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Thread: GM May Kill the Buick or Pontiac Brand

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    RZ Chamber of Commerce Unassisted's Avatar
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    GM May Kill the Buick or Pontiac Brand

    http://cnn.netscape.cnn.com/ns/news/...&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."
    /r/reds

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  3. #2
    The wino and I know bucksfan's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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.
    "I'm virtually free to do whatever I want, but I try to remember so is everybody else..." - Todd Snider

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    Member Reds4Life's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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
    Pessimists are well informed optimists

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    Team Puffy Leadoff Hitter CbusRed's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by Reds4Life
    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.

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    Puffy's Daddy Red Leader's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Buick has a LTC with Tiger Woods. Pontiac does not.

    Look for Pontiac to go.
    'When I'm not longer rapping, I want to open up an ice cream parlor and call myself Scoop Dogg.'
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    Your Mom is happy.

  7. #6
    Team Puffy Leadoff Hitter CbusRed's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by Red Leader
    Buick has a LTC with Tiger Woods. Pontiac does not.

    Look for Pontiac to go.
    True, but what about Pontiac's ties to NASCAR?

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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by CbusRed
    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.

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    Big Red Machine RedsBaron's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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.
    "Hey...Dad. Wanna Have A Catch?" Kevin Costner in "Field Of Dreams."

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    RZ Chamber of Commerce Unassisted's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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?
    /r/reds

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    We Need Our Myths reds1869's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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.

  12. #11
    Big Red Machine RedsBaron's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by Herd Fan
    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.
    "Hey...Dad. Wanna Have A Catch?" Kevin Costner in "Field Of Dreams."

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    For a Level Playing Field RedFanAlways1966's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    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?
    Small market fan... always hoping, but never expecting.

  14. #13
    Big Red Machine RedsBaron's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Ironic that you mention the Grand Am. Pontiac no longer builds it, as the G6 has taken its place.
    "Hey...Dad. Wanna Have A Catch?" Kevin Costner in "Field Of Dreams."

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    For a Level Playing Field RedFanAlways1966's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by RedsBaron
    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.
    Small market fan... always hoping, but never expecting.

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    Member dman's Avatar
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    Re: GM May Kill the Buick or Pontiac Brand

    Quote Originally Posted by CbusRed
    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.


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