GM is acting like scum

[quagmire]

I have heard that argument before about GMC, but I still don't buy it. How in the world can Ford be more successful with one brand of pickup if some wouldn't be caught dead in a mainstream brand? What you do is make your one brand cover a wider swath like Ford does marketing their Platinum trim level at the top of the rest.

It costs a lot of money to maintain two dealer networks, two marketing budgets, and having to design two vehicles (I should say re-style because they are the same thing anyhow). Still it's not efficient. GM also really wanted Buick and you can argue it's needed in China and I'd agree, but it's not necessary in North America anymore. GM fans say these brands must remain for GM to be successful, but I don't buy it at all. GM could easily be Chevy and Cadillac. Move the Denali line over to Chevy and since you longer are forced to make the GMC "nicer" you are allowed to no longer hold your mainstream brand back. Anyhow I personally don't feel GM is ready to compete with the re-designed 2015 F-150 and their cash cow is in danger of continued market share erosion.

I understand you are a GM fan (maybe you sell them) and it's great to like a brand, but I don't see how anyone can look at the numbers from GM and Ford and say GM is a better run company. GM claimed they "had to" maintain the old way of doing business because radical re-structure would have made them unprofitable.i don't think it was about profitability, but more about nostalgia. If the Government would have let them keep Pontiac, Saturn or Hummer it wouldn't surprise me if some of those were still running down the assembly line today. I know for a fact they wanted to keep Pontiac and the Government say no way!

Anyhow GM is still not efficient and their size (employees, divisions, number of factories, etc.) just doesn't equal their marketshare. If you can argue their being more efficiently ran then other automakers (especially Ford) I'd love to hear the argument. Otherwise you change or die or in the case of GM wait for your next Government bail-out.

I agree with everything you say. I may be a fan of GM's products, but I am in no way a fan of GM the company. Their management still sucks, they should be pulling in more money than they are, etc.

It's not that hard to imagine GMC buyers not going to Chevy if GMC was killed. It's not about GMC buyers refusing to buy mainstream. It's that they are a fan of GMC and there is a rivalry between them and Chevy. When you build up a loyal customer base, they won't take kind when the brand is killed. People left GM after they killed Oldsmobile. Those buyers didn't switch to Buick or Cadillac. Pontiac fans are even more loyal and they left GM as well. GM Canada is struggling because of Pontiac's demise( Pontiac was huge up north). Even though 95% of Pontiac's were rebadged Chevy's at the end, they didn't switch to Chevy. These fans were fans of the brand, not the parent company.

Right now with GMC integrated into the Buick network, it doesn't cost that much more. GMC's have higher ATP's than Chevy's and trucks have big profit margins which negate the cost to make the styling changes when you also factor in the higher ATP's and the success of Denali. It isn't hard to imagine GMC prints money for them. It's just they squander that money.

As I said above, management still sucks and despite the bankruptcy getting rid of their debt and bad assets, they are inefficiently run and that is costing them money. Ford is absolutely the better run company.

 

[DakotaGuy]

I agree with everything you say. I may be a fan of GM's products, but I am in no way a fan of GM the company. Their management still sucks, they should be pulling in more money than they are, etc.

It's not that hard to imagine GMC buyers not going to Chevy if GMC was killed. It's not about GMC buyers refusing to buy mainstream. It's that they are a fan of GMC and there is a rivalry between them and Chevy. When you build up a loyal customer base, they won't take kind when the brand is killed. People left GM after they killed Oldsmobile. Those buyers didn't switch to Buick or Cadillac. Pontiac fans are even more loyal and they left GM as well. GM Canada is struggling because of Pontiac's demise( Pontiac was huge up north). Even though 95% of Pontiac's were rebadged Chevy's at the end, they didn't switch to Chevy. These fans were fans of the brand, not the parent company.

Right now with GMC integrated into the Buick network, it doesn't cost that much more. GMC's have higher ATP's than Chevy's and trucks have big profit margins which negate the cost to make the styling changes when you also factor in the higher ATP's and the success of Denali. It isn't hard to imagine GMC prints money for them. It's just they squander that money.

As I said above, management still sucks and despite the bankruptcy getting rid of their debt and bad assets, they are inefficiently run and that is costing them money. Ford is absolutely the better run company.

I don't really know how profitable Buick or GMC are to GM, but I guess if Buick or GMC buyers refuse to drive a Chevy or Cadillac then I guess they have to maintain the bloat. Ford sold off all their brands, reduced Mazda stake to 3% and closed Mercury and they are running a much more streamlined business model. I still am curious whether Lincoln will survive long term, but I guess they feel they need a luxury brand and Lincoln is what they have left to work with at this point. It just seems to me that the most successful automakers have a laser focus on one or two brands.

Since you say that the majority of GMC buyers would not buy a Chevy it would be interesting to see where they would all go? Ford? Toyota? Dodge? I guess GM thinks it is still necessary, but it is interesting that GM is forced to sell two overlapping brands and combined they still have trouble matching Ford's one brand in most markets excluding full sized SUV.

I still wonder what it will take for GM to actually reorganize and build a company that will have long term sustainability. Ford was forced to radically rebuild their business model in order to survive without bailouts or going bankrupt. If there is another economic downturn and GM comes back for another bail-out would the public support it? I'm thinking they won't and next time GM needs to adapt or be shut down or sold off. I hope they figure it out while there is still time.

 

[quagmire]

I don't really know how profitable Buick or GMC are to GM, but I guess if Buick or GMC buyers refuse to drive a Chevy or Cadillac then I guess they have to maintain the bloat. Ford sold off all their brands, reduced Mazda stake to 3% and closed Mercury and they are running a much more streamlined business model. I still am curious whether Lincoln will survive long term, but I guess they feel they need a luxury brand and Lincoln is what they have left to work with at this point. It just seems to me that the most successful automakers have a laser focus on one or two brands.

I wonder if Ford wasn't in dire straights at the time and needed the money from the sale of JLR, would Ford closed down Lincoln and kept at least Jaguar. A lot of the products you see from Jaguar today are still based on the plans set up under Ford ownership. And despite their crappy products before their latest lineup, they still had a better image than Lincoln.

Since you say that the majority of GMC buyers would not buy a Chevy it would be interesting to see where they would all go? Ford? Toyota? Dodge? I guess GM thinks it is still necessary, but it is interesting that GM is forced to sell two overlapping brands and combined they still have trouble matching Ford's one brand in most markets excluding full sized SUV.

Just like with brands, truck owners are fiercely loyal as well. They could rival Apple fans. The combination of the Silverado/Sierra would get close to the F-Series before the bailout. But since then I think the political ideals of some of the truck buyers managed to shake that loyalty and they ended up switching. And it hasn't been close since. Also factor in the GMT-900's were aging and the K2XX's are way too conservative. So loyal buyers were underwhelmed.

I still wonder what it will take for GM to actually reorganize and build a company that will have long term sustainability. Ford was forced to radically rebuild their business model in order to survive without bailouts or going bankrupt. If there is another economic downturn and GM comes back for another bail-out would the public support it? I'm thinking they won't and next time GM needs to adapt or be shut down or sold off. I hope they figure it out while there is still time.

The public didn't support the first one. Unless the economy is in such a horrible state like it was back in 2008 where it couldn't survive the folding of GM and Chrysler, I doubt the government would intervene again.

Oh and here is the story of how Buick and GMC survived:

The Feds basically wanted to get GM down to Cadillac and Chevrolet. They said, "you don't need all these brands. You need one prestige brand, and one mass-market brand." And we said "well we can't get rid of Buick because Buick is important in China, and if Buick becomes an orphan in the United States then the Chinese are no longer gonna be interested in it." And the Feds said "Fair enough, but everything else goes." We said well we'd also like to keep GMC. They said "well, GMC is basically just like Chevrolet," and we said "that may be true, there may be a lot of shared components, but GMC has an entirely different image, a different customer base, and people are willing to pay different prices for a GMC, and here's the profitability," and the Feds said "whoops, okay, keep GMC."

Though I don't know how the death of Buick in the US would impact their sales in China.

http://jalopnik.com/the-feds-killed-pontiac-bob-lutz-says-1452735716

 

[DakotaGuy]

I wonder if Ford wasn't in dire straights at the time and needed the money from the sale of JLR, would Ford closed down Lincoln and kept at least Jaguar. A lot of the products you see from Jaguar today are still based on the plans set up under Ford ownership. And despite their crappy products before their latest lineup, they still had a better image than Lincoln.

Yes I totally agree that Jaguar has a much better image then Lincoln and would have been a stronger luxury brand going forward, but like you said Ford needed the money at the time. I also believe that Volvo could have been moved upmarket and the dealer network expanded resulting in a more successful brand then Lincoln, but again Ford needed the money. Alan Mulally said in an interview they were extremely close to closing down Lincoln at the same time they shut down Mercury, but the Ford family fought against that decision and won. The newest Lincoln models like the MKZ and MKC are pretty nice offerings, but Lincoln is still weighted down by a poor brand image (Fords with more chrome and wood), outdated products like the MKS and Navigator, and one of the ugliest vehicles ever made the MKWhale..eerr... I mean MKT. Oh and the whole MK thing is a mess for marketing. How about doing something different and using names like Continental, Zephyr, Aviator? Lincoln has some of the best vehicle names ever, but had to jump on the whole alpha-numeric naming thing.

I guess time will tell if Ford can re-build Lincoln into a semi-successful luxury brand. My guess is if their target is just keeping it profitable and a place for Ford buyers to go if they want to move upmarket it will probably do ok. I don't ever expect them to go toe to toe with brands like BMW, Mercedes, or even Cadillac. Lexus, Audi or Infiniti is a better target for them.

Even with the Lincoln problem, however Ford is very well ran compared to GM. They probably should have seen if Alan Mulally wants to come over and teach them a thing or two since he is retiring from Ford. lol

Anyhow thanks for the discussion. I can tell you also have a lot of interest in the US auto industry.

 

[quagmire]

Yes I totally agree that Jaguar has a much better image then Lincoln and would have been a stronger luxury brand going forward, but like you said Ford needed the money at the time. I also believe that Volvo could have been moved upmarket and the dealer network expanded resulting in a more successful brand then Lincoln, but again Ford needed the money. Alan Mulally said in an interview they were extremely close to closing down Lincoln at the same time they shut down Mercury, but the Ford family fought against that decision and won. The newest Lincoln models like the MKZ and MKC are pretty nice offerings, but Lincoln is still weighted down by a poor brand image (Fords with more chrome and wood), outdated products like the MKS and Navigator, and one of the ugliest vehicles ever made the MKWhale..eerr... I mean MKT. Oh and the whole MK thing is a mess for marketing. How about doing something different and using names like Continental, Zephyr, Aviator? Lincoln has some of the best vehicle names ever, but had to jump on the whole alpha-numeric naming thing.

The MKZ and MKC are nice vehicles. But they are still Ford's with leather, wood, and chrome. The MKZ is a Fusion at heart, the MKC is an Escape, MKX an Edge, and MKS a Taurus.

They are much better differentiated than before though. But, still I don't see them going any higher than Buick, Acura, etc in the near future. But they do seem content with that going after the value minded crowd instead of the image driven crowd and going after vehicles like the LaCrosse, Lexus ES, etc and not the heavy hitters in the 3 series, C Class, E Class, S Class, etc.

Even with the Lincoln problem, however Ford is very well ran compared to GM. They probably should have seen if Alan Mulally wants to come over and teach them a thing or two since he is retiring from Ford. lol

Anyhow thanks for the discussion. I can tell you also have a lot of interest in the US auto industry.

No doubt Ford is a better run company. And outside the F-Series and Mustang, the whole company only uses the same platform for the class. That certainly helps keep costs down and increasing profits. Where GM while better than before still has more variety. GM has Gamma II, Delta II, Epsilon II, Theta, Theta-Epsilon, K2XX, GMT-800 HD, GMT-900HD, Lambda, Zeta, Alpha, and Y-Body.

Though Zeta is on the way out, Delta II and Theta will be merging, and Lambda and Theta-Epsilon will be merging. So GM is getting there with streamlining platforms as well.

I am a car enthusiast. While I prefer GM's products( again not to be confused with liking GM the company), doesn't mean I don't keep tabs on what is going on with the industry and won't give credit where credit is due. So I enjoy discussing car related things.

 

[yg17]

http://media.gm.com/media/us/en/gm/...nt/Pages/news/us/en/2014/Jun/0630-recall.html

7.6 million more cars recalled today.


Pretty sure next GM's going to recall my Subaru.

 

[ucfgrad93]

Damn, it is almost a daily event.

 

[bluespark]

It was a real bankruptcy. Just instead of the banks, etc financing GM through the process, it was the government. Why? Because the banks were also failing due to the recession. The only bankruptcy GM would have gone through was Chapter 7 without the governments support.

What happened was the government created a new company. This new company bought General Motors Corporations good assets. GM Corporation became Motors Liquidation and stayed in bankruptcy for several years before finally closing down after the liquidation was finished. The company that the government formed was renamed GM Company once the sale was complete. It was the same process Chrysler went through before GM did.

Yes, everyone knows how it works. Was there a point to your summary of recent past events?