Now that the big three CEOs are sealing up their second week on Capitol Hill trying to convince U.S. lawmakers that their companies collectively need tens of billions to survive, what do they plan on doing internally? As in, what changes could be made to the product lines of all three automakers to fit a changed marketplace and a consumer and business populace that has hit the reset switch on what they want out of an automobile? How about jettisoning some brands that aren't core assets? That's the ticket -- or at least a big part of it.
Just which brands are at serious risk of going away? Brands from all three domestic automakers have been bandied about this week, and with 112 models offered from 15 brands just from the three domestic automakers, the industry clearly needs some fat trimmed. The three U.S. automakers now have only a 47% market share in the U.S., down from 62% just five years ago. Just imagine the design, engineering and support a complex product portfolio like that requires in terms of investment. Is that sustainable? Apparently not, and the big three are fighting for their lives in part because of it.
Right off the bat is General Motors Corp.'s (NYSE: GM) Hummer brand. The king of masculine brands has shriveled into virtual nothingness over the past year as consumers stayed away due to higher gas prices, which have now fallen heavily back down. Still, the damage to Hummer is most likely irreversible, and it will be one of GM's first brands to go away. Ford Motor Corp.'s (NYSE: F) luxury Volvo brand is also a prime contender. Volvo sales have fallen 28% this year as customers flock to lower-priced vehicles while tightening those wallets and purse strings.
GM may also be taking a hard look at its European Saab brand, as well as its domestic Pontiac and Saturn brands. Saturn was a great idea 15 years ago, but not any longer. It was never marketed as a GM product, something that has come back to hurt it a bit due to its drag on GM's bottom line.
How about Pontiac? The sports-oriented brand in many ways is a clone of Chevy vehicles, but with different skins. Still, the ax could fall on it, just as GM rid itself of the Oldsmobile brand years ago (a brand the world has not missed at all). Both brands ended up being perceived as niche-y, and an automobile "for every purse and purpose" just won't cut it in 2009 going forward. Sorry, Alfred Sloan.
Ford may even consider getting rid of its Mercury brand as well, and would just then have the Ford and Lincoln brands under its domestic belt. Chrysler may even jettison every brand except its own namesake brand and Jeep (would we really miss Dodge?). In these harsh economic times, anything will go -- and you can bet that some brands we've all come to know will be vanishing forever very soon.
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Reader Comments (Page 2 of 26)
12-05-2008 @ 2:41PM
Richard said...
If the US auto makers Fail,,, The US Government will miss out on Billions of tax dollars from all the Companies and Employees that make parts , work in the factories and all support companies that make up the US auto manufactures and after market parts base,, The shift to imports will send US jobs and Money out out of the US. I say we support a Logical plan to keep our US Automakers in bussiness before we all start speaking a foreign tounge and Living in welfare. WE NEED Change and we need it NOW. BUY AMERICAN. Support our country.
12-05-2008 @ 2:39PM
Dawn said...
This is not about Cars disappearing for all of Eternity, Because if it was the people at the top of the Food Chain such as the CEO's and other high paying executives, in the Big Car manufactures, they would clean the " Fat " starting with there big pay increases that they very cheerfully get, as well as the Vice Presidents of these large Automakers. Clean your own fat, and do what it takes to survive, and stop asking for a loan.
When my husband was severally hurt in an accident where he was Electrocuted, and he lost his Alarm business, no one came to him and wanted to give him anything, and he had a very prosperous Security System business that covered the whole state of Florida. He sure didn't get no loan from the Government, so why should you big auto makers be an exception ?
If you auto makers take all those big pay raises every year that you get, and then your forced to lay off part of your work force, then that is bad management on your part, where you failed to look out for yourself, your business, your co-workers, and now you need to step down with a lot less pay, because those under you have now seen the light as to how you stole from the profits of the company because of your own selfish greed.
So grab your boot straps, and bend over and take like it like a man, because you sure failed us as Consumers who buy your products ! Now you must Pay big car dealers.
Horses and other travel is going to put you out of business anyway, if the US keeps falling like it is doing. These Congress people need to tell the foreign Oil companies to give us cheaper Oil prices, or we will start to sell them our US Grain for the same barrel price as Oil. Maybe our Farmers would like to have some of this money that they have been robbed from for so many years....
12-05-2008 @ 2:39PM
Todd said...
Amazing to see how many people are so qucik to write off these staple American companies that affect the country as a whole. The money they are asking for is loans, not free money. So let's not invest in shoreing up our own economy and jobs, with small lines of credit, people are ok with this, and people dont seem to care their country is failing economically, and have no quams about wasting 15 billion a month on slaughtering and maiming people with the invasions of other countries. Something seriously wrong with this picture, to think it's ok to waste billions on killing and being killed to protect oil, but when it comes to using tax dollars to shore up their own house they say no way let em tank.
12-05-2008 @ 2:43PM
sla said...
Back in June I bought the "car of my dreams" (after years and years of settling for something practicle)
I now own a Dodge Charger, and giggle with the joy of a child on Christmas morning each and every time I drive that wonderful car!
So, the writer asks "would we really miss Dodge"
Uh, yeah....some of us would. I guess we don't count.
12-05-2008 @ 2:43PM
Chuck said...
Want to get rid of something get rid of Buick! GM already has a luxury vehicle in Cadillac. And who really buys Buick anyway. Only the old fudgy daddies who want to drive their living room sofa down the street.
They are about as exciting as the local city bus and basically are just clones of Chevrolet with a better fake wood dash.
Better to save Pontiac the division that at least offers some excitement in comparison.
12-05-2008 @ 2:46PM
Frank said...
First of all Obama is not even in office yet so lets wait to blame him till he has at least taken the oath please.
Secondly and this is coming from someone with bad credit Jay are you an Idiot. The reason they wont give you a loan is because your credit score says that you don't like to pay for the things you have gotten on credit. So man up save 20k and buy yourself a nice little honda.
Third why is it ok for the gvmt to give AIG and Citi Billions of dollars and not the big 3? We are talking blue collar over white collar here how many blue collar jobs are there at AIG or Citi to save? Havn't both of those companies prooven they can't be trusted with our money. Citi took tax payer money and bought another bank that made them go belly up and AIG is using our loot to give its failed ceo bonuses and retreats.
Oh well i guess let the big 3 fail and see where we are when it happens I promise you won't like it at all.
12-05-2008 @ 2:50PM
G said...
It's ashame that the auto or any industry has to suffer in our day and age, if our goverment were on the ball everyone would have gotten a tax rebates or a bailout years ago. most americans in buisness saw this coming since 9/11 but everything has basicaly been a coverup. dropping intrest, pushing credit to crazy limits so many cannot come out without bankruptcy, losing ther homes, cars, buisnesses. Bailing out the banks and other companys wont help people get loans to buy cars, who even wants to buy any thing now you may not have a job. but give the money to the people and just watch americans spend it. so creating jobs in a tough economy is nearly impossible. don't know all the answers, but apperantly nether do the banks and other big corperations
12-05-2008 @ 2:52PM
Jazfest said...
The big 3 can cut costs by breaking the uniion. I can't believe that ANYBODY would agree to a contract that states that anyone would receive 95% of their wage after being laid off, especially with NO time limit. Please. lay me off so I can receive my wage for no work, EVER.
12-05-2008 @ 2:53PM
TW said...
Mercury-gone.
Dodge-gone
Hummer-Saab-gone
Pontiac-Buick-GMC-gone
Chevy-stays. Rebadge a Buick Lucerne,call it a Caprice and let it bridge the gap between Chevy and Cadillac.
Cadillac-stays.
Buick-Pontiac-GMC operate as one group within GM. GM will have to settle with the dealers that hold those franchises and provide warranty work and parts. Just like they did with Olds.
12-05-2008 @ 2:57PM
Kate said...
Melonie:
I own an H3, also! I have to say I have never, EVER loved any of my cars I've had like this one (except for the 426 hemi barracuda I had)...and I must say I'm very disappointed with people's perceptions of these cars. Fast? No..able to tow? You betcha? Comfortable? I am disabled due to back problems & it is one of the ONLY cars that hasn't made me lose feeling in my legs, make me ache for days after a trip and I can get in and out of easily. And I have drive Escalades, SRX's, Jeep's, etc. and I want this one over anything I could think of. Gas mileage this past summer to Colorado over 20 mpg..hate my dealership I bought this through..Love my car and I'm pissed @ the UAW not the carmakers per se..Get your heads outta your butts and realize there are automakers out there making a good living and you're wanting ME to pay twice for my car..the bailout and keeping your businesses open by buying another American made car. Be an American and I might but my H3 is the LAST american made car I plan on buying you RB's!
12-05-2008 @ 2:57PM
Bill said...
Great Job for Obama - Just Fix It!!!
I didn't vote for Obama, never been a member of any union and I have no connection to the auto industry - except for the cars I own.
Auto Mfg is as U.S. as apple pie - it's our history. Get the right people in place and make it work! Save thousands of American Jobs! Again, don't just give these goons money - MAKE IT WORK FOR AMERICA!
12-05-2008 @ 3:00PM
Kathi said...
jeana...you're not driving a SUV..you're driving a cross over. SUV's are meant to be larger..So, it's just a SUV wannabe.
12-05-2008 @ 2:56PM
carol drewry said...
It's always been within our means to make a car...reliable, safe, good looking, middle sized, efficient etc ect...not just a dream but a reality but gas and love don't make the world go round...it's $$$ and THAT's failed!
12-05-2008 @ 2:59PM
TW said...
Keep Saturn. Which started as an answer to a question nobody asked has turned into a nice line of products.
12-08-2008 @ 9:40AM
Jose Rivera said...
Casey: If unreliability and inferiority when compeared to others such as Toyota were the criteria for bailing them out then none of them has any hope. I own two Impalas, Both with had only 35,00 mi warranty. Even Kia offers 100,000 mi warranty. Both have the DXcool problem and with less than 70,00 mi and the company refuses to recall or fix. They are going to court and loosing just about every class case on this subject. When and if they make cars as good as Japanese with their warranties (and honor them) then I will buy US cars again.
12-05-2008 @ 3:12PM
Cynthia said...
Good, let the Hummer fail. What a wasteful overindulgent taxpayer subsidized waste!
12-05-2008 @ 3:06PM
Jack said...
I have, over 48 years of driving, owned Chevys, Fords, Chryslers, AMCs, Pontiacs, Dodges, Buicks, Plymouths and Saturns.
The best vehicle I ever owned was a Buick LeSabre. In fact, over the last decade or so, the 4 best cars I ever owned Were Buick LeSabres.
I needed a second car a few years back and I shopped for and purchased a Saturn Vue. This is an absolutely wonderful vehicle which almost lets me see over the massive "beasts" parked in adjacent parking spots.
I've enjoyed the Saturn experience so much that, when GM did away with the LeSabre in favor of "other" models, I went out and shopped again. This time, i was drawn again to Saturn and ended up buying a Saturn Aura.
I hate to think that these cars are going to be discarded. I could think of a lot of other vehicles which should be eliminated before the Saturn line.
12-05-2008 @ 3:09PM
us. citizen said...
if our gov.bails out our bigest auto makers its over for the land of the free i mean come on why do pepole have to live so much like king$&Queen$ think about this some wher in a 3rd world country right now someone is lucky to eat a piece and i mean a piece of friut how about a mudpie thats right a mudpie americans every wher dont under stand how good we got it so to our goverment why in the world would you help compienies that only care about their best interrests like thier 1/4 ly reports or proffits or wich manuf. won the points race in nasscar and such other things i think you should let them know what its like to have to worry about bills kepping a roof over your kids heads and finding a job oh and one more thing those 3rd world countryies i speak of they are like that becuse of our goverment and others like it and before long we will be apart of that 3rd world liven you like mudpies i did when i was 5 im now 36 wishing i would have never brought my children into this decetful country we call the land of the free
12-05-2008 @ 3:07PM
lance said...
To "Dawn" these companies are HUGE compared to your husband's little security company, these companies would have a DIRECT severe effect on the economy if they failed, were talking the REAL posibility of a DEPRESSION here for the first time since 1929. MILLIONS of jobs would be lost. It's not about the CEO's it's about the American workers, Millions of job lost on top of the worst unemployment would be a catastrophe. I've watched the hearings at congress and they are starting to get the picture, but they are not going to hand a blank check to the big 3, they are going to hold them to specific requirements they have to follow. This I feel is the only way to save them. But I do feel Chrysler will have to merge with gm or ford b/c they can't run on their own.
if they aren't helped out, so many Americans against this will be eating their words when the stock market crashes. And GM and Ford don't make junk either it's a myth quality has controlled greatly over the early 90's so just shut up about that please.
12-05-2008 @ 3:09PM
Steve said...
Lance you are an idiot !! The man hasn't even taken office yet and you are bad mouthing Obama !!! He is taking over what Bush managed to f up !! We will probably suffer from Bush's 8 years in office for a decade !!!