GM took Pontiac off life-support Monday. Odds are this is just a waystation to an even smaller General Motors. The General Motors we'll likely see, whether in 2010 or in 2015, may be GM's two extremes: Chevrolet in the mass market, Cadillac at the high end. Everything else is a goner. The impact on the future of cars, particularly life-saving technologies such as OnStar, will be minimal. GM gets credit - lots of it - for pioneering OnStar and putting it in every vehicle, and for driving down the cost of driver safety aids to half the cost of what you may for the same thing in a European luxury sedan. GM's action Monday seems to substantiate the whispers of the 1950s that grew to a crescendo by the 1990s: Chevrolet, Pontiac (gone by 2010), Oldsmobile (R.I.P. 2004), Buick, and Cadillac were more alike than different under the skin. Here's my projection for the newer, leaner GM:
Buick is next to go. When imports were only a nuisance factor and many buyers remained GM people or Ford people all their lives, there was a progression: Start with a Chevrolet, then move up through Pontiac to Oldsmobile and Buick and finally at the pinnacle of your career, to Cadillac (so long as your boss hadn't stopped at Buick). Buick is no longer an almost-Cadillac but another soft-riding brand with aging demographics and not much mindshare in the critical markets such as California. Industry analyst Maryann Keller says dropping Buick focuses GM's attention where it should be: One mass market brand, one luxury brand. Just like Toyota and Lexus.
Too bad for Saab, Saturn. Quirky and safe doesn't have much cachet so Saab is likely to be shut down unless a buyer can be found. If one is found, Saab starts from a deep technology hole compared to Volvo, BMW, Audi, Lexus, and Infiniti, so sooner or later, Saab's owners will place a call to Dr. Kevorkian . Saturn dies because its unique selling proposition - good cars sold by dealerships that treated you right - only got the second part right. GM VP Bob Lutz recently griped that GM gave Saturn great cars and buyers never showed up. The scratching sound you hear is the pen running dry as history is being recast in a more favorable light. Saturn didn't have that many great cars.
See ya, Hummer. Hummer was cool for shock effect for a couple years before anyone knew what "carbon offset" meant. Dinoasaurs died off as the earth cooled and for Hummer the it may happen as the earth (allegedly, right?) warms.
Opel lives on in Europe. GM makes pretty good cars in Europe under the Opel brand and would have done better here if more Opels were imported. It's a viable business and someone will buy.
Trucks live on, too. Doesn't matter if they're Chevrolet or GMC, or both for a while, or forever. You can't haul construction materials in an Isuzu pickup. Nor can you be a real man with a compact pickup in many states.
Leaner dealership structure can't hurt. GM has too many dealers selling too few cars and hopes 500 more take buyouts (along with another 21K GM workers). Even without fewer sales, fewer dealers were needed because cars need less service. If you go in for service four times a year, you want a dealer 5 miles away. If it's once a year, 10 or 15 miles is acceptable. Now, if only, GM can convince the surviving dealers to treat customers better.
Technology lives on. GM stumbled conceiving and marketing cars. Don't blame the engineers. GM's technology is world-class, and often cheaper than what others charge for the same or similar technology, whether active cruise control or blind spot detection.
Safety technology lives on. No matter how small GM becomes, it will continue with the OnStar safety and calling service, which is a positive selling point. In the future, there's a question if GM wants to stick with OnStar or partner with a third party as Ford has done with Microsoft, Nuance, and others for Ford Sync. GM sees OnStar as a safety package worth $15 a month; Ford sees Sync as an entertainment and safety package that helps sell cars. But not as a revenue service since Sync is free, including for its Mayday calling (911 Assist).
Foreign automakers invest in Michigan R&D. Non-U.S. automakers will find it prudent financially and politically to site some of their high-tech R&D efforts in Michigan. Michigan has a car-centered technology base and it may be easier to move there than lure away a dozen people, a dozen there. Plus, land and buildings are cheap to come by in Michigan, and the University of Michigan's research facilities aren't going to be shipped out of Ann Arbor.
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April 27, 2009 2:51 PM
Good grief, who came up with this? The author clearly knows nothing about the GLOBAL car business, which GM is in. Just because something doesn't do well in the US doesn't mean it isn't successful elsewhere. And the US isn't the only large market for cars in the world.
Buick: one of the hottest selling brands in what has recently become the largest car market in the world, China. Too much revenue and profit to be lost for GM to kill it. It will continue along as a bridge between Chevy and Cadillac in N. America for a while, since it still has "ok" sales numbers, and some people won't buy an upscale Chevy or a cheaper Cadillac.
Saturn: won't go away, will become a dealer/distribution network for someone (possibly Chery or Tata), and may still have a few models built under contract by GM.
Saab: the Swedish govn't won't let it die, at least not right away. Expect it to soldier on for a while, primarily in Europe, since its main market was Europe and not the US.
Hummer: does quite well outside of N. America, particularly the Gulf region and parts of Asia, will be bought by someone (likely a Gulf-region investor), and will continue along in N. America for specialty vehicles (like fire/rescue and disaster response), not general retail like today.
Opel/Vauxhall: of course it will be around, its one of the most successful and largest brands in Europe. GM will still own part of it, but their sale is about trying to build goodwill in the European market (partly to atone for Saab). GM has said it will take the proceeds of the sale, and turn around and invest it right back in Opel, just without majority control.
OnStar vs. Sync: OnStar is a cellphone-based system providing emergency services, directions, etc. using human operators. Except for the 911 service, Sync is a PC in your car, making Microsoft just another component supplier, not a service provide. Besides, Ford just builds the cost of the limited service it offers into the price of the car. OnStar used to be the same way until GM made is a separate entity. OnStar has tried for a while to get into non-GM cars, so expect that to continue.
R&D: possibly, but most non-US brands seem to prefer California, since it puts them in the heart of the biggest market and the most active state when it comes to trying to influence or regulate automotive technology.
April 27, 2009 3:02 PM
The demise of GM is long overdue. They've been making tanks and mediocre cars for far too long. Trying to play catch up now is too little too late. I agree that Pontiac will not be their last brand to go.
April 27, 2009 4:10 PM
In the last few years, the overall quality of most of GM's cars has greatly improved. Did anybody go to the Detroit auto show this year? They had some great cars. The Chevy Cruze, to replace the Cobalt. And they better keep Buick--I want the 2010 LaCrosse! It's gorgeous.
April 27, 2009 5:51 PM
Just responding to the previous comments about Buick and Opel.
First, I don't think GM is trying to atone for anything by shedding majority control of Opel. Opel simply hasn't made any money for GM in 10 or 15 years, and the European unions make the UAW seem like pussycats. It's a shame they have to let go of Opel, but as Fritz Henderson said, everybody now has to pay their own freight.
As to Buick, the people trying to push Buick into a grave are DEAD WRONG ... at least if they continue with the "American Lexus" strategy. Right now, I drive a 2002 Acura TL that cost me $27,000 new. I enjoy the quiet, smooth ride, my Bose stereo and the nicer appointments. To me, the Acura is NOT a luxury car, but the natural evolution of Oldsmobile or Buick had GM's management not been so boneheaded. You will NEVER get me to buy a Toyota or a Chevrolet. I simply refuse to load up a cheap mass-market car intended to be an econobox with a bunch of leather. And, I will NEVER pay $50,000 for a Caddy. Paying that much for a car is stupid (and there are still some of us who actually PAY for their cars).
Thus, Buick represents a GREAT opportunity to appeal to people like me who want something above-average but are too cheap (or smart, maybe) to go high-end. When you pay cash, it hurts to write out a $45,000 check, but it hurts a lot less to write one out for $28,000. This part of the market has been lacking until now because of badge engineering, but if Buick starts putting out cars that are as well executed as the Enclave, they will have a winner.
April 27, 2009 9:01 PM
The beginning of the end started for GM on 12/12/2000, when it announced that it would drop Oldsmobile. Now the process continues with the cutting of Pontiac. And that will not stop. Buick will be next; it's just a matter of when, not if. And Cadillac and Chevrolet are not immune to the laws of economics; there's no guarantee for them.
10 years from, there may not be a GM.
April 27, 2009 9:46 PM
I have been a GM driver for 50 years. Owned every one made and NEVER have had a warranty call on any of them. GM's problem was never attacking the American Press that fell for all the foreign hype and the american press started downing GM and the other american cars to win foreign praise. GM should keep Buick and dump GMC, Chevy makes the same trucks, Chevy has become a Cadillac but people do not realize it since they never drive both to compare and the Buick line matches Cadillac also for options, comfort, drivability.
It's definitely time for a real American backing for American goods and if not too late GM should push all the great features that are standard on US and a $4000 option or more on foreign.
Go GM, I will drive them until I die!!!!!!
April 28, 2009 12:37 AM
At age 70 I bought my first new Cadillac.
Hoping the best for GM.
April 28, 2009 1:10 AM
Ford will become the best U.S. automaker, so why hasn't the stock soared?
April 28, 2009 5:23 AM
People have sentimental feelings about the Pontiac, Buick and Chevrolet names, but the name badge isn't what makes the car go. I've thought for a long time that keeping the profusion of brands alive decades after the original companies had been merged out of existence was rather silly and wasteful. Much of GM's offerings overlapped and divisions were stealing business from each other. Their entire product line could be folded into just a "General Motors" brand, with various vehicle model numbers and price points based on features. Ditto for Ford, Chrysler, and all the rest of them.
April 28, 2009 7:47 AM
Saab is nowhere near in a "deep technology hole." Their cars were on the IIHS "Best Pick" list before the other lux brands, and their history with turbocharging and light FWD architecture puts them at an advantage in today's gas-crunch marketplace. They just need an owner who won't rape them for their technology (GM's using a Saab-designed turbo in the "savior" Cruze) and will actually allow them to redesign their aging cars. Still, Saab makes the best they can with what they have, and innovations such as SAHR, EBD, ReAxs, and Trionic have been made on their shoestring budget. With a "real" budget they could do quite well.
April 28, 2009 11:42 AM
I am 73 years young, and I have owned Ford, Chrysler and GM vehicles. The last descent Ford was a 1955 Fairlane 500. The last Chrysler was a 1957 Dodge D500. In between and up to this date, I have had GM cars and trucks and never regretted a minute. As far as shutting down the Pontiac line, I think is a mistake, the same as the mistake they made shutting down the Oldsmobile line. Getting rid of the Hummer, Yukon and Tahoe makes sense. Afterall, are we not striving to get vehicles that are more economical to
operate? When I look at the bodylines of the Chevrolet, Pontiac, Buick and Cadillac, there isn't one foreign vehicle that can compete. These are good looking vehicles. I don't believe that the trouble with the Big Three would be in the shape they are today, if our government years ago restricted the import of foreign cars. Then to make matters worse, they allowed foreign car manufactures to build their factories here. I believe my feelings are shared by many, at least I hope so. GM will survive if they get a new CEO and Board of Directors.
April 28, 2009 12:25 PM
Uh, Danny K., you do know that Acura you are driving is just Honda with the appointments you mentioned regarding a Chevrolet or Toyota and re-named Acura, right?
I don't think anyone knows exactly what will happen to GM, Ford or Chrysler at this point other than it will need to be drastic.
I owned an Opel 1900, one of only 4 that I know of ever brought into the U.S.A. (the 1900 model that is). It had, surprise surprise, a 1.9 liter cast iron overhead cam engine and was a 4 door sedan. The car was actually given to us by a friend when my wife needed a car and we only had one. It had been sitting outside and had vines growing all over it. I put in a battery, aired up the tires (and yes they did hold air)checked the oil and put in some fuel and drove it to my house where I could put it back into good condition. Since it was a rare model here, I had to special order any parts via a Buick dealer. We drove that Opel 1900 for at least 5 years, it had well over 200,000 miles on it when one of the ball joints failed in the front end and finally I couldn't get parts for it. I really wish GM had kept bringing in the Opels, they were great cars.
April 28, 2009 12:31 PM
The last GM car I drove for any length of time was a Pontiac Grand Prix (I think) rental car a couple of years ago. It wasn't a terrible car, but when you are used to driving a Honda/Acura product (which I consider to have the best engineering), you can immediately sense how it falls short. Again, it wasn't a bad car, but there was something about just the feel of the car that didn't measure up. It just didn't feel as tight as what I'm used to. Authors on other blogs said it best (paraprasing) that GM has treated its customers like marketing statistics, whereas the BMW's, Hondas and Audis of this world focussed on engineering their products. The best in class sweat out the engineering details and provide superior products while GM just talks about it.
April 28, 2009 12:48 PM
cnc002: I am well aware of the fact that my Acura TL indeed starts out as a gussied up Honda Accord. I struggled with this very issue when buying the car, thinking then it was way too similar. But after driviing it for 7 years now, I can appreciate that it is much more than that. There is, for instance, sound deadening and the actual metal skin on the cars is of a heavier gauge. The leather seats are of a heavier quality of leather (or at least seemed that way), the carpet plusher, nicer guage of rubber on the dash and an EXCELLENT Bose stereo system. Sounds great and has great radio reception as well. The point is that you can throw on as much leather and other options onto a Chevy as you want, but you still won't get this level of refinement. That, in my mind, is why Buick is a great opportunity for GM, if executed properly`.
Overall, you do get a different driving experience than you do with a Honda. If I buy a Honda, which I have before, I'm not going to waste money loading it up with leather and a bunch of options .... I'm going to get the $19,300 LX-P version ($4,000 off sticker) which I just bought for my mother. But then again, why do many people wear Nikes instead of sneakers off the rack from Wal-mart? There is a difference that is important to people.
To better illustrate, go drive a Buick Enclave, then go drive the Chevy version and tell me this is the same product and is going to appeal to the same customer. Or tell me that slapping a bunch of leather and fake woodgrain in the cabin of the Chevy is going to appeal to the Buick customer. As long as Buick can continue to build their line in the tradition of the Enclave, I think they have a winner.
April 28, 2009 2:22 PM
Let's face it. The best cars in the world are German. Audi, BMW, Mercedes-Benz, Porsche, Volkswagen.
Not a single American brand can match any of these. Even Opel and Ford Europe are better than what GM and Ford serve up in the U.S.
Too bad Chrysler is on it's way out too. At least they appeared to be innovative before getting in deep with trucks and tank cars.
April 28, 2009 2:24 PM
Stick to gadgets, guys. Really. The notion that GM would only have an entry and a luxury brand makes no sense.
April 28, 2009 4:06 PM
What in the heck is this guy thinking? Get rid of Buick? If GM kills Buick, that would be a huge mistake. Buick is the best quality car GM makes. I'm absolutely sure there are enough people out there who want a decent quality, nicely styled car that won't break the bank (and is not as embarrasingly common as a Ford or Chevy), and Buick fits the bill perfectly. I should know, I'm one of those people. When I first saw the new 2010 Lacrosse, I thought WOW! I want one. And I'm only 31. Basically, if GM gets rid of Buick, they'll lose me as a customer for life. Think about this, too: with the announced cuts of Saturn, Hummer, Saab and now Pontiac, there is lots of room for Buick to become a much stronger brand.
April 28, 2009 5:05 PM
DCLawyer and Bob Putz-o The Clown (not to be confused with Bob Putz), you are 100% correct. I had the very same impression of the 2010 Lacrosse. The is no problem with Buick that can't be solved with product. If you bother to test drive the Enclave and the Traverse, you will find that GM has learned their lesson that you can't take a Chevy Cavalier, put a waterfall grill and call it a Buick. If Buick has the proper product, it will be very popular again. You will never get me into a Malibu, but I am also very interested in buying a Lacrosse ... especially if it gets the same kind of reviews the Enclave gets. I recently read a review that calls it simply the best luxury crossover on the market, period. Being a cheaper Lexus is a smart strategy if they can back it up with product.
April 28, 2009 7:11 PM
I think this was a long over due for GM. Ford realized this years ago and began restructuring itself. Their new Fusion Hybrid will get over 1,000 miles on one tank of gas. That is smart in my opinion(although the car is ugly). I personally like German cars and Ford Trucks. I hate to see Americans lose their jobs, but producing cars that constantly break down and built poorly will not cut it any longer. Capitalism baby...
May 14, 2009 1:17 PM
"One mass market brand, one luxury brand. Just like Toyota and Lexus."
When you discredit yourself in the second paragraph of your story, those of us who actually know what's happening in the auto industry laugh and move on. Did you not realize that Scion is a Toyota brand? Or, did it just not fit into your neat little comparison? Wait, don't bother answering, those were rhetorical questions.
The rest of your article pretty much is a joke too. On-Star, or more correctly, Hughes Electronics is already branching out to other automakers. Giving the technology away for free, including implementation costs, to make money on the back end subscriptions. Oh wait, you knew that too? No I didn't think so.
Another tech writer playing a car guy... move along folks, nothing to see here....
July 31, 2009 10:28 AM
Buick is a hot brand in China.