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Unassisted
03-23-2005, 11:08 PM
http://cnn.netscape.cnn.com/ns/news/story.jsp?id=2005032315440002961051&dt=20050323154400&w=RTR&coview=

GM Says It May Kill Off One of Its Brands



DETROIT (Reuters) - General Motors Corp., which issued a shock profit warning last week and has been losing market share, may phase out one of its weaker car brands if sales fail to meet projections, company Vice Chairman Bob Lutz said on Wednesday.

GM's Buick and Pontiac are both "damaged brands" due to lack of investment over the years, and GM is working to correct that with an array of new vehicles coming to market, Lutz told a Morgan Stanley automotive conference in New York.

But if some of its brands fail to meet sales projections, "then we would have to take a look at a phase-out. I hope we don't have to do that. What we've got to do is keep the brands we've got."

Financial analysts have said for years that the world's largest automaker has too many brands to support, even with the gradual phase-out of the Oldsmobile brand a few years ago, particularly with its weaker U.S. sales.

Sales for both Pontiac and Buick have lagged in recent years. But GM is in the midst of a $3 billion investment in new vehicles for Buick, and Pontiac showrooms and they will have four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-size coupe.


GM, which last week cut its earnings outlook for 2005 by as much as 80 percent, posted a 6 percent drop in U.S. sales for the first two months of the year. GM's U.S. market share fell to about 25 percent, far below its share of 27.5 percent for all of 2004.


Analysts said last week that GM's March sales could fall as much as 10 percent in March, while foreign automakers such as Toyota Motor Corp., Hyundai Motor Co. Ltd. and Nissan Motor Co. Ltd. would continue to gain U.S. market share.


Lutz said GM will post relatively flat U.S. sales for March, however, performing much better than expected.


"I think we're going to be just about even, our best guess at this point. Either a percent over or a percent under," he said. "It is a substantially better month than January or February, and it looks like the whole industry is up."


"A HUGE ALBATROSS"


No details about an expected restructuring at GM, the largest private U.S. provider of health care, have emerged since it roiled markets with its warning last week.


But the company, which has about $300 billion in outstanding debt, said on Wednesday it was in talks to sell a stake in its GMAC Commercial Mortgage unit after potential investors expressed interest in the unit.


And Lutz and Gary Cowger, GM's president for North America, spoke of possible demands for a cut in mounting health care benefits for the company's hourly union employees in remarks on the sidelines of the New York auto show on Wednesday.


An elimination of any one of GM's brands would likely mean plant closings and a shrinking of GM's hourly work force.


"An across-the-board competitive health care plan for salaried and hourly employees could literally save us billions," Cowger said. Health care costs, added Lutz, are "a huge albatross hanging over American industry today."


Lutz particularly acknowledged that the automaker, which will struggle to make a profit this year, faces challenges. But he said GM was "taking the necessary step to right this ship."


"Sure, we face short-term challenges, and this is not going to be a banner year," he said. "It's a difficult period of adjustment. But we will get through it."


He said some of GM's new cars, such as its Chevrolet Cobalt small car and the Pontiac G6 mid-size car, will post their best sales to date in March, and told the Morgan Stanley conference "I don't know where all the gloom and doom is coming from."


He quoted one car reviewer who said, referring to GM's troubles, that the quality of the Cobalt convinced him that "the Titanic may yet turn fast enough to miss the iceberg."

bucksfan
03-23-2005, 11:15 PM
I think they cancelled or at least postponed their Zeta platform (which we quoted on earlier in the year) FWIW. I would not be surprised from the little I know though. From my standpoint it seems as though they reinvent the wheel on every new vehicle instead of finding a solid design and sticking with it or improving it. Bu this view is from a very narrow/limited perspective.

Reds4Life
03-23-2005, 11:51 PM
Of the 2 I'd say Pontiac is more likely to get the axe, it's been regulated to more or less rental car fodder for quite some time. Ever since they rolled out the Aztek they have pretty much been the bad joke of the automotive world

CbusRed
03-24-2005, 12:10 AM
Of the 2 I'd say Pontiac is more likely to get the axe, it's been regulated to more or less rental car fodder for quite some time. Ever since they rolled out the Aztek they have pretty much been the bad joke of the automotive world

I dont know man, The GTO and the G6 are two very powerful selling cars now. I cant imagine them discontinuing, or changing the name plate on either of them, I think it would be easier to do that with the Buicks.

Red Leader
03-24-2005, 12:13 AM
Buick has a LTC with Tiger Woods. Pontiac does not.

Look for Pontiac to go.

CbusRed
03-24-2005, 12:15 AM
Buick has a LTC with Tiger Woods. Pontiac does not.

Look for Pontiac to go.

True, but what about Pontiac's ties to NASCAR?

Big Donkey
03-24-2005, 02:07 AM
True, but what about Pontiac's ties to NASCAR?

I don't think Pontiac has ties to NASCAR anymore, Cbus. I know they consolidated all the Pontiacs and Chevrolets to just Chevys in 2003, I think it was. Even then, there were only five full time Pontiacs, though two of them were well-known guys, Tony Stewart and Bobby Labonte. They both went to Chevrolet and are still there now. It sucks though, cause I was always a GM man through and through, brought up that way with my pop and I know they started phasing out Oldsmobile some time back, and Pontiac has always been my favorite particular make. I'd rather they both stay, Pontiac and Buick both.

RedsBaron
03-24-2005, 06:59 AM
I certainly wouldn't be shocked to see Pontiac and/or Buick go the way of Oldsmobile. If you look at the model followed by the Japanese, it has been to have a basic brand (Toyota, Nissan, Honda) and a luxury brand (Lexus, Infinity, Acura). For GM, Chevrolet and Cadillac fill those roles. GM has talked about Buick challenging Lexus, but that will be a tall order. What role does Pontiac fill?
GM does have real cost problems, with a more expensive workforce largely because of the cost of health care, but GM's styling department has largely failed as well IMO. Except for Corvette and maybe a few Cadillacs, GM has few cars that will catch your eye.
I wish GM well. Our firm gets a vendor discount, so I definitely prefer to buy GM. I've owned '76, '79, '83 and '85 Firebirds/Trans Ams, a '98 Olds, and a 2000 Montana; I currently own a '92 Corvette.

Unassisted
03-24-2005, 09:04 AM
I've thought for a long while that GM is spread too thinly. There isn't enough substantial differentiation among the brands, except that Chevy has trucks and the others don't... at least until that Cadillac pickup came out this(?) year. I always assumed the biggest stumbling block to dropping brands would be re-organizing the dealer network. Maybe the Oldsmobile consolidation showed GM that it was possible to consolidate dealers semi-painlessly?

reds1869
03-24-2005, 09:09 AM
Buick is wildly popular in China and North Korea. They still associate the term Buick with "great American car." China is a huge market and will only get more profitable, so don't look for the Buick name to go anywhere soon.

RedsBaron
03-24-2005, 09:11 AM
Buick is wildly popular in China and North Korea. They still associate the term Buick with "great American car." China is a huge market and will only get more profitable, so don't look for the Buick name to go anywhere soon.
That's interesting. China is not merely a huge market-it is a fast growing market. The growth in the use of autos in China, and China's increased consumption of fuel, is one reason the price of oil has risen and may not come down.

RedFanAlways1966
03-24-2005, 09:17 AM
Hmmmm. Interesting. Personally I'd think Buick would go... if either eventually does. Who drives Buicks.... other than senior citizens? Next time you drive somewhere, take note of how many Grand Ams & Grand Prixs you see on the roadway. Esp. Grand Ams.

Senior citizens have lots of money. But I tend to think there are more Grand Ams on the road than all Buicks combined in my neck of the woods. Just a guess... no true evidence of course.

Perhaps a Pontiac or Buick SUV would help? :devil:

RedsBaron
03-24-2005, 09:18 AM
Ironic that you mention the Grand Am. Pontiac no longer builds it, as the G6 has taken its place.

RedFanAlways1966
03-24-2005, 09:22 AM
Ironic that you mention the Grand Am. Pontiac no longer builds it, as the G6 has taken its place.

Wow, I didn't know that! Perhaps that is their problem. Why eliminate a car that seems to be all over the place? Once again I have no evidence to back it up, but those cars are all over the streets of the Dayton area. I have never heard of the G6. Guess I had better Google that thing up and see what it is.

The Grand Am seemed to be GM's version of the Honda Accord. Accords seem to be real popular too. The Grand Am seemed to be about the same size.

dman
03-24-2005, 09:34 AM
I dont know man, The GTO and the G6 are two very powerful selling cars now. I cant imagine them discontinuing, or changing the name plate on either of them, I think it would be easier to do that with the Buicks.
True, but for what a person pays for a GTO, you would expect that car to put out more ponies than what it does. GM lost a big share of the market when they did away with the Firebird/TransAm and the Camaro/Z28 models. They left a wide open market to Ford and when Ford redesigned the Mustang, I'm sure a lot of former GM pony car owners went to Ford because GM had nothing to offer other than the GTO and the Corvette.

One of the other things I noticed about GM was how overpriced they are on their trucks. I looked at one of their 4-door Canyon models in 4x4 and that vehicle, with only a 5-cylinder engine, was running around $29,000. I looked at the Dodge Dakota in similar styling but with a 4.7L V-8 and ended up swiping one of those for $22,500 OTD. Granted, I got the Dakota while Dodge was going through a redesign of the Dakota and I'm sure that helped quite a bit.

remdog
03-24-2005, 09:35 AM
The Baron beat me to it----the Grand Am was a (ahem) grand car. But it's gone, and maybe Pontiac with it. It had some style and some pop to it. The current Pontiac brands don't seem to have anything that sets them apart.

BTW, I had a Buick for a rental car for four days a few weeks ago. Talk about nondescript mush! If that's what Buick was trying to say, they've definately captured the meaning. ACK!

Rem

reds1869
03-24-2005, 09:41 AM
Who drives Buicks.... other than senior citizens?

One of the things that shocked me when I first moved to Columbus was how many people around here drive Buicks! Go to any used car lot on Morse Road and you'll see a ton of the things. Same goes for used lots on the South Side (Parsons/Livingsotn, etc.). Weird.

CbusRed
03-24-2005, 09:44 AM
True, but for what a person pays for a GTO, you would expect that car to put out more ponies than what it does.


Are you kidding me? The '06 GTO has 400 HP Stock!!!

MWM
03-24-2005, 09:48 AM
Both GM and Ford are in trouble. I wouldn't be surprised to see both declare bankruptcy in the next decade. They are the stereotypical example of companies so stuck in the old way of doing things that they're refusal to change is about to make them go belly-up. They need new, visionary leadership with a fresh approach to the auto industry. Insteady they have so many old-school guys around running the show, they just keep digging the hole deeper and deeper.

Unassisted
03-24-2005, 10:17 AM
Buicks don't hold their resale value very well, so they can be a good buy used. I got a good deal on a used Regal a few years back. The sales rep was astounded that we were at his dealership on the other side of town seeking a particular used Buick. I guess that doesn't happen often.

BTW, Mrs. U loves that car and we are nowhere near AARP-qualified. :D

RedsBaron
03-24-2005, 10:22 AM
Are you kidding me? The '06 GTO has 400 HP Stock!!!
The GTO is a great engine in search of a great body. The GTO, the Grand Prix and the G6 all look too much alike IMO. I wish Pontiac had a Firebird to put that 400 hp engine (a slightly detuned version of the Corvette motor) in.

RedFanAlways1966
03-24-2005, 10:43 AM
BTW, Mrs. U loves that car and we are nowhere near AARP-qualified. :D

Oops... sorry, Unassisted. I have had that perception about Buicks for quite some time. It just seems that way to me. Nuthin' to back it up though. Just my perception (which some here would tell ya is pretty distorted!).

Reds4Life
03-24-2005, 11:28 AM
Both GM and Ford are in trouble. I wouldn't be surprised to see both declare bankruptcy in the next decade. They are the stereotypical example of companies so stuck in the old way of doing things that they're refusal to change is about to make them go belly-up. They need new, visionary leadership with a fresh approach to the auto industry. Insteady they have so many old-school guys around running the show, they just keep digging the hole deeper and deeper.

Ford can stay in business based on their truck sales alone, they sell more trucks annually than Chevy and Dodge combined and are the #1 truck supplier in the world. I'd still like to see Ford dump some of their brands though, like Mercury.

bucksfan
03-24-2005, 12:12 PM
Ford can stay in business based on their truck sales alone, they sell more trucks annually than Chevy and Dodge combined and are the #1 truck supplier in the world. I'd still like to see Ford dump some of their brands though, like Mercury.


Quite true. I am not Ford fan (just personal taste wise), but their F150 platform is HUGELY popular.

jmcclain19
03-24-2005, 12:24 PM
One of the other things I noticed about GM was how overpriced they are on their trucks. I looked at one of their 4-door Canyon models in 4x4 and that vehicle, with only a 5-cylinder engine, was running around $29,000. I looked at the Dodge Dakota in similar styling but with a 4.7L V-8 and ended up swiping one of those for $22,500 OTD. Granted, I got the Dakota while Dodge was going through a redesign of the Dakota and I'm sure that helped quite a bit.

Fully agree.

Went to the Auto show here in town over Christmas, because I intend to buy a full size pickup. I've always owned Japanese cars, but this is my first truck, so I went in with a clean slate to really look closely at all the major makers and the Full size Chevy's and GM's were across the board more expensive for comparable models than Ford, Dodge, Nissan or Toyota. Considering that GM typically has a lower consumer reports rating than either of those four, I've completely eliminated it as a possibility. Just struck me as odd.

Sad thing is, the new SSR truck has some serious Wow factor in styling, something that didn't come out when I saw the new little sport coupe, (the name evades me) which was compared to a Corvette in it's early ads, but one look at it and you realize it's essentially a old Cavalier body with a spolier.

RedsBaron
03-24-2005, 12:33 PM
Fully agree.

Went to the Auto show here in town over Christmas, because I intend to buy a full size pickup. I've always owned Japanese cars, but this is my first truck, so I went in with a clean slate to really look closely at all the major makers and the Full size Chevy's and GM's were across the board more expensive for comparable models than Ford, Dodge, Nissan or Toyota. Considering that GM typically has a lower consumer reports rating than either of those four, I've completely eliminated it as a possibility. Just struck me as odd.

Sad thing is, the new SSR truck has some serious Wow factor in styling, something that didn't come out when I saw the new little sport coupe, (the name evades me) which was compared to a Corvette in it's early ads, but one look at it and you realize it's essentially a old Cavalier body with a spolier.
IMO if GM had developed the SSR with the same styling minus some frills and offered it at a cheaper price it would be selling much better.
As for the new little sport coupe, I think you are referring to the Cobalt. The car mags have generally given it positive reviews and have indicated it is a much better vehicle than the Cavalier.
Two new GM cars soon to come to market that I like the looks of are the Pontiac Solstice and the Saturn Sky, 2 seat convertibles that will compete against the Mazda Miata.

Rojo
03-24-2005, 12:44 PM
No details about an expected restructuring at GM, the largest private U.S. provider of health care, have emerged since it roiled markets with its warning last week.

Anyone doubt that a national healthcare system is on the way?

Red in Chicago
03-24-2005, 10:35 PM
i'm 39 and i drive a buick regal...by buddy drives a buick rendevous and he's 36...both offer great rides...i must admit though, there is quite the stigma about only old timers driving them...

about a month ago, we went to the auto show and were both very impressed by the new buick lucerne (not the lacrosse) that will be coming out in the fall...it's supposed to take over for the lesabre and/or the park avenue...it was kind of sporty and classy at the same time...

MWM
03-25-2005, 03:05 AM
Ford can stay in business based on their truck sales alone, they sell more trucks annually than Chevy and Dodge combined and are the #1 truck supplier in the world. I'd still like to see Ford dump some of their brands though, like Mercury.

But that's the ONLY thing they sell well. There are plenty of industry analysts who believe Ford will declare bankruptcy within a decade. They sell trucks well, but they are still a very poorly ran company in lots of trouble. One bright isn't enough to cover up the mess they're in from years of mismanagement.

RedsBaron
03-25-2005, 07:32 AM
Anyone doubt that a national healthcare system is on the way?
I have no doubt but that GM, Ford and other older, large corporations with expensive employee health care plans would love to see some type of national health care plan enacted so that they could get rid of the burden of their present plans. There are usually winners and losers with just about any legislation-they clearly would be winners.

SunDeck
03-25-2005, 12:49 PM
Man,
My dad has a Buick Century (which my wife calls the official car of retired men),
My mom has a (blech!) Rendezvous,
One brother just bought a Grand...something. Prix, Am?
The other still has an Olds Alero (that's not even a word!)

In other words, if someone in my family buys it, manufacturer beware!

Reds4Life
03-25-2005, 05:53 PM
But that's the ONLY thing they sell well. There are plenty of industry analysts who believe Ford will declare bankruptcy within a decade. They sell trucks well, but they are still a very poorly ran company in lots of trouble. One bright isn't enough to cover up the mess they're in from years of mismanagement.

It's the only thing they really need to sell well, the majority of Ford's assets are geared for truck production. The truck line has been carrying Ford on it's back the last 10 years.

Personally, I'd like to see Ford stop producing most of their consumer cars. Keep making the Crown Vic, but make it available to Law Enforcement agencies only, since that's who buys most of them. Lincolns could be sold to limo companies and car services. The only Ford cars I'd keep in mass production is probably the Focus (which sells very well BTW) and the Mustang. Dump the rest and stick to truck and SUV sales.

BCubb2003
03-25-2005, 06:30 PM
GM needs a clear product line and should have done this years ago, but there's always a sliver of a reason to protect somebody's turf. GM would be a stronger company if it offered classic American Chevrolets, luxury Cadillacs and import-beating Saturns. I'm curious if there are any dealers left who sell only Pontiacs or Buicks. They might object, but it would be better for the company.

Yachtzee
03-25-2005, 09:56 PM
When I spent a lot of time travelling for work, I rented numerous GM cars. I would say that the Buicks were by far the worst, just because they all had that supersoft mushy suspension. To me, driving a Buick was like shaking hands with someone who has a "dead fish" handshake. Chevies were okay, but at that time most of their cars had the styling of a Tylenol caplet. I liked driving Pontiacs the best because they had a little more pick-up and had a nice tight suspension, which is my personal preference.

If I were GM, I would definitely get rid of Buick. It's market spot could easily be taken by fitting Chevy models with luxury packages. If Pontiac sticks around, I would try to differentiate it from Chevy as far as looks go and limit the production to the G6, Grand Prix and GTO. No SUV, no minivan, no cheapy compact version of a Chevy.

paintmered
03-26-2005, 09:55 AM
This after GM killed Oldsmobile just a year ago?

Things don't look good for GM right now :(

SunDeck
03-26-2005, 11:23 AM
It's the only thing they really need to sell well, the majority of Ford's assets are geared for truck production. The truck line has been carrying Ford on it's back the last 10 years.

Personally, I'd like to see Ford stop producing most of their consumer cars. Keep making the Crown Vic, but make it available to Law Enforcement agencies only, since that's who buys most of them. Lincolns could be sold to limo companies and car services. The only Ford cars I'd keep in mass production is probably the Focus (which sells very well BTW) and the Mustang. Dump the rest and stick to truck and SUV sales.

Kill the Fabulous 500? Indeed, what a flop, a car so boring, so underpowered, so uninspired that the only thing Ford can think to say of it is that you get to sit up real high. Looks like a Jetta for old guys, doesn't it?

RedsBaron
03-26-2005, 11:40 AM
Kill the Fabulous 500? Indeed, what a flop, a car so boring, so underpowered, so uninspired that the only thing Ford can think to say of it is that you get to sit up real high. Looks like a Jetta for old guys, doesn't it?
From what I've read, if Ford would simply put a motor in the thing, it would be a decent car.

MWM
03-26-2005, 11:54 AM
It's the only thing they really need to sell well, the majority of Ford's assets are geared for truck production. The truck line has been carrying Ford on it's back the last 10 years.

NOt sure where you got the idea that most of Ford's assets are ties up in truck production? Ford is in MAJOR financial rouble. Dominating the truck market hasn't been, or never will be, enough to keep them from going belly-up.

westofyou
03-26-2005, 11:57 AM
MWM have you ever read The Reckoning by David Halbersom?

MWM
03-26-2005, 12:07 PM
MWM have you ever read The Reckoning by David Halbersom?

I've not read it but heard of it. My guess is if it's Halberstam it's probably pretty good.

westofyou
03-26-2005, 12:24 PM
I've not read it but heard of it. My guess is if it's Halberstam it's probably pretty good.

Yeah really good, and being in Detroit you'd get a good look at the culture of the auto from the business side in the early 20th century and how it effected the area you're in now.

Or you could just drive to downtown Detroit and look at the burned out buildings. :mhcky21:

SunDeck
03-26-2005, 12:58 PM
From what I've read, if Ford would simply put a motor in the thing, it would be a decent car.
A 4.6L police interceptor would be kickin...did I mention you ride way up high?
:thumbup:

Reds4Life
03-26-2005, 01:09 PM
A 4.6L police interceptor would be kickin...did I mention you ride way up high?
:thumbup:

The 4.6 in the PI is the same 4.6 that's in every standard Crown Vic, the only difference is the PI had a higher output alternator and the PCM is flashed differently.

I think Ford made a mistake when they discontinued production of the Focus SVT, it was a peppy little car that sold very well because it was affordable to younger buyers. They sure make some stupid decisions sometimes.

SunDeck
03-29-2005, 10:22 AM
The 4.6 in the PI is the same 4.6 that's in every standard Crown Vic, the only difference is the PI had a higher output alternator and the PCM is flashed differently.

I think Ford made a mistake when they discontinued production of the Focus SVT, it was a peppy little car that sold very well because it was affordable to younger buyers. They sure make some stupid decisions sometimes.

From what I hear, the actual specs of the PI are "classified". Whatever that means. But, supposedly the thing puts out more HP than the one in the Vic.

The Focus is about the only thing they have going, don't you think? I had a 2000, which dropped parts all over the road for four years, but I admit it was fun to drive. And I bought the DOHC motor with it. That little squirt had some giddyap. Had to be a Mazda drive train, according to a friend who is a mechanic. He said it was a pretty big leap away from the rubberband used to power the Escort. And I've noticed that the Focus is getting tricked out by the kids almost as much as those little Hondas. Something I could never get into, personally. Gimme a '70 Hemi Cuda, or a '69 Camaro anyday. Ah, the GM of my youth. Sad to see the demise.

westofyou
03-29-2005, 10:29 AM
http://www.nytimes.com/2005/03/27/weekinreview/27haki.html


DETROIT BIG SLICE has a prescription for the ills facing Detroit's automakers.

"They need to step their game up and put their ear to the streets," said the bear-sized 32-year-old who lives outside Los Angeles and customizes cars and buses for the rapper and trendsetter Snoop Dogg that include a purple and gold 1967 Pontiac Parisienne signed by several Los Angeles Lakers. "Go put your ear to the street and ask people what they want instead of trying to force something on people," he said. "They're making ugly cars."

Once again, Detroit has resumed its long slide to automotive oblivion, and everyone's getting his two cents in about how to stop the bleeding. One suggestion: Make cars and trucks that people actually want, as opposed to ones that they'll tolerate in their driveway because of a $5,000 rebate or zero percent financing. A century ago the landscape was littered with American automakers. At this point, we're down to two domestic automakers, or three, depending how you count. Since Chrysler became a division of the German automaker DaimlerChrysler in 1998, people in Detroit sometimes call the Big Three the Big Two-and-a-Half.

Though Chrysler has shown recent signs of revival, General Motors and Ford are rapidly losing customers at home and their debt is rated one notch above junk by Standard & Poor's. That's bad news for two of the nation's biggest corporate borrowers, because a further downgrade could cost billions of dollars. G.M. is in particularly bad shape. Most believe a significant overhaul is required, including possibly sending another brand like Pontiac or Buick to join Oldsmobile on the chopping block.

Crises visit at least one Detroit automaker at least once a decade. But this is a different time: The silver bullets have run out. Previously, someone or something came to the rescue. In the 1980's, Chrysler fell back on the government for a bailout and then helped itself by inventing the minivan. In the 1990's, the Big Three rode the sport utility vehicle to the mainstream, and the big rigs helped them skate past lagging reputations and terminally tacky design.

But there aren't any new magic cars or trucks in the works. And with the Japanese capturing broad swaths of the S.U.V. market and even taking on Detroit's hegemony of pickup trucks, the domestics are hurting in an era when Washington looks increasingly unwilling to backstop American industry.

Detroit's dependence on trucks also has some analysts worried.

"Demand for S.U.V.'s has evidently stalled," said Standard & Poor's in a recent report. G.M. is rushing its next generation of big S.U.V.'s like the Chevrolet Suburban into production by year's end, but with increased competition and volatile gas prices, "it is questionable whether these will generate the profit margins" of the past, the report said.

Worse, there used to be just the Japanese and the Europeans to worry about. Now a vigorous Korean competitor, Hyundai, and a Chinese company, Chery, promises to bring the first ultracheap Chinese cars to the United States in two years. Worse still, soaring healthcare costs are a severe competitive disadvantage for American companies with hundreds of thousands of retirees. G.M. spends nearly $2,000 for each car or truck it produces in the United States on health care and pension benefits, more than enough to equip each car with free leather seats.

Would it be so bad if we all drove cars made by Toyota and Honda and Nissan and Hyundai and BMW? After all, foreign automakers have plants here and domestically assembling many of their vehicles.

But the Big Three and their suppliers have a much deeper employment impact because more of their parts and cars are still made here and they support so many American retirees. They also provide health care to more than two million Americans, when one includes workers, retirees and family members, or about 0.7 percent of the entire population. G.M. and Ford are Top 10 employers in both Michigan and Ohio and their huge former parts operations, Delphi and Visteon, are themselves among the nation's largest companies.



The Big Three's impact is by far the most prevalent in the Midwest, where a domino chain of suppliers is suffocating as the Big Three shrivel, leaving Michigan tied with Mississippi for the second-highest unemployment rate, behind only Alaska. But the domestics also have nearly 20,000 dealers around the country and plants in cities like Chicago, where Ford produces its new Five Hundred sedan, and Arlington, Tex., where G.M. makes the Cadillac Escalade and other big S.U.V.'s.

To become more competitive, the Big Three are coming with hat in hand to the United Auto Workers union, which recently gave an inch on its legendary health care benefits by agreeing that Chrysler workers who used preferred provider organizations, or P.P.O.'s, would pay the first deductibles levied on Big Three autoworkers.

Until now, unionized autoworkers have not had to pay deductibles or monthly premiums for health care. Those sterling benefits have made Big Three jobs some of the most sought after blue-collar work in America, but last week G.M. executives said that era needs to come to a close.

Critics, executives and analysts say that getting Detroit's finances and benefits in order can only be a first step. More fundamentally, the companies have to give brands clear design identities that are not just marketing images.

G.M.'s current position is similar to the one Kmart found itself in in recent years, squeezed between the more fashionable Target and the more cut-rate Wal-Mart.

"They are neither the lowest cost mass manufacturer nor are they clearly positioned to support brand values to justify consumers paying more just to have one of the G.M. brands in their driveway," said Helmut Panke, the chief executive of BMW, in an interview last week. G.M., he added, is "stuck in the middle."

For many analysts, the antidote can be found in what has worked for Detroit. Chrysler has shown signs of revival recently on the back of distinctive cars, like the Chrysler 300 sedan, that match an attempt at a glossier image.

G.M.'s Cadillac brand has also been a success story.

"They clearly have achieved a major turnaround there," Mr. Panke said. "Maybe it's best described by the very coherent, consistent design language, everything they offer, from the cars through the S.U.V.'s in there, but also the focus on the message of, we are back and we are performance and we are the American luxury brand."

And what about some of G.M.'s other brands, like Pontiac-Chevrolet-Buick-GMC-Saab-Saturn? "The rest, if you took off the badges, or the labels, you would have a hard time recognizing who's who, what is what," Mr. Panke said.

This is a common view. John DeLorean, the flamboyant and scandal-prone G.M. executive who briefly ran his own car company in the 1980's and who died last week, was also concerned that Detroit had "lost touch with the buying public," says his nephew, Mark DeLorean.

Today's Detroit relies on big rebates to get people to buy cars they aren't "in love with," the younger Mr. DeLorean recalled his uncle saying. "John's attitude was always, I want people's eyes to light up when they walk through the showroom."

Or as Big Slice puts it, "G.M. is looking too plain, that's what it is, they need some spice and some seasoning."

"They need to come holler at Big Slice," he added. "I'll put 'em back in the game.

MWM
03-29-2005, 10:40 AM
They suffer from "good-old-boy-itis". Not in the racist sense, but in the sense that they are a victim of themselves. It's kind of like campaign finance reform. The very ones who need to be controlled are the very ones who have to decide the change the rules. It ain't never gonna happen. The very people who need to be replaced with younger and fresher perspectives are the very ones who have the power to make the decision. They're not going to fire themselves.