May 07, 2007
Reengineering General Motors

I've been kicking this idea around in my head for several months, since talking to my mother's neighbor (a long-time GM engineer) about the company's woes. I recall CG Hill writing something similar some time ago over at Dustbury, although I am not ready to go plowing through his enormous archives to find it..

GM currently sells vehicles under eight nameplates here in the United States—Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, and Saturn. There is no reason why they need that many nameplates, and the tremendous advertising resources they expend to promote all those brands could be better used elsewhere within the company. I have some ideas about each of their brands, and what to do with them.

Buick—appeals to an aging demographic, and their near-total replacement of their lineup has not translated into increased sales, which dropped 30% from last year. Still, there is some potential there, as much of the shrinkage occurred in the fleet-sales business, as GM cuts back on the discounts offered to volume buyers.

Cadillac—One of GM's success stories. They successfully managed to take a nameplate with even worse demographics than Buick and turn it into a desirable brand.

Chevrolet—The corporation's mainstay; this division is crucial to the company's success, due to the sheer volume of vehicles they move every year.

GMC and Hummer—Why do these divisions exist? Sales are stong, but since they offer a variety of large, not terribly fuel-efficient vehicles, they are vulnerable to volatile gas prices, although most of their affluent buyers are not as concerned about driving costs as their less-affluent counterparts at Chevrolet.

Pontiac— the "excitement" division has not offered anything exciting for quite some time now, as their highest volume vehicle, the Grand Prix, is also the highest-volume fleet sales car sold by GM. Their most interesting offerings are not developed in house; the Solstice is a rebadged Saturn, and the Vibe is a joint project with Toyota, essentially the same vehicle as the Toyota Matrix. The GTO was a Holden Commodore, an Australian vehicle also rebadged and offered in Britain.

Saab—Saab's niche for quirky vehicles is not large enough to cut it in the cutthroat US market.

Saturn—Saturn jettisoned everything that made them "A different kind of car" and saw their sales rise dramatically. Many of their new and future offerings are redesigns of vehicles designed in Europe by GM's Opel division, which is one of the largest auto manufacturers in Europe. In any case, their brand already appeals to a demographic which GM desperately needs to capture— the 25-49 buyer with higher income than the Chevrolet market.


My proposal is to halve the number of brands sold here. Here's what I suggest:

Merge Pontiac into Chevrolet. Eliminate the overlapping models and rename the remaining models with Chevrolet-appropriate names if necessary.

Merge GMC into Buick. The two divisions complement each other nicely, with very little overlap in model range or demographics, although both marques appeal to the same income brackets. Getting GMC customers into a dealership that sells Buicks may get them to take a look at what is available and provide a bump to Buick sales.

Merge Hummer into Cadillac. Again, both brands appeal to similar demographics with no overlap in vehicle range at all. Hummer is another niche vehicle that does not need its own division within GM.

Merge Saab into Opel and continue the Opel/Saturn partnership. Since Saab is already selling vehicles based on Opel models (and built in Opel plants in Germany) this won't have much effect on the company, except for the savings in marketing and management. GM's Vauxhall division (its UK Marque), which sells rebadged Opels and Holdens, should also be closed down at the same time, resulting in even more savings.


Obviously, this proposal is not likely feasible in its present form. The issue of dealer networks is another story in and of itself, and killing five brands would raise a huge fuss from the unions, regardless of the impact on manufacturing capacity. And since two of my targeted divisions are European Union-based, there is the possibility of getting the bureaucrats in Brussels involved, which would be a headache GM really doesn't need right now. But GM needs to do something a lot more dramatic than closing a few plants, selling the same vehicle under five different names, and offering "factory to dealer incentives" that eliminate every last cent of profit from their vehicles.

posted on May 07, 2007 12:46 PM


Do you even know what GMC is? GMC sells trucks. Rebadged Chevy trucks. They don't have any cars. Just trucks. Supposedly a little better equipped than the comparable Chevy truck, but basically a Chevy with a GMC badge on it. Unlike Pontiac and Chevy where the body panels are different, the GMC body panels are interchangeable with Chevy.

So, to put GMC with Buick only means you're giving Buick a truck line that is basically a Chevy.

posted by Guess on May 9, 2007 01:00 PM

No, I obviously have NO idea that GMC sells only trucks, and Buick has only one truck—an SUV, which they are dropping at the end of the current model year.

Jesus, what a tool.

"Giving Buick a truck line" was the point of that particular merge, since the GMC division is one of the few GM divisions that is actually growing, instead of falling off a cliff, like Pontiac, or running in place, like Chevrolet. Buick doesn't sell trucks, but they target the same income bracket as GMC. Buick owners (in North America, at least) are significantly older than GMC division buyers, which is a liability unless Buick can find someone to replace the older buyers as they die off. Getting a truck buyer into a showroom that sells Buicks might persuade them to look at Buick's cars when it comes time to replace their other vehicles.

As to the "rebadged" snark, read through my post and you will notice I use that EXACT word several times. All makers with more than one brand sell rebadged vehicles, but just as the Lincoln brand has more snob appeal than Ford, the Navigator sold for much more than the essentially identical Ford Expedition. (In fact, the Navigator survived after the Expedition was dropped due to slow sales.) The point is that people who are looking for a high-end truck are not going to shop at Chevrolet or Ford, but may go to a Buick or Lincoln dealer.

posted by timekeeper on May 9, 2007 01:41 PM

Actually, you know little about Lincoln/Mercury/Ford, too. While there are similarities, they don't drive the same.

For instance, the Lincoln Navigator is based on the Ford Expedition, but the suspension and drive train are not the same. There is a huge difference in how they drive. They don't even feel like the same vehicle. Even the hoods are different.

The Lincoln Continental is built on the Crown Victoria chassis, but there is no way you can ever confuse the two even when blindfolded. Again, they feel different. They have different suspensions. They drive different. They handle different.

When it comes to GM trucks, there is no difference in how they drive. The GMC feels like the cheaper Chevy. All mechanical parts from the GMC are interchangeable with the Chevy. The same is not true with the Navigator and the Expedition.

I don't see Buick drivers and GMC drivers being the same demographic. I just can't see a Florida Q-tip hobbling into a Buick showroom and going, "Oh! I think I'll buy a Buick truck instead of a sedan."

Trucks are bought by younger people. Buicks are bought by older people who want a Cadillac but wouldn't be caught dead driving one.

posted by Guess on May 9, 2007 05:09 PM

If you want to get nitpicky, the GMC and Chevrolet versions of each model have different hoods and bumper and wheel wheel designs, and (in the case of the Sierra Denali) the transmissions are different. The Sierra Denali has the 6L90 6-speed transmission, which is not available on the Silverado. Of course, we haven't even discussed the Acadia, which has no Chevrolet analogue at all.

You say that you don't see the Buick and GMC divisions attracting the same demographic. It's interesting that you notice that, because I specifically mentioned that in both my original post, and in my first response. They attact different ages in the same income bracket. And my reasoning was the opposite of what you are claiming I said; what I said was that GMC buyers might take a look at Buick's passenger cars, since a lot of families who own more than one vehicle have both a car and an SUV or truck. Nobody expects my 71 year-old Buick-driving mother in Florida to hop into a Denali and decide that she has to have it.

posted by timekeeper on May 9, 2007 06:24 PM

I can't speak for the rest of the country, but based on my (unscientfic) observations in CA the Saturn is either a chick car or a gay man's car.

If a man is driving, it invariably has a rainbow flag on the bumper.

My problem with american cars is how horrible their interiors are. However, my experience is mostly with rental cars which are not the high end interiors so I could be biased.

posted by Kevin on May 11, 2007 01:14 PM

The last Lincoln Continentals were built in 2002, and they were front-wheel-drive unibodies; obviously they were not built on the Crown Victoria full-frame rear-wheel-drive chassis.

posted by CGHill on May 13, 2007 05:04 PM

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