Good-Bye Pontiac, Saturn, Saab, Hummer
By Michelle Krebs April 27, 2009By Michelle Krebs
DETROIT -- General Motors will eliminate or dispose of the Saturn, Saab and Hummer brands by the end of 2009 and Pontiac by no later than the end of 2010, under the automaker's most recent viability plan unveiled on Monday.
Eliminating the Pontiac division was a tough decision and "an intensely personal one" for many at the auto company because of its heritage, GM CEO Fritz Henderson said in a press conference Monday. "But it is one that needed to be taken."
Under the original plan, GM was to make Pontiac a niche brand as the marque is generally sold alongside Buick and GMC vehicles. "We concluded that we didn't have a strategy that would allow us to win with the Pontiac brand," said Henderson. "We didn't have the resources in the form of product or marketing muscle behind the brand."
He said GM will discontinue production of Pontiac vehicles "no later than 2010."
GM has struggled in recent times to keep Pontiac relevant. But Edmunds.com's data supports GM's decision to abandon the brand.
For the past few months, the percentage of people who traded their Pontiac for another Pontiac dropped to 16 percent. By comparison looking at GM as a whole, 50 percent of the people who traded in a vehicle from any GM brand bought another GM model, according to Edmunds.com's data.
Further, Pontiac has been attracting a low-end buyer. The average down payment on a Pontiac is a very low $1,600, on average. Only Kia buyers apply a lower down payment to their purchase.
And Pontiac's inventory of unsold vehicles has climbed even higher than the rest of GM's brands. Even if GM stopped production of all Pontiac models, the automaker would have well over a three-month supply, according to Edmunds.com's calculations.
Henderson also noted to financial analysts on Monday afternoon that Pontiac was heavy in fleet sales -- sales that can be shifted to another GM brand.
Saturn: End Advanced
Henderson confirmed the last Saturn vehicle will be built this year unless a buyer for the brand emerges with a good offer. GM will phase out Saturn by the end of this year instead of 2011 as previously planned.
An investor group that a private equity firm and some Saturn dealers said it has approached GM to acquire and operate the principal assets of Saturn. Last week, Henderson said it wasn't the only party interested in Saturn. However, his remarks Monday sounded less optimistic about a buyer for the marque.
"If there's a successful offer on table that we think might justify doing contract assembly [for Saturn] beyond then, we would consider that," said Henderson Monday, adding so far not one that "we find acceptable" is on the table.
Hummer: Could Be Sold
Henderson said "several parties have made bids" for Hummer. GM was supposed to announce a decision on the sale or elimination of Hummer on March 31 but Henderson postponed that announcement, saying it would come in days or weeks, not months.
"There's a reasonable likelihood there would be a sale [of Hummer]," Henderson said. That sale could involve GM contract building vehicles for Hummer. "Otherwise, we wouldn't expect to build Hummers beyond 2009."
Saab: In Negotiations
GM will cut ties with Saab by year-end. Saab is in the equivalent of Chapter 11 reorganization in Sweden's courts now. Reportedly a number of buyers are interested in the brand.
"Any buyer would want to have Saab's U.S. distribution system and we'll want to negotiate that," said Henderson. It's possible GM's overseas operations would contract build Saab models. However, the Saab 9-7 will no longer be built in the U.S. after this year.
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Click here to comment on this entry.Too bad the old regime couldn’t seem to make these necessary and obvious decisions. Regrettably GM never embraced the Saab culture or the Saturn concept. Both could have made major contributions but its way too late now. Hummer was a product of an American lust for manly vehicles and a fluke in automotive history.
The demise of Pontiac should pretty much end the stupid domestic tendency with GM to re-badge the same car for different divisions and try to push them off as different cars. I’ve never understood why anyone literally buys into that whole mentality.
From my professional dealings with them in the 70s and 80s, GM was so big that they lost all perspective and couldn’t see past their own domain. Now it looks like the company will well itself to the U.S. taxpayers and the UAW. In the end the top brass didn’t serve stockholders, creditors, employees, or customers well (only themselves).
I hope Saturn and Saab remain. I owned a Saab around 1980 and still value their uniqueness. Saab has provided perspective to the industry in typical Swedish fashion. Perhaps they’ll be able to develop some worthwhile, new models (historically their biggest problem). Saturn brought a bit of fresh air to the U.S. car market. I’d like to see one or more of the green car companies take over and have a launch pad to promote sustainable personal transportation.
Now we see the immediate closing of 1,000 - 1,200 "under performing" dealerships. IMO while the domestic's initial quality has become acceptable, the service provided by most of their dealers has always been very poor.
Dealerships have been the weak link for GM. Slimy sale staff, apathetic parts departments, and service that defines the word "oxymoron".
I have owned and driven Saabs for over 20 years, starting before the time GM took a fifty percent stake from Investor AB, then buying the rest.
Saab has good values in its DNA. Safety, performance and innovation. But GM did some incredibly stupid things to the brand, dealers and buyers, including the 9-2x "Saabaru" and the 9-7x "TrailSaaBlazer". They finally seem to be showing some innovation with the 9-3x.
I hope I get an opportunity to buy another Saab in the future, hopefully an Aero 9-3x convertible.
If Fritz henderson wants to do this "only once", then GM's going to have to cut Buick and GMC in North America as well. Cutting Pontiac does very little to alleviate the badge engineering that helped get them where they are today. Buick offers nothing in NA beyond the superficial that isn't sold as Chevrolets or Cadillacs. GMC is the most disposable brand for the same reason. Pontiac had more exclusive vehicles.
Cut Buick and GMC and dual all the remaining dealerships as Chevrolet/Cadillac stores.
Y'know, I wonder if the Aztec would have done better as a Saab?
GMC is critical to GM. GMC's main profits don't come from pickups and SUV's, it comes from their commercial vehicles, like dump trucks, large van and stake body trucks, busses, and even tractors (as in tractor-trailers). GM cannot afford to give up the commercial market.
But they should dump Buick, not Pontiac. The only people buying Buicks are old men with white hair, belts and shoes. And polyester slacks. They should also put a new front end on the G8 and sell it as a Chevy, same goes for the Solstice. It is these kind of management blunders that put them in the state they are in now - apparently they have learned nothing!
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