Is the Writing on the Wall for Saturn?

[2NDSOUT]

I read this article on AOL just a few minutes ago...

Is the end in sight?

http://www.bloggingstocks.com/2008/0...to-cut-brands/

[KennedySaturn]

Yea Saturn has had all 5 models redone in the past year and a half. Gm has spent tons of money on the brand. Saturn is not going any where for awhile. The cut in my opinion would be pontiac which needs a total revamp. Look at how many grand am and grand prix rentals and fleet cars they have. No need to get fired up by one article you read, the author is getting what they wanted. Which is people talking about it!! Long Live Saturn

Greg Kennedy
Saturn of Norwood Mass

[mikec]

From a purely emotional level, I hope that Saturn survives. However, when you look at GM's problems from a logical and financial level, the only solution for their financial woes is to cut brands. GM has been addicted to badge engineering for the last 60 years. It's like heroin. The only way to stop this addiction is to go cold turkey and cut a few brands.

[mackinturk]

dude, that isnt even an article. there is no info cited to back up his claims, there are no actual statistics or anything. it's basically just one guys opinion. he probably drives a pontiac and now he's just pissed because saturn is nicer than pontiac now.

[AuraDrvr89]

Although I don't agree, he does have legitimate arguments..

GM is competing with itself. Although, it always has...

I would hope that they wouldn't cut any brands.. Especially Buick and Saturn, who are/were both landmark divisions of the company.

[kknobl]

More doom and gloom GM death watch propaganda...

The article seems less rooted in fact than it does someone's random thoughts on the plight of General Motors.

Saturn will not go anywhere, nor do I think any of the other brands will. GM has just invested a boatload into Saturn, and they're going to want to try to get a return on that investment. Rick Wagoner was interviewed recently and asked some very pointed questions, one of which being the elimination of any more divisions, specifically Saturn (the interview may even have been posted somewhere on these boards). He pretty much shot that down, saying something that they learned from Oldsmobile, and they know that it may take time for Saturn to build up a full head of steam again.

All that aside, it would probably cost GM MORE $$ (lawsuits and what not) to eliminate a division than it would to actually keep it.

Additionally, GM has usually competed more with itself than anyone else which is largely due to the internally competitive culture that took root in the 50s and 60s. Back then, GM was so far ahead that the divisions weren't so much concerned with outselling other COMPANIES (which had already been done handily), but outselling other GM DIVISIONS. I think under Rick Wagoner, there is a significant positive cultural transformation taking place at GM, but time will be the ultimate judge of that.

[Uzzy]

GM is spending tons of money on Saturn right now. They're not going to dump the brand...even though they probably could, or maybe even should as far as the corporate line-up goes.

[John10]

GM brands may compete with each other but it is impossible for GM to compete with itself. A GM sale is a GM sale, regardless of the GM brand. That sale didn't go to another competing car company.

Cutting a brand may make sense in terms of saving costs if the brand is actually losing money per unit sold. Cutting a brand like Saturn or Buick does not necessarily mean however that Saturn or Buick buyers will buy another GM brand. I don't know if there is any reliable data out there but I would be very interested to know how many Oldsmobile owners bought their next car from another GM brand. Anecdotally I don't hear a lot of Saturn owners talking positively about GM or other GM brands. I would therefore not assume that if Saturn closed down, most of the Saturn owners would switch allegiance to another GM brand.

[ajs_saturn]

saturn has become a well like company by many consumers, just look at how many saturns there are on the road compared to pontiac. if GM decides to dump somebody, it's most likely going to be pontiac

[Uzzy]

Originally Posted by John10

GM brands may compete with each other but it is impossible for GM to compete with itself. A GM sale is a GM sale, regardless of the GM brand. That sale didn't go to another competing car company.

Cutting a brand may make sense in terms of saving costs if the brand is actually losing money per unit sold. Cutting a brand like Saturn or Buick does not necessarily mean however that Saturn or Buick buyers will buy another GM brand. I don't know if there is any reliable data out there but I would be very interested to know how many Oldsmobile owners bought their next car from another GM brand. Anecdotally I don't hear a lot of Saturn owners talking positively about GM or other GM brands. I would therefore not assume that if Saturn closed down, most of the Saturn owners would switch allegiance to another GM brand.

One thing competition does is drive the price down. So GM dealers are competing against each other and driving each other's prices down. This might not hurt GM's bottom line since they still sell it to the dealer at invoice anyway, but then the dealers are forced to recoup the losses in other ways that often is how they end up with the shady reputations that they often have. This is not just GM dealers though, most dealers can be thought of as shady by certain people, so I'll say that it is a weak argument, but a bit of a problem nonetheless.

The other thing competition does is breed innovation. Since it's just reskins of the same car, that is not applicable to GM's case. So even if it doesn't hurt GM it is a huge waste of money for no benefit. What it does do to hurt GM is dilite it's brands, and they all need to better focus their line ups right now.

GM needs ot cut the fat. The unions are the #1 thing stopping them from doing so, but having bloated overlapping vehicle portfolios doesn't help. What GM really needs to do (and I've been saying this for a long time) is sell all brands and products under one roof. Then they can eliminate the delar infighting and unhealthy competing. And also it would help GM's divisions focus their product line better. There would be no need for Pontiac SUVs and economy cars. Vehicles like the G5, Torrent, the upcoming Terrain, Canyon, etc would never need to exist. They are not needed.

My ideal GM line up:

Chevrolet: The bread and butter brand. Everything to every one. Competes in just about every vehicle segment from economy cars to trucks.

Pontiac: RWD performance. Think BMW's line up without the ugly crossovers/SUVs and not neccesarily intended to compete directly with BMW, just the same essence of vehicles. Like a low-rent Bimmer. Might snipe a sale from them from time to time, based on price, but not a priority.

Saturn: Much like Chevrolet, but more upsacle and with a European flare. The cars would be indistinguishable from Opels, though the line ups might not be exact mirrors. With High Tech "test" vehicles for alternative propultion and fuels. Could prove redundant and be eliminated, though. Survival of the fittest, of course.

Buick: High luxury and high style with FWD. They would be more classicly styled, in the vein of the new Enclave. The line up would be small, however and not cover all segments. Just a midsize car, large car, midsize Crossover, large crossover (Enclave).

SAAB: That weird, little quirky Swedish brand. Pretty just they'd keep doing what they're doing.

Cadillac: The Luxury flagship. All RWD, and competing in all Luxury segments. They would srtive to become the "Standard of the World" once again.

Corvette: I think the Vette should be severed from Chevrolet and turned into it's own sports car brand. That would give them room for a mid-engine under the same nameplate. Ferrari, Lambo...look out!

HUMMER: The SUV brand. Pretty much what they're doing now. True off-road capable trucks.

GMC: GMC would be tossed to the Professionals as they claim to be. I like GMCs, but why does GM need 2 truck brands? I think too much is tied up in the Chevy Truck image, to drop it. GMC could be 2500s and bigger, sold only to contractors and fleets. This would mean that Chevy only built a 1500 series truck and left the bigger stuff to GMC only.

This can only work if GM brings all of it's bradns together. The brands can't serve their niche marlest and expect the delaers to make much money. Even the Caddilac/Chevy and P/B/GMC and Saturn SAAB pairings don't work well enough. Saturn can not truely flourish as a mainstream brand with it small dealer netweork, either. After the unions, it's fractured dealer network is the biggest thing hurting GM.

[GR898SL2]

Originally Posted by Uzzy

GM is spending tons of money on Saturn right now. They're not going to dump the brand...even though they probably could, or maybe even should as far as the corporate line-up goes.

Agreed, Uzzy. GM won't do it and would be foolish if they even considered it. They don't want Olds revisited, even with ~440 Saturn franchisees to pay off.

Cutting Oldsmobile was supposed to return the General to profitability and increase market share, but all it did was scare potential buyers over to Hyundai, Honda and Mercury, among others. A case could be made that GM may not be any better off now then they were in 2000; there's just considerably nicer cars in the portfolio that are aggressively advertised (CTS, Malibu, Lambda, etc.).

I disagree with the blogger's assertion that additional brands need to be cut as evidenced by the consequences of doing away with the Olds division in terms of both marketshare and total cost. If anything the RenCen brass need to do a better job of defining and managing the brands that presently exist, getting more out of less.

Just my .02 - .03 worth, since the greenback is weak these days.

[MidnightVue07]

They do have alot of different Brands. As far as cutting out Division's etc.. I think the two with probably the biggest lack of Profit is Buick and Saab..

[PurdueGuy]

GM isn't anxious to cut brands - it's freakin' expensive, and as nice as it is to think that the customers will just buy from another GM division, that's not the reality of it. Some feel angry and go elsewhere out of spite, others just buy from someone else for whatever old reason. It cost GM a ton of money to cut Olds, and isn't anxious to do it again, IMO.

If it were going to happen, though, I can't decide if the Opelization of Saturn helps the brand stay, or helps it go. On one hand, making Saturn into Opel US makes it potentially very profitable, as the brand has little R&D required outside of marketing and safety compliance. On the other hand, if they wanted to kill it, they could just stop shipping the cars over here, and swap the badge on the Vue to a Chevy or something. There aren't a bunch of US factories with union jobs making it hard to cut the product.

I don't think we'll see the death of any brands soon, though I think Pontiac is probably first in line if one does.

[davidsky]

[QUOTE=Uzzy;1213530]
My ideal GM line up:

Pontiac: RWD performance. Think BMW's line up without the ugly crossovers/SUVs and not neccesarily intended to compete directly with BMW, just the same essence of vehicles. Like a low-rent Bimmer. Might snipe a sale from them from time to time, based on price, but not a priority.

Would a sporty crossover be OK?

Saturn: Much like Chevrolet, but more upsacle and with a European flare.

Saturn should be the only brand with a 3 and 5 door hatchbacks and a mid size wagon.

Buick: High luxury and high style with FWD. They would be more classicly styled, in the vein of the new Enclave. The line up would be small, however and not cover all segments. Just a midsize car, large car, midsize Crossover, large crossover (Enclave).

The large car should be very large. The biggest sedan that GM makes.

Cadillac: The Luxury flagship. All RWD, and competing in all Luxury segments. They would strive to become the "Standard of the World" once again.

I don't even think they should be in the entry luxury segment. Leave that for Saturn and Buick

[Uzzy]

Originally Posted by davidsky

Would a sporty crossover be OK?

No, I don't think it's necessary. "Sporty" can be handled by Chevy.

Originally Posted by davidsky

Saturn should be the only brand with a 3 and 5 door hatchbacks and a mid size wagon.

Since those are more european flavours of vehicles, I can agree.

Originally Posted by davidsky

The large car should be very large. The biggest sedan that GM makes.

Certainly. Perhaps 3 cars in the mid-size to large car sizes.

Originally Posted by davidsky

I don't even think they should be in the entry luxury segment. Leave that for Saturn and Buick

I can agree to that as well. The CTS should be their lowest level of vehicle, which is is now, but it's probably their nicest as well. But the CTS could shrink perhaps just a bit to put it more in line with the Lexus IS and BMW 3-series, but not right at the bottom of the entry level. No need to worry about BMW 1-series, or Benz's B-Klasse. Cadillac has come along way..and has a long way to go still.

[2NDSOUT]

Originally Posted by Uzzy

One thing competition does is drive the price down. So GM dealers are competing against each other and driving each other's prices down. This might not hurt GM's bottom line since they still sell it to the dealer at invoice anyway, but then the dealers are forced to recoup the losses in other ways that often is how they end up with the shady reputations that they often have. This is not just GM dealers though, most dealers can be thought of as shady by certain people, so I'll say that it is a weak argument, but a bit of a problem nonetheless.

The other thing competition does is breed innovation. Since it's just reskins of the same car, that is not applicable to GM's case. So even if it doesn't hurt GM it is a huge waste of money for no benefit. What it does do to hurt GM is dilite it's brands, and they all need to better focus their line ups right now.

GM needs ot cut the fat. The unions are the #1 thing stopping them from doing so, but having bloated overlapping vehicle portfolios doesn't help. What GM really needs to do (and I've been saying this for a long time) is sell all brands and products under one roof. Then they can eliminate the delar infighting and unhealthy competing. And also it would help GM's divisions focus their product line better. There would be no need for Pontiac SUVs and economy cars. Vehicles like the G5, Torrent, the upcoming Terrain, Canyon, etc would never need to exist. They are not needed.

My ideal GM line up:

Chevrolet: The bread and butter brand. Everything to every one. Competes in just about every vehicle segment from economy cars to trucks.

Pontiac: RWD performance. Think BMW's line up without the ugly crossovers/SUVs and not neccesarily intended to compete directly with BMW, just the same essence of vehicles. Like a low-rent Bimmer. Might snipe a sale from them from time to time, based on price, but not a priority.

Saturn: Much like Chevrolet, but more upsacle and with a European flare. The cars would be indistinguishable from Opels, though the line ups might not be exact mirrors. With High Tech "test" vehicles for alternative propultion and fuels. Could prove redundant and be eliminated, though. Survival of the fittest, of course.

Buick: High luxury and high style with FWD. They would be more classicly styled, in the vein of the new Enclave. The line up would be small, however and not cover all segments. Just a midsize car, large car, midsize Crossover, large crossover (Enclave).

SAAB: That weird, little quirky Swedish brand. Pretty just they'd keep doing what they're doing.

Cadillac: The Luxury flagship. All RWD, and competing in all Luxury segments. They would srtive to become the "Standard of the World" once again.

Corvette: I think the Vette should be severed from Chevrolet and turned into it's own sports car brand. That would give them room for a mid-engine under the same nameplate. Ferrari, Lambo...look out!

HUMMER: The SUV brand. Pretty much what they're doing now. True off-road capable trucks.

GMC: GMC would be tossed to the Professionals as they claim to be. I like GMCs, but why does GM need 2 truck brands? I think too much is tied up in the Chevy Truck image, to drop it. GMC could be 2500s and bigger, sold only to contractors and fleets. This would mean that Chevy only built a 1500 series truck and left the bigger stuff to GMC only.

This can only work if GM brings all of it's bradns together. The brands can't serve their niche marlest and expect the delaers to make much money. Even the Caddilac/Chevy and P/B/GMC and Saturn SAAB pairings don't work well enough. Saturn can not truely flourish as a mainstream brand with it small dealer netweork, either. After the unions, it's fractured dealer network is the biggest thing hurting GM.

Uzzy, I'll agree with your post...with exception to the Hummer line:

HUMMER: The SUV brand. Pretty much what they're doing now. True off-road capable trucks.

Trust me on the Hummer, they suck hands down period when it comes to being anywhere close to being "True Off road capable", while the one that is sold consumer based is based off of the one that is for military use, Hummers are crap for off-road when you compare them to Jeeps.

In college,two friends of mine operated their own off-road jeep outfit with a group of other Jeep owners. One day while they were doing some off roading in southern Kentucky and Tennessee, someone that they knew decided to bring their Hummer along. The Hummer got stuck in a ravine and had to be pulled out by two Jeep Grand Cherokees because the Hummer was too big and wide to manuever the off roading.

[s-seriesguy]

I though Saturn was supposed to be one of Saturn's stronger selling brands. GM sucks. Even though I don't really care all that much for the new lineup of Saturns, they're the only ones that have some looks to the boring GM lineup.

[Uzzy]

Originally Posted by 2NDSOUT

Uzzy, I'll agree with your post...with exception to the Hummer line:

HUMMER: The SUV brand. Pretty much what they're doing now. True off-road capable trucks.

Trust me on the Hummer, they suck hands down period when it comes to being anywhere close to being "True Off road capable", while the one that is sold consumer based is based off of the one that is for military use, Hummers are crap for off-road when you compare them to Jeeps.

In college,two friends of mine operated their own off-road jeep outfit with a group of other Jeep owners. One day while they were doing some off roading in southern Kentucky and Tennessee, someone that they knew decided to bring their Hummer along. The Hummer got stuck in a ravine and had to be pulled out by two Jeep Grand Cherokees because the Hummer was too big and wide to manuever the off roading.

It was an H1 no doubt. They are not for mud bogging, but the rest of the line can handle it as well or better than the Jeep line. Hummer is working on a Wrangler competitor right now. And most of the mud bogging stories I know and hear from my friends, involve a truck of some other sort having to recuse the Jeeps that get in over their heads. Now that I think about it, Hummer could lose some of the "flash" that they have. The H3 is a good example of what Hummer should be. The H2 is too pricey and trying to add too much luxury to off roading. That is the main reason why I hate Land Rover.

[BobbyP]

Originally Posted by s-seriesguy

I though Saturn was supposed to be one of Saturn's stronger selling brands. GM sucks. Even though I don't really care all that much for the new lineup of Saturns, they're the only ones that have some looks to the boring GM lineup.

Saturn sales wasn't that great in February... Down 36.1% from last year.

GM would be so much stronger if they consolidate to a single GM store. Eliminate at least half the models. I would enjoy shopping with every GM model and brand under one roof.

[John10]

Originally Posted by BobbyP

GM would be so much stronger if they consolidate to a single GM store. Eliminate at least half the models. I would enjoy shopping with every GM model and brand under one roof.

That does make some practical sense but you need to also understand that most customers have little loyalty to the GM corporate brand and relate far more to the individual brand names they actually buy. Read and understand the majority of anti-GM and anti-non-Saturn GM brand comments here on Satfans if you don't believe me. And if you think Saturn owners are bad go ask a few fanatical Chevy owners what brand name they identify with. I'd be very careful before I destroyed the identity of the individual GM brands that took decades to build.