From Automotive News:
The General Motors of 2012 will have fewer brands and nameplates, thousands fewer dealers and employees, and much less debt on its balance sheet, under a restructuring plan GM gave Congress today. GM will focus on its “core brands” of Chevrolet, Buick, GMC and Cadillac, the plan says. GM will sell Saab, shrink Pontiac to a niche brand and consider selling or closing Saturn, GM President Fritz Henderson told reporters at a briefing today. GM also plans to trim its U.S. dealerships from today’s 6,450 to about 4,700, Henderson said. It will cut about one-third of the nameplates from its vehicle lineup. GM executives say the plan will enable the company to be profitable even if the U.S. new-vehicle market makes only a modest recovery.
Well, GM is giving up. They have clearly spelled out a plan to cut costs to the point of not making many cars. Why bother making better cars?
In my opinion this will hurt the American economy. We are talking about close to 2000 dealerships and their employees out of work. We are also talking about lawsuits like the ones GM dealt with when it shut down Oldsmobile. Remember, when they closed Olds they never recovered any of the customer that bought the vehicles Olds was producing. Oldsmobile was producing over 250,000 vehicles a year. Yes, that was poor, but Pontiac & Buick never saw an increase from customers moving over. Those customers went to the foreign nameplates. Pontiac & Saturn dealers should start planning to be out of business within the next few years. There is no way Pontiac will survive as a niche maker of cars. They are no Mini or Scion.
One good thing can come from this. When the auto industry rebounds GM will be able to grow again… if it learns how to build cars people actually want. If they keep bean counting their offerings until they are dull, lifeless cars then GM is going to continue to shrink until it dies.
Good luck GM, you’re going to need it.
Did you ever think about a plan that included firing all your executives responsible for getting you into this position, and getting rid of your Board of Directors that let them do it? Now that would be a plan. Get the real car guys and engineers to build great cars that people will stand in line to buy. That’s an even better plan.