It’s no great secret that GM is in dire straights. They’ve been recently dethroned as the largest auto manufacturer, they are teetering on the edge of Chapter 11, and the government had to step in to back their warranties. Any company that needs a program like that isn’t positioned for success, or able to instill consumer confidence.
While many people want to see GM go away for good, most of their arguments are a little short sighted. The company shaped automotive styling for decades, influenced a generation of muscle cars, not to mention produced aircraft during World War II. This isn’t a mom and pop hardware store that got run out of business by Home Depot, this is a company rich in history in modern America. Capitalism allows for the free fall and destruction of companies, but what should GM do to prevent this?
First off, they are going to give the big ugly axe to a few of their lineups. By 2012, prepare to see only Chevrolet, Buick, Cadillac and GMC surviving. Saab? On sale. Saturn? Back to being just a planet. Pontiac? Maybe a niche brand, maybe gone all together. The fantastic G8 sits on lots, the Solstice isn’t selling at a record pace, and the G5 and G6 might drive quietly into the sunset.
Keeping a pulse in the veins of GM will take a bit more than that, but it’s a great start. The amount of money siphoned off to keep different brands afloat is trimmed, car designs can be more focused, as there really isn’t market share for everything they have. The cross pollination of brands can be cut to a minimum, and sales can be based on one model, rather than the same chassis sharing multiple badges.
The cost cutting isn’t going to end there however. With the UAW and lenders hopefully seeing the writing on the wall, GM has the possibility to whittle their debt down by half. Combine that with the closure of manufacturing plants and dealerships, some more bailout money, and you might have a solution to a very complex, and large problem.
Just as my grandfather remembered GM brands like LaSalle, hopefully GM can sort through this mess so I can tell my grandchildren about long dead GM brands like Pontiac.
-KF
