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 5 of 26)
12-05-2008 @ 3:52PM
Kansas City said...
Jazfest.....What are you talking about? My husband is a Union Member, yes his wage is good, but if he takes a vacation...it is on his time, there is no vacation pay. If he is laid off from work....there is no paycheck! None...Nada Bottom line, when my husband works, he gets paid. When he doesn't get to work....no money$
12-05-2008 @ 3:57PM
kevin said...
let ford & chrysler go under... everything in their lineup is crap
keep some pontiacs & the corvette
who the hell wrote this article anyway?
12-05-2008 @ 3:52PM
Zane said...
Linda, you moron, no one's gonna take anyone's car away from them. The big 3 auto companies are going to STOP MAKING SOME VEHICLES BECAUSE THEY ARE INEFFICIENT IN USING GAS OR ARE LOW SELLERS. Use your brain FOR ONCE. This has nothing to do with "green geek" trying to take over, you idiot. It has to do with some of the biggest companies in the world trimming the fat, TO SAVE THEIR OWN ASSES. It is their choice. Greenpeace didn't step in and order them to stop making vehicles. THE CRASHING ECONOMY IS FORCING THEM TO MAKE THESE DECISIONS. I hate morons.
12-05-2008 @ 3:57PM
Pontiacsarecool! said...
I have owned a 2000 Pontiac Grand Prix and I now own a 2006 Pontiac Grand Prix. I have NO complaints about either of them. I only have a few complaints about GM's management decisions. I don't understand why they are not making the Grand Prix anymore; nor do I understand why the ended up eliminating the supercharged V-6 in the time of high gas prices. I get so much power with my supercharged V-6 Grand Prix--it has the same power as a V-8 and it gets better gas mileage. Why didn't they stay with more fuel efficient engines? Who wants (or can afford) a Buick or Cadillac? Is there anything neat in the Cheyv/Buick/Cadillac line? Pontiac HAD neat cars, until some DOPE decided to make nothing but SUV's and drop the Grand Prix line. Who wants to drive a cross-over anyway? (just call it a mini-van). Perhaps the workers that should be fired are those in management making the decisions on what should stay and what should go. If GM is in financial trouble, what makes them think that the general public will be able to afford $40,000+ cars? Do they really need to produce the Escalade when the Suburban is pretty much the same thing? Does anyone know what types of Buicks there are being produced today? Chevy really only has the Silverado, Suburban and the boring Impala. When will they realize that not everyone wants (or needs) a minivan or an SUV? Ford only has the Mustang in it's line-up that is any good, Dodge, only has the Charger (and mini-vans).
12-05-2008 @ 3:57PM
Tami said...
talkingdeer55 hit the nail on the head. Losing decent paying jobs and settling for a much lower paying job does not increase the American worker's purchasing power. What exactly do these large corporation think we can afford to buy when we American's are making less money. When I read that American's are hanging on to their money...I think what money? More of my money is going for necessities there is no room for luxuries or added expenditures. They are bailing out the wrong people. Give every Legal Working Adult American Citizen $50,000. It price tag will be much less than the $700 billion already shelled out. I will buy a new/or nice used US made auto, I need a new roof, several local contractors could use the business. Two new insulated doors would be nice in Minnesota right now - Welcome to Home Depot/Menards. I really need a new stove the pilots don't stay lit on mine - Hello - GE/Kenmore/Whirlpool. Haven't had extra cash to dine out in months a few of the local Mom & Pop restuarants would love to have my business as well as most of the other restaurants. Yeah...yeah, that's the ticket give the American worker the bail out.
12-05-2008 @ 3:57PM
Zane said...
Hey Dee Dee, you stupid, ignorant moron, we may not be paying for your 10 miles a gallon Hummer but by using such an inefficient vehicle, YOU ARE CONTRIBUTING TO THE DEMAND OF MORE GAS, WHICH IS ONE OF THE REASONS WHY GAS PRICES WERE SO HIGH. YOU CAUSED THE REST OF US TO PAY 4.35 A GALLON. Now look at gas prices. We couldn't afford that much so we changed our driving habits, drove less, took public transportation, rode our bike or walked. AND THE DEMAND WENT DOWN. And they will go back up as soon as everyone can afford to drive more often again. This summer was a lesson to us. Hopefully, we learned it.
12-05-2008 @ 3:58PM
Ian said...
This whole thing is B.S.. The big 3 along with the UAW have no one to blame but themselves. They had DECADES of opportunity to increase the quality of their cars. They had DECADES to see the Japanese coming...what did they choose to do? Nothing. Know why? Because they figured that the American public was too stupid and too loyal to the pieces of garbage that they produced. When they broke, the dealers gouged you again, IF they could fix it at all. Greed, combined with no accountability. BTW, haven't we already bailed out Chrysler and American Motors(RIP, THANK GOD) before? Obviously, did not do a lot of good then, nor will it now. How do I know this? Simple. Attitude. For these meat heads to not even have the forethought to realize that arriving in the corporate jets, rattling their "tin cups" might set off a sh**storm, well...there you go. Pompous idiots. Let 'em burn...the entire country will be soon anyway, thanks to all of the fine work of yours and my elected officials. It saddens me to see such a fine country being systematically dismantled by a bunch of political hacks (both sides) and corrupt business people. God bless America.
12-05-2008 @ 4:43PM
tom said...
I have an idea.....how about we take the billions needed to bail out the auto industry and divide it among the 400 million or so people in america. That would make everyone in this country wealthy and the jobs lost would no longer be very important! That would be truely spreading the wealth.
12-05-2008 @ 4:04PM
Jon said...
Why dont all u Jap lovers move to Japan..maybe with your low credit score they might let u buy a car.. GET A HEMI
12-05-2008 @ 4:08PM
Gary Jones said...
Concerning the big three US automakers: None of them deserve any financing from the US taxpayers. We taxpayers have already voted with our pocketbooks for foreign brands based on one important critical factor: QUALITY. I bought an Olds in 1979 and it fell apart within 5 years. Then I bought a Chrysler New Yorker in 1984 and it was junk by 1991. I bought a Ford in 1991 and it fell apart within 6 years. I have bought Hondas, Toyotas and Nissans since then and they have all held up well with normal maintenance.
12-05-2008 @ 4:05PM
commuterpilot said...
Zane>>>>I have a tiny Toyota Echo that gets 35 mpg. Yeah, it doesn't have all the cargo room that the H3 has but I don't need it AND NEITHER DO YOU.
12-05-2008 @ 4:12PM
Nakaina said...
Let's get rid of the Hummer for starters. Who would be dumb enough to buy a vehicle so big that it doesn't fit in a parking space? Stupid people with security issues. I'm sick of trying to park near these idiots who take up two or more spaces because they drive a vehicle too big to handle. I use my small suv's space frequently but these idiots don't haul anything but their wallets with them. Make fuel efficient cars that compete with foreign automakers - not useless monstrosities. There's a start for GM.
12-05-2008 @ 4:07PM
Davey Crocket said...
Doesn't anyone know about economics or criminal law. GM was $42 a share six months ago and is now $3 a share and no one is in jail?? Look at GE, Bank of America, CitiBank, etc. funny how all of these stocks are out of play at the same time when the Big 3 went down, yet we allow the pigs to get another $700B over the weekend with no strings attached? People are running around thinking that oil went to $147 a barrel due to demand and our larger V-8's? Now it is $40 a barrel and do you see less people driving. You just like the Big 3 who where screwed and all you can do is blame the Unions & the CEO's flying in on their private jets? Pull your heads out of your Arse and hold the Politicans accountable who have created a market place where no one can win unless you are from New York or Texas! It is very obvious that the South still doesn't understand they lost the Civil War and are trying to pay us back with their ignorance.....
12-05-2008 @ 4:07PM
Tom Crumley said...
If the auto companies were to go belly up, the pensions would be transferred to the Federal Government. Granted there would be a reduction of benefits to the retirees, but the cost would be much higher than loaning them money now. Almost any person with a brain could see the benefit to the country to keep the auto manufacturers solvent. This solution to this economic problem could be boosted if the public starts to see some of these corporate leaders and subordinates being led away in handcuffs for arraignment.
12-05-2008 @ 4:08PM
commuterpilot said...
Zane>>>>I have a tiny Toyota Echo that gets 35 mpg. Yeah, it doesn't have all the cargo room that the H3 has but I don't need it AND NEITHER DO YOU.
12-05-2008 @ 4:08PM
bob said...
what about the people that are retired from the big 3 if they go under i loose a small pension for all my hard work. i wonder why freddy mac and fanny mae and aig didnt have to jump thru hoops to get real big bail out money all the bigt three want is a loan not a give me if the big three go down it will trickle down to effect everyone so hang on
12-05-2008 @ 4:10PM
commuterpilot said...
Maybe AOL will let me put up the whole post at some point and not cut me off...
Zane says>>>>I have a tiny Toyota Echo that gets 35 mpg. Yeah, it doesn't have all the cargo room that the H3 has but I don't need it AND NEITHER DO YOU.
12-05-2008 @ 4:12PM
Paul said...
Well, I guess the world isn't gonna wait for the "Brid Flu" to solve it's Problems. So next year when some other group of companies puts Billions of $$$ into it's CEO's pockets are they gonna get a bailout. How about WalMart (the Walton family hold what the 7 top billionair positions in the world) I think maybee they are looking at a bailout in 2009. Where does it end?
GM
Ford
Chrysler
Three brands is all we need.
The US gov. shouldn't be in the bailout buisness, go see a BANK!!! oops they needed a bailout too.
We all need a bailout HHHMMMM.
Maybe Congress should give every Adult in the US $$$25,000.00 I think that would kick start the economy alot better. I'm not asking for Much.
12-05-2008 @ 4:12PM
SavethePontiac! said...
Pontiac's slogan went from "We Build Excitement...!" to "We Built Excitement..." Chief Pontiac would be ashamed.
12-05-2008 @ 4:20PM
Vince said...
The big question... Why should our tax dollars bail out these companies? This sucks more money from our hard earned paychecks and I don't even drive a Big 3 automobile. Before I get bashed for not driving an American car it was still assembled in the States unlike the GTO.