Add two more brands to the formerly broad General Motors portfolio that might die as a result of the government-imposed restructuring the Detroit automaker is facing: Pontiac and GMC . The viability of the two brands is currently under review by GM and the Obama administration’s auto industry task force.
According to Bloomberg, both brands are now under heavy review. Months ago, GMC had been considered safe by GM and the automaker had said it would develop Pontiac into a small-volume niche brand that might eventually be phased out.
Now, it looks like the only truly safe brands are GM’s high-volume Chevrolet brand, its luxury Cadillac brand and its historic, mid-level (and successful in the growing Chinese market) Buick brand – if you can call standing under the leaking umbrella of a nearly bankrupt automaker a good place to be.
“We are continuing to assess our global operations, brand portfolio and nameplates, and will take further actions to more aggressively restructure our business,†Renee Rashid-Merem, a GM spokeswoman, told the media yesterday. “It’s premature to comment on what those actions could entail.â€
GM’s initial plans, given to the U.S. government in February, said that Buick, Cadillac, Chevrolet and GMC would survive, Pontiac would scale down to a niche brand and the automaker would sell or close Hummer, Saab and Saturn. The government auto team immediately stated that the plan’s cuts weren’t deep enough – and now it appears that at least one more brand might get the hatchet.
GMC
Long considered safe because of its low development costs and high profit margins, 100-year-old GMC’s future has nonetheless faced quiet speculation for months from those deep within the industry. To those on the outside, GMC’s lack of unique products has been its detriment; the automaker’s offerings include not one exclusive model. The cost of supporting GMC’s separate marketing and dealer channels could ultimately lead to its demise.
Pontiac
The most likely of GM’s “safe” brands to face the chopping block is unquestionably Pontiac, however. Low profit margins and generally weak public sales, despite a brief, recent rise in G8 sales, have doomed the brand. Bloomerberg reports that a GM insider indicated that GMC’s chance of survival is greater than Pontiac’s and that a decision on the brand’s future has been brought to the forefront of discussions with the auto team.
Saturn
Saturn might have a future if Oklahoma City-based Black Oak LLC has its way. Though several offers have been made for Saturn, the one apparently being considered most seriously is that of private equity firm Black Oak, which teamed up with a number of dealers to make a bid for the brand. Black Oak would initially sell GM-built and designed Saturns before converting the brand over to imported, “Saturn-tailored” models. The offer is being taken so seriously that GM has issued official, albeit vague, comments.
Saab
Considered by most analysts to be the most likely brand to survive on its own or to be swallowed up by another automaker, Saab has until the end of 2009 to find a buyer before GM drops its ties to its Swedish unit. Though the automaker’s current and future products are GM-based, it will have a fresh lineup by this time next year – if things stay on schedule – and its small size and history of innovation mean that it could be brought back to life with comparatively minimal effort.
Hummer
GM CEO Fritz Henderson has said that there are serious offers on the table for Hummer, but names and faces have been kept from the public. Analysts and industry insiders keep expecting GM to make an announcement on the brand, but the automaker delayed its announcement a few weeks ago. Though Hummer is hardly the current focus at GM’s Renaissance Center headquarters, we do expect an announcement to be forthcoming in the near future.
