GM Recovery Plan

[dwightlooi]

Let's put aside emotional attachments to historically illustrious brands for a second. Let's also put aside the complications of labor contracts, dealership commitments and various fiefdoms within the General's camp. Let's simply ask where we want to be in four years...

I hope for a GM with no badge engineered products, half as many models and one third as many (US) brands tapping its engineering, design, financial, logistics and advertising resources makes pretty good sense. I also hope that this trimmer and focused GM will also be one which has regained technological and qualitative leadership over the rest of the world. But hope is not a strategy.

So, this is what I propose...

• All Luxury Cars, SUVs and Crossovers are Cadillacs
• All Trucks, SUVs and Commercial Vehicles are GMCs
• All mainstream Cars and SUVs are Chevys

• Dump all overlapping models
• Move all remaining models to the appropriate brand

• Reduce the number of engine blocks to five
• Introduce Diesel engines for the Export markets
• Introduce HCCI on all NA OHC engines
• Introduce VVT on OHV engines
• Introduce DI on all engines

• GM stops manufacturering Manual Transmissions
• Reduce the number of transmission models to six
• All Transmissions feature 6-ratios

Edited February 22, 2009 by Oldsmoboi

[SAmadei]

So, this is the GM as Toyota plan.

Playing devil's advocate... Why stop at Chevy/GMC/Cadillac? Since they are, IMHO, as damaged as the rest, just get rid of all "Divisions"... let all the dealers become GM dealers and have them sell whatever they want. You could still get a GM Pontiac... it would be a G8. Actually, it could be a GM Pontiac Roadster (Solstice) and GM Pontiac Deluxe Sedan (G8). It would be like 1939 all over again.

Also, I like the simplification of the drivetrains... a plan I am very much in favor of. Why do we need more than a micro-4 cyl 1.1-1.4ish, a 2.1-2.4ish 4 cylinder, a 3.9 V6 and a 5.7-6.0 V8. Make it so any model can swallow 2 or 3 of these engines to give the public some choice.

I'm not real familiar with GM's manual transaxles, but I thought GM didn't build any manual transmissions anymore... but bought them from Tremac and ZF. If GM does still make manual transaxles, they should be built by someone else, as well.

Personally, I don't like 80% of your plan, as I feel killing off historic brands limits during these times is short-sighted and will limit GM's future ability to compete with all comers.

I also don't like the future development of SUVs and Pickups. This is, IMHO, wasted money, and GM needs to take a page from the '70s/'80s truck development and have 15 year product cycles with minor yearly changes. They are trucks for crying out loud, and the basic truck hasn't fundamentally changed much since 1911. GM needs to lure these truck buyers back into cars to combat CAFE... because if they don't, Toyota will.

One thing your plan does not address is that GM needs a big dose of flexibility. Taking half a decade to react to trends is not going to cut it. With modern manufacturing techniques and just in time inventories, GM needs be able to shift the product portfolio on a dime. Why GM management was able to cope with major market changes like the Great Depression, WW2 and the fickle public of the '50s, but couldn't react to the SUV slaughter, when you could see it coming from a mile away, is beyond me... and tells me ALL GM management needs to be scrapped. Yeah, scrapped... like put in a big car crusher, not just fired.

[Croc]

This plan is not only ridiculously shortsighted, but completely ignores global realities that make the plan impossible to implement without costing the company more money than it would to play it forward as-is.

I like my proposals with a hint of realism, please.

[ZL-1]

You forgot Buick and the importance of that brand in China. GM cannot just get out.

Oh and that last pic was a nice humorous detail. It did make me laugh.

Edited February 22, 2009 by ZL-1

[ehaase]

The way things are going, GM may be much smaller by 2012 than shown above. I don't think it is realistic to expect HCCI will be ready or even widely available by 2012 or that manual transmissions should be dropped.

[Paolino]

Enclave should be XTS?

Doesnt the "S" stand for sedan?

[ZL-1]

Xitty Touring Sedan?

[FUTURE_OF_GM]

GM needs to maintain at least 5-6 brands.

I'll stop at that.

[GMTruckGuy74]

dwightlooi, I just wanted to let you know that it was me that removed your double-post of this topic :AH-HA_wink:

[dwightlooi]

The idea is that every brand needs its own advertising, marketing, logistics and managerial resource. Also, every model needs engineering, styling, tooling, inventory and testing resource -- even if its built on the same platform with the same basic drivetrains. Hence, going down to the minimum number of brands and models allow GM's very finite resources maximally focused. The idea is that no brands will build the same "class" of vehicles.

For example, instead of spending development and production resources on the Aura, Malibu and G6, produce the three different models with three different bills of materials, then having to promote the three different cars with three different messages in three separate marketing campaigns... if there is only the Malibu we can have a better engineered Malibu, built with at a lower cost and get three times as many ads out for it.

There is also no reason why Chevy needs to build SUVs and trucks, instead of having all GM trucks and SUVs be GMCs. Similarly, all luxury vehicles can be Caddys instead of splitting it between Buick and Caddy. For certain models that make sense like the Lacrosse -- a front drive, luxurious sedan which just recently got a revision -- we simply fold it into another brand; Cadillac in this instance. Similarly we can fold the HHR into the GMC brand, make Solstice and G8s Chevys, etc.

As far as manual transmissions go, to keep things simple I'll say GM should simply stop selling cars with Manuals. You get a 6-speed auto right down to the Aveo. For sporty car fans, well, they'll get used to it... no AMG model has a manual and they sell well enough that one in every nine M-B sold is now an AMG model.

Edited February 22, 2009 by dwightlooi

[dwightlooi]

You forgot Buick and the importance of that brand in China. GM cannot just get out.

Oh and that last pic was a nice humorous detail. It did make me laugh.

The dealers can sell Caddys! And the only models that matter are folded into the Caddy brand. Just tell them it's a label change... like Datsun being rechristened as Nissan.

Edited February 22, 2009 by dwightlooi

[dwightlooi]

Same thing for engines. There is no reason to have a 1.8, 2.0, 2.2 and 2.4 liter Ecotec. Just have a GOOD 2.1. There is also no reason for a 4.8, 5.3, 6.0, 6.2 and 7.0 liter small block. I'll even go as far as to say let's drop the Northstar and have ONE 5.2 microblock -- 103mm bore center, 94mm x 94mm (Bore x Stroke), which has direct injection, synchronous VVT. A 103mm bore spacing also makes the engine about 1.5 inches shorter, lighter and makes it easier to build it along side the 3.6 liter V6 which also has a 103mm bore spacing and 94mm bores.

[buyacargetacheck]

I think something like this is going to happen anyway. There are some very real marketing productivity economics at play here. GM simply cannot keep building more than a couple versions of the same vehicle and expect to grow Chevrolet let alone 3 or 4 other brands at the same time. Toyota and Honda and Nissan have changed the economics of how the volume car building game is played.

I have always liked the idea of Buick, but I think GM could make more profits (slightly higher MSRP, fewer incentives) with the same cars styled and badged as Cadillacs (LTS for LaCrosse and TRX for Enclave). With the way the biz is now, the new LaCrosse will not do big volume anyway. Buick dealers in the US can expect more pain. Buicks could still be sold in China.

With truck sales going down for good (shrinking economy for years, tougher CAFE) they should phase out GMC light duty products and sell off the GMC medium duty business with all the GMC franchises (even the ones that don't sell many medium duty trucks).

It might even make sense to change the name of the company to Chevrolet Motor Company, spin off Opel, and start concentrating on GMDAT designs built in Eastern Europe for Europe. Opel doesn't appear to be in as good a shape as we've all come to believe. No surprise -- high cost production market, lots of competition. Bad combo.

[dwightlooi]

It might even make sense to change the name of the company to Chevrolet Motor Company, spin off Opel, and start concentrating on GMDAT designs built in Eastern Europe for Europe. Opel doesn't appear to be in as good a shape as we've all come to believe. No surprise -- high cost production market, lots of competition. Bad combo.

They won't spin off Opel. Opel is getting bail out cash from the German Government...

[regfootball]

GM's brands should only be brands. Dealers should be able to sell any of the brands they want. But they should all be under one GM halo. My take is keep the brands and get rid of 'divisions'. Add or cut models as the market requires. GM's biggest problem is the dealer agreements. If GM dealers had the ability to sell all GM brands, then they would not need to cut any. If they could consolidate GM dealers to half or a third of what they are now, it would be a better customer experience and all the brands could remain. In that scenario, Pontiac could even thrive. It would be up to each dealer to prove which cars they can sell. GM would thrive best as GM SUPERSTORES.

[buyacargetacheck]

That's basically a good idea on the distribution front. However, the advertising problem remains in that GM still has to spend money to advertise GMC Acadia, Chevrolet Traverse, Buick Enclave, etc. At a certain sales volume, it makes no business sense to advertise because you won't be profitable. But if you don't advertise you won't move the metal.

The solution is that you concentrate your advertising and engineering dollars into one brand. So when Chevrolet advertises Silverado, everytime the bowtie flashes up on the screen and "Chevrolet" is mentioned GM is getting residual advertising time for the other models in the Chevy lineup. That effect multiplies when you take Pontiac ad dollars and spend them advertising Malibu instead.

GM's brands should only be brands. Dealers should be able to sell any of the brands they want. But they should all be under one GM halo. My take is keep the brands and get rid of 'divisions'. Add or cut models as the market requires. GM's biggest problem is the dealer agreements. If GM dealers had the ability to sell all GM brands, then they would not need to cut any. If they could consolidate GM dealers to half or a third of what they are now, it would be a better customer experience and all the brands could remain. In that scenario, Pontiac could even thrive. It would be up to each dealer to prove which cars they can sell. GM would thrive best as GM SUPERSTORES.

[ZL-1]

The dealers can sell Caddys! And the only models that matter are folded into the Caddy brand. Just tell them it's a label change... like Datsun being rechristened as Nissan.

I saw too many models for that brand. But it's just IMHO...

My ideal brand structure would be Chevy-Buick-Cadillac in NA; Chevy-Opel-Cadillac in Europe (even though we don't give a #$%& about Cadillac over here, meaning GM doesn't have a premium/luxury brand outside of NA). The rest of the world would be Chevrolet and whataver brand would command more respect locally, depending on the market being able to absorb brands above Chevrolet. And I'd keep a 20% stake in Saab with it being more or less GM's Subaru. However, the way things are going with the economy, I think no one knows which OEMs will be alive 5 years from now, let alone individual brands...

[dwightlooi]

I saw too many models for that brand. But it's just IMHO...

Cadillac will have six models -- 4 cars, 1 SUV, 1 crossover. That's about the same as Lexus (IS, ES, GS, LS, RX, LX) or Acura (RSX, TSX, TL, RL, RDX, MDX).

Well, fundamentally its very simple...

Save power train engineering and manufacturing dollars

• Consolidate [6 sizes of Small block V-8s, two sizes of Northstar V8s and the Atlas Six] --> One 5.2L Microblock V8 -- See Microblock thread --
• Consolidate [4 sizes of Ecotec fours and the Atlas four] --> One 2.1L Ecotec I4
• Consolidate [5 sizes of OHV V6es, two DOHC V6es and one DOHC I5] --> One 3.6L DOHC V6
• Create --> Diesel Derivatives of the 2.1 and 3.6 engines
• Consolidate [6 4-spd, 4 5-spd, 6 6-spd automatics] --> 5 6-spd automatics
• Eliminate --> all Manuals

Save Vehicle Engineering Dollars

• Consolidate [ 3~4 body styles for a given platform for 3~4 different brands] --> One body style for one brand

Save Advertising Dollars

• Consolidate [ 3~4 body styles for a given platform for 3~4 different brands] --> One body style for one brand
• Consolidate [8 brands with overlapping segments] --> 3 brands with discrete segments.

Edited February 23, 2009 by dwightlooi

[dwightlooi]

Put simply, there are so many wrongs with GM that it is better off being completely re-booted as a company. Imagine getting rid of all the liabilities, legacy UAW shackles, shut down all but 3 or 4 factories (preferably exclusively in right to work states), keep the core engineering talents and start over as a company 1/10th its current size. Selling half a dozen of vehicles, but do them right and at market costs instead of extorted overheads left behind by five decades of Union racketeering.

However, this is not going to happen because GM does not have the ability to make it happen as a company with no equity, no credit and no cash. And, the powers that can make it happen don't want to see it happen because they fall into three categories -- creditors who don't want their slate wiped clean, unions who want to keep the golden goose on life support and a very socialist US administration who cares less about GM as a business than it does about it as a jobs bank. So... it won't happen. A 3 brand GM, with half the head count and a union forced into accepting fair market labor rates under the threat of the Golden Goose putting on a do not resuscitate bracket, is probably the next best thing.

[buyacargetacheck]

Yeah. Think about it this way, though. If you had $50B to start a new business would you plow it into automobile manufacturing? Are there industries with better outlooks and returns? Any sane capitalist would answer NO to the first question and YES to the second. From a strict business standpoint there's probably no reason to continue either GM or Chrysler except in some relatively stable market segments where they are very strong, e.g., full-size pickup trucks.

Put simply, there are so many wrongs with GM that it is better off being completely re-booted as a company.

[dwightlooi]

Well... in retrospect, there was a very similar reduction in brands and lineup. They kept Buick, but otherwise it was close. There is also continued overlap between GMC and Chevy trucks where I would have preferred if Chevy get out of the truck business altogether and leave it to GMC. Finally, wasn't a reduction in power train lineup, however which IMHO they could have implemented. But, all it all, Government Motors is leaner and more streamlined than GM was. Let's hope that this company can turn itself around and take the company back to non-government ownership ASAP.

[Oracle of Delphi]

There is also continued overlap between GMC and Chevy trucks where I would have preferred if Chevy get out of the truck business altogether and leave it to GMC.

I agree 100% with this statement ...

[67impss]

I agree 100% with this statement ...

Yeah that's 1 way to weaken their core brand and find a way for GMC to be relevant while charging 10 - 15% more.

Chevrolet like a rock

Chevrolet we'll be there

[Chicagoland]

A good suggestion for "Jeopardy!"

Contestant: I'll take GM for $800...

Alex: The answer is...

GM needs to maintain at least 5-6 brands.

I'll stop at that.

Contestant: I say 'Why did GM go bankrupt?' Alex

Edited August 3, 2009 by Chicagoland