Mark Phelan on GM

[HarleyEarl]

MARK PHELAN: Don't bury GM yet: It has the vehicles for recovery November 22, 2005 FREE PRESS COLUMNIST General Motors Corp. builds more good cars and trucks today than it has in decades, but it's still saddled with too many losers. Its plant closures should address that and allow GM to stop diverting resources it can't afford to vehicles it doesn't need. It may make sense for Pontiac and Buick to attempt to sell minivans in some alternate universe, but on Earth the boring vehicles only distract GM from coming up with vehicles the public actually wants. Every big automaker has its share of underperforming models -- even Japan's successful automakers have the Toyota Echo, Nissan Quest and Honda Ridgeline. We don't pay attention to those vehicles and heap scorn on them like we do when GM foists a vehicle like the Pontiac Aztek on us. There are two good reasons for that. First, thousands of Michigan jobs hinge on GM's every move, so we focus on the company obsessively. Second, Toyota and Honda have their own obsessive focus on doing a superb job with their core vehicles like the Camry, Sienna and Accord. That success makes the occasional failure of a marginal vehicle seem insignificant. GM has another problem, and it created this one for itself. The world's largest automaker has spent the better part of a generation teaching us to expect poor quality and lousy fuel economy. That's generally not the case today -- the Chevrolet Malibu midsize sedan gets 35 miles per gallon on the highway and has won several awards for its quality. As fuel prices rose this summer, it became fashionable to dismiss the new full-size SUVs that GM has coming next year as out of touch and out of time, but GM's big SUVs have outsold the Toyota Prius gasoline-electric hybrid by more than 4 to 1 this year. And that's in a down year. Just as it was a mistake to assume the Nissan Titan pickup would run Ford and Chevy pickups off the road when it went on sale two years ago, it's too early to write the obituary for GM's profitable SUVs. When a brand has become severely damaged, it takes 3 to 5 years for the public perception to catch up with an improvement in its products, GM Vice Chairman Bob Lutz told me last summer. By that measure, GM's Cadillac and Chevrolet brands are in recovery. The automaker's latest moves could set the stage for repairing the rest of its product line. The two C brands build many excellent models today. The Cadillac CTS has been on the market since 2002 and its sales are still rising, a trend that's almost unprecedented among domestic brands. Buyers are paying the sticker price for the Chevrolet HHR, and that's unheard of for a small car from GM. Cadillac has a clear mission -- to be America's luxury car -- and a well-defined product line. Chevrolet's not quite there yet, but upcoming vehicles like the full-size SUVs and pickups and the stunning replacement for the Malibu midsize sedan spell out GM's plan. Chevy must again become the brand that combines affordability, style and performance for the American family. Phasing out plants that build peripheral vehicles like Chevrolet's enjoyable but slow-selling SSR convertible pickup makes sense. So does reducing production of midsize SUVs by idling GM's Oklahoma City plant and cutting a work shift in Moraine, Ohio. The market is moving away from vehicles like the Chevy TrailBlazer, GMC Envoy and Buick Rainier. GM is better off concentrating on the fuel-efficient replacements for those vehicles that will come from its new assembly plant just outside Lansing. The idea that GM has to provide Buick, GMC, Pontiac and Saturn dealers with a vehicle for every market niche is a luxury GM can't afford. If Cadillac and Chevrolet are healthy, GM is healthy. The rest is gravy. However, Buick and Pontiac remain weak. The brands have no clear identity, and they've had too many bland cars for too many years. Their images have sunk lower than Cadillac's and Chevrolet's ever did, Lutz admitted to me last summer. Pontiac has the first cars in its revitalization on the road now in the Solstice roadster and GTO sport coupe, but Buick is just getting started. By sweeping away the minivans and so-so midsize sedans that clutter the brands' lineups, GM may hasten the recovery by sharpening Pontiac and Buick's focus.

[balthazar]

Hoo-boy is FOG gonna tear this one up. Let me get him started:

Don't bury GM yet

the boring vehicles

[Newbiewar]

Well written, I wonder what he means by a replacement for the Malibu... it just got a new look for 05... are they replacing it already... That sounds like good news... maybe not Lutz keep up the good work...

[hyperv6]

Well written, I wonder what he means by a replacement for the Malibu... it just got a new look for 05... are they replacing it already... That sounds like good news... maybe not

Lutz keep up the good work...

[post="47902"]<{POST_SNAPBACK}>[/post]

The Malibu will be all new for 08 and from the press that have seen it none have said anything bad. All have said it has knock out looks and should really help GM.

Lutz has done a great job! He came here with both arms tied behind his back with no money and little time to make changes. The Solstice and HHR are just two of his new products alongh with the grat new looking SUV's.


I have know idea where some critics think things were going to be different over night at GM with Lutz there. He could only patch up what was already started and in the real world it takes 4-5 years to see new product from a clean sheet. 4-5 years if you have money.

Also if Toyota or Nissan overhaul there product line they only have to address 1/4 as many vehicles as GM as they do not offer as many lines

If GM can get the labor problems worked out the rest will come and GM will be very competitive in the near future. The key is the labor cost and over capacity of labor.

Mark is right when Caddy and Chevy are healthy the rest will come. GM could just survive on the two dividsions alone. The other divisions when healthy are just added profits and market share, both good when the divisions are healty and a burden when they are not.

[Munson05]

Well written, I wonder what he means by a replacement for the Malibu... it just got a new look for 05... are they replacing it already... That sounds like good news... maybe not

Lutz keep up the good work...

[post="47902"]<{POST_SNAPBACK}>[/post]

There is a redesinged malibu comming out soon and I hear its really nice looking , I think thats what he meant I would love to see pictures of it,

[aaaantoine]

Well I'll say what FOG will probably say, except not as aggressively as he might... Mark defends the media's harsh criticism on GM by more or less saying "we're doing it to help them out". For every article making GM out to be the protagonist, there are multiple that cast GM in a negative light. For the most part, they say, "The interior isn't refined enough. Buy a Toyota/Lexus/BMW!" None of them say, "We want GM to do good, but..."