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Old 04-13-2009, 10:57 PM   #18
eelfliw is on a distinguished road
Join Date: Aug 2003
Location: Mississauga, ON
Posts: 207

2009 Outlook XE
2002 SL
Default Re: New GM CEO Not Fazed by Future Competition from Saturn Brand, Peugeot Cited As P

Unfortunately, this article does not detail what the "partnership" means. It can mean a lot of different things.

And Henderson is right about where GM's problem lie :

While most of the interview focused on the company's new so-called core brands, the UAW, and it bloated dealership body,
GM has too many "brands". The Lambda chassis, for example, is sold by 4 different brands (Buick, Chev, GMC & Saturn). That's 4X the marketing, cosmetic engineering (read packaging), secondary manufacturing (eg. brand specific assembly), sales, parts logistics etc., and all the overhead (read management) to run these operations just to sell 1 platform. Reducing the number of brands to fewer "core" brands to sell 1 model per platform will dramatically cut costs associated with selling a platform.

Speaking of costs, the UAW is a massive cost for GM that foreign transplants do not have. The money doesn't just go to current workers. The pensions, healthcare benefits, 401K etc. all add up.

Finally, the dealership network is just massive. I live in a big city that has several "auto malls" (areas with a congregation of many car dealerships). Some of these auto malls has Pontiac/Buick/GMC dealership on one end, Chev on the other end and Saturn/Saab sandwiched in the middle. That's 3X the people to serve one set of GM customers.

So, getting rid of Saturn will help GM in the long run. In the mean time, Saturn needs to salvage what it has going for it to recover some of the investments people made in building the dealerships.

Partnering with Peugeot may or may not help both sides of the party depending on the degree of partnership. Here's one possible scenerio : Peugeot needs North American presence and Saturn need products to market. But what does Peugeot know about the North American market? Probably not as much as Saturn. As such, if Saturn designs the cars, shares cosmetic engineering with Peugeot and sells/services Peugeot cars, while leaving the manufacturing to Peugeot (let them deal with union issues - one of the key issue that's dogging GM), then Saturn effectively avoids all the problem GM is having now (too many brands, manufacturing unions and bloated dealer network).

The question is, will Peugeot (or anyone other manufacturer) bite?


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