****
Actually, Honda and Toyota are infamous for giving the U.S. the most dumbed-down and bubba-ized versions of their vehicles. Honda, especially, almost to the point where you wonder if the guys in charge of the company actually hate Americans or something(and don't get me started on their miserable motorcycle offerings compared to the rest of the planet).
At least a few companies like Mazda and Porsche still give us their best vehicles. But you'd honestly think that GM and Ford would do this for the U.S. Yet, you can get a better car in Mexico, Canada, the E.U., or even places like South Africa than you can get in the U.S. from GM and Ford.
Robert Snell / The Detroit News
General Motors Corp. doesn't need Chrysler LLC's brands, workers or plants, but if the companies merged, the Auburn Hills automaker's $11.7 billion in cash could help GM survive the worst sales market in 15 years, analysts said Monday.
The cash, which Chrysler said it had on June 30, and an estimated cost savings of about $6 billion through combining automotive operations, is a key reason why GM and Chrysler-parent Cerberus Capital Management LP are discussing a possible merger that otherwise makes little sense for either company, analysts said.
Barclays Capital analyst Brian Johnson said GM needs $10.3 billion in fresh cash through next year, at which point the automaker could see significant savings from a new union contract and a possible sales boost from fuel-efficient models such as the Chevrolet Cruze and Volt, an extended-range electric car. A deal with Cerberus could quench GM's cash quest, said auto analyst Erich Merkle of Crowe Horwath.
http://detnews.com/apps/pbcs.dll/article?AID=/20081014/AUTO01/810140353/1148
If GM wants to compete with Honda and Toyota, it needs insanely fuel efficient smaller vehicles asap, and the Volt is a piece of junk because it will be lease only and will therefore not actually make GM a dime in profit or help to create a future market for the technology. More worthless "look at what we can do - now let's crush them once the lease is over..." wasting of time, brainpower, and money.
GM closes down all full size Dodge/Chrysler truck plants and then GM's Full size truck plants run at capacity due to the huge uptick in transferred volume (Ford shares in this, and Toyota also does slightly). Issue is it is an all new truck and all that investment is wasted but as long as GM is not responsible for it they may not care. Another possibility is they put the GMC nameplate on the new Dodge truck. But this would probably only last until the next model changeover.
GM keeps Jeep, midsize SUV's and the minivan and drops pretty much everything else. Lots of Chrysler people get laid off. The Chrysler and Dodge nameplates are dropped but Jeep is kept. Or maybe they drop GMC nameplate and put Dodge trucks with Buick/Pontiac dealerships. They could also keep some newer Dodge models around for awhile (Charger).
Big issue though is dealers. GM cannot take on all those dealers. It will be part of the deal to drop them. Best way is for Chrysler to declare bankruptcy but that would screw up the money transfer unless the money is for GMAC?
Bottom line though is the cash.
"Why should one of mine go away?" he asked. "There are lots of brands that we out-sell. Why doesn't one of them go away?"
And while LaNeve's remark came before the recent buzz about GM-Chrysler merger talks, it's even more apropos in light of the possibility that two of the old Detroit Big Three could merge their brands as well as their operations. GM's brands would be largely likely to survive any such combination, while most of Chrysler's would likely disappear.
The consensus of industry pundits mulling the brand architecture of any potential GM-Chrysler combination is that Jeep would be the only surviving brand from the existing Chrysler stable, with GM attempting to bolster it into something that it once hoped for Hummer - but couldn't accomplish.
"Look at the volumes that the Jeep brand generates on an annual basis relative to Hummer, which has remained very narrow in its appeal," said Joseph Phillippi, president of Auto Trends Consulting, in Short Hills, N.J. Moreover, he and others said, Jeep has lots of unrealized potential to grow as an international brand.
Now, it's widely assumed that the Dodge and Chrysler brands wouldn't comprise enough equity to make the cut at a combined GM and Chrysler.
Dodge's truck specialty could be subsumed by a GM brand (although it's possible that Dodge, rather than GMC, might survive as the lone all-truck brand).
And while the Chrysler Town & Country is a formidable premium entry in the minivan segment that Chrysler created, GM easily could excise the minivan platform and redeploy it - and then jettison a Chrysler brand that never really has had a distinct identity over the decades, at least in comparison with the company's other brands.
But while a GM-Chrysler marriage doesn't seem to be on the front burner for an industry that is lurching from one crisis to another this year, LaNeve and his colleagues do have to reckon with continuing questions over the brand lineup they have to work with now.
He brings up Pontiac, for example, as the remaining brand in the GM stable "that everyone questions," and then rolls out sales data. The Pontiac brand sold nearly 203,000 cars this year through August. True, that was down 17 percent from a year earlier.
But instead of conceding a thing to the critics of GM's brand strategy, LaNeve ticked off a handful of the many brands that Pontiac still outsells by far.
"It's twice as big as Scion," he noted. There's also Volkswagen, Mini, Mazda, Subaru, Suzuki and other brands, all still eating Pontiac's dust. "I'm a smart-[non-permissible content removed] when I say it, but I don't hear people questioning those brands. As far as I'm concerned, we don't need them.
Go to the link, there is a lot more stuff.
Go to: http://www.autoobserver.com/2008/10/why-no-more-general-motors-brands-are-likely- -to-follow-hummer.html
The Wall Street Journal is reporting Monday that GM's directors "gave a cool reception" to the idea of acquiring Chrysler's automotive business when it was discussed at last week's board meeting.
Cooler Heads Prevail
Regards,
OW
LaNeve needs a serious reality check.
It is not because of the number of brands that GM is losing money. To look for an example look at Chrysler and Ford. Both lose money and both are down to 3 brands. The basic issue is that the big 3 have many costs that the competitors do not have. They are getting those down but the big 3 do not have a way of cutting off 40 years of a huge number of retirees. Well, actually they did some of that by dropping retiree health care. They also are getting better labor conditions that will greatly reduce cost. Would dropping a couple brands reduce some cost? Yes, but it is minimal compared to the other costs. Also they would lose lots of volume. Please read the link above for lots of outside expert input, not jsut my opinion.
"Chevy is casting its new Camaro as a modernist sports coupe rather than a revisionist pony car, and their case holds water. That argument is backed up with an expected EPA highway fuel-economy rating of 26 mpg, which is 3 higher than the similarly powerful Mustang GT, and equal to the ratings for the Infiniti G37 and BMW 335i."
Luckily, GM is not thinking about any 4-cylinder unit, but for the same 260 HP, 2.0-liter turbocharged, direct-injected four-cylinder that’s used in the Pontiac Solstice and Saturn Sky roadsters.
They might not sell too many SS models but a V-6/ 300HP at the given economy is better than most competitors.
Finally...it's worse than pulling teeth at GM.
Regards,
OW
Is this the case of the geese sucking the golden egg dry?
Just curious, are the large non-health care costs borne by GM pensions? Wouldn't those have been paid into as annuities and not cost anything at this time? Or did GM underfund the pensions such that they now have large fixed costs to retirees coming out of their operational costs? Or something else I've not thought of?
Because if the retirees are sucking away from the general revenue of GM then that is bad - sort of a demographic disaster, especially when the company is shrinking.
The red herring in the Pontiac comments is that Mini, Scion, VW, and Subaru don't sell half their cars to fleets. Now that GM has turned Pontiac over to its new mission, those fleet sales should subside substantially (except for the Torrent, I suppose), but so will overall sales. You can forget the 203K figure. The G8 will sell about 25% of the Grand Prix's annual figure, again because they aren't selling a million G8s to fleets like they did with the Grand Prix. The new G1, or whatever the Pontiac Aveo is called, will be a fleet special just like its Chevy cousin, though, as is the G5, so who knows, maybe the overall volume won't drop so dramatically. But they wil continue to be 40-50% low- or no-profit sales.
If retail sales at Pontiac are more like 100-120K per year, then they are substantially LESS than Subaru, for instance. Mini and Scion, with their specialized missions for their respective owners, shouldn't even have been included in his remarks. They were set up from the start to be niche brands.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Regarding the sales in divisions many say should be killed off - I have to believe most of these would simply go to other GM divisions, especially in the high fleet models. These buyers won't vanish into thin air.
LaNeve is sorely out of touch. Pontiac is a shell of what it used to be. Buick is in the same boat and should be presented as an option to cut sales in the US. I don't see how either one can be revive into a profit making sub-brand. GM simply does not have the cash to support all these brands. This is why I believe LaNeve is out of touch. For GM to even have talks with Chrysler about a merger tells me the situation is more dire then I ever thought. I suspected Chrysler would be sold by this fall (posted that back in February) but I thought GM would be fine.
Here's a very scary article discussing GM and bankruptcy. They may be closer then we think.: http://money.cnn.com/2008/10/14/news/companies/gmwoes_taylor.fortune/index.htm?c- - nn=yes
Also GMAC announcing yesterday that they will only finance people with credit scores over 700 will further hurt GM, not unless dealers can secure regional financing.
What would you suggest GM do? Riding out this downturn in car market does not appear to be an option. I've written on here a few times, consolidate the brands. Whether it is Saturn, Pontiac, GMC, Saab, Buick, etc., two need to go. Buick can exist for the overseas market, it's doing well there. So far GM has used sandpaper and a planer to trim the fat. Time to bring out the chainsaw. Not unless you have a $100 billion laying around to loan them....... Heck, the federal government has $1 trillion to give out, maybe GM can get in line for their handout.
BTW 62vettefp, I like the fact you post these articles. It keeps me informed as i would miss most of them.
Chryslers answer to the small car-Neon and then Caliber. Both real pieces of junk! The Chevrolet Cobalt-inferior to the Civic and Corolla the day it came out.
Yes, maybe they need 7 Billion to figure out how to build competitive products!
Regards,
OW
Never been brand loyal. I think it's my cheap and practical side.
Probably wayyyy yoo late. Too bad, really. The managers in that company did not set strategy and use resources wisely. Over the years, had they been completely fair with the rank and file, there would have been no need for unions in the first place, a big part of the overall failure. Greed begets plunder.
Regards,
OW
Because if the retirees are sucking away from the general revenue of GM then that is bad - sort of a demographic disaster, especially when the company is shrinking.
GM's pension is currently over funded. However GM made large payments inot to it over the last 5 years to get it there. The health care cost, which are huge, will be gone as of Jan 1 and the pensioners will get an extra $300 in their pension to try and make up some of the loss in benefits.
In one year GM will have dropped all kinds of cost that they were not able to get rid of including overcapacity (plants and hourly). I have read these savings will cut $2000 from each vehicle and get them closer to the import cost. They just need time to get there. Unfortunately they have run out.
Thats what they thought about Olds. Did not work that way. People buy by brand and Olds buyers were not interested in Buicks or Chevy's. They went elsewhere and GM lost out on a lot of volume.
I know a lot of guys here thing that buyers see Chevy and Buick and Pontiac as the same but the buyers do not. Many Chevy buyers would never buy a Pontiac and vice versa. If GM drops the Pontiac/Buick/GMC franchise they would see a huge drop in volume and that would put them out of business for sure.
It's called right sizing. Currently, GM is too big to support itself.
Regards,
OW
But here's a sobering thought: GM has probably wasted that much money since 1980, and its market share has shrunk by more than 50% during that time, as the imports gained in strength. You give GM that money now, they won't accomplish your objective, but will just lose it all once again. At least, that's the fear, and certainly my strong conviction.
You may like GM's cars, but GM's management has NEVER been up to snuff, has NEVER had a long-term vision it could stick to, until maybe the last 2 years, when things were truly desperate. And if you put $700 billion in their bank account, they would just start acting fat and stupid once again. Not to mention that some of the key figures that have steered the company with such an iron fist the last 2 years are not far off retirement. Once the team changes over, any gains accomplished on the previous watch will probably be lost.
They don't need money, they need a cold dose of reality and a competent management team. If you get those two elements in place, THEN perhaps the money couldn't hurt!
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It is just a FAST downward spiral with any of these suggestions. One of these suggestions would instantly cost GM money they just do not have and as the experts agree bankruptcy is not possible unless GM is planning on shutting it's doors.
GM is putting out competitive products now and car sales are actually doing well in relation to the rest of the market. Unfortunately it is now a race to see which OEM's can just hang on long enough to get past this economy.
I think Chrysler is a goner. From what I have heard they have gotten rid of most all their engineers so Cerebus is looking for a way out.
My theory is that GM will take on Chrylser and $15 BILLION and give GMAC to Cerebus. Then watch the cutting with Chrysler taking the hits. They will have to work out a dealer buy out/ Union deal with Cerebus before it happens because virtually all Chrylsers plants will close. Hopefully the Chrysler Pension fund is funded.
So far GM has used sandpaper and a planer to trim the fat. Time to bring out the chainsaw.
Perhaps but GM has been planeing away for 7 years. The media missed that. They only talk about the huge hits in the last 2 years. I would say the average cut per year was 5-10% which is huge. And with the union agreement they can finally cut plants.
How profitable would those sales be compared to having a good portion of them but ditching the costs of the extra divisions?
Agree that Chrysler is a goner. Their sales were already in the dumpster. All Cerebus was doing was trying to make Chrysler pretty for another buyer. Even if they sold it for only $10B, they made 25%. Now the cat is out of the bag. I expect their sales to fall even further.
I think a merger between Chrysler and GM is a desperation move. GM has no need for Chrysler or its products. Imagine how much it will cost to consolidate Chrysler dealerships along with negotiating with the union. Not a lot of options for GM right now.
It's going to be ugly.
Seriously though, as a once long time Buick owner, I think that any make becomes a possibility. A lot of long time owners like the dealers that they had. I really did like my old Buick dealer. They sold out to the local Pontiac dealer, making the combined Pontiac Buick dealership that GM was behind, but I found the new dealership not entirely to my liking. The old Buick service manager did go to the new place too, but quit in time. I bought an Oldsmobile Aurora, which was something I sort of wanted instead of the 1995 Buick Riviera in any case, which got me away from the new dealer.
I guess what I am saying is that the Pontiac dealerships will probably turn into some other dealership, and the old Pontiac customers may end up buying the new make that the old dealer is now selling. However, my old Buick dealer was also a Honda dealer, which they moved into the Buick showroom and continued to sell. I might have gone for an Acura, but they did not have that franchise. The Accord was not quite what I wanted.
Now, if Pontiac went away, I think GM could get away with restyling the Solstice and G8 and selling them as Buick models. And if the G6 got an interior upgrade and more Buicky sheetmetal, it might even work. The retractable hardtop would be a cool thing to hang onto. And the Grand Prix is on the way out, anyway, so no loss there. It's not that different from the LaCrosse, anyway.
I think it would be harder to do away with Buick or GMC, though.
In one year GM will have dropped all kinds of cost that they were not able to get rid of including overcapacity (plants and hourly). I have read these savings will cut $2000 from each vehicle and get them closer to the import cost. They just need time to get there. Unfortunately they have run out.
So does that mean in one year the *entire* "boat anchor" of retirees (from a cost perspective) has gone away? Or are there still added costs of the large retiree base that GM will continue to need to cover?
The reason I ask is that we've heard how one of the biggest problems for the legacy automakers in this country is the large retiree cost. I'm curious whether this only improves the situation, or whether it pretty much eliminates the cost problem.
And BTW, 62vet, I also really appreciate your posts and insights.
G3 = Aveo
G5 = Cobalt
Vibe = Matrix
G6 = Malibu / Aura (sedan only; coupe and convertible are unique)
G8 = unique
Torrent = Equinox
Solstice = Sky
Take the G8 and turn it into the Chevy Caprice.
Take the G6 coupe and convertible and turn them into Buicks and offer them only with the 3.6 V6.
Nobody will miss the rest.
it'd be one thing if imports from China were eating our lunch, but the fact that Honda and Toyota are building many cars here in the states tells me subsidizing the "big" three is just a waste of money.
If it weren't for the Japanese showing up with their cars back in the 70's, I bet we'd still be buying Granadas, Pintos and Vegas to this day.
But for the life of me I don't know what they've been up to since about 1975.
Some truly brilliant and inspired moments, run in parallel with ... stupefying lunacy.
How many Lumina's did Chevy try to market at once? Or how about Olds and the parallel Cutlasses for a couple years.
And now...
I kind of think they may have to go bankrupt to drop a couple of brands, shutter a third of the dealerships, and figure out how to become a car company instead of a health benefits company. Whatever one's feelings about the UAW, it brings on a huge amount of inertia.
Chevy, Caddy, Vauxhall/Opel/Saturn/Holden, Saab is what emerges in 4 years.
I'd hate to see Buick go, but darned if I can tell any difference between the two remaining models they have (and I've scanned their website), and Pontiac... well its styling and its purpose appear as useful as the proverbial something on a boar hog.
They can make some really good stuff, and nobody's done powertrain as well, but either there isn't any focus or there are dozens of them.
Shouldn't be long.
The division that has no business being a GM right now is Saturn. Does GM reallly need the 15-20K units Saturn sell every month? Honda and Toyota can sell hat many cars with a single model. Also, Saturn is the easiest brand to let go since it has its own sale channels.
I thought they would choose either the Ford Flex or the Chevy Traverse. I was wrong.
Possible scenario would eliminate rival, reduce excess capacity; pact similar to AMC purchase.
David Shepardson, Christine Tierney and Alisa Priddle / The Detroit News
General Motors Corp. could swallow Chrysler LLC and end the Auburn Hills automaker's 83-year existence under one scenario being discussed by GM and Chrysler's owner, Cerberus Capital Management LP, said a source briefed on the talks.
Such a deal, similar to Chrysler's 1987 acquisition of American Motors Corp., would allow GM to pick up some of Chrysler's 2.7 million in annual sales -- while avoiding the bulk of Chrysler's costs, the source said.
GM, Cerberus and Chrysler all declined to comment.
http://detnews.com/apps/pbcs.dll/article?AID=/20081016/AUTO01/810160399/1148
Sales were driven largely by the continuing popularity of the company's Buick brand, led by the Excelled sedan and hatchback. The company sold 105,000 of those two models between January and September, according to the China Auto Industry Association, although GM gave no figures for the entire year
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