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Thread: GM maybe about to pull the plug on some of its brands

  1. #1
    Vulture of The Western World Eric's Avatar
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    GM maybe about to pull the plug on some of its brands

    General Motors is planning to cut thousands of white-collar jobs and is considering whether it should sell or stop production of more of its brands, The Wall Street Journal said, citing people familiar with the matter.

    Both moves are part of a broader re-evaluation of the company's strategy and of its ability to meet an internal projection of returning to profitability in 2010, the people told the paper.

    The job cuts are likely to be approved when GM's board of directors meets in early August, the people said. The reductions would be in addition to earlier announced cuts.

    Management may also present the board with options for raising additional cash, they told the paper.

    The board may also hear management's latest thoughts on whether GM should trim the number of brands it offers in the United States, the people told the paper.

    All but the Cadillac and Chevrolet brands, which GM considers core to its business, are undergoing close scrutiny, some other people told the paper.

    In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by Chief Executive Rick Wagoner, the paper said, citing people familiar with the matter.

    GM has put its Hummer brand up for sale to prospective buyers thought to include Mahindra & Mahindra (MAHM.BO), but the SUV brand is expected to fetch far less than $1 billion in any sale.

    The company, hit by rising oil and raw material prices, the credit crunch and the housing downturn, will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch had said last week.

    U.S. auto sales plunged in June to a 15-year low.

    Although GM clung on to its top spot in the American market, some analysts have raised concerns over the financial state of the firm, whose shares fell to a 54-year low earlier this month.

  2. #2
    Senior Member Ken's Avatar
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    Re: GM maybe about to pull the plug on some of its brands

    Quote Originally Posted by Eric
    General Motors is planning to cut thousands of white-collar jobs and is considering whether it should sell or stop production of more of its brands, The Wall Street Journal said, citing people familiar with the matter.

    Both moves are part of a broader re-evaluation of the company's strategy and of its ability to meet an internal projection of returning to profitability in 2010, the people told the paper.

    The job cuts are likely to be approved when GM's board of directors meets in early August, the people said. The reductions would be in addition to earlier announced cuts.

    Management may also present the board with options for raising additional cash, they told the paper.

    The board may also hear management's latest thoughts on whether GM should trim the number of brands it offers in the United States, the people told the paper.

    All but the Cadillac and Chevrolet brands, which GM considers core to its business, are undergoing close scrutiny, some other people told the paper.

    In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by Chief Executive Rick Wagoner, the paper said, citing people familiar with the matter.

    GM has put its Hummer brand up for sale to prospective buyers thought to include Mahindra & Mahindra (MAHM.BO), but the SUV brand is expected to fetch far less than $1 billion in any sale.

    The company, hit by rising oil and raw material prices, the credit crunch and the housing downturn, will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch had said last week.

    U.S. auto sales plunged in June to a 15-year low.

    Although GM clung on to its top spot in the American market, some analysts have raised concerns over the financial state of the firm, whose shares fell to a 54-year low earlier this month.
    One of my informers has sent me a copy of the last GM Board meeting. It looks as though GM are going to reduce their production line to just two, environmentally friendly, mechanised vehicles. One for the broad base of eco-friendly motorists and the other to satisfy the desperate need for a cheap, mass produced, agricultural vehicle to enable farmers to display their 'Green' credentials whislt meeting the demand for the nations food and bio-fuel crops. I'm not sure how he managed it but my 'spy' managed to obtain photographs of the new vehicles which I have reproduced below.

    Ken.

    Die dulci fruimini!
    Ken.
    Wolds Bikers, Lincolnshire, England.

  3. #3
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    Re: GM maybe about to pull the plug on some of its brands

    Major brands to get the axe:

    Pontiac: Performance for everyone isn't selling in the time of $4+ gasoline.

    Saturn: Didn't do anything wrong -- just wasn't successful enough in competing with Toyota & Honda.

    GMC: Left their core market of trucks for doing work. And in the work-truck market, they're losing to Ford & Toyota.


    What about their partnerships?

    Saab: Doubtful they could find a buyer. May keep it as their entrypoint into the European market (since Chevrolet cars are usually too big, too inefficient, and sometimes have the steering wheel on the wrong side)

    Isuzu: DOA in America. I read that Bank of America won't lend you money to buy one.

    Did I miss any?

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  4. #4
    Vulture of The Western World Eric's Avatar
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    Re: GM maybe about to pull the plug on some of its brands

    Quote Originally Posted by chiph
    Major brands to get the axe:

    Pontiac: Performance for everyone isn't selling in the time of $4+ gasoline.

    Saturn: Didn't do anything wrong -- just wasn't successful enough in competing with Toyota & Honda.

    GMC: Left their core market of trucks for doing work. And in the work-truck market, they're losing to Ford & Toyota.


    What about their partnerships?

    Saab: Doubtful they could find a buyer. May keep it as their entrypoint into the European market (since Chevrolet cars are usually too big, too inefficient, and sometimes have the steering wheel on the wrong side)

    Isuzu: DOA in America. I read that Bank of America won't lend you money to buy one.

    Did I miss any?

    Chip H.
    I think that about covers it - with the only you missed being Buick. It, too, is probably not long for this world....

  5. #5
    Senior Member misterdecibel's Avatar
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    Re: GM maybe about to pull the plug on some of its brands

    Opel, Vauxhall, Daewoo should be safe.

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    Re: GM maybe about to pull the plug on some of its brands

    Quote Originally Posted by Eric
    I think that about covers it - with the only you missed being Buick. It, too, is probably not long for this world....
    Buick - yes, I naturally didn't think of them, probably because I'm not 60 years old or a professional golf player. Which is probably as good a reason as any other to give them the axe.

    I also forgot about Opel -- they're sort of the Chevrolet of Europe, aren't they?

    Don't know anything about Vauxhall or Daewoo.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

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    Re: GM maybe about to pull the plug on some of its brands

    What the GM marketing department should do is look at what people will likely want to buy 4 years out, and then give that info to senior management.

    Management should then say: "If we were starting from scratch, what business organization would we need in order to sell to this market?"

    Because what they've been doing is having all the brands go after the same segment, and that's just silly -- you're competing internally for a declining overall share of the world's market.


    Splitting into two divisions is an excellent first step.
    If you look at what the Japanese marques have done, they have a 'bread & butter' brand (Toyota, Nissan, Honda) and a 'luxury brand' (Lexus, Infiniti, and Acura). Toyota has gone a step further and added a 'youth' brand (Scion), but from what I hear, it's not doing that well.

    Having two brands like this, and a variety of cars within the brands, means the Japanese are much more tightly focused, not only in the marketing efforts (like brand identity), but also keeping costs down in engineering the cars, as it's a much simpler organizational structure for their R&D folk to share ideas & parts.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  8. #8
    Senior Member misterdecibel's Avatar
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    Re: GM maybe about to pull the plug on some of its brands

    Quote Originally Posted by chiph


    I also forgot about Opel -- they're sort of the Chevrolet of Europe, aren't they?

    Don't know anything about Vauxhall or Daewoo.

    Vauxhall is identical to Opel, except sold in G. Britain. Although I think the Irish get Opels.

    And we've forgotten Holden, which is sort of like a cross betwen Opel and Chevy.

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