GM should sell Pontiac
Registered User
Joined: May 2000
Posts: 210
From: Cincinnati, OH
In my eyes, the Pontiac name is not damaged. It has zero business value however because if one wanted to buy Pontiac, along with the name, the buyer would be getting LOTS of liabilities and with the prospect of have a dealer network who can't pay their bills and live off of credit -- more so than they should.
There is not a bank or VC firm in existence who would float a loan for anyone to buy Pontiac because, in their eyes, there is no way that the interest could be satisfied out of cash flow -- forget about ever getting the principle back.
Therefore, the only one who can buy Pontiac is a firm who is absolutely flush with cash, has room to take on tons of liability without wrecking their balance sheet, etc. The problem is that anyone in that position would look at the acquisition and say to themselves, "Why buy Pontiac and its customers? We can TAKE the business are a far lower cost and far less liability."
And that, my friends, is why GM is simply shuttering Pontiac and not looking to sell it.
There is not a bank or VC firm in existence who would float a loan for anyone to buy Pontiac because, in their eyes, there is no way that the interest could be satisfied out of cash flow -- forget about ever getting the principle back.
Therefore, the only one who can buy Pontiac is a firm who is absolutely flush with cash, has room to take on tons of liability without wrecking their balance sheet, etc. The problem is that anyone in that position would look at the acquisition and say to themselves, "Why buy Pontiac and its customers? We can TAKE the business are a far lower cost and far less liability."
And that, my friends, is why GM is simply shuttering Pontiac and not looking to sell it.
Registered User
Joined: Mar 2007
Posts: 1,173
If GM closes Pontiac rather than sell the brand, they can still make money off of licensing on nostalgia memorabilia and merchandise.
Sell the Pontiac name, and they lose that capability.
Saturn and Hummer don't hold the same merchandising value and therefore should be sold while there still is some value left.
Sell the Pontiac name, and they lose that capability.
Saturn and Hummer don't hold the same merchandising value and therefore should be sold while there still is some value left.
Also, they are haveing a hard enough time selling brands already.
Registered User
Joined: Dec 2005
Posts: 1,502
If GM closes Pontiac rather than sell the brand, they can still make money off of licensing on nostalgia memorabilia and merchandise.
Sell the Pontiac name, and they lose that capability.
Saturn and Hummer don't hold the same merchandising value and therefore should be sold while there still is some value left.
Sell the Pontiac name, and they lose that capability.
Saturn and Hummer don't hold the same merchandising value and therefore should be sold while there still is some value left.
My point is that say a Chinese manufacturer is already going to have huge perception issues, taking on the Pontiac name would only make things worse.
Registered User
Joined: Sep 2002
Posts: 9,705
From: Oakland, California
Doesn't matter, the perception exists. GM knew it, that's why they junked their nameplate equity and went to alphanumerics.
My point is that say a Chinese manufacturer is already going to have huge perception issues, taking on the Pontiac name would only make things worse.
My point is that say a Chinese manufacturer is already going to have huge perception issues, taking on the Pontiac name would only make things worse.
Registered User
Joined: Dec 2005
Posts: 1,502
Apologies! I meant to reply to this one:
You do know that the year the Grand Prix took top honors in quality and reliability was also the year GM decided to kill the car, right?
Pontiac was doomed by GM's brass, but they don't have quality problems. Forget what happened in the 80's and early 90's because every GM car sucked.
Instead post 2000 Pontiac produced solid cars.
Pontiac was doomed by GM's brass, but they don't have quality problems. Forget what happened in the 80's and early 90's because every GM car sucked.
Instead post 2000 Pontiac produced solid cars.
Registered User
Joined: Mar 2001
Posts: 13,713
From: The Golden State
Ironically, many of Holden's previous designs and company "language" was based on the North American Pontiac.
I have a counter proposal to throw out there to mull on.
Take the Saturn and convert it to Holden.
Utilize the established dealer network for sales, utilize the VE and WE from Holden, keep the Aura, let Sky run out it's life. The lineup would be stylish and mid-market.
Holden would handle the marketing. Dealers who are trying to buy Saturn today and staff it with whatever cars they can find would instead invest and become partial owners in the Holden USA brand.
Of course it wouldn't save the Pontiac or Saturn name, but it would expand Holden into the US (something it has been itching to do... and GM refuesed... for decades), GM North America would be rid of 2 brands at once while actually getting something for it (via dealers and Holden's side of the GM ledger, and perhaps give it quasi-independent status allowing it to have it's own stocks).
It would also give GM a truly import brand. Something it's tried to do with one US division then another (Pontiac, Saturn, Oldsmobile) since the 1970s.
I have a counter proposal to throw out there to mull on.
Take the Saturn and convert it to Holden.
Utilize the established dealer network for sales, utilize the VE and WE from Holden, keep the Aura, let Sky run out it's life. The lineup would be stylish and mid-market.
Holden would handle the marketing. Dealers who are trying to buy Saturn today and staff it with whatever cars they can find would instead invest and become partial owners in the Holden USA brand.
Of course it wouldn't save the Pontiac or Saturn name, but it would expand Holden into the US (something it has been itching to do... and GM refuesed... for decades), GM North America would be rid of 2 brands at once while actually getting something for it (via dealers and Holden's side of the GM ledger, and perhaps give it quasi-independent status allowing it to have it's own stocks).
It would also give GM a truly import brand. Something it's tried to do with one US division then another (Pontiac, Saturn, Oldsmobile) since the 1970s.
Last edited by guionM; May 1, 2009 at 01:53 PM.
Registered User
Joined: Jan 2002
Posts: 5,308
From: Oshawa - Home of the 5th-gen
The potential was there.Unfortunately, it's just another in a long line of upper management F-ups
, ie: killing the 4th-gen F-bodies YEARS before they were actually discontinued in 2002, and always being "late-to-the-party" with new model introductions (PT Cruiser --> HHR ..... retro Mustang --> retro Camaro).Not that I'm "glad" to see ALL of Pontiac go, but the concept of re-badging is ridiculous. GM needed to "clean up" their line-up years ago. They should have streamlined to one or two brands like they're NOW doing (too little, too late).
I wish they could hold onto a couple of the models from Pontiac though ... specifically, the G8 and the Sky ... they're both really great cars in their own way
.
Registered User
Joined: Sep 2004
Posts: 1,448
From: Irving, TX
Ironically, many of Holden's previous designs and company "language" was based on the North American Pontiac.
I have a counter proposal to throw out there to mull on.
Take the Saturn and convert it to Holden.
Utilize the established dealer network for sales, utilize the VE and WE from Holden, keep the Aura, let Sky run out it's life. The lineup would be stylish and mid-market.
Holden would handle the marketing. Dealers who are trying to buy Saturn today and staff it with whatever cars they can find would instead invest and become partial owners in the Holden USA brand.
Of course it wouldn't save the Pontiac or Saturn name, but it would expand Holden into the US (something it has been itching to do... and GM refuesed... for decades), GM North America would be rid of 2 brands at once while actually getting something for it (via dealers and Holden's side of the GM ledger, and perhaps give it quasi-independent status allowing it to have it's own stocks).
It would also give GM a truly import brand. Something it's tried to do with one US division then another (Pontiac, Saturn, Oldsmobile) since the 1970s.
I have a counter proposal to throw out there to mull on.
Take the Saturn and convert it to Holden.
Utilize the established dealer network for sales, utilize the VE and WE from Holden, keep the Aura, let Sky run out it's life. The lineup would be stylish and mid-market.
Holden would handle the marketing. Dealers who are trying to buy Saturn today and staff it with whatever cars they can find would instead invest and become partial owners in the Holden USA brand.
Of course it wouldn't save the Pontiac or Saturn name, but it would expand Holden into the US (something it has been itching to do... and GM refuesed... for decades), GM North America would be rid of 2 brands at once while actually getting something for it (via dealers and Holden's side of the GM ledger, and perhaps give it quasi-independent status allowing it to have it's own stocks).
It would also give GM a truly import brand. Something it's tried to do with one US division then another (Pontiac, Saturn, Oldsmobile) since the 1970s.
Also, Saturn was priced the same as Chevy, or pretty close in most cases. I wouldn't consider them mid market.
Thread Starter
Registered User
Joined: Aug 2001
Posts: 388
From: Racine, WI
It seems it was a pretty good idea. Here is a link to the article I wrote about this very subject that was featured on BusinessWeek.com on May 22.
http://www.businessweek.com/bwdaily/...521_339302.htm
It was a surprise to me that the story was featured on three other major websites as well.
Registered User
Joined: Sep 2004
Posts: 1,448
From: Irving, TX
Pontiac is basically rebadged Chevys today. GM doesn't want too many brands between Chevy and Caddy. Pontiac and Saturn were too close to Chevy so they were competing for the same buyers.
Buick is higher than those, as well as GMC, which also makes money.