: GM is helping the competition by defeating themselves



Cadence
08-11-05, 07:15 AM
I'm not seeking to make this a huge controversy or anything. But it seems to me that GM has WAY TOO MANY models to sell to the public. And many of those models are mere copies of each other. Not to mention, I'm starting to wonder if they (GM) are ready to go down the tubes (if they aren't already)?

Does GM need both Pontiac and Buick? They've already gotten rid of Oldsmobile. And it's very unlikely that Saturn will be gone anytime soon. It's not just Pontiac and Buick, but GMC and Chevrolet basicaly makes the same vehicles as well (truck wise). It just seems to me that if they downsize the models they have on the roster and maybe get rid of, or merge two other divisions, that they can then concentrate more of an effort into marketing these newer models. But I have a feeling that if they continue like they are, they'll lose more than just a share of the market, they'll lose out completely to the foreign companies as well.

Of all the auto companies around the world today, only GM is trying to control 8 seperate divisions. Now, dividing those divisions and their current rosters.......

Pontiac has 15 models (12 cars 3 utility models).

Chevy has 19 models (9 cars and 10 utility models) not including their van lineup, which would bring the count up to 24.

Buick has 8 models (5 cars and 3 utility models)

Cadillac has 9 models (5 cars and 4 utility models)

GMC has 10 models (2 trucks and 8 utility models) not including the van lineup, which would bring the count up to 13.

Saturn has 4 models (2 cars and 2 utility models)

Hummer has 4 models (4 utility models)

SAAB has 6 models (5 cars and 1 utility)

Adding that up comes to 75 models which to choose from under the GM umbrella. I mean really, does one company need so many models to offer to the public?

Mercedes? Nope.

BMW? Nada

Suburu? No way.

Honda? Ditto

Only Nissan and Toyota comes close, and their entire inventory together doesn't even come close to GM's, that's including their luxury lines (infinity and Lexus) as well.

I'm thinking that GM needs to really consider restructuring before it's too late. It's one thing to have a great product, but what good does it do to have it, and nobody knows it exist?

Lord Cadillac
08-11-05, 07:36 AM
I totally agree and have said it before... GM needs to give each division it's own identity and stop offering 4 models to confuse people with when Honda has one that beats them all. Instead of paying all kinds of money for 4 bad designs and all kinds of research regarding each model, put all that money into ONE vehicle for all the R&D and marketing and THEN they'll have a car that competes or beats the competition...

Playdrv4me
08-11-05, 10:01 AM
I'm not seeking to make this a huge controversy or anything. But it seems to me that GM has WAY TOO MANY models to sell to the public. And many of those models are mere copies of each other. Not to mention, I'm starting to wonder if they (GM) are ready to go down the tubes (if they aren't already)?

Does GM need both Pontiac and Buick? They've already gotten rid of Oldsmobile. And it's very unlikely that Saturn will be gone anytime soon. It's not just Pontiac and Buick, but GMC and Chevrolet basicaly makes the same vehicles as well (truck wise). It just seems to me that if they downsize the models they have on the roster and maybe get rid of, or merge two other divisions, that they can then concentrate more of an effort into marketing these newer models. But I have a feeling that if they continue like they are, they'll lose more than just a share of the market, they'll lose out completely to the foreign companies as well.

Of all the auto companies around the world today, only GM is trying to control 8 seperate divisions. Now, dividing those divisions and their current rosters.......

Pontiac has 15 models (12 cars 3 utility models).

Chevy has 19 models (9 cars and 10 utility models) not including their van lineup, which would bring the count up to 24.

Buick has 8 models (5 cars and 3 utility models)

Cadillac has 9 models (5 cars and 4 utility models)

GMC has 10 models (2 trucks and 8 utility models) not including the van lineup, which would bring the count up to 13.

Saturn has 4 models (2 cars and 2 utility models)

Hummer has 4 models (4 utility models)

SAAB has 6 models (5 cars and 1 utility)

Adding that up comes to 75 models which to choose from under the GM umbrella. I mean really, does one company need so many models to offer to the public?

Mercedes? Nope.

BMW? Nada

Suburu? No way.

Honda? Ditto

Only Nissan and Toyota comes close, and their entire inventory together doesn't even come close to GM's, that's including their luxury lines (infinity and Lexus) as well.

I'm thinking that GM needs to really consider restructuring before it's too late. It's one thing to have a great product, but what good does it do to have it, and nobody knows it exist?

Ive always been for getting rid of either Pontiac OR Buick, and most likely Buick because Pontiac is going to be making some real strides here pretty soon. HOWEVER, barring that, if they dont close any divisions, which some would argue hurts their image also, they most certainly need to consolidate down to less than 50 vehicles throughout the entire lineup to be as profitable PER CAR as possible.

Honda has a Civic and an Accord, plain and simple (and yes, quite possibly worlds most boring vehicles). Chevy has Aveo, Cobalt, Malibu AND Impala in that same demographic range. 4 separate cars battling to achieve the same market share only TWO do under Honda.

Buick DROPPED the one model that really defined them (Park Avenue) and instead brought out a TrailBlazer copycat SUV of their own, and a mildly refreshed mid-line sedan (Lacrosse) based on ages old technology? Again, a vehicle the top line Honda Accord EXL V6 does battle against formidably with more power, and even a Hybrid in the lineup.

There are many examples like that throughout the GM lineup.

Jesda
08-11-05, 10:29 AM
GM does still have the largest market share. Could it be because of all the brands and models? *shrug*

ben72227
08-11-05, 11:03 AM
I only count 12 models for Pontiac, and they're losing most of their lineup this year anyway. They're dropping the Sunfire, the Bonneville, the Aztek, the Grand Am, and the Grand Prix too (I think). So, I mean, GM is trimming down the lines and purging themselves of the crap cars.

As for the GMC/Chevy clones, I think its stupid to have two of the same, BUT They do sell, so...Some people just have brand loyalty I guess. If anything, they should just make GMC be the commercial truck line and let Chevy make the consumer trucks...

I think they will kill Buick *because* Saturn is moving up to that spot on GM's lineup, and Cadillac's are in the same price range now (BLS, CTS) and, Buicks are nothing special anymore since they killed of the Park Avenue. So...at the very LEAST, they should drop the SUVs from the Buick line...

Kev
08-11-05, 12:21 PM
I think a lot of the problem is public perception. How many times have you heard a Pontiac or Buick owner say that Chevys are junk and they would never own one? That may be a bit old school by now but it was common 20 years ago. How much difference has there ever really been between a Firebird and Camaro?

In the HVAC industry forced air furnaces for homes are built by only a few manufacturers and sold under many different company names. Now you might say that the units are made per spec for various companies and I would counter with the fact that the unit comes with multiple company name tag decals (as with Carrier/Payne/Day & Night) and I would ask the customer which one they prefer or give them all of them so that they can change them by the month according to their mood.

It's not that much different with GM vehicles. There are some features unique to certain models but for the most part, they are all just over-glorified Chevys! :shhh: :hide:

Lord Cadillac
08-11-05, 12:52 PM
Since Buick isn't going to be concentrating on performance (they don't have the Regal GS anymore and they're not building a Grand National type GTO of any sorts), they can stick around but just concentrate on building inexpensive luxury vehicles with soft, comfortable interiors and quiet rides. One division or another is going to need to fight-off Hyundai and I think Buick should be it. (And yes, Hyundai is easily competition for Buick and Buick is no competition for Lexus. :p) Pontiac can keep focused on performance vehicles but it seems to me that Chevy does pretty good at that as it is. I think I see more overlap in car-types and goals between Chevy and Pontiac than Buick and anyone..

Ralph
08-11-05, 08:32 PM
Does GM need both Pontiac and Buick? They've already gotten rid of Oldsmobile.

Winners never quit. We have to learn the lessons from what happened after GM phased out and killed Oldsmobile. It ended up costing billions more because people panicked and thought GM was entirely going out of business and went to other manufacturers for their purchase. ALSO, the orphaned Olds dealers sued for billions because they were left cold with stock they had a very hard time selling.

Kill Pontiac or Buick??? Absolutely NO! Invest MORE to make them profitable again by giving people what they want, EXACTLY like the Cadillac re-investiment of a few years ago, and it's paying off now. If you have a downsized GM, you also risk being taken over by the likes of an upcoming Chinese car company, etc. Not every GM division may always be profitable, but in those times, at least you have the OTHER divisions to "make up" the difference and money to re-invest to remain profitable. I agree GM should not duplicate too many models among the divisions, but realize also that each division has it's loyal customers, and no one is going to buy a car from a company that people think is going bankrupt. I also agree that they build too many factories and end up shutting them down and/or laying off thousands of workers in the end....

"Four years after killing Oldsmobile, Buick and Pontiac are sicker, GM's overall market share is down and North American profits are a fraction of what they were in 2000. In fairness, 2000 was a record year for the auto industry. And GM can divert funds that might have been used for creating new Olds models towards developing new vehicles for its other brands."

"All that said, I don't think GM's management back in 2000 was capable of saving Olds. They just didn't understand the business back then. Today management is stronger and has a better idea of what they want to do and how to realize their goals. Now to Buick. Sales are down to where Oldsmobile was when it was killed. Buick has been starved for product, but is getting some help."

"Here's the biggest problem: No one runs Buick. No one except GM Vice Chairman Robert Lutz seems to be able to order or make even the smallest product decisions for the entire company. The GM management system eliminated power. The Buick of today really isn't a division; it's a marketing operation with a few dozen people doing advertising, marketing and public relations. That's no way to run an army or a car company. GM put a top-flight engineer, a car guy, in charge of Cadillac. If that's the way to save Cadillac, then it's the way to save Buick."

"Some more advice: Figure out what Buick is supposed to be. They use the word "premium" as a guide, but that is meaningless Madison Avenue bull. And now I hear that GM's struggling Saturn division is also being repositioned as a premium brand. I can remember what Buick was when it was a best seller: dazzling styling, lots of chrome, hot engines and a soft but comfortable ride. Now we have anemic styling, old transmissions and old engines. Buick needs a dedicated team to figure out its strategy."

"The truth is GM has to save Buick because if it can't save Buick, it can't save anything. Buick was the heart of GM when this corporation was first created. You can't kill your heart and live."

http://www.forbes.com/columnists/columnists/2005/01/04/cz_jf_0104flint.html

Ralph
08-11-05, 08:49 PM
Ive always been for getting rid of either Pontiac OR Buick, and most likely Buick because Pontiac is going to be making some real strides here pretty soon.

I can remember when someone wanted Mercury to be killed also, and now they are turning profits..... ;)

"Some pundits think that Buick should be put out of its misery. But those people should go back and look at what happened when GM closed down Oldsmobile a few years ago. GM sales, market share and profits did not improve with the death of Oldsmobile. And as far as being able to put more effort into the surviving nameplates, just how much more effort did GM put into Buick when it killed Oldsmobile?"

Other people are offering advice to kill Buick or Pontiac--or both. Their theory is that GM could concentrate on its remaining product lines. If killing lines of cars or trucks or closing factories were all there is to the auto business, anyone could run a company. Who can't say: "Kill those cars, shut that factory?" But the art is in building attractive products, not killing nameplates.

Buick and Pontiac still are short of product, but they account for 17% of GM's U.S. volume. Kill them and you lose 800,000 annual sales and scare off hundreds of thousands of other buyers, who figure that all of GM will be going out of business soon."

Lesson learned yet???


http://www.forbes.com/columnists/columnists/2005/04/04/cz_jf_0404flint.html

ben72227
08-11-05, 09:18 PM
Buick and Pontiac still are short of product, but they account for 17% of GM's U.S. volume. Kill them and you lose 800,000 annual sales and scare off hundreds of thousands of other buyers, who figure that all of GM will be going out of business soon."

OR kill them and move the product into other divisions. Let Chevy pick up the Pontiacs worth keeping, and let Cadillac pick up the Buicks worth keeping. Chevy is pretty much its own car company anyway, and so is Cadillac for that matter. I mean, that's a possibility.

But what I would like to see is Pontiac move away from wimpy cars and more towards sporty, powerful cars. IMHO, Pontiac should not have a I4 engine in any of its cars.

As for Buick, they need to be what they once were: Sleek, Beautiful, And Luxurious, but not too pricy. Perfect example - the Buick Velite. I see Buick competing with the likes of Chryler, the 300, Pacifica, Crossfire, etc.:yup:

Ralph
08-11-05, 09:26 PM
OR kill them and move the product into other divisions. Let Chevy pick up the Pontiacs worth keeping, and let Cadillac pick up the Buicks worth keeping. Chevy is pretty much its own car company anyway, and so is Cadillac for that matter. I mean, that's a possibility.



I agree with you about Pontiac moving away from wimpy cars BUT you're forgetting that thousands of buyers will buy because of the brand, and panic is created by killing off the division entirely. Some people will ONLY buy a Pontiac and never a Chevy. And vise versa. Again, with Olds, GM thought Olds buyers would convieniently move over to Buick, but they NEVER did. They went to Nissan, Honda, Chrysler, etc. , etc.

Brand loyality is a big issue to many, but I agree they can get rid of certain unpopular models, NOT divisions! Too much is invested into those divisions already...

People won't be fooled by a Cadillac "Lacrosse" (if Cadillac picks up the remaining Buick after killing them off) especially with an inflated sticker price, remember how successful the Cimmeron and Catera were??

something to consider..

addison_ii
08-11-05, 10:02 PM
"The truth is GM has to save Buick because if it can't save Buick, it can't save anything. Buick was the heart of GM when this corporation was first created. You can't kill your heart and live."

http://www.forbes.com/columnists/columnists/2005/01/04/cz_jf_0104flint.html

Brand loyality is a big issue to many, but I agree they can get rid of certain unpopular models, NOT divisions! Too much is invested into those divisions already...

I agree. I think that as was mentioned in another thread, GM should trim the offerings within the divisions. Killing the divisions will probably make the people who are brand loyal move to another company instead of moving to another brand within GM.

SilverCTS
08-11-05, 11:41 PM
Does GM need both Pontiac and Buick?

This has come up in about 50 different threads. There are those amongst us who feel that one or both should be cut.

Buick is somewhat of an enigma to me. Buick is rated very high in the J.D Power surveys, but it isn't a luxury brand anymore (like they used to be a long time ago). Buick doesn't (can't) compete with BMW, Mercedes, Acura, Lexus, Infiniti, etc.

However, Buicks aren't cheap either... They are generally in the same price range as the Nissan Maxima and Toyota Avalon. This is a tough market segment for Buick. GM should take steps to aggressively position Buick against the Maxima and Avalon. By the way, why doesn't Buick offer a Nav system like Nissan and Toyota?

Pontiac should focus strictly on muscle cars and be done with it. They should offer 2 models: a better version of the new GTO and a brand new version of a beefy Trans Am.

GMC??? Either get rid of GMC, or make it the truck division, and have Chevy build and sell only cars (no trucks).

Saab, Hummer and Saturn are ok, because they have extremely loyal buyers and serve niche markets very well.

Chevy & Cadillac should obviously be the cornerstones of GM.

ben72227
08-12-05, 01:13 AM
This has come up in about 50 different threads. There are those amongst us who feel that one or both should be cut.

Buick is somewhat of an enigma to me. Buick is rated very high in the J.D Power surveys, but it isn't a luxury brand anymore (like they used to be a long time ago). Buick doesn't (can't) compete with BMW, Mercedes, Acura, Lexus, Infiniti, etc.

However, Buicks aren't cheap either... They are generally in the same price range as the Nissan Maxima and Toyota Avalon. This is a tough market segment for Buick. GM should take steps to aggressively position Buick against the Maxima and Avalon. By the way, why doesn't Buick offer a Nav system like Nissan and Toyota?

Pontiac should focus strictly on muscle cars and be done with it. They should offer 2 models: a better version of the new GTO and a brand new version of a beefy Trans Am.

GMC??? Either get rid of GMC, or make it the truck division, and have Chevy build and sell only cars (no trucks).

Saab, Hummer and Saturn are ok, because they have extremely loyal buyers and serve niche markets very well.

Chevy & Cadillac should obviously be the cornerstones of GM.

My thoughts exactly. I've said this before, but I think that Buick's intended Market is for people who either can quite afford, or don't want the "flamboyance" of a Cadillac. In other words, its a vehicle that old people can drive to church in and not feel bad about themselves for spending WAY too much on a Cadillac when they don't need it. That's just my opinion though. Buick does do quite well, but I really think they need to lose the SUVs and the Minivan, and add that Velite thing. It has a 400HP V6:thumbsup: Need I say more?

Really, Chevy could just take the sedans from Pontiac, and Pontiac should just sell sporty coupes - the GTO, Trans Am replacement, and the Solstice.

And I guess making GMC sell all of the trucks would be good too. There would obviously be some upset because of brand loyalty, but in the end, they would have a better business model, with defined identities for each brand, with no overlapping SO:

Chevy - SEDAN Cars, from budget Aveos, to compact Cobalt, to Midsize Malibu, to Family Sedan Impala, to Corvette. And Vans too:rolleyes:

GMC - Trucks, SUVs

Saturn - niche, upscale, hip and modern for the yuppie crowd. V6 powered Coupes & Sedans with leather, XM radio, plug-ins for their ipod:sneaky:, etc. In other words, the Saturn SKY and AURA.:thumbsup:

Saab - niche, the foreign, European car in GM's lineup. However, if it was me, I'd just treat Saab like Vauxhall or Holden - keep them overseas, they steal sales from the American part of GM and they don't make a profit over here anyways as it is:thumbsup:

Hummer - niche, big unpractical trucks, for guys with little d*cks:sneaky:

Buick - Really, the should go back to the glory days - Ultra Sleek designs (i.e. the Velite), with lots of chrome (don't overdo it though), expensive, but not outrageous. No need for all of the gadgets either - those are for Cadillac.

Cadillac - obviously the cream of the crop luxury brand. The highest you can go, with eveything you could imagine.

Pontiac - Sports/Muscle coupes - GTO, Trans Am replacement, Solstice

mcf1000x2003
08-12-05, 07:11 AM
Ford/lincoln/mercury also does a lot of clones as well and just about every car in the nissan infinity has a lot of similarities but the nissan/infinity is doing the best job along with honda in giving people what they want.I notice alot of the cars gm is bringing out seems to be relying on power much like chrysler/dodge but most of the redesigned gm cars (exclude Cadillac)are just butt ugly IMO.

Jesda
08-12-05, 07:30 AM
GM should reverse its payout, buy Fiat Group, and rebadge the CTS-V as a Ferrari.

I'm sooooooooo joking!

Ralph
08-12-05, 07:58 PM
Buick is somewhat of an enigma to me. Buick is rated very high in the J.D Power surveys, but it isn't a luxury brand anymore (like they used to be a long time ago). Buick doesn't (can't) compete with BMW, Mercedes, Acura, Lexus, Infiniti, etc.


It's more like "affordable luxury" to many I believe. If you want more than a Chevy, but don't want to pay the high price of a Cadillac, get a Buick. Similar to Mercury as an affordable option to Lincoln.....

They have a place, and since they killed off Olds when it was profitable, (the announcement in 2000) they'd better darn well keep Buick! It's quite a difference from a Chevy to a Cadillac!

Playdrv4me
08-12-05, 09:06 PM
I can remember when someone wanted Mercury to be killed also, and now they are turning profits..... ;)

It would take nothing short of a Miracle to get me to have any faith in Mercury. Its pretty much the one Ford brand I absolutely despise. It consists of not a few, but AN ENTIRE LINE of rebadged products. Its only doing better because the core vehicles are better (Mariner, that 500 copy thing etc.), but the brand itself still reeks of unimportance.

Buick you might still convince me on, Mercury no.

Ralph
08-12-05, 09:09 PM
It would take nothing short of a Miracle to get me to have any faith in Mercury. Its pretty much the one Ford brand I absolutely despise. It consists of not a few, but AN ENTIRE LINE of rebadged products. Its only doing better because the core vehicles are better (Mariner, that 500 copy thing etc.), but the brand itself still reeks of unimportance.

Buick you might still convince me on, Mercury no.

Isn't Ford in the same boat then?

Ralph
08-12-05, 09:09 PM
It would take nothing short of a Miracle to get me to have any faith in Mercury. Its pretty much the one Ford brand I absolutely despise. It consists of not a few, but AN ENTIRE LINE of rebadged products. Its only doing better because the core vehicles are better (Mariner, that 500 copy thing etc.), but the brand itself still reeks of unimportance.

Buick you might still convince me on, Mercury no.

Isn't Ford in the same boat then? How can you hate one and not the other? Mercury have always been a little more "upscale" than a Ford, and many do not want to go "all out" and purchase a Towncar, as they are happy with a Grand Marquis.

It seems that many here think EVERYONE would be happy with either a bare bones car, OR an ultra luxury division to satisfy the masses. Isn't CHOICE a better option?? It is for me.

WHY can't there be an "in-between??!!" Since Mercury is turning a profit, isn't it more difficult to argue your perspective on Mercury?

If the historical examples of what happened to GM after Olds died cannot convince you, or at least get your serious attention, then I can never convince you. History does have a nasty way of repeating itself, but lets hope for GM's sake it doesn't! GM acquired it Greatness by BUILDING divisions and NOT killing them off.....and NOT by just "throwing in the towel" when the Japanese start selling more cars!

SilverCTS
08-12-05, 09:35 PM
Isn't Ford in the same boat then? How can you hate one and not the other? Mercury have always been a little more "upscale" than a Ford, and many do not want to go "all out" and purchase a Towncar, as they are happy with a Grand Marquis.

It seems that many here think EVERYONE would be happy with either a bare bones car, OR an ultra luxury division to satisfy the masses. Isn't CHOICE a better option?? It is for me.

WHY can't there be an "in-between??!!" Since Mercury is turning a profit, isn't it more difficult to argue your perspective on Mercury?

If the historical examples of what happened to GM after Olds died cannot convince you, or at least get your serious attention, then I can never convince you. History does have a nasty way of repeating itself, but lets hope for GM's sake it doesn't! GM acquired it Greatness by BUILDING divisions and NOT killing them off.....and NOT by just "throwing in the towel" when the Japanese start selling more cars!

Ford and GM have the same basic problems. Also, Mercury isn't "turning a profit." Ford doesn't report separate earnings for Mercury.



Here is Standard and Poor's financial assessment of Ford.
Highlights July 26, 2005



We see 2005 North American industry light vehicle sales of nearly 17 million units, up from 16.9 million in 2005 levels. We expect Ford's 2005 automotive revenues to grow 3% to 5%, despite lower projected production volume, on the introduction of new products and greater average revenue per vehicle, despite overall pricing pressures; financial services revenues should decline 2% to 4%, as we expect higher interest rates to restrict demand. The financial services segment has been an important contributor to recent sales and earnings, but we expect its income to decline in 2005 from the record level of 2004. We estimate that the modifications to agreements with Visteon will reduce Ford's 2005 EPS. In 2006, we project automotive revenue to rise 1% to 2% and financial services revenues to fall 2% to 4%.
Pension and other retiree benefit expenses should increase in 2005 and 2006, but F does not anticipate required pension fund payments before 2009. We believe that the most recent contract with the UAW will enhance productivity by allowing Ford to close several production plants.
For 2005 and 2006, we expect operating EPS of $1.08 and $0.99, respectively, compared to an adjusted $2.11 in 2004. The difference between our operating EPS projections and our S&P Core Earnings per share estimates reflect adjustments for pension income. We are concerned about Ford's corporate governance, particularly the dual class capital structure that gives Ford family members greater voting rights than other shareholders.
Investment Rationale/Risk July 26, 2005 https://content.etrade.com/sandp/sr/images/spacer.gif

We have a sell opinion on Ford shares. While most of the issues that contributed to Ford's April earnings warning did not come as a surprise, we are concerned that management reduced its projection so soon after reaffirming guidance in March. In addition, in June, Ford lowered its full year outlook despite raising its second quarter forecast. We think the company has been benefiting from the 2004 introduction of several new and updated vehicles (to be followed by additional new vehicles in 2005), but it continued to lose market share in 2004. We do not think the products are helping as much as expected, and the company is continuing to lose market share in 2005. Nevertheless, profitability remains better than at General Motors (GM: strong sell, $37). With lower earnings and cash flow outlooks, we see increasing risk that Ford will reduce its dividend.
Risks to our opinion and target price include a mitigation of competitive challenges; a recovery in demand and production; and greater than expected financial services income.
Despite the rising interest rate environment that we anticipate and amid relatively high oil and gasoline prices, some automotive valuations have been rising. The stock traded recently at discounts to the P/E multiples of GM and the S&P 500. Based on historical and peer comparative P/E multiples, our 12-month target price is $9, equal to about 8X our 2005 EPS estimate.
Ford is the world's second largest motor vehicle manufacturer. It produces cars and trucks, many of the vehicles' plastic, glass and electronic components, and replacement parts. It also owns a 33% stake in Mazda Motor Corp. Financial services include Ford Motor Credit (automotive financing and insurance), American Road Insurance Co., Hertz Corp. (car rental), and Granite Management, which manages a portfolio of real estate loans.

In March 2001, Ford purchased the shares of Hertz that it did not already own, for about $750 million. In 1997, it had spun off 18.5% of Hertz Corp. via a public offering. In 1998, it distributed its 81% interest in Associates First Capital Corp. to Ford common and Class B shareholders, and recorded a related gain of $12.90 a share.

In 1999, the company acquired the car operations of AB Volvo, for $6.45 billion.

In 2000, Ford acquired Land Rover from BMW Group. About two-thirds of the $1.9 billion price was paid at closing.

In August 2000, the company completed a financial restructuring. As part of the plan, stockholders exchanged existing common and class B shares for new F common and Class B shares. In addition, shareholders had the option of receiving either $20 in cash per share, or the equivalent value in new F common shares, or a combination of cash and stock worth $20 a share. Nearly $6 billion in cash was distributed to shareholders. The company also distributed ownership of its Visteon parts subsidiary to Ford stockholders.

In a reversal from an earlier strategic plan to be involved in all stages of the automobile life cycle, Ford plans to sell Kwik-Fit, Europe's largest vehicle maintenance and light repair chain, which it acquired in 1999 for about $1.6 billion. In addition, it plans to sell other non-core assets.

The company, together with GM, DaimlerChrysler and others, owns a founding equity stake in Covisint LLC, a business-to-business Internet-based supplier exchange.

Ford, Mercury, Lincoln, Volvo (since 1999) and Jaguar models accounted for about 13.6% of cars sold in U.S. markets (including foreign-built) in 2004, versus 15.4% in 2003, 16.4% in 2002, 17.7% in 2001, and 19.1% in 2000. Comparable respective figures for trucks were 23.7%, 24.7%, 25.5%, 27.5% and 28.2%. Vehicle unit sales totaled 6,798,000 in 2004, including 3,623,000 in North America, versus 6,736,000 (3,810,000) in 2003.

In January 2002, the company said that, including earlier initiatives since January 2001, it planned to eliminate up to 35,000 employees worldwide as part of a restructuring. It recorded a related charge of $4.1 billion ($2.27 a share) in 2001 for asset impairment, restructuring and other costs. Ford plans significant new or freshened products in the U.S. annually, and capacity reduction of about 1 million vehicles per year by mid-decade. It will focus on material cost reduction, discontinuance of low margin-models, and divestiture of non-core assets.

In December 2003, Ford assumed about $1.65 billion in post-retirement health care and insurance obligations from Visteon Corp., its former subsidiary.

In March 2005, the company agreed to relieve Visteon of a portion (about $25 million per month) of its obligation to reimburse Ford for the costs of Ford's employees assigned to Visteon; reduce by about one-fourth the number of days within which Ford will make payment to Visteon for materials and components it purchases from Visteon; and acquire up to about $150 million of new machinery and equipment for use by Visteon necessary for its production of components for Ford. In exhange, Visteon agreed to continue to supply Ford with certain components without cost surcharges.

In June 2005, despite predicting higher second quarter EPS, the company maintained its April EPS outlook for 2005 of $1.25 to $1.50. This April forecast had been lowered from March guidance reiterating between $1.75 and $1.95. In April, F also said that it expects to be cash flow positive in 2005, but that it does not expect to reach its objective of $7 billion in pretax income in 2006.

Ralph
08-12-05, 09:42 PM
Ford and GM have the same basic problems. Also, Mercury isn't "turning a profit." Ford doesn't report separate earnings for Mercury.



Here is Standard and Poor's financial assessment of Ford.
Highlights July 26, 2005



We see 2005 North American industry light vehicle sales of nearly 17 million units, up from 16.9 million in 2005 levels. We expect Ford's 2005 automotive revenues to grow 3% to 5%, despite lower projected production volume, on the introduction of new products and greater average revenue per vehicle, despite overall pricing pressures; financial services revenues should decline 2% to 4%, as we expect higher interest rates to restrict demand. The financial services segment has been an important contributor to recent sales and earnings, but we expect its income to decline in 2005 from the record level of 2004. We estimate that the modifications to agreements with Visteon will reduce Ford's 2005 EPS. In 2006, we project automotive revenue to rise 1% to 2% and financial services revenues to fall 2% to 4%.
Pension and other retiree benefit expenses should increase in 2005 and 2006, but F does not anticipate required pension fund payments before 2009. We believe that the most recent contract with the UAW will enhance productivity by allowing Ford to close several production plants.
For 2005 and 2006, we expect operating EPS of $1.08 and $0.99, respectively, compared to an adjusted $2.11 in 2004. The difference between our operating EPS projections and our S&P Core Earnings per share estimates reflect adjustments for pension income. We are concerned about Ford's corporate governance, particularly the dual class capital structure that gives Ford family members greater voting rights than other shareholders.
Investment Rationale/Risk July 26, 2005 https://content.etrade.com/sandp/sr/images/spacer.gif

We have a sell opinion on Ford shares. While most of the issues that contributed to Ford's April earnings warning did not come as a surprise, we are concerned that management reduced its projection so soon after reaffirming guidance in March. In addition, in June, Ford lowered its full year outlook despite raising its second quarter forecast. We think the company has been benefiting from the 2004 introduction of several new and updated vehicles (to be followed by additional new vehicles in 2005), but it continued to lose market share in 2004. We do not think the products are helping as much as expected, and the company is continuing to lose market share in 2005. Nevertheless, profitability remains better than at General Motors (GM: strong sell, $37). With lower earnings and cash flow outlooks, we see increasing risk that Ford will reduce its dividend.
Risks to our opinion and target price include a mitigation of competitive challenges; a recovery in demand and production; and greater than expected financial services income.
Despite the rising interest rate environment that we anticipate and amid relatively high oil and gasoline prices, some automotive valuations have been rising. The stock traded recently at discounts to the P/E multiples of GM and the S&P 500. Based on historical and peer comparative P/E multiples, our 12-month target price is $9, equal to about 8X our 2005 EPS estimate.
Ford is the world's second largest motor vehicle manufacturer. It produces cars and trucks, many of the vehicles' plastic, glass and electronic components, and replacement parts. It also owns a 33% stake in Mazda Motor Corp. Financial services include Ford Motor Credit (automotive financing and insurance), American Road Insurance Co., Hertz Corp. (car rental), and Granite Management, which manages a portfolio of real estate loans.

In March 2001, Ford purchased the shares of Hertz that it did not already own, for about $750 million. In 1997, it had spun off 18.5% of Hertz Corp. via a public offering. In 1998, it distributed its 81% interest in Associates First Capital Corp. to Ford common and Class B shareholders, and recorded a related gain of $12.90 a share.

In 1999, the company acquired the car operations of AB Volvo, for $6.45 billion.

In 2000, Ford acquired Land Rover from BMW Group. About two-thirds of the $1.9 billion price was paid at closing.

In August 2000, the company completed a financial restructuring. As part of the plan, stockholders exchanged existing common and class B shares for new F common and Class B shares. In addition, shareholders had the option of receiving either $20 in cash per share, or the equivalent value in new F common shares, or a combination of cash and stock worth $20 a share. Nearly $6 billion in cash was distributed to shareholders. The company also distributed ownership of its Visteon parts subsidiary to Ford stockholders.

In a reversal from an earlier strategic plan to be involved in all stages of the automobile life cycle, Ford plans to sell Kwik-Fit, Europe's largest vehicle maintenance and light repair chain, which it acquired in 1999 for about $1.6 billion. In addition, it plans to sell other non-core assets.

The company, together with GM, DaimlerChrysler and others, owns a founding equity stake in Covisint LLC, a business-to-business Internet-based supplier exchange.

Ford, Mercury, Lincoln, Volvo (since 1999) and Jaguar models accounted for about 13.6% of cars sold in U.S. markets (including foreign-built) in 2004, versus 15.4% in 2003, 16.4% in 2002, 17.7% in 2001, and 19.1% in 2000. Comparable respective figures for trucks were 23.7%, 24.7%, 25.5%, 27.5% and 28.2%. Vehicle unit sales totaled 6,798,000 in 2004, including 3,623,000 in North America, versus 6,736,000 (3,810,000) in 2003.

In January 2002, the company said that, including earlier initiatives since January 2001, it planned to eliminate up to 35,000 employees worldwide as part of a restructuring. It recorded a related charge of $4.1 billion ($2.27 a share) in 2001 for asset impairment, restructuring and other costs. Ford plans significant new or freshened products in the U.S. annually, and capacity reduction of about 1 million vehicles per year by mid-decade. It will focus on material cost reduction, discontinuance of low margin-models, and divestiture of non-core assets.

In December 2003, Ford assumed about $1.65 billion in post-retirement health care and insurance obligations from Visteon Corp., its former subsidiary.

In March 2005, the company agreed to relieve Visteon of a portion (about $25 million per month) of its obligation to reimburse Ford for the costs of Ford's employees assigned to Visteon; reduce by about one-fourth the number of days within which Ford will make payment to Visteon for materials and components it purchases from Visteon; and acquire up to about $150 million of new machinery and equipment for use by Visteon necessary for its production of components for Ford. In exhange, Visteon agreed to continue to supply Ford with certain components without cost surcharges.

In June 2005, despite predicting higher second quarter EPS, the company maintained its April EPS outlook for 2005 of $1.25 to $1.50. This April forecast had been lowered from March guidance reiterating between $1.75 and $1.95. In April, F also said that it expects to be cash flow positive in 2005, but that it does not expect to reach its objective of $7 billion in pretax income in 2006.




Mercury sales are climbing, and helping Ford in the long run.......William Clay Ford did the right thing and saved Mercury and now they are doing fine...

"I remember a few years ago, when the leadership at Ford (nyse: F - news - people ) was determined to kill Mercury, it was starving it of product while officially denying there was a plot to kill it. Fortunately William Clay Ford Jr. stepped in, tossed out the Ford chief executive and, among other things, ordered that Mercury be saved. Mercury sales are now climbing."

http://www.forbes.com/columnists/columnists/2005/06/14/generalmotors-buick-discontinuation-cz_jf_0614flint.html

Obviously starvation and killing divisions is NOT the answer. How plain does this have to be to understand it?? The financial statement of Ford does not obviously go into specifics about the divisions in Ford, but rather overall how FORD is doing.....I'm not sure what you are trying to argue, but it is profitable again.

SilverCTS
08-12-05, 10:11 PM
Mercury sales are climbing, and helping Ford in the long run.......

That could be, but climbing sales is very different than profitability.

You could sell a lot of product, but still lose a lot of money. GM and Ford both had very very impressive sales over the summer (largely because of the so called employer discounts). However, the problem is that it didn't translate to profitability. GM and Ford are still losing a ton of money.

In order to increase profitability, Ford and GM need to radically restructure their businesses.

They basically need to go on a diet and shed a few pounds. Unfortunately, they are not like someone trying to go from 200lbs down to 180lbs. They are more like someone trying to go from 550lbs down to 180lbs.

Keeping divisions is nice. It is loyal. It is traditional. It would be the politically correct thing to do...

The problem is that both GM and Ford need to lose some serious weight.

Ralph
08-12-05, 10:22 PM
That could be, but climbing sales is very different than profitability.

You could sell a lot of product, but still lose a lot of money. In order to increase profitability, Ford and GM need to radically restructure their businesses.


The problem is that both GM and Ford need to lose some serious weight.

I agree that climbing sales can be different than profitability, and in fact, often Ford and GM lose money on vehicles or break even. ( I once started a thread on how much GM loses on each car and it was substantial)

Yes, they have to restructure their business, but kill off too much and there may be no business to restructure, that is the concern. In the auto world, takeovers and mergers are common, and often the smaller or unprofitable manufacturers are taken over. Not something I want to see happen to GM if they downsize too much.

ben72227
08-12-05, 10:31 PM
THey should keep the divisions, and just trim down the number of cars, so that Chevy and Cadillac have lots of models, while Pontiac, Saturn, Buick, Hummer, and Saab should have (at the most) 5 models each. That way, it makes the brands have identities, and lets Chevy and Cadillac be the backbone of the company.

Ralph
08-12-05, 10:34 PM
THey should keep the divisions, and just trim down the number of cars, so that Chevy and Cadillac have lots of models, while Pontiac, Saturn, Buick, Hummer, and Saab should have (at the most) 5 models each. That way, it makes the brands have identities, and lets Chevy and Cadillac be the backbone of the company.

I'm,.........I'm very proud of you Ben. :crying:

Identity is important, and not a GM badge on everything...

SilverCTS
08-12-05, 10:45 PM
THey should keep the divisions, and just trim down the number of cars, so that Chevy and Cadillac have lots of models, while Pontiac, Saturn, Buick, Hummer, and Saab should have (at the most) 5 models each. That way, it makes the brands have identities, and lets Chevy and Cadillac be the backbone of the company.


I agree. I think I said something similar in one of my posts? Does Buick need to sell an SUV??? Does Pontiac need to sell the Aztec, Vibe, and whatever their minivan is?

Chevy and Cadillac should be the backbone.

For the rest of the brands: Fewer products. Better products. Make each brand much more distinctive. No product overlaps.

Ralph
08-12-05, 10:51 PM
This thread is going to get boring now because we all agree, overall.



:yawn:

SilverCTS
08-12-05, 10:56 PM
On the bright side...

Despite all the negative stuff we keep discussing, I still think that Cadillac is the hottest car brand on the planet.

CTS, XLR, STS, Escalade, V-Series

addison_ii
08-12-05, 11:11 PM
This thread is going to get boring now because we all agree, overall.



:yawn:
I agree that we agree that we all are in agreement with the general agreement about the course of action we agree on.:histeric:

Ralph
08-12-05, 11:21 PM
On the bright side...

Despite all the negative stuff we keep discussing, I still think that Cadillac is the hottest car brand on the planet.

CTS, XLR, STS, Escalade, V-Series


I AGREE!!!

DOOOOOOOOOOOOOOOHHHHHHHHHH!!! :highfive:

Ralph
08-12-05, 11:22 PM
I agree that we agree that we all are in agreement with the general agreement about the course of action we agree on.:histeric:

Unfortunately, I tend to agree.

:bomb: :thehand:

Playdrv4me
08-13-05, 12:07 AM
Isn't Ford in the same boat then? How can you hate one and not the other? Mercury have always been a little more "upscale" than a Ford, and many do not want to go "all out" and purchase a Towncar, as they are happy with a Grand Marquis.

It seems that many here think EVERYONE would be happy with either a bare bones car, OR an ultra luxury division to satisfy the masses. Isn't CHOICE a better option?? It is for me.

WHY can't there be an "in-between??!!" Since Mercury is turning a profit, isn't it more difficult to argue your perspective on Mercury?

If the historical examples of what happened to GM after Olds died cannot convince you, or at least get your serious attention, then I can never convince you. History does have a nasty way of repeating itself, but lets hope for GM's sake it doesn't! GM acquired it Greatness by BUILDING divisions and NOT killing them off.....and NOT by just "throwing in the towel" when the Japanese start selling more cars!


Not at all, why would Ford be in the same boat as Mercury? What Im saying is that its the very products that make Ford successful that Mercury basically leaches off of to prop up their brand. I wouldnt for one minute make the mistake of thinking a Mercury is a "more luxurious" Ford. In fact I cant think of one time in the past twenty years that has been the case. If a Ford product is successful, then the Mercury product thats a rebadged version of it typically does the same. Sable and Taurus sales trends always followed eachother. Mercuries always seemed to me like the brand the dealer could still steer the customer to in the same showroom when that customer couldnt afford the Lincoln they really wanted. Since most Lincoln dealerships are only Lincoln and Mercury, this tends to make some sense. "Instead of losing the customer lets sell them this rebadged Ford".

Ralph
08-13-05, 12:20 AM
Not at all, why would Ford be in the same boat as Mercury? What Im saying is that its the very products that make Ford successful that Mercury basically leaches off of to prop up their brand. I wouldnt for one minute make the mistake of thinking a Mercury is a "more luxurious" Ford. In fact I cant think of one time in the past twenty years that has been the case. If a Ford product is successful, then the Mercury product thats a rebadged version of it typically does the same. Sable and Taurus sales trends always followed eachother. Mercuries always seemed to me like the brand the dealer could still steer the customer to in the same showroom when that customer couldnt afford the Lincoln they really wanted. Since most Lincoln dealerships are only Lincoln and Mercury, this tends to make some sense. "Instead of losing the customer lets sell them this rebadged Ford".

Because they both share the same platforms.

Mercury IS a more luxurious Ford. The Grand Marquis always had nicer seats than the Crown Vic, as well as a few more options like auto climate control and power seats, etc. Same for Mercury Topaz over the bare bones Tempo, etc. The only original Mercury that I can think of recently that was not platform shared was the Cougar of 1997? So I give you that point, however, isn't it better if people who go into a Lincoln showroom hoping to afford a Town Car and realizing the expense, buy a Grand Marquis instead?? (like you mentioned) Isn't that better than going to buy a Toyota Avalon if one wanted to help out Ford, etc. That's just "good business." There is nothing wrong with selling a Mercury if one cannot afford a Lincoln, in effect, that is likely what is happening with Buick as well. It's not a bad thing and it is good to offer choice in those situations IMO.

Playdrv4me
08-13-05, 12:36 AM
My argument is that BMW, Toyota, Honda etc, are successful and they DONT need 10 brands to do so. If GM and Ford built better products, whats wrong with selling less of them and making more profit on each one because more people want to buy it? Id be just fine with Ford and Lincoln only and no Mercury. After all, now that Cadillac's are very desirable there ARE more and more dealers that are Cadillac only or Cadillac/Saab/Hummer etc right? Why not make Lincoln BETTER, and then do Lincoln/Jaguar/Volvo? My point is it costs money to produce and keep the extra inventory necessary to maintain two separate but otherwise equal brands (advertising, parts, dealership space etc.. it adds up), invest that money into making your core brands successful and make more money on each individual model.

Ralph
08-13-05, 12:54 AM
My argument is that BMW, Toyota, Honda etc, are successful and they DONT need 10 brands to do so. If GM and Ford built better products, whats wrong with selling less of them and making more profit on each one because more people want to buy it? Id be just fine with Ford and Lincoln only and no Mercury. After all, now that Cadillac's are very desirable there ARE more and more dealers that are Cadillac only or Cadillac/Saab/Hummer etc right? Why not make Lincoln BETTER, and then do Lincoln/Jaguar/Volvo? My point is it costs money to produce and keep the extra inventory necessary to maintain two separate but otherwise equal brands (advertising, parts, dealership space etc.. it adds up), invest that money into making your core brands successful and make more money on each individual model.

BMW is part of a larger group of auto manufacturers, from mergers, etc. to help remain profitable. Pretty much all of them do this and it proves that the more models you have, the more profitable you can be, and for survival. Not too many auto manufacturers can survive solely on their own anymore.... The larger you are, the more profitable you can be, and GM proved this historically.

How are you going to sell less products and make more money? That implies an increase in price?? Don't people already complain about cars being too expensive, especially luxury cars? Another good reason to offer an "intermediate" division if you ask me. I don't think people are going to be willing to pay more for a bare bones Ford Taurus....

I see what you are saying about investing the money and making the core brands successful, but consider that during hard economical times, like recessions, etc. more people are likely going to purchase economy cars and not just luxury cars, so during this time, you need low level and mid-level cars to "take up the slack." Just like GM offering something for everyone, and in differing price ranges, it's all about choice for each individual and for each economic situation...

Cadence
08-13-05, 02:32 AM
I honesty didn't see Oldsmobile surviving much longer anyhow, because when you look at Oldsmobile, Buick and Cadillac, they basically did the same thing and Olds actually overlapped both Buick and Cadillac. The one thing tht realy drove Olds off the map was the fact that they didn't have the money to advertise their products. GM has so little money to advertise the 50+ products on thier roster that Olds ended up beingthe odd one out. I felt sorry for that division, but what could they have done better than to shut them down?

Back in the 60's, having the current set up worked very well, and the threat of foreign cars was really at a minium. But in this era, having so many divisions, with the number of products that overlap, under one roof is insane to say the least. You can't keep doing the same thing and expect a different outcome. Times have really changed and they just have to simply face the fact that the old way isn't the best way of handling the current market.

And product identity is a huge issue. Just where is Buick in the scheme of things? I understand the concept of "affordable luxury", but looking at their roster, Chevy has more of a foot hold than Buick actually has right now. Saturn has moved in to their territory, with some of their new offerings, and I don't see Buick getting those customers back anytime soon. if Buick did merge some of their line up with Cadillac, and discontinued the rest, I think it would be so much better for GM in the long run.

Pontiac was suppose to be the renagade division. But IMO, the biggest issue with Pontiac right now is that their hands are cuffed by Chevy, who has their hands in everything from trucks, affordable economy cars to the higher end sports cars segment. If Pontiac would just focus on being the "Outlaws" that they once were, then things would be different. Getting rid of the Aztec and Montana, would be the first step to admitting that they have a problem here. Bringing back the Trans Am and making a "true, american made" GTO, would be the first shot to the performance world that they are indeed back in the fold.

Playdrv4me
08-13-05, 03:06 AM
Well I think you make alot of good points in general, with the biggest concern for me being Buick's total loss of indentity. As far as the Aztek it is thankfully officially axed after this year. The Montana NEVER had any business whatsoever being a Pontiac, I dont know whose wet dream that was. Pontiac is not and never will be a MINIVAN division, your description of "renegade" division is really spot on.

Heres the bottom line, I work for a Bank that in the world of Banks might as well be the GM of Banks. The truth is, these large coporations are like a modern train. We all see things that can clearly be done to improve the situation, but for those in the company who are "riding" that train, it takes a HUGE AMOUNT of finagling and force to get that whole operation to stop just long enough to make the changes you need and then get the whole thing going again. So where we see clear holes and gaps, they may as well but they might also feel its too much trouble to stop and correct some of the problems unless they can do it "on the fly". This is what made car companies like Packard, the ORIGINAL Saturn, etc etc very different, they were just the right size to be able to infuse customer feedback into their production strategies. Unfortunately they were also short lived (and Im talking about Saturn the way it was originally designed, not the extra finger of GM it is now).

Jesda
08-13-05, 07:37 AM
Nissan rebuilt Infiniti. I dont see what the hell is keeping Ford and GM from revitalizing their brands.

ben72227
08-13-05, 02:17 PM
I dont see what the hell is keeping Ford and GM from revitalizing their brands.

GM rebuilt Cadillac too:rolleyes: in case you've forgotten. Right now they're rebuilding Pontiac, and next in line is Saturn.

But what REALLY needs some work is Buick. And I mean, they need some serious work. THe cars are just yucky looking. Even Mercury cars don't look that bad. I mean, they have that NEW Mercury Montego and Milan. Granted, they are dressed up Fords, but STILL, they are new life into a company that almost died.

Buick just needs the Velite. Period.:lildevil:

Ralph
08-13-05, 10:49 PM
. So where we see clear holes and gaps, they may as well but they might also feel its too much trouble to stop and correct some of the problems unless they can do it "on the fly". This is what made car companies like Packard, the ORIGINAL Saturn, etc etc very different, they were just the right size to be able to infuse customer feedback into their production strategies. Unfortunately they were also short lived (and Im talking about Saturn the way it was originally designed, not the extra finger of GM it is now).

Saturn and Packard are interesting parallels.

Packard is a good example of what I'm talking about. They were a strong car company, lasting from the 1890s to 1958, very focused on the luxury market where they competed directly with Cadillac. However, this narrow focus was too small, and the company didn't have the size to survive against the multi-brand Big 3 corporations. Packard tried adding a lower-priced division, Clipper, but it was too late.

Like any small car company, they became a take-over/merger victim, and were bought by Studebaker. Studebaker did the same thing to them that GM did to most of its brands: it decided to go for short-term cost-savings and folded it into their management structure. Packards soon became badge-engineered Studes, just as Caddies and Buicks later began sharing parts. Saturn started as a distinct division, but it was cheaper in the short-term to fold it in. THAT is the problem with big corporations.

The realities of car manufacturing remain as before: big companies eat up smaller ones. If things have changed recently, why did Ford buy Volvo, Land Rover, Jaguar/Daimler, Aston Martin Lagonda? Why did BMW buy Rolls-Royce and Mini? Why did Mercedes acquire Chrysler, Dodge, Jeep and add Smart and Maybach? Why did Toyota buy Daihatsu and create Lexus, and why did Honda invent Acura? Why did Renault acquire Samsung, Dacia, and Nissan (which had just created Infiniti)? And VW: why did they add Seat, Skoda, Lamborghini, Bugatti, and Bentley to Audi?

Bigger is always better, it allows you to spread your risk. The companies that kill their brands instead of reinventing them, get swallowed.

Incidentally, it was probably Pontiac dealers who wanted a minivan to sell, hence the Montana. You're right, GM shouldn't have made a Pontiac minivan.

Cadence
08-14-05, 07:20 AM
I'm not really sold on the Velite being successful right now. It came at the sametime as the Solstice, which is a typical GM snafu. And then once it does hit the market (if it actually does make it) it will be going head on against not only the Solstice, but the Saab 9-3 convertible (a very nice and sport ride in it's own right), Chevy's SSR and Corvette convert, and the XLR. And with the addition of the XLR-V, Buick really doesn't have much of a chance of selling this car, the way I see it. And that's just under GM's domain.....

The difference between the foreign car makes buying up the smaller ones, versus GM, is that GM wants to control all of their products. Mercedes might have some input in what Dodge can bring out, but they aren't likely to take away the creativity that goes into making the vehicle what it is. Like withthe new Firepower concept, that doesn't cross over into what Mercedes does with their own vechicle and it actually goes head to head with the Aston Martin lineup.

In comparison, GM got ahold of Saab, and Saab has struggled immensely as a result. I remember when Saab was their own company and didn't have to worry about GM taking the quirkiness from their models. Things like the ignition in the floor of the car, the 4 door hatchback and a turbo 4 cylinder were just as common in a Saab ,as big block V-8's were to GM back in their heydays. Problem with Saab, as I see it, they've become too "american".

Where's the Saab dealerships? Back in '92, there were 3 Saab dearships in Wichita KS, now, I haven't a clue where to take the '87 9000 S sitting in the garage. What ends up happening is, we have to take it to a "euro-garage", and hope that whatever little problem we have won't cost an arm and a leg. Which really brings up another strike for GM. Where's the support for the foreign product? You can't treat a Saab like a Chevy, at least you're not suppose to....

Ralph
08-14-05, 07:50 PM
Where's the Saab dealerships? Back in '92, there were 3 Saab dearships in Wichita KS, now, I haven't a clue where to take the '87 9000 S sitting in the garage. What ends up happening is, we have to take it to a "euro-garage", and hope that whatever little problem we have won't cost an arm and a leg. Which really brings up another strike for GM. Where's the support for the foreign product? You can't treat a Saab like a Chevy, at least you're not suppose to....

I think GM basically starved them out!? They used to be sold along with Saturn, if I recall, but not anymore. Why did GM buy SAAB again??

ben72227
08-14-05, 09:17 PM
Hmm. I think it has something to do with Ford buying Volvo, so of course GM had to buy a Swedish car company too:p

Ralph
08-17-05, 10:36 PM
Hmm. I think it has something to do with Ford buying Volvo, so of course GM had to buy a Swedish car company too:p

Sort of. Ford bought Volvo in 1998. It was more that Ford was on a buying rampage in the mid-to-late 1980s, too, with Aston Martin Lagonda and Jaguar (and very nearly AC).

That's why GM bought Lotus and Saab around the same time. And then did virtually nothing with them, except shove an Isuzu engine into the Elite.

GM does have the bad habit of merging its newly-purchased divisions into its huge corporate structure, which dilutes the unique-ness and heritage of the brands. They do it in the name of cost-savings, but end up killing sales, and then it becomes a big money pit, and then they stop spending "good money after bad", and then the brand starves ... you know the drill.