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GM to consider dropping Pontiac, GMC

04/16/2009, 9:02 AM

By Andrew Ganz

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.”

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.

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04/16, 9:16 AM

posted by:

oldraven

If anything, kill GMC. Silverado’s are the ugly ones, but I can see the redundancy of the Sierra, if not a truck division. Pontiac isn’t even a division anymore. I don’t see how killing the brand name will save any money whatsoever.

04/16, 9:16 AM

posted by:

No more oil for GM

it hit the news wire today that there are 27 companies interested in buying saab and that have gone forward meeting management and discussing things.. looking good..

i don’t get it with pontiac.. it is the one u.s. gm brand that could make it in europe by selling true pontiac muscle cars.. instead they spent zillions trying to sell cadillacs..

04/16, 9:17 AM

posted by:

Madcapp

Although it is a shame to watch American institutions collapse, those brands are in all reality, redundant to Chevrolet and Chevrolet Trucks. So its not like there’s gonna be any real loss of product.

04/16, 9:19 AM

posted by:

KeithRich23

need more oil for gm…where were u at on the gm recall topic?…and gm should get rid of Pontiac, such ugly cars

04/16, 9:38 AM

posted by:

bigdawg

GM should only have 2 brands Chevrolet & Cadillac. Or maybe 3 Buick, Chevrolet & Cadillac Chevy as the lower cost mainstream brand Buick as the mid level near lux brand & Cadillac as the top luxury brand. Without Pontiac, Saturn, GMC, Hummer & Saab eating up development and marketing $ GM could put that $ into making better products that the buying public would actually want. Maybe GM could bring back the Geo brand as ‘youth oriented” small cars sold in Chevrolet dealerships sort of like Toyota did with Scion. Whatever happens GM will not look like the company it was 5 years ago.

04/16, 9:38 AM

posted by:

CADDY-V

Keep them both.
I would rather have a GMC truck over a Chevy. I know some people out there think they are the same… they are different it’s more than just a different grill.
As for Pontiac they just got the G8. If you have not seen one in person our have not driven one I say you should check it out. It did’nt beat a 550 BMW for no reason and at over 10 grand less.
GM needs to do a better job of advertising what they got and stop waiting for someone to stumble into a dealership.

04/16, 9:42 AM

posted by:

teahead

Kill Pontiac and make the G8 an Impala SS and the Solstice a Chevy.

Why does it have to be so difficult? It’s a no brainer to kill Pontiac and GMC.

04/16, 10:13 AM

posted by:

parts guy

I agree with teahead. As products, the G8 is awesome, the Solstice is still strong enough, but the rest of the Pontiac lineup with the exception of the Vibe is now(G3, G5) or soon to be(G6) pointless. As for the Vibe, it really never fit in the Pontiac lineup. Decent product, but I’m sure it would be no more out of place in a Chevrolet or Buick store than it was in the Pontiac store.

While I prefer the Sierra to the Silverado, and the Acadia to the Traverse, GM does not need to spread its marketing dollars any thinner than it has to right now. Give the small rural dealers that now have GMC the right to sell Chevy trucks – if they aren’t closed.

04/16, 10:13 AM

posted by:

leftwingagenda

how are chevy trucks and gmcs that much different? i’d need to see specifics before believing that…just sayin’ it doesn’t make it true! ;)

04/16, 10:20 AM

posted by:

parts guy

GMC has some specific sheet metal, plus grille and headlight differnces. As well, the Denali models have some exclusive (except for Cadillac) powertrain combinations and option combinations. These bits and pieces could just as easily be migrated to Chevy from the GM parts bin.

04/16, 10:31 AM

posted by:

johnnycanuck

I don’t know either how much difference there is between a Chevy and a GMC truck, but you can be fairly certain that if you eliminate the GMC brand not all those customers will flock to Chevy so you’re going to lose volume. The combined sales of the Sierra and Silverado have usually been greater than the F150. If they pair it down to one truck I don’t think the lone survivor could do that on its own. As much as we’d like to think otherwise people still buy from the heart and if you take away their brand they simply might not come back no matter how silly that may appear on the surface. For that reason alone I don’t think you’re going to do GM any favors by eliminating GMC.

04/16, 10:41 AM

posted by:

yamahr1

Given that Buick-Pontiac-GMC became a combined channel, if you just drop the few independent stores then I don’t see why there’s any advantage to killing Pontiac and GMC. GMC in particular has a pretty loyal following, particularly on the high end with the Denali. There are lots of rich “horsie set” types who want their Denalis and don’t want to wear the Chevy badge no matter how nice the truck is.

As for Pontiac, they at least have a chance of becoming a niche brand of interesting cars, and bringing back the Firebird as recently speculated is an intriguing prospect. Bring the coupe and wagon versions of the G8 over and get nav working in them, keep the Solstice, and do the Trans Am, and that’s a very interesting showroom right there with very little overlap to other GM models. I mean if you were a BPG dealer, wouldn’t you rather have more variety of products to sell rather than fewer?

Most people who comment on these forums clearly have no friggin’ clue in the world, and no particularly good intentions for GM to start with. GM has already been scavenged by the earlier spike to $4 gas, the banking meltdown, the incessant targeting of GM in the press, and the keystone cops of a mess we call the U.S. government. They need to stabilize at what they have, lick some wounds, build some momentum as the marketplace improves, and push back a little on the Obama mindset to remake GM into the image of Toyota! IMO, in a normal market and with bondholders settled, GM is already fully viable. Some positive talk out of the White House instead of all this self-flagellation would go a long way to bringing back GM, the economy, and a little bit of national pride for a change.

04/16, 10:41 AM

posted by:

bigdawg

Give the G6 coupe/convertible to Chevrolet with malibu like styling cues & interior and call it the Laguna.
make the Solstice a Chevy & rename it Monza & make the G8 into a Chevrolet Caprice while keeping the Impala FWD.

And GM needs a lower price hybrid than the Volt to compete with the Insight.

04/16, 10:47 AM

posted by:

HoosierHero

KeithRich23- that’s not NMOFGM. It’s one of his clones. Look at his name carefully- there are now like 5 of them lol.

Anyways, I think this sounds like the best news yet for GM. Keep the low, mid and high level brands so there isn’t much if any overlap and kill off the rest. One thing to remember here is while a lot of their brands will go away, their cars and ideas don’t have to. There’s nothing to say that GM couldn’t put a gluttonous SUV like the Hummer back on the road, or do high performance models like Pontiac. They just won’t be called those names. Now would I suggest this as they have helped drag GM down in the past few years? No. But it would be and is a possibility for the future depending on technology, energy, etc.

04/16, 10:56 AM

posted by:

LSUtigers

I honestly think GMC should have been dropped long ago. I don’t think many people who like a yukon can really hate a tahoe. And as for the denali tag, the yukon denali is an escalade without the badge, or a tahoe fully-loaded. I do agree with yamahr1 on that GM is getting the negative coverage for the entire auto industry. There are several external economic factors coming in to play. But GM will come away from this a stronger company than before.

04/16, 11:01 AM

posted by:

oldraven

“For that reason alone I don’t think you’re going to do GM any favors by eliminating GMC.”

Agreed. As much as I hate to admit it, Pontiac closing down makes more sense than GMC right now, since GMC is selling vehicles with a much higher profit margin than Pontiac is. I think it would make much more sense to eliminate the Chevrolet versions of the competing trucks and SUVs. Who knows right now?

I don’t think forcing GM to eliminate even more brands has anything to do with viability and everything to do with making an example out of GM and doing a song and dance for the nation. They’re eating their hat over the free pass they gave the banks/financial institutions, so they’re making as public a display of taking a hard line on the auto industry as they can to divert attention over that blunder. I just hope they aren’t killing what little is left of the manufacturing industry in North America by doing so.

04/16, 11:03 AM

posted by:

j-dubb

It looks like the Obama administration will have its wish after all to break up the 100 year old GM into a smaller company, their answer to saving the company, you cant just press the delete button and end Pontiac and GMC without them 2 companies GM wouldnt be GM today! and besides that look at the jobloss figures didnt Obama promise more jobs this would cause a ripple effect in the Industry, and a another sad day in America :(

04/16, 11:11 AM

posted by:

Kid Icarus

Ya think? I guess it takes threats of bankruptcy for GM to make smart business decisions.

04/16, 11:17 AM

posted by:

Lariat Luxury Locomotive Liner No.3

GM should just close its most successful division, the Rebadging Division. Oh, wait a minute, that would mean closing GM. Logical.

04/16, 11:18 AM

posted by:

Borat

Kid, it wasn’t GM board that makes those decision. As scary as it is our efficient government makes better sense then GM board of directors.

04/16, 11:31 AM

posted by:

letsgorange

obviously GM needs to be more lean. With years of enjoying great car/truck sales, it intoduced more brands with even more confusing marketing and product differentiation. All in all they are just competing with their own brands and undercutting their own. Very stupid. I mean what does GMC really offer? All their bread and butter is a rebadged Silverado that is marketed as “professional grade” come on please..so a GM brand is trying to undercut their own product which happens to be one of the best selling trucks. This is the problem….not product it is getting better…new equinox, srx, malibu…MARKETING is miserable. I thought it was getting better until…wait lets rebadge an aveo and give it a pontiac logo….how stupid. the only badge engineered product that works is the dodge caravan and chrysler t&c 2 different markets and 2 different price schemes….ugh

04/16, 11:33 AM

posted by:

carstuff

The only reason to kill GMC is to shut down dealerships easily. Stop building GMC’s and the dealers will fold. GMC is the most profitable of all divisions.

While we may say that Chev and GMC are basically the same, to many consumers Chevy is an entry level brand and GMC is mid level brand. Just the way it is.

04/16, 11:51 AM

posted by:

strongbad

There are a lot of Pontiac-GMC combo dealers, and there is a Pontiac-GMC-Hummer dealer in my area. If you kill Pontiac, the GMC dealer can’t really stand on its own, so its got to go, even if they are profitable. They don’t make enough profit to justify running dealers, service bays, warranties, marketing, etc. GM must cost costs, and this is one area.

The standalone Chevy and Caddilac dealers can survive, and that is what should happen.

04/16, 12:06 PM

posted by:

Mikeymove

If any division should go, it should be GMC and Buick. GMC for the above reasons, and Buick just because there are 3 choices, Pontiac has 7. Yes, I agree with some that Pontiac is only rebadged cars, but…. GM could turn Pontiac into a powerhouse like it was 20 years ago. Get rid of the stupid alpha/numeric nameplates and get back to the names that made Pontiac, Grand Am, Grand Prix, etc. I think since the new Insignia is not going to Saturn, it should come here as a Grand Am. Imagine what the Grand Am GTP could be. I think if GM keeps Pontiac, it should offer front wheel drives, all wheel drives and rear wheel drives. Get back into the market of making exciting cars for Pontiac, not something boring like the G6. Getting rid of Hummer, Saturn, GMC, Buick and Saab, will leave Cadillac, Chevy and Pontiac. It will have a luxury division, a somewhat economical division, and a sport division.

04/16, 12:25 PM

posted by:

F50

I think they should keep Chevy, Cadillac, Buick and Pontiac, Buick because of its success in China, and the need to bring Pontiac back and ditch the G# series, rename the G8 to Bonneville(or something else), the Insignia as a Grand Am, a Firebird/TransAm, Fiero(RWD, Mid engined sports car maybe using Volt technology and going against the Telsa roadster and the upcoming Dodge EV

04/16, 12:27 PM

posted by:

j-dubb

Mikeymove you obviously dont know much about the auto industry let alone GM..

04/16, 12:59 PM

posted by:

jayjc08

Chevrolet and Cadillac. It’s sad to see so many dealerships close down and jobs lost, but for GM it’s business. This is crunch time.

Caddy-V- Then whats the differences aside from a few badges, bodypanels and a few minor accessories?

04/16, 1:13 PM

posted by:

anyclearer

i agree make the g8 the new impala and kill pontiac and gmc dont have one truck or car that is they’re own so ditch it also! Id love to hear news soon that they did something smart by killing these to brands!!

04/16, 1:20 PM

posted by:

letsgorange

mikeymove-cant kill buick, to much of a powerhouse in china, and could make a possible resurgence in the US if the lacrosse takes off. All it takes is some marketing and the right product…note to GM make comercials like you did when the cts was redesigned and put caddy back in the game for younger buyers and iis now starting to get away from the barge old people rigs that will notbe around forever.

04/16, 1:56 PM

posted by:

oldraven

letsorange is right. Buick can be just as desirable and profitable as Cadillac. The same is true for Pontiac. Take a look at what Cadillac was a decade ago and what it is now.

What I don’t understand is why they don’t give the dealerships an ultimatum. Merge Pontiac/Buick/GMC as ONE ENTITY!!! One marketing department, one dealer network, one development arm. One division with three badges. Think the Toyota ‘T’ and the MR2 emblem. http://mr2wiki.com/uploads/MKI/mr2-chicken-emblem.jpg , or Ford with their separate badging for the Thunderbirds. This could easily work for PBG.

04/16, 2:19 PM

posted by:

DomKing

No need for either GMC or Pontiac. Too many overlap products at GM, and all with low margins. Here is my dream lineup for GM:
Cadillac: sub-CTS, CTS, SRX, and, somewhere down the line, add a roadster. Aim squarely at BMW, Mercedes, Audi, Lexus and match their sedans, coupes, and crossovers. Alright, Alright, you can keep building the Escalade if people want to buy it.
Buick: FWD upscale sedans, upscale crossover, upscale coupe. Aim at the fully loaded versions of Altima, Maxima, Camry, Accord.
Chevy: Trucks, SUV’s, Crossovers, Muscle cars (Vette, Camaro), RWD sedans (the G8 should have been the Impala), Volume FWD sedans like Malibu, Entry Level like the new Cruze, maybe even a hatchback.
And then pour all of the R&D money into these handful of models to make them with the best engines, interiors, and drive trains available at each price point. In fact, if you just make them almost the best people will buy them anyway for patriotic reasons. Then, fire all of the accountants and marketing people who think that selling cars is all about low-cost parts and glitzy ad campaigns. GM will sell fewer cars, but make a profit on each one, while getting lots of free marketing with glowing reviews in the automotive press.

04/16, 3:36 PM

posted by:

SHOspeed

Exactly, Pontiac has nothing but the solstice and the G8. They should just make them chevys. GMC still has some good use.

04/16, 3:41 PM

posted by:

A.J.

I hope that GMC doesn’t get canned – but if it does, I wouldn’t mind having a GM (or whatever the new company will be called) that’s just Chevrolet, Buick, and Cadillac.

Once (or if) GM gets back on their feet and earns some decent cash, they should paobably try to bring Opel over here to the states to fill the gap left between Chevrolet and Buick – to split the difference between mainstream and luxury.

04/16, 3:58 PM

posted by:

NRG

Pontiac should stay and GMC should go. To much overlapping with GMC.

04/16, 4:57 PM

posted by:

shane train

If they keep Pontiac, they’ll need to tweak their other offerings from their other badges. If Pontiac is to become a focused performance niche company, they can’t have a great deal of competition from Chevy. The only high performance Chevy that should never ever EVER die is without a doubt the Corvette. It’s one of the few American cars I would be sick to see go extinct.

But there’s the dillemma. See, if Pontiac wanted to expand its performance horizons, it would be treading on the Corvettes turf. So Pontiac is kind of faced with a glass cieling as a performance division, unless GM minds creating competition for it’s Corvette. I mean, they can only get so fast before they damage Vette sales.

Drop all these obvious rebadges. If you must do a badge job for Pontiac it should be a Camaro. The only reason they could pull it off is because Pontiac’s smaller performance cars always had a pretty unique look to them. Their overall coupe shapes were a bit more slim and trim, with enough Euro influence but not too much, while the other Muscle and Pony cars were more butch stylewise.

I don’t think I can think of a reason to keep GMC, besides nostalgia and some styling differences. They can bag it and up the volume of the Chevy clones of the whole GMC lineup, and offer Denali versions on the Chevy, maybe using a different name, if they have to keep the Denali line going, but honestly, that just competes with Caddies.

So If GMC IS to survive, they need to be a little bit utilitarianized from where they are now so there’s less Caddy overlap in the upscale models and large SUVs. But they could line Chevy up to the seam, and keep offering a Buick crossover as a stepping stone, though the Enclave is certainly on the level with Caddy.

I personally think that GMC can go, there’s no reason, and the “differences” everyone is talking about are silly. Just offer a solid honeycomb grille with no bar as an option on the Chevy. It’s not hard. Honda offers a bunch of grille choices on almost all their cars, so it’s not like it’s some major change. The Ridgeline (while ridiculous and ugly, I know) has an optional solid black grille that looks MUCH better than the regular one.

04/16, 10:16 PM

posted by:

elviososa

Hummer goes to Chinese….Pontiac should die….Saab <<<do they make cars??? GMC, pathetic….Saturn need to build some UFO’s to sell.

04/18, 10:29 PM

posted by:

teke616

GM won’t be able to survive in Europe because of tax implications. Virtually all of their entire line would be similar to the American “gas guzzler” tax in Europe.

 
 
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