I guess we will soon know what is in store for GM and Chrysler as we are less than a week away from the government's imposed deadline of March 31, when both companies need to have their plans for survival completely in order.

Perhaps it would be smart to avoid the internet one week from today. I can see the threads now...

GM files Chapter 7, plans to liquidate assets;
SAIC buys Corvette, promises Asian-built Hybrid model by 2011;
Camaro canceled!

 

Nah, according to Guy worst case scenario is G.M. just becomes Chevrolet. So Camaro & Corvette should be safe. That should also assuage warranty worries, just take your Pontiac, Cadillac, Buick, Saturn, GMC, Hummer to your local Chevy dealer (I'm sure they'd love it.).

 

When I last took my Tahoe in for service, the Chevy-Cadillac dealer had a huge sign out front that said "We Service GMC, Buick and Pontiac as well".

 

I love the history of the GM brands but to be honest having one brand, like Chevy and Cadillac as a mainstream brand and axing the others would be a good idea in this day and age and sure as hell streamline production of vehicles without all the brand variations. I'm no whiz concerning the auto industry but the one core brand with a luxury division seems to working pretty good for Ford.

 

Say this in the right thread, and a dozen marque fans will come out and tell you how Saturn, Pontiac, Saab will bring in the $$$ if only GM did it right.

 

I would love it if GM did all the brands right but they havent for a while, even though they are making great cars like the G8 now. It's a shame that they cant manage to run all their marks to their full potential. But what I was trying to say before is that more in a sense to keep GM making money in the current state of things that simplifying the whole operation would seem to make more sense.

 

My question would be:

If GM drops to Chevrolet and Cadillac only, how are they ever going to repay all of the money they owe and become profitable again? The other GM divisions sell quite a large number of cars for GM and you can't assume those buyers will buy a Chevy. If anything, they will probably be pissed their brand was canceled (or bought out???) and go to another brand. I also think a large percentage of people would stray from Chevrolet for several years until they can prove they won't go under completely. I think GM would lose a large % of market share which they may never recover. Smaller is fine, but smaller is going to take a lot longer to pay off debt. Unless that all somehow gets wiped out... I still don't fully understand how bankruptcy works.

 

I agree with you, by the way. The different brands all made sense in a different era. I also think it's a little silly to paint GM as totally incompetent. They've made mistakes, but every human endeavor makes mistakes. It just turns out that it costs too much to develop all the models they have, and money spent developing a Pontiac G6 could go to making a Chevy Malibu better instead. There's just no way around that. So the only way it makes sense to develop a G6 is if doing so results in more sales than improving the Malibu.

 

I've taken my last two Pontiacs to the local Chev dealer for service - it's closer to work so it's more convenient than the Pontiac dealer I bought them from with no problems whatsoever - a GM car is a GM car, it doesn't matter what brand it is - Saab I'm not so sure about since it's somewhat different from the rest - at least on the outside.

 

They'd simply have to sell more Chevys.

Seriously though, Chevrolet would need to focus on what makes them sell volume models, which means inexpensive, efficient, cookie-cutter appliance sedans and crossovers.

Under the only Chevrolet and Cadillac survive scenario, Cadillac could remain ultra-high-end, and in fact possibly push even further in that direction. To fill the gap, GM would at least need a performance division, or at the very least a niche brand for North America. Call it GM Performance or call-it nothing, however I still believe there is a market, at least in North America for Corvettes, Camaros, Pontiac G8s and whatever goodies GM has in store for its enthusiast buyers. There really isn't much demand for Buick in North America (China is a different story altogether), and you could easily rebadge Saturns as Chevrolets, kind of in the same way GM phased out Geo.

I doubt any of this will happen though. My guess is we'll see GM sell SAAB; phase out Hummer and Saturn; and at least in North American, keep two distinct dealership models: Chevrolet-Cadillac and Buick-Pontiac-GMC, just as GM has been saying all along. The only thing really in flux is which models survive under a meaner and leaner GM.

 

There's an old business adage that says if something costs you $10 and you sell it for $9, you can't make that up with volume.


GM must concentrate it's focus and resources on fewer products to create profit. Selling 100,000 G6's per year at a loss won't get you there.

 

Well, a week to go and no agreement with the bondholders to reduce debt. My guess is that GM will end up in Chapter 11.

 

This scenario would make much more sense to me.


You are absolutely correct, but good luck convincing the "General American Public" that a Chevy is worth more than a Toyota or Honda or God forbid that they are at least worth the SAME! (I'm being serious) A lot of people buy Chevy because they are "known" as a "cheap" brand. *Most* people won't pay a premium price for a Chevrolet car. The way the majority of Americans think of Chevrolet needs to change before GM will be able to take cash off the hoods

 

Which is why the UAW may actually need to work for less than the Toyota and Honda workers, in the long run. Unless Toyota and Honda are so profitable that GM still be profitable underselling Toyota and Honda.

The other option is being profitable at the sales volume where the Chevy is sold at the same price. I don't know what that volume would be, but it would be less than today.

 

That needs to change. If it doesn't, GM (or whatever is post-BK), is dead - simple as that. This strategy of bribing people to buy cars has been an unmitigated disaster.

The Malibu has shown us that buyers will respond with higher transaction prices when offered something desirable, something on par with it's competition. Hopefully GM won't drop the ball, and will have a timely replacement for it. The goal here would be to bring out a better car before every last bit of equity is squeezed out the current one, and the brand name becomes worthless. GM is good at doing that.

The whole car franchise for Chevy - *correction* - GM, will be a flawlessly executed Malibu, a no excuses Cruze, a much more polished Gamma car than what we have now and in time --- a more relevant Camaro.