A Highly Simplified Analysis

[buyacargetacheck]

To put GM’s situation in perspective, here is a list of assembly plants along with their respective product’s 2009 sales run rate based on US January 2009 numbers. Mexican, Canadian and export sales are not included so there’s some need for adjustment there. Assuming each plant has a 250,000 unit capacity with 3 shifts and that we might see US market sales in the 10-11M unit range this year and next, it’s clear GM needs to rid more facilities and people to become profitable.

Below that list is a plant outline for a new GM made up of Cadillac, Chevrolet and GMC at 100% capacity utilization at a 10-11M market sales rate. Enough capacity is left to allow for a 30% increase in sales should the economy recover to the 13M unit level.

GMNA Today:

Arlington Assembly, Silao Assembly, Fort Wayne Assembly, Pontiac Truck Assembly:

46,188 Chevrolet Tahoe

16,236 Cadillac Escalade

27,156 GMC Yukon

8,064 Cadillac Escalade ESV

21,324 GMC Yukon XL

25,656 Chevrolet Suburban

4,020 Cadillac Escalade EXT

17,772 Chevrolet Avalanche

287,844 Chevrolet Silverado

96,240 GMC Sierra

550,500 total

Fairfax Assembly, Orion Assembly

111,744 Chevrolet Malibu

16,056 Saturn Aura

17,868 Buick LaCrosse/Allure EpII

29,616 Pontiac G6

175,284 total

Wentzville Assembly

32,616 Chevrolet Express Van

14,640 GMC Savana Van

47,256 total

Shreveport Operations

40,932 Chevrolet Colorado

12,144 Hummer H3

14,136 GMC Canyon

67,212 total

Bowling Green Assembly

10,104 Chevrolet Corvette

696 Cadillac XLR

10,800 total

Lordstown Complex

62,292 Chevrolet Cobalt

9,204 Pontiac G5

71,496 total

Wilmington Assembly

3,648 Pontiac Solstice

2,328 Saturn Sky

5,976 total

Detroit/Hamtramck Assembly

33,108 Buick Lucerne

16,344 Cadillac DTS

49,452 total

Flint Truck Assembly

Selling to Isuzu

Lansing Delta Township Assembly

32,544 Buick Enclave

38,796 GMC Acadia

11,328 Saturn Outlook

82,668 total

Spring Hill Manufacturing Operations

65,580 Chevy Traverse

Lansing Grand River

41,016 Cadillac CTS

10,656 Cadillac SRX

4,956 Cadillac STS

56,628 total

Ramos Arizpe, Mexico

34,452 Saturn Vue

20,400 Chevrolet HHR

54,852 total

CAMI

64,836 Chevrolet Equinox

19,680 Pontiac Torrent/GMC Terrain

84,516 total

Oshawa Car Assembly Plant

84,720 Chevrolet Impala

35,000 (same as Mustang?) Chevrolet Camaro

119,720 total

NEW GMNA:

Arlington Assembly

46,188 Chevrolet Tahoe

16,236 Cadillac Escalade

27,156 GMC Yukon

8,064 Cadillac Escalade ESV

21,324 GMC Yukon XL

25,656 Chevrolet Suburban

32,616 Chevrolet Express Van

14,640 GMC Savana Van

191,880 total

Silao Assembly

17,772 Chevrolet Avalanche

143,922 Chevrolet Silverado

48,120 GMC Sierra

209,814 total

Fort Wayne Assembly

143,922 Chevrolet Silverado

48,120 GMC Sierra

192,042 total

Fairfax Assembly

115,986 Chevrolet Malibu (picks up 25% Saturn Aura sales)

60,000 Chevrolet Impala (EpII)

30,000 Cadillac LTS ($30K LaCrosse replacement)

205,986 total

Bowling Green Assembly

10,104 Chevrolet Corvette

Lordstown Complex

175,000 Chevrolet Cruze

20,400 Chevrolet HHR

20,000 Chevrolet Orlando

10,000 Chevrolet Volt

225,000 total

Spring Hill Manufacturing Operations

67,168 Chevy Traverse (picks up 25% of Outlook sales)

38,796 GMC Acadia

32,544 Cadillac TRX (replacement for Buick Enclave priced the same)

73,336 Chevrolet Equinox (picks up 25% of Saturn Vue sales)

10,000 Cadillac SRX (Theta)

28,180 GMC Terrain (picks up 25% of Saturn Vue sales)

250,024 total

Lansing Grand River

41,016 Cadillac CTS

10,000 Cadillac CTS Coupe and Wagon

35,000 Chevrolet Camaro

86,016 total

TOTAL PRODUCTION/SALES: 1,370,866 ABOUT A 13.7% MARKET SHARE AND PROFITABLE

Close:

Pontiac Truck Assembly

Orion Assembly

Wentzville Assembly

Shreveport Operations

Wilmington Assembly

Detroit/Hamtramck Assembly

Lansing Delta Township Assembly

Ramos Arizpe, Mexico

Oshawa Car Assembly Plant

Saab

Hummer

Saturn

Pontiac

Buick in the US

Sell:

Flint Truck Assembly to Isuzu

CAMI to Suzuki

Expand: NUMMI relationship by selling a version of the Tacoma and cancelling the Colorado and Canyon. Vibe could continue to be sold as a GMC “small crossover.”

Cancel: Colorado, Canyon, DTS, XLR, Escalade EXT, STS, LaCrosse/Allure, Lucerne, Enclave, Aura, Outlook, Vue, Astra, Sky, Solstice, G5, G6, G8, H2, H3, 9-3, 9-5

Edited February 5, 2009 by buyacargetacheck

[balthazar]

Sorry- not following the presentation of this information. Maybe it's just been a long day for me.

Wondering how you determined plant capacity & profitability level- Corporate profit is based on FAR more than merely assembly plant capacity utilization.

Is a 3-shift SOP cost effective? Obviously, that would require X-number more employees.

Should production capacity analysis be based on anymore than 1 or maybe 2 shifts?

This would be a complex, plant-by-plant cost analysis to determine the most cost-effective action (plant sale, plant demolition, 1-shift, 2-shifts + more employees, 3 shifts + yet more employees).

Apologies if a misunderstanding on my part makes these questions O/T ramblings...

[buyacargetacheck]

No worries. Granted, it's not well organized.

Yes, a proper analysis would require more information than I have access to. Since I don't have inside info on GM's plant capacity I simply assumed each plant (except maybe Grand River and definitely Bowling Green) has a maximum 3 shift capacity of about 250,000 units. This seems to be industry-standard for large volume vehicles. Granted, some of them might be 2 shift operations but the output is roughly the same.

Profit at these plants is highly dependent on keeping them running at or near 100% capacity to reduce the fixed costs (tooling, building, etc) per unit produced. That $28/hour paid to the line worker is very expensive if only 1 car an hour is produced instead of 25 (an extreme example for the sake of argument). That's why even Toyota is losing its shirt right now.

Obviously some older platforms/plants/tooling have been amortized longer than others. For example, the DTS and Lucerne might have been profitable at 100,000 units a year even though Hamtramck can produce far more than that. But 49,000 units? Doubtful. Volume is even more important for the newer products whose tooling is new. In the case of Lambda, not only is volume low there are 2 plants allocated to production. It's just hard to believe that GM needs two Lambda plants for the kind sales they are making now or even that they would make in a 13M unit market.

Bottomline, if GM is serious about becoming viable they're going to have to get rid of nearly half of their assembly plants and start building different kinds of vehicles in the same plants.

Sorry- not following the presentation of this information. Maybe it's just been a long day for me.

Wondering how you determined plant capacity & profitability level- Corporate profit is based on FAR more than merely assembly plant capacity utilization.

Is a 3-shift SOP cost effective? Obviously, that would require X-number more employees.

Should production capacity analysis be based on anymore than 1 or maybe 2 shifts?

This would be a complex, plant-by-plant cost analysis to determine the most cost-effective action (plant sale, plant demolition, 1-shift, 2-shifts + more employees, 3 shifts + yet more employees).

Apologies if a misunderstanding on my part makes these questions O/T ramblings...

[daves87rs]

No.

While I can agree with some of the model cuts, there are just too many plants that are gone.

If you can live with that many plant closings, then you would be better off cutting even more models....

And where are you getting a profit? What makes you think that the current models are going to be winners?

Still too many factors there....

[buyacargetacheck]

While I can agree with some of the model cuts, there are just too many plants that are gone.

What do you mean by "too many?"

If you can live with that many plant closings, then you would be better off cutting even more models....

No need to cut more models if the plants are running at or near capacity as shown in the proposal.

And where are you getting a profit? What makes you think that the current models are going to be winners? Still too many factors there....

The scope of this exercise is plant capacity utilization only. If the plants could be run at or near capacity in this downturn then they'll be spectacularly profitable when the economy recovers. It's all about recovering fixed costs. That's how you make a profit in a capital-intensive business like this one. I'm not making any statements about how good the products actually are or how good GM's sales and marketing effort is. You're right, those are factors to consider. But not in this little exercise.

[buyacargetacheck]

BTW, there are plenty of potential moves in this proposal that may not be realistic. For example...

1) How much would it cost to move large van production to Arlington? Could the vans and SUVs be run on the same line without major reconstruction?

2) It would take 4-5 years at the earliest to develop a new EpII Impala, the Cadillac LTS, the Cadillac TRX. Where is the capital coming from?

3) If you move the Volt to Lordstown you increase the cost of shipping the engines which are to be built in Flint.

4) Is it possible to build Thetas and Lambdas on the same line? How much investment would that require?

5) Unlikely that it would be worth stopping Camaro production to move it to the underutilized Cadillac factory.

6) Would Suzuki buy GM's interest in CAMI?

7) Would Toyota be willing to provide Tacomas for GM?

8 A 4-year phaseout of Saturn, Buick and Pontiac as well as a GMC switch for the Vibe would be ideal as many of the models are new or early in their lifecycles. It would take that long for GM to recoup at least some of its investment in those programs. Less harsh for the dealers too.

Edited February 5, 2009 by buyacargetacheck

[gm4life]

I totally disagree with MANY of your model cuts, this won't happen nor be this dramatic unless GM wants to loose customers who have been very loyal like me they better not try this. If I leave GM because of a plan with no Pontiac and the various other cuts and I am GM loyal who will be left?

Edited February 5, 2009 by gm4life

[buyacargetacheck]

It looks like GM has left you based on your last 2 car choices. Bonneville was cancelled and Terrain has a date with death. What Pontiac do you have your eye on this summer to purchase?

[daves87rs]

What do you mean by "too many?"

No need to cut more models if the plants are running at or near capacity as shown in the proposal.

The scope of this exercise is plant capacity utilization only. If the plants could be run at or near capacity in this downturn then they'll be spectacularly profitable when the economy recovers. It's all about recovering fixed costs. That's how you make a profit in a capital-intensive business like this one. I'm not making any statements about how good the products actually are or how good GM's sales and marketing effort is. You're right, those are factors to consider. But not in this little exercise.

While not bad, there were too many cars/trucks shoved into a plant. That's just begging for quality issues....

But after reading your post, I do see where you are coming from......

[daves87rs]

I totally disagree with MANY of your model cuts, this won't happen nor be this dramatic unless GM wants to loose customers who have been very loyal like me they better not try this. If I leave GM because of a plan with no Pontiac and the various other cuts and I am GM loyal who will be left?

There will still be model cuts....it just depends on where GM plans these cuts...

[balthazar]

>>"If the plants could be run at or near capacity in this downturn then they'll be spectacularly profitable when the economy recovers. It's all about recovering fixed costs. "<<

Unfortunately, if every plant is running at/near capacity for a 9-10M unit market, if/when that improves to -say- 13M, there is no more capacity. Unless "at capacity" is 1 shift, only. In order to meet this hypothetical increased demand, a new multi-billion $ factory will have to be built- and that would take some years to get up & running. That's poor long-term planning, wouldn't you agree?

[buyacargetacheck]

I have most of the plants running at 80% in a 10M market and 100% in a 13M market. It would be nice, for a change, if GM actually built just slightly fewer vehicles than were demanded, say, 1 to 3% under demand. That's the kind of thing that improves residual values as BMW, Toyota and Honda have shown.

>>"If the plants could be run at or near capacity in this downturn then they'll be spectacularly profitable when the economy recovers. It's all about recovering fixed costs. "<<

Unfortunately, if every plant is running at/near capacity for a 9-10M unit market, if/when that improves to -say- 13M, there is no more capacity. Unless "at capacity" is 1 shift, only. In order to meet this hypothetical increased demand, a new multi-billion $ factory will have to be built- and that would take some years to get up & running. That's poor long-term planning, wouldn't you agree?

[FUTURE_OF_GM]

Why in the world would GM EVER want to shoot for 13.7% market share when they have 21% of the retail market now?

You CANNOT cut your way to profitability. I hope someone at GM understands this. As long as they keep cutting, the corporation will keep falling (for a number of reasons) Does GM need to 'trim the fat'? Sure.

[buyacargetacheck]

Because GM is effectively buying that 21% market share with $3,000 on the hood per vehicle on average while not effectively utilizing their plants. Costs increase even further per vehicle when you have to advertise and promote 2 similar vehicles, priced similarly, made in different plants, but one sells 5-6 times better (Malibu vs G6 for example).

When companies are overwrought with capacity and low ROI projects/businesses they CAN cut their way to profitability. General Electric was famous for this. Retrenching to a sustainable position and growing from there is what GM needs to do. Cadillac has tremendous potential for growth, but they're pissing away resources with Buick at Cadillac's expense. BTW, I love Buick but I realize that it doesn't have the cache of Cadillac in the US, is less popular with buyers every year, and doesn't have a ghost of a chance competing with any other similarly-priced line except to its own customer base (which is declining). Cadillac, on the other hand, has the potential to sell more Enclave and LaCrosse equivalents at a slightly higher profit on the name alone.

Why in the world would GM EVER want to shoot for 13.7% market share when they have 21% of the retail market now?

You CANNOT cut your way to profitability. I hope someone at GM understands this. As long as they keep cutting, the corporation will keep falling (for a number of reasons) Does GM need to 'trim the fat'? Sure.

Edited February 5, 2009 by buyacargetacheck

[balthazar]

>>"I have most of the plants running at 80% in a 10M market and 100% in a 13M market. It would be nice, for a change, if GM actually built just slightly fewer vehicles than were demanded, say, 1 to 3% under demand. That's the kind of thing that improves residual values as BMW, Toyota and Honda have shown."<<

Wait- plant capacity utilization directly effects residual values ??? Care to explain how ?

Sticking with this - with 100% utilization, GM must be running 3 full shifts. What of the market returns to 15M? What if in the meantime, other brands are forced to withdraw from the USDM, giving marketshare back to the remaining even in 'only' a 13M market? What if the Volt takes off while gas remains cheap & truck sales increase even more? Where will additional capacity come from?

I realize the long term trend has been the opposite of that as far as volume goes, but again- the cost analysis here is very complex. New factory vs. buying & renovating another automaker's plant? 3 shifts of employees & their benefits vs. 1 shift + now? Cost of demolishing all these factories / EPA costs and eventual real estate liquidation capital vs. mothballing them ? Who outside of GM accounting hads these numbers ??

So easy to snap one's fingers and say 'Sell this & this & this', but this market is very rough and nearly nothing is a given.

[Drew Dowdell]

>>"I have most of the plants running at 80% in a 10M market and 100% in a 13M market. It would be nice, for a change, if GM actually built just slightly fewer vehicles than were demanded, say, 1 to 3% under demand. That's the kind of thing that improves residual values as BMW, Toyota and Honda have shown."<<

Wait- plant capacity utilization directly effects residual values ??? Care to explain how ?

If Chevy can only sell 100,000 Cobalts but the plant is running at a rate of 180,000 then 80,000 get dumped into rental fleets. Hurts resale value.

[buyacargetacheck]

Wait- plant capacity utilization directly effects residual values ??? Care to explain how ?

See Oldsmoboi's answer.

What of the market returns to 15M?

We won't see 15M for a very long time. Even if we did, GM would be running at 100% capacity, profitable, with demand higher than supply. That's good for GM and its remaining brands.

What if in the meantime, other brands are forced to withdraw from the USDM, giving marketshare back to the remaining even in 'only' a 13M market?

Excellent, again demand slightly exceeding supply helps polish the Cadillac, Chevrolet and GMC brands.

What if the Volt takes off while gas remains cheap & truck sales increase even more? Where will additional capacity come from?

At $40,000 the Volt won't "take off." It will be a plaything for rich greenies. Even if it did, there's plenty of capacity at Lordstown.

I realize the long term trend has been the opposite of that as far as volume goes, but again- the cost analysis here is very complex. New factory vs. buying & renovating another automaker's plant? 3 shifts of employees & their benefits vs. 1 shift + now? Cost of demolishing all these factories / EPA costs and eventual real estate liquidation capital vs. mothballing them ? Who outside of GM accounting hads these numbers ?? So easy to snap one's fingers and say 'Sell this & this & this', but this market is very rough and nearly nothing is a given.

All true. I don't claim to be a GM accounting/finance insider. Just a fun exercise to contemplate. That said, I don't believe anything in business is mysterious or impossible. GM can be fixed. However, that requires leadership and guts, 2 things that seem to be missing amongst GM's largest shareholders, directors and C-level management.

Edited February 5, 2009 by buyacargetacheck

[balthazar]

>>"If Chevy can only sell 100,000 Cobalts but the plant is running at a rate of 180,000 then 80,000 get dumped into rental fleets. Hurts resale value."<<

Here, residual value is only affected by the percentage of fleet vehicles sold, not at what percentage the plant is running at RE capacity.

If the answer to that is that GM is building 180K and cannot/does not trim production to meet a 100K demand, then that is a legitimate criticism and needs to be addressed. But retail/fleet was never initially mentioned. In other words, 2 different plants, both running at -say- 95% capacity, could be turning out a wildly different retail/fleet breakdown... which is why I'm saying capacity does not determine residual directly.

[Intrepidation]

While not perfect buyacargetacheck, you certainly make a lot of good points. It's much better for GM to have less models which compete with each other, have the plants running at capacity and not exceeding the market demand, than the current situation of too many cars, too many plants, not enough utilization, and not enough demand.

After all, this problem has been around long before the economy took a dump...that just mad e things worse.

[SAmadei]

115,986 Chevrolet Malibu (picks up 25% Saturn Aura sales)

30,000 Cadillac LTS ($30K LaCrosse replacement)

67,168 Chevy Traverse (picks up 25% of Outlook sales)

32,544 Cadillac TRX (replacement for Buick Enclave priced the same)

73,336 Chevrolet Equinox (picks up 25% of Saturn Vue sales)

28,180 GMC Terrain (picks up 25% of Saturn Vue sales)

This is some BAD assuming here... this is 300,000 sales made out of thin air. Based on the Oldsmobile Death Sentence Experiment, you can't assume Chevy/GMC will inherit Saturn sales and Cadillac will inherit Buick sales. Ain't going to happen. You got on thing right, though... Kill off Pontiac and kiss those sales goodbye forever.

I think the idea of having a Chocolate, Vanilla and Cookie Dough flavor of one platform is a good thing... GM is squandering a fortune in high-end Trans Am sales because they aren't willing to build a handful of Firebird specific parts. GM's cost problems are much bigger than too many brands, IMHO.

If eliminating brands is the goal, lets cut to the chase. Introduce the GM Car. One model to rule them all.

I'd rather see GM give it's brands independence... even it is BPG and a couple other horrifying combos, like Saab-Hummer-Daewoo. Let them hire the best guns and compete to survive. It's better than the hospice treatment that is killing ALL GM's brands. Chevy, included.

[buyacargetacheck]

No, the 347,214 sales include what the Traverse, Malibu, Equinox, and Pontiac Torrent (soon to be Terrain) are already selling today + what Buick is selling now but badged as Cadillacs in my plan + the marginal sales Malibu, Traverse, Equinox and Terrain would pick up from G6/Aura (4,242), Outlook (1,588), Vue (8,500), and Vue (8,500) respectively.

The Malibu today is on an annual run rate of 111,744. Chevy will pick up some Aura and G6 (which I originally forgot to include) sales. So to be very conservative, let's say that the 4,242 is the total sales the Malibu would pick up from the G6 and the Aura (9%). That's very realistic.

The Cadillac TRX and LTS sales are simply the replacements for the LaCrosse and Enclave. I am assuming the EpII LaX will do better than the current product (30,000 versus 17,868 currently). This is also conservative: similar product, same price, "better" nameplate. This is not overly optimistic.

Ever since the Traverse was introduced, Saturn Outlook sales have been down in the 50% to 60% range month after month. This is no coincidence. Saturn dealers are pointing at the Traverse as the cause. I believe one of the Detroit papers carried a story about this. So, it's no big leap to say that Chevy might be able to capture 25% of the remaining Outlook volume if the Outlook were cancelled (1,588 additional annual sales).

Maybe it is unreasonable to assume that the Terrain would pick up 25% of the Vue sales, but it would pick up some.

So, only 34,962 sales of the 347,214 sales you're questioning are really in question. GM might or might not pick up these sales depending on how good they market the products. Based on what they've done with the Malibu they know how to do it right -- they just have to get focused.

I'm trying to show a scenario where GM could leverage its brands and plants better. What they're doing now isn't working.

This is some BAD assuming here... this is 300,000 sales made out of thin air. Based on the Oldsmobile Death Sentence Experiment, you can't assume Chevy/GMC will inherit Saturn sales and Cadillac will inherit Buick sales. Ain't going to happen. You got on thing right, though... Kill off Pontiac and kiss those sales goodbye forever.

I think the idea of having a Chocolate, Vanilla and Cookie Dough flavor of one platform is a good thing... GM is squandering a fortune in high-end Trans Am sales because they aren't willing to build a handful of Firebird specific parts. GM's cost problems are much bigger than too many brands, IMHO.

If eliminating brands is the goal, lets cut to the chase. Introduce the GM Car. One model to rule them all.

I'd rather see GM give it's brands independence... even it is BPG and a couple other horrifying combos, like Saab-Hummer-Daewoo. Let them hire the best guns and compete to survive. It's better than the hospice treatment that is killing ALL GM's brands. Chevy, included.

[gm4life]

No, the 347,214 sales include what the Traverse, Malibu, Equinox, and Pontiac Torrent (soon to be Terrain) are already selling today + what Buick is selling now but badged as Cadillacs in my plan + the marginal sales Malibu, Traverse, Equinox and Terrain would pick up from G6/Aura (4,242), Outlook (1,588), Vue (8,500), and Vue (8,500) respectively.

The Malibu today is on an annual run rate of 111,744. Chevy will pick up some Aura and G6 (which I originally forgot to include) sales. So to be very conservative, let's say that the 4,242 is the total sales the Malibu would pick up from the G6 and the Aura (9%). That's very realistic.

The Cadillac TRX and LTS sales are simply the replacements for the LaCrosse and Enclave. I am assuming the EpII LaX will do better than the current product (30,000 versus 17,868 currently). This is also conservative: similar product, same price, "better" nameplate. This is not overly optimistic.

Ever since the Traverse was introduced, Saturn Outlook sales have been down in the 50% to 60% range month after month. This is no coincidence. Saturn dealers are pointing at the Traverse as the cause. I believe one of the Detroit papers carried a story about this. So, it's no big leap to say that Chevy might be able to capture 25% of the remaining Outlook volume if the Outlook were cancelled (1,588 additional annual sales).

Maybe it is unreasonable to assume that the Terrain would pick up 25% of the Vue sales, but it would pick up some.

So, only 34,962 sales of the 347,214 sales you're questioning are really in question. GM might or might not pick up these sales depending on how good they market the products. Based on what they've done with the Malibu they know how to do it right -- they just have to get focused.

I'm trying to show a scenario where GM could leverage its brands and plants better. What they're doing now isn't working.

Flawed plan with many flawed ideas...

Lets see in your plan Pontiac is gone, mistake. Just like killing Olds was don't even get me going on that or Pontiac for that matter. You have the Lucerne and DTS just floating away and thus getting rid of many traditional buyers. (They'll go to the Lincoln MKS, Avalon or ES trust me.) That is one huge mistake, I support a "premium" fullsize FWD vehicle for Buick and Cadillac with a six speed automatic and a Northstar or DI V6. Anyways that prolly won't happen. GM must do something because in the traditional luxury market Lucerne/DTS buyers GM has, basically most of that market. These buyers tend to be VERY loyal to domestic cars and trade in every few years, pissing these folks off isn't bright by not offering them a vehicle. Next off you have assumed many things will happen in the market/industry which may not happen and have CUT SO MUCH truck production out you might as well give the market to Ford and Toyota. I support this... Chevrolet, Cadillac, Buick, GMC and Pontiac all remain the tradtional and "old" brands Saturn (which was a mistake) is phased out, Saab is sold or kept, and Hummer just get rid of it. Then narrow Pontiac's focus to cars with a G6 (as a volume seller) G8 (as a niche performance car) Solstice (niche sports car) and nix the damn Vibe (after the cycle ends) and introduce a new Cruze based Pontiac that actually looks like a Pontiac not a rebadge. As for the rest keep it simple would be my advice and bring out great products. Not all your crazy ideas have to happen nor thankfully will some of them happen. Once again depending how GM treats Pontiac that could change what company I buy my next NEW car from. If they piss away a loyal customer like me who will be left to buy them? That is what scares me.

FOR THE FINAL TIME GM CAN'T BE TOYOTA. I they can't try to be Toyota nor should they be Toyota. Offering a wide range of vehicles from different brands works pretty well for GM and will keep doing so. Just give it time, and if Pontiac has to live with some not so great products for a while fine, but when the time comes to give them a great new product then do it. Time will only tell.

As for my car coming in the summer most likely a 2006-2007 Monte Carlo 1LT (price must be right under 10K) a 2007-2008 G6, or maybe a 2002-2004 Seville depends all on what I find. I could end up with a GP or another Impala but who knows.

Edited February 6, 2009 by gm4life

[Intrepidation]

You're kidding yourself if you think GM won't be killing brands in short order. They'll phase them out to avoid the Olds fiasco. GM is just too big with too many models that compete with each other.

[Sixty8panther]

Here's an idea:

Cut 30% of the plants.

With the other 70% produce only 5 models:

Cadillac STS/CTS/CTS-V

Chevrolet/GMC Trucks/SUVs

Pontiac G8-GT (add a 2dr hardtop)

Corvette/Z06/Zr1

Chevrolet Camaro & a Buick Riviera based on a stretched version of the same Zeta-platrorm

Done. All the rest are useless.

[Drew Dowdell]

>>"If Chevy can only sell 100,000 Cobalts but the plant is running at a rate of 180,000 then 80,000 get dumped into rental fleets. Hurts resale value."<<

Here, residual value is only affected by the percentage of fleet vehicles sold, not at what percentage the plant is running at RE capacity.

If the answer to that is that GM is building 180K and cannot/does not trim production to meet a 100K demand, then that is a legitimate criticism and needs to be addressed. But retail/fleet was never initially mentioned. In other words, 2 different plants, both running at -say- 95% capacity, could be turning out a wildly different retail/fleet breakdown... which is why I'm saying capacity does not determine residual directly.

Ah, I see the misunderstanding. Look at the statement as a whole.

>>"I have most of the plants running at 80% in a 10M market and 100% in a 13M market. It would be nice, for a change, if GM actually built just slightly fewer vehicles than were demanded, say, 1 to 3% under demand. That's the kind of thing that improves residual values as BMW, Toyota and Honda have shown."<<

He is referring to building to demand rather than building to capacity. GM overbuilds because they have to pay the workers anyway if they're on the line or at the jobs bank. Might as well be able to book some revenue for it.

[evok]

Flawed plan with many flawed ideas...

LOL

Some of the plants identified in his analysis are already on the hit list. Overall his flawed plan is not that flawed.

[buyacargetacheck]

Well, this just in...

http://money.cnn.com/news/newsfeeds/articl...35_FORTUNE5.htm

People close to the situation expect GM to announce plant closures on February 17th when GM presents its plan to the government. One analyst expects 2 closures coming: Pontiac Truck and either Oshawa Car or Orion.

The article reiterates the importance of factory utilization to profitability:

To be profitable, an auto plant typically needs to use at least 80% of its capacity. Half-empty plants are a major cost drain because of the massive overhead involved in running a factory, from paying property taxes to maintenance to white-collar support staff.

LOL

Some of the plants identified in his analysis are already on the hit list. Overall his flawed plan is not that flawed.

[Intrepidation]

buyacargetacheck, I'm going to move this thread to C&G Features, since it's your own idea/article.

[Oracle of Delphi]

Well, this just in...

http://money.cnn.com/news/newsfeeds/articl...35_FORTUNE5.htm

People close to the situation expect GM to announce plant closures on February 17th when GM presents its plan to the government. One analyst expects 2 closures coming: Pontiac Truck and either Oshawa Car or Orion.

The article reiterates the importance of factory utilization to profitability:

To be profitable, an auto plant typically needs to use at least 80% of its capacity. Half-empty plants are a major cost drain because of the massive overhead involved in running a factory, from paying property taxes to maintenance to white-collar support staff.

I have a feeling there will be more than plant closures announced on 2/17/09 ...

[cire]

I have a feeling there will be more than plant closures announced on 2/17/09 ...

Sort of like the following:

1) GM will set a deadline for selling Hummer. If the division can't be sold by that deadline, it will be discontinued.

2) Saab is either up for sale or will be withdrawn from the U.S. market. Since Saab has more acceptance in Europe than Cadillac, it may be designated as GM's sole luxury brand in that market.

3) Saturn will be discontinued once the current Aura, Outlook, Vue, and Sky reach the end of their model cycles. The next gen Astra will be assigned to another brand as will any other U.S. bound Opel models.

4) Pontiac will be discontinued once the current Vibe, Solstice, and G8 reach the end of their model cycles. Pontiac is essential to the B-P-G network because the Vibe will be the only FWD small car offering for the network until Buick receives next gen Opel small cars.

OR

GM is filing for bankruptcy.

Neither one is desirable, but the latter of the two would definitely be a worst case scenario.

[ehaase]

The Cadillac TRX and LTS sales are simply the replacements for the LaCrosse and Enclave.

I have a feeling that your TRX and LTS will actually be the next Escalade and DTS. I predict that by 2014 Cadillac's lineup will be TE SRX, Epsilon II DTS, Lambda Escalade, and hopefully Alpha CTS.

For those who complain Cadillac can't compete with BMW and Mercedes with this, well I won't be surprised if the economic slump and European emission control standards force BMW and Mercedes to slash their offerings. I've already read that BMW may drop its V8 and replace it with turbo six cylinder engines.

I think Buick will stay in the US only because dropping it will harm its image in China.

[buyacargetacheck]

I think you might be right about the Cadillac lineup. I do think the old DTS customer is slowly fading while the ES350-type buyer is taking its place for those who want a luxury badge and traditional comfort. GM should celebrate Cadillac for what it is (a comfortable car with style and flash) and not worry about the Germans. Because Cadillac is not a separate company and only sells 200K worldwide there will always be a little "Chevy" under the skin. Hey, that's OK -- Chevys are pretty good nowadays. But BMW and Mercedes buyers worldwide know the difference. Conventional wisdom says that it's all blue skies and prosperous days for Buick in China, but I don't believe that. China has a tendency to surprise and contradict the conventional thinking.

I have a feeling that your TRX and LTS will actually be the next Escalade and DTS. I predict that by 2014 Cadillac's lineup will be TE SRX, Epsilon II DTS, Lambda Escalade, and hopefully Alpha CTS.

For those who complain Cadillac can't compete with BMW and Mercedes with this, well I won't be surprised if the economic slump and European emission control standards force BMW and Mercedes to slash their offerings. I've already read that BMW may drop its V8 and replace it with turbo six cylinder engines.

I think Buick will stay in the US only because dropping it will harm its image in China.

[Oracle of Delphi]

The bad economy is catching up with China, factories are starting to close and people are being let go ...

[Lamar]

The bad economy is catching up with China, factories are starting to close and people are being let go ...

So what do you predict? That China's economy will burst like the oil bubble of the summer or that they'll revert to how they were before their recent (past few decades) modernization movements?

And is there a cryptic GM message in here?