Could Pontiac Become The Next Olds?

[ragingfish]

Quote »All signs point to big GM shakeoutWagoner forced to confront whether Detroit behemoth must shrink to live.By Daniel Howes / The Detroit NewsDaniel HowesFor a guy prone to sports analogies, General Motors Corp. Chairman Rick Wagoner may have wondered whether there are two outs, it's bottom of the ninth and he's up.The first out came in the early 1980s, when a recession-scarred GM under Roger Smith bet it could wrest market share from rivals Ford Motor Co. and Chrysler Corp. Smith whiffed, saddling GM with too many workers, too many plants and a chaotic reorganization that took years to work through.The second out came in the early 1990s, when stunning losses sparked a coup that installed Wagoner's mentor, Jack Smith, in the top job. He could have used the tough times to lead an extreme makeover, but favored re-engineering, brand management and globalization over plant closings to reverse sliding market share.On that part, Jack Smith whiffed, too.Now Wagoner's up, and he's sending unmistakable signals that his turn at bat may yield different results.Bonuses (for this year, but not last) are gone; white-collar salary raises are on hold; matching payments for 401(k) plans are reduced; the dividend is in jeopardy; product programs are being accelerated, and others are being killed.A massive restructuring reminiscent of Ford's overhaul in 2002 or Chrysler's the year before is in the works. Talks with the United Auto Workers are under way to slow the automaker's cash burn and cut costs.Last Monday, Wagoner and GM North America President Gary Cowger briefed UAW President Ron Gettelfinger and (removed) Shoemaker, head of the union's GM department, on GM's deteriorating financial situation and explored what the union could do within the confines of the current national contract to help.There are options short of "reopening" the four-year contract due to expire in September 2007. GM, for example, could exercise contract language allowing it exclude certain drugs from coverage or to cut certain high-cost HMOs.GM is studying whether to close more assembly plants in the United States -- not Canada or Mexico -- to reduce fixed costs and persuade more hourly workers to retire.It also could kill at least one of its North American brands -- Pontiac or Buick would be the most likely candidates -- though that seems less likely for now because it's expensive and because it would further erode U.S. revenue and market share.Wagoner and Gettelfinger face fundamental choices.Gettelfinger can take a calculated political risk, bend to help GM survive and keep his people working. Or he can take the hard line, extract whatever value remains for his members and hasten GM's demise.Wagoner's GM can continue to understate the evident reality of competition in its home market -- that is, market share lost in the New World Order is mostly lost forever -- and lurch from crisis to crisis.Or GM can be more aggressive about fixing its business and find renewed prosperity by becoming a smaller company, even if that means ceding the title of world's largest automaker to Toyota Motor Corp.A choice like that is unacceptable to GM brass, mostly because none wants to be remembered as the one who let GM fall from global market leadership.But going smaller may be a wiser, if more unsavory, choice for GM shareholders, employees and communities where it operates.The current financial crisis gives Wagoner a golden opportunity -- an excuse, even -- to push GM farther and faster, to make profits out of losses, to align perception with reality.Yes, it would be a sharp departure from GM's No.1-above-everything machismo. That's OK. GM's ingrained swagger at the top is one impediment to getting GM where it wants to go but can't seem to.But will Wagoner and GM, whose leadership these days prides itself on confronting "the brutal facts," actually pull a Big Trigger? Doing so would admit that GM cannot regain much of the market share it has lost in just the past few years.The brutal facts are that too many of GM's new cars and trucks have failed to meet the expectations that preceded them, despite some high praise. Without sales volume, GM's business model simply won't work.The brutal facts are that GM was slow to the SUV party of the '90s; it dismissed gas-electric hybrids as marketing gimmicks; and its cars and crossovers have struggled to crack Toyota and Honda's hegemony in segments getting renewed attention with gas at more than $2 per gallon.It's also true that GM has made remarkable progress over the past decade. The revival of Cadillac, for one, proves a Detroit automaker can design, engineer, build and market luxury vehicles with global credibility.That's not enough, as GM's profit warning and the coming restructuring show. Brace yourself for what's likely to be a harrowing ride.Daniel Howes' column appears Sundays, Wednesdays and Fridays. He can be reached at (313) 222-2106 or at dchowes@detnews.com.

[damronjr]

I would think Buick would go long before Pontiac.

[Kari]

One could only hope that would be the case, but you never know. Since when does anyone corporate do anything that makes sense?

[MoonDogg]

Quote, originally posted by damronjr »I would think Buick would go long before Pontiac.My thoughts exactly..

[ragingfish]

Quote, originally posted by damronj »I would think Buick would go long before Pontiac.Quote, originally posted by MoonDogg »My thoughts exactly.. Not likely guys. Buick is to China as Toyota, Nissan and Honda are to the US.

[scherry2]

Quote, originally posted by ragingfish » Buick is to China as Toyota, Nissan and Honda are to the US.I don't understand? try Numbers, the divison that makes the most profit wins in the North American Operations. thats what GM looks at, they could care less about quality (even tho they say different), they could care less about your fathers buick, they just want profit. anything overseas is pretty safe right now.

[ragingfish]

Buick is apparantly a very sought-after brand in China...it sells well over there...and frankly, most of their models are nicer than ours even.

[tnpartsguy]

If I get a vote, I vote Saturn. If Saturn is left out, I vote Buick. I believe that Saturn should have gone before Oldsmobile, same for Buick. I don't believe Pontiac is next, but some of the signs make me wonder....the end of the Bonneville being #1 in my mind. Here's my big question.....why have both GMC and Chevy Trucks, marketing against each other? Either take Chevy's trucks away, or fold GMC trucks into Chevy.....save MILLIONS every years.....maybe billions!

[tnpartsguy]

They could stil make "Buick's" for China, just Rebadge Chevy's....kinda like they do now.....

[scherry2]

Quote, originally posted by tnpartsguy »why have both GMC and Chevy Trucks, marketing against each other? Either take Chevy's trucks away, or fold GMC trucks into Chevy.....save MILLIONS every years.....maybe billions!they should!! GM builds both 1/2 ton trucks on the same line, and you would not believe how many people think GMC trucks are better than Chevy trucks and they both have the same mechanical parts.

[kostby]

Apparently what some of us here have speculated about for months is only now being rumored in the 'legacy' automotive press...From a discussion slightly off-topic to the Pontiac Pursuit thread...Quote » « Re: Production Photos: Pontiac Pursuit (ColonelPanic) « » 1:48 PM 1/24/2005 Reply Edit --------------------------------------------------------------------------------Quote, originally posted by ColonelPanic » I know! I wonder if *gasp* our beloved brand is next to go? The silence is mind boggling... TICK TICK TICK...That's been my favorite GM conspiracy theory for a while now... ever since they discontinued a popular rental-car-standard (Grand-Am) and replaced it with much more expensive car (G6). It follows exactly what GM did with Oldsmobile - axed the rental-car-industry standard Olds A-body 'Cutlass Ciera', replaced it with more upscale and more expensive 'Cutlass' built off the Malibu/Century platform. They also considered renaming the brand to Aurora and then decided to kill it off. Link to full Pontiac Pursuit thread --> http://forums.genvibe.com/zerothread?id=14603And from a thread about Pontiac's G6 marketing plans...Quote »GM Extreme B.S. WARNING:Quote from the thread» In recent years, the Grand Am has been little more than an afterthought in the increasingly competitive U.S. market, with a large share of its production earmarked for daily rental fleets. But Pontiac is looking to shift the focus to the retail market with the G6, and is confident consumers will buy the new car without the support of heavy incentives. (italics mine.) This same scenario was the death knell for Oldsmobile beginning in the early 1990's!!!First , they stopped making dime-a-dozen 'mature technology' A-body cars (where development & tooling had been paid for eons ago) Selling 400,000 Olds 'Cutlass' Cieras a year into the rental car market kept them alive! Then they attempted to move 'upmarket' with the Auroras, even considering renaming the Oldsmobile brand. They saw sales and market share tumble drastically.Finally, GM pulled the rug out from under Oldsmobile in 2000, announcing the end of the marque.That sound you hear is the Pontiac dealers screaming! Link to full Pontiac G6-thread --> http://forums.genvibe.com/zerothread?id=13052

[ragingfish]

Forgive my ignorant confusion K...Are you saying this is unfounded?

[kostby]

Sorry for the confusion. I shouldn't post when I'm sleepy!Unfounded? No, not at all. I'm saying this is another of the significant signs that the 'death' of the Pontiac brand is already well underway at GM.

[sylvainber]

consider that two of the current pontiac models can only carry the name after the little plastic badge is glued on... yes gm had a hand in designing the vibe but they still had to rely on toyota for the bulk of the assembly components. the gto is even more of an import.from what i've read of the G6 track record so far, it is not living up to the gm hype (it doesn't look like the 'import' killer). the current grand prix is mostly an adapted version of the previous one.that does not leave much home grown pontiac badges out there. looks like the field is narrowing and the brand is low on it own steam.buick is showing signs of coming out with new and more aggressive designs (although after what they did with the lacrosse , i'll believe it when i see it ). with the aging baby boomer market, the brand could have a chance at longevity. sylvain

[rasermon]

Front page on the Detroit News today.http://www.detnews.com/2005/au...2.htmBy Ed Garsten / The Detroit NewsGM pulls plug on '08 line of cars.DETROIT -- General Motors Corp. has killed plans for a new line of rear-wheel drive passenger cars slated to reach North American showrooms in 2008, in large part to free up resources to bring its next generation of large pickups and sport utility vehicles to market quicker. The news comes after GM reassured investors, suppliers and Wall Street analysts last week that future car and truck programs would remain on schedule despite a new cost-cutting effort. The automaker is under severe pressure to streamline after announcing last week its 2005 earnings would fall as much as 80 percent below previous estimates. "While work on particular North American applications of our premium rear-wheel drive midsize vehicle architecture have indeed been stopped, we have begun to study new approaches to efficiently capitalize on future opportunities we see for future midsize rear-wheel drive applications," Marc Beckers, a spokesman for GM, said. The rear-drive "global architecture" -- dubbed Zeta -- was to provide the basic underpinnings for an array of cars and crossover vehicles for markets around the world. It will continue to be the basis for products sold in regions outside North America. GM's decision to kill the Zeta program puts the brakes on development of the next generation Pontiac GTO sports car, and new entries for Chevrolet, Buick and Pontiac. The current GTO is already being produced by GM's Holden unit in Australia. Bob Lutz, GM's vice chairman for product development, canceled development of the premium rear-wheel models for North America, according to two people familiar with the situation. It was Lutz who first championed the new rear-wheel drive platform. The renowned car expert announced the Zeta program in 2003 as the industry was turning its attention toward rear-wheel drive vehicles. But he pulled the plug on the North America models after determining the vehicles could not be engineered and assembled to sell at prices competitive with the popular Chrysler 300C, Ford Mustang and other models, without sacrificing quality and content. In addition, GM is anxious to free up resources to speed up the launch of its new line of full-size pickup trucks. They are not expected to arrive until 2006. Many in the industry expected the Zeta architecture would mean the return of the Chevrolet Camaro and production versions of the Buick Velite concept car, which debuted at the 2004 New York auto show to rave reviews. "This is scary. It puts GM behind the eight ball," said Joseph Phillippi of AutoTrends Consulting in Short Hills, N.J. "It makes you wonder why can't they get it right. Where does it seemingly go wrong?" The retreat from Zeta could delay the introduction of GM's new rear-wheel drive passenger cars by at least a year, Phillippi said. That's bad news for the automaker, which has seen only lukewarm early sales for several of its newly launched products, such as the Pontiac G6, Chevrolet Cobalt and Buick LaCrosse. The new Chevrolet Equinox, a small SUV, has been a strong seller. Global Insight market analyst John Wolkonowicz said GM's decision to stop the development of Zeta-based vehicles for North America means a missed opportunity to compete. "The Chrysler 300C is a watershed car like the 1986 Ford Taurus," said Wolkonowicz. "With Zeta, GM had an answer." For sure, GM has not given up on rear-wheel drive vehicles. Two roadsters, the Pontiac Solstice and Saturn Sky, will be rear-wheel drive entries. Other rear-wheel drive GM cars include the Cadillac CTS and STS sedans, the Chevrolet Corvette and the Pontiac GTO. GM Chairman Rick Wagoner last week said there would be no reduction in capital spending in light of the abrupt profit warning and signaled new product programs would be safe from the budget ax. "Product remains the first and most important element of the strategy to get North America on track," he said. Through February, GM sales are down 10 percent from last year and its market share has slipped to 24.9 percent, compared with 26.7 percent a year ago, according to Autodata Corp. "When you have an automaker struggling from a market share or sales standpoint, the worst thing you can do is slow introduction of product," said Erich Merkle, an analyst with Grand Rapids consultants IRN Inc. "It may point to some issues GM is having internally, perhaps from a communication perspective between what the market wants and what GM can afford."

[GMJAP]

With gas prices zooming up, and expected to remain very high, does it make sense to anyone that they seem to be betting so heavily on trucks and SUVs?

[kostby]

Paraphrasing Zig Ziglar, "If you set yourself on fire, the world will gather to see you burn."IMHO GM's building one helluva bonfire...Hmm. Better get that warranty work done TODAY.

[tnpartsguy]

Another 'nail' to me was when GM withdrew support for Pontiac in NASCAR. Yes, I know they support Pontiac in NHRA, but it's not the same.

[kostby]

Related bad news thread (poor G6 sales) --> http://forums.genvibe.com/zero...89242Heck, at this rate GM could become the next Oldsmobile!!!

[SGT]

I find it remarkable that GM is so heavily invested in large gas guzzling trucks when we are facing 3.50 a gallon gasoline costs here in the not to distant future. Don't they remember any of what happened in the mid to late 70s?

[soldierguy]

I agree with what the others have said...Saturn would go first, then Buick.Looking at it from the perspective of the vehicles each brand offers and image of those vehicles, it's easy to see why. I'll give a quick rundown of MY perceptions of each brand:Chevrolet: totally safe from being killed off. That's GM's "a vehicle for everyone" brand. Good range of products, although few stand out as being excellent in their market, except for the Corvette. The Cobalt is a good car too, if a little bland-looking. Chevy should be the minivan brand for GM and do a knockout minivan that will be better than Honda, Toyota, and Dodge...the current crop of GM minivans is weak.Cadillac: Safe from being killed off. They seem to be re-inventing themselves as an American alternative to BMW...the move towards rear-drive platforms is helping that along nicely.Pontiac: Reasonably safe from being killed off. Good products with a performace twist to them. To really be safe from being killed off, Pontiac needs to work on better powertrains and higher quality interiors. The GTO is good in that respect and so is the Vibe, but the rest of the lineup could use some work on one or the other. The Aztec needs to die.GMC: Reasonably safe from being killed off. Perception is of a high quality truck / SUV, but it's really just the same as what's being offered at Chevy. But that perception commands higher prices, and hence more profit for GM. I totally agree that GMC and Chevy trucks could be sold under one label or the other for increased savings, but brand loyalty among truck owners is VERY high...GM would lose sales if they killed off GMC or Chevy's truck line.Buick: In danger of being killed off or dying on its own. They seem to be positioning themselves as an American Lexus, but the powertrains and styling don't support that. Combine that with an aging customer base, and it's easy to see why the brand's days are numbered. If Buick wants to save itself, they need to do a lot of work on their product line, particularly in the area of powertrains and interior quality. In terms of Buick not being killed off because of the huge market for them in China...that helps Buick, but that alone won't save it. If Buick goes, I could see the name living on in China, but with a combination of Opels, Daewoos, and Chevys being rebadged as Buicks just for the Chinese market.Saturn: In grave danger of being killed off. It started out as a good idea...a high-quality small car, but the styling and a long time between redesigns has hurt them. Not to mention the fact that the Ion is not that great of a car...the Cobalt is what the Ion should have been. In the end, they come off as an alternative to Chevy, but without a lot of incentive to buy one instead of a Chevy. But in their favor, the quality is good...but the perceptions of cheapness run rampant through their interiors.

[tnpartsguy]

Quote, originally posted by soldierguy »I agree with what the others have said...Saturn would go first, then Buick.Saturn: In grave danger of being killed off. It started out as a good idea...a high-quality small car, but the styling and a long time between redesigns has hurt them. Not to mention the fact that the Ion is not that great of a car...the Cobalt is what the Ion should have been. In the end, they come off as an alternative to Chevy, but without a lot of incentive to buy one instead of a Chevy. But in their favor, the quality is good...but the perceptions of cheapness run rampant through their interiors.The Cobalt and the Ion are the same car; they share the same chassis and driveline.The new Malibu is the L300 Saturn.The Vue is the Equinox (Chevy) is the Torrent (Pontiac)The Relay is the Uplander (Chevy) is the Montana SV6 (Pontiac) is the Terraza (Buick)The Sky is the Solstice (Pontiac).GM's badge engineering has run amok. I agree Saturn is the 1st to go logically, but because GM made so many concession to the UAW when they built Saturn (the UAW's emblem was larger than GM's on every sign on the property before the ground was even broken for the plant). To be able to build the cars cheaply enough to actually have an entry level 'brand', GM should have done what Nissan has done successfully at Smyrna TN, keep the union out, but treat the employees more than fairly.

[soldierguy]

You're exactly right about the platform sharing, but there are a couple key differences in some of the cars you mentioned. For instance, the Cobalt went through some upgrading based off of GM's experience with the ION...the basic platform is the same, but many parts are new or substantially upgraded for use in the Cobalt. So the cobalt comes off as a better package than the Ion. Car and Driver did a write-up on a pre-production Cobalt a while back and talked a lot about the upgrades to the Cobalt...structural upgrades, engine tweaks, suspension tuning (particularly bushings...fluid-filled for better impact harshness control)...the list goes on. That's why I said that the Cobalt is what the Ion should have been.And I hate to knock Saturn...my parents have had one since it was new in the mid-90's, and have had no problems with it. It's a fun little car to drive. But the competition has outpaced Saturn's development, and Saturn has had some funky styling lately...kinda like they borrowed tooling for old Subaru Legacy's to make the L300 front end...and they completely lost their mind when they put the gauges in the middle of the dash. Not only is that less functional, it just doesn't look right either!

[ragingfish]

I think Saturn has a fighting chance with the upcoming Aura and Sky...those are two AMAZING cars, and every time i see them at the shows, I'm drawn to them like a magnet...

[Big_Red]

Well, Buick just re-disgned all their cars, they would be stupid if they were to cancel the entire process. As for Pontiac....it would be the end of the Vibe...and most likely even this site.

[ragingfish]

Quote, originally posted by Big_Red »As for Pontiac....it would be the end of the Vibe...and most likely even this site.I dunno about the site...Keep in mind, sites are still running everywhere for long extinct cars...and more recently, bonnevilleclub.com doesn't show signs of fading...