General Motors should have consolidated brands a decade ago to avoid the position they are in. With Rick Wagoner's resignation of GM, or firing by President Obama, depending how you look at it, the reports state that GM hasn't posted a profit in 5 years. FIVE years! That is a lifetime for a company.
I pride myself on automotive product knowledge, but somehow I completely missed that GM has been hemorrhaging money for that long. No matter, it made me consolidate my thoughts about something in the back of my mind. GM missed a key business decision of eliminating brands. Hybrid SUVs were not any better.
My heart goes out to the employees who have lost their jobs at the plants, the suppliers and the dealerships. But competition, the costs of the union labor agreements and legacy costs of the pensions made GM a big medical care and pension company that is in the red. A familiar theme these days. GM should have done something unrelated to that aspect, but perhaps equally significant a long time ago.
Eliminating Oldsmobile was too little, too late. It was the tip of the iceberg. Ten years ago, not only should Oldsmobile have been eliminated, but Chevrolet trucks and the Buick nameplate too. Pontiac should have merged with Chevrolet and Cadillac. Hummer and Saab should never had entered the equation. Consolidate the small cars and sedans into Chevrolet from Pontiac and Buick by simply offering various trim levels. Have the maybe two profitable (and I'm guessing here) nameplates from Cadillac, the CTS and Escalade, sold at the Chevrolet showrooms. Put the SUVs and trucks in the GMC nameplate. Saturn would also be absorbed by Chevrolet.
I doubt GM will ever release how much they lost per brand, but lets look at what was involved. Separate bumpers front and rear, hoods, trunks, emblems interior options and materials, tail lights etc. all essentially the same platforms across the company. Development, marketing and advertising, logistics, inventory, shipping are major cost centers that could have been reduced sharply.
This massive consolidation would have eliminated billions in repetitive costs. It would also allow engineers to concentrate on modern development rather than brand differentiation. How many brands does Toyota have? Three: Toyota, Scion and Lexus with distinctly different models in each one. But they are probably pushing the envelope, having recently posted a loss as well. Nissan has kept it rather simple with two brands but have had their missteps too. I could go on addressing each manufacturer but you get the point.
Finally what about SUV and truck hybrids? A ridiculous notion only because they came BEFORE a small-car hybrid. Toyota scored a home run with the Prius, and its probably profitable for them. I will not get into debate about the carbon footprint of mining and manufacturing the battery but the 2008 Chevrolet Malibu PARTIAL hybrid was way too little, way too late.
I really want GM, Chrysler and Ford to succeed, but unfortunately we are paying for their mistakes. GM still needs to consolidate brands, immediately.
I pride myself on automotive product knowledge, but somehow I completely missed that GM has been hemorrhaging money for that long. No matter, it made me consolidate my thoughts about something in the back of my mind. GM missed a key business decision of eliminating brands. Hybrid SUVs were not any better.
My heart goes out to the employees who have lost their jobs at the plants, the suppliers and the dealerships. But competition, the costs of the union labor agreements and legacy costs of the pensions made GM a big medical care and pension company that is in the red. A familiar theme these days. GM should have done something unrelated to that aspect, but perhaps equally significant a long time ago.
Eliminating Oldsmobile was too little, too late. It was the tip of the iceberg. Ten years ago, not only should Oldsmobile have been eliminated, but Chevrolet trucks and the Buick nameplate too. Pontiac should have merged with Chevrolet and Cadillac. Hummer and Saab should never had entered the equation. Consolidate the small cars and sedans into Chevrolet from Pontiac and Buick by simply offering various trim levels. Have the maybe two profitable (and I'm guessing here) nameplates from Cadillac, the CTS and Escalade, sold at the Chevrolet showrooms. Put the SUVs and trucks in the GMC nameplate. Saturn would also be absorbed by Chevrolet.
I doubt GM will ever release how much they lost per brand, but lets look at what was involved. Separate bumpers front and rear, hoods, trunks, emblems interior options and materials, tail lights etc. all essentially the same platforms across the company. Development, marketing and advertising, logistics, inventory, shipping are major cost centers that could have been reduced sharply.
This massive consolidation would have eliminated billions in repetitive costs. It would also allow engineers to concentrate on modern development rather than brand differentiation. How many brands does Toyota have? Three: Toyota, Scion and Lexus with distinctly different models in each one. But they are probably pushing the envelope, having recently posted a loss as well. Nissan has kept it rather simple with two brands but have had their missteps too. I could go on addressing each manufacturer but you get the point.
Finally what about SUV and truck hybrids? A ridiculous notion only because they came BEFORE a small-car hybrid. Toyota scored a home run with the Prius, and its probably profitable for them. I will not get into debate about the carbon footprint of mining and manufacturing the battery but the 2008 Chevrolet Malibu PARTIAL hybrid was way too little, way too late.
I really want GM, Chrysler and Ford to succeed, but unfortunately we are paying for their mistakes. GM still needs to consolidate brands, immediately.
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