CaDDy
Banned
DETROIT, March 23 (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) , which issued a shock profit warning last week and has been losing market share, may phase out one of its weaker car brands if sales fail to meet projections, company Vice Chairman Bob Lutz said on Wednesday.
GM's Buick and Pontiac are both "damaged brands" due to lack of investment over the years, and GM is working to correct that with an array of new vehicles coming to market, Lutz told a Morgan Stanley automotive conference in New York.
But if some of its brands fail to meet sales projections, "then we would have to take a look at a phase-out. I hope we don't have to do that. What we've got to do is keep the brands we've got."
Financial analysts have said for years that the world's largest automaker has too many brands to support, even with the gradual phase-out of the Oldsmobile brand a few years ago, particularly with its weaker U.S. sales.
Sales for both Pontiac and Buick have lagged in recent years. But GM is in the midst of a $3 billion investment in new vehicles for Buick, and Pontiac showrooms and they will have four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-size coupe.
GM, which last week cut its earnings outlook for 2005 by as much as 80 percent, posted a 6 percent drop in U.S. sales for the first two months of the year. GM's U.S. market share fell to about 25 percent, far below its share of 27.5 percent for all of 2004.
Analysts said last week that GM's March sales could fall as much as 10 percent in March, while foreign automakers such as Toyota Motor Corp. (7203.T: Quote, Profile, Research) , Hyundai Motor Co. Ltd. (005380.KS: Quote, Profile, Research) and Nissan Motor Co. Ltd. (7201.T: Quote, Profile, Research) would continue to gain U.S. market share.
"A HUGE ALBATROSS"
No details about an expected restructuring at GM, the largest private U.S. provider of health care, have emerged since it roiled markets with its warning last week.
But the company, which has about $300 billion in outstanding debt, said on Wednesday it was in talks to sell a stake in its GMAC Commercial Mortgage unit after potential investors expressed interest in the unit.
And Lutz and Gary Cowger, GM's president for North America, spoke of possible demands for a cut in mounting health care benefits for the company's hourly union employees in remarks on the sidelines of the New York auto show on Wednesday.
An elimination of any one of GM's brands would likely mean plant closings and a shrinking of GM's hourly work force.
"An across-the-board competitive health care plan for salaried and hourly employees could literally save us billions," Cowger said. Health care costs, added Lutz, are "a huge albatross hanging over American industry today."
© Reuters 2005. All Rights Reserved.
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Now for my opinion:
I'm sure many people just as I have, have heard that GM is in big financial trouble. I've read in the Wall Street Journal that GM has even mentioned banckruptcy which I'm sure WON'T happen, but the mere fact that they allude to it is quiet alarming.
Both Ford and Chrysler have had troubled times, but they rebounded and came back with some very strong products namely the Mustang and 300C--Ford's and Chrysler's newest best sellers, respectively. It appears that for GM that sh!t has finally hit the fan. They reported that they lost over 1 Billion during the last 6 months
. And GM has said that it will be tough in 2005 (nothing to get too worked over but still)
What's even more alarming is what GM is doing to improve sales. Take Honda or Toyota for example. They take a good, reliable car like the Camry and continue to improve upon it. They make it better year after year to gain the trust of their customers. They don't ship the Camry out to every division they own and rebadge it make 4 different trims and mark up its price. GM makes the very succesful Envoy then takes it and gives one to Pontiac, why? :??:
To see GM in this situation is difficult for some. "GM was once the New York Yankees of the automobile business. They didn't just most of the championships - they won the championship every year. At the peak of its time, GM dominated the U.S. automobile industry, consistently capturing more than 40 percent of the market (think about that figure for a moment in context with today's market, with GM struggling mightily to even maintain a 25 percent share)."
My opinion is that GM simply has too many models,nameplates and divisions. It desperately needs to be re-organized and I'm not simply talking about getign rid of their CEO, which i don't personally feel is responsible for everything that's happenign to GM right now.
I'm not trying to flame GM I'm just pointing out that one of the "Big Three" is starting to fall behind. Not to say Ford has the best marketing campaign in the world or even Chrysler for that matter, just making people aware of what I think is happening in the auto industry right now
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Now for your opinions
GM's Buick and Pontiac are both "damaged brands" due to lack of investment over the years, and GM is working to correct that with an array of new vehicles coming to market, Lutz told a Morgan Stanley automotive conference in New York.
But if some of its brands fail to meet sales projections, "then we would have to take a look at a phase-out. I hope we don't have to do that. What we've got to do is keep the brands we've got."
Financial analysts have said for years that the world's largest automaker has too many brands to support, even with the gradual phase-out of the Oldsmobile brand a few years ago, particularly with its weaker U.S. sales.
Sales for both Pontiac and Buick have lagged in recent years. But GM is in the midst of a $3 billion investment in new vehicles for Buick, and Pontiac showrooms and they will have four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-size coupe.
GM, which last week cut its earnings outlook for 2005 by as much as 80 percent, posted a 6 percent drop in U.S. sales for the first two months of the year. GM's U.S. market share fell to about 25 percent, far below its share of 27.5 percent for all of 2004.
Analysts said last week that GM's March sales could fall as much as 10 percent in March, while foreign automakers such as Toyota Motor Corp. (7203.T: Quote, Profile, Research) , Hyundai Motor Co. Ltd. (005380.KS: Quote, Profile, Research) and Nissan Motor Co. Ltd. (7201.T: Quote, Profile, Research) would continue to gain U.S. market share.
"A HUGE ALBATROSS"
No details about an expected restructuring at GM, the largest private U.S. provider of health care, have emerged since it roiled markets with its warning last week.
But the company, which has about $300 billion in outstanding debt, said on Wednesday it was in talks to sell a stake in its GMAC Commercial Mortgage unit after potential investors expressed interest in the unit.
And Lutz and Gary Cowger, GM's president for North America, spoke of possible demands for a cut in mounting health care benefits for the company's hourly union employees in remarks on the sidelines of the New York auto show on Wednesday.
An elimination of any one of GM's brands would likely mean plant closings and a shrinking of GM's hourly work force.
"An across-the-board competitive health care plan for salaried and hourly employees could literally save us billions," Cowger said. Health care costs, added Lutz, are "a huge albatross hanging over American industry today."
© Reuters 2005. All Rights Reserved.
=======================================================
Now for my opinion:
I'm sure many people just as I have, have heard that GM is in big financial trouble. I've read in the Wall Street Journal that GM has even mentioned banckruptcy which I'm sure WON'T happen, but the mere fact that they allude to it is quiet alarming.
Both Ford and Chrysler have had troubled times, but they rebounded and came back with some very strong products namely the Mustang and 300C--Ford's and Chrysler's newest best sellers, respectively. It appears that for GM that sh!t has finally hit the fan. They reported that they lost over 1 Billion during the last 6 months
. And GM has said that it will be tough in 2005 (nothing to get too worked over but still)What's even more alarming is what GM is doing to improve sales. Take Honda or Toyota for example. They take a good, reliable car like the Camry and continue to improve upon it. They make it better year after year to gain the trust of their customers. They don't ship the Camry out to every division they own and rebadge it make 4 different trims and mark up its price. GM makes the very succesful Envoy then takes it and gives one to Pontiac, why? :??:
To see GM in this situation is difficult for some. "GM was once the New York Yankees of the automobile business. They didn't just most of the championships - they won the championship every year. At the peak of its time, GM dominated the U.S. automobile industry, consistently capturing more than 40 percent of the market (think about that figure for a moment in context with today's market, with GM struggling mightily to even maintain a 25 percent share)."
My opinion is that GM simply has too many models,nameplates and divisions. It desperately needs to be re-organized and I'm not simply talking about getign rid of their CEO, which i don't personally feel is responsible for everything that's happenign to GM right now.
I'm not trying to flame GM I'm just pointing out that one of the "Big Three" is starting to fall behind. Not to say Ford has the best marketing campaign in the world or even Chrysler for that matter, just making people aware of what I think is happening in the auto industry right now
===============================================
Now for your opinions
