GM dealers remain in limbo

Confusion with dealers at GM is not a good start to reinstatement. What has changed in the last year that GM now needs another 661 dealers? Why did they get rid of them in the first place? Who made the final call to ax these dealers last year?

From CNN.com:

NEW YORK (CNNMoney.com) — The 661 axed auto dealers General Motors is offering to reinstate aren’t ready to pop the champagne just yet. They’re still waiting to find out about the terms they’ll have to meet to regain their franchises.

“Initially, we were excited,” said Howard Braunstein, CEO of M&M Auto Group in Liberty, N.Y. “However, I am concerned that GM’s offer for reinstatement will mandate requirements that will be difficult or impossible for many dealers to meet, especially in the 60-day timeframe we were given.”

Read the full article here.


Photo from fOTOGLIF

  

Pontiac will be a “focused niche brand”

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The GM restructuring plan will kill off Saturn and demote Pontiac.

And on Tuesday, when General Motors asked the federal government for more bailout money, it also announced a reorganization plan that included demoting Pontiac to a “focused niche brand,” signaling that its lineup of vehicles would shrink and that it would no longer be a separate division.

To industry analysts and Pontiac’s longtime fans, the downgrade provides a case study of the product missteps that helped put G.M. in its precarious state, and a reminder of the dangers in straying from a successful formula.

“When you deviate too far from it, that’s when you run into trouble as a brand and a company,” said Jack R. Nerad, executive editorial director at Kelley Blue Book, whose 1968 Firebird made him feel “as cool as I could be.”

More than any other G.M. brand, Pontiac stood for performance, speed and sex appeal. Its crosstown rivals followed with similar muscle cars, giving Detroit bragging rights over the cars that Japanese automakers were selling based on quality and reliability.

Though still G.M.’s third-best-selling division, behind Chevrolet and GMC, Pontiac’s sales peaked in 1984, when it sold almost 850,000 vehicles, roughly four times as many as it sold last year.

G.M.’s chief executive, Rick Wagoner, said the company’s decision to concentrate primarily on Cadillac, Chevrolet, Buick and GMC left the company with a “comprehensive portfolio.”

By many accounts, Pontiac started to falter when G.M. pursued a cost-saving strategy of providing the same cars to different divisions.

No kidding. It’s stunning that GM needs an economic catastrophe to admit to obvious truths.

This is the best thing for GM, and for Pontiac. Now, they can focus on cool cars, and maybe even recapture some of the muscle car glory of the brand’s past.

  

Saturn may bite the dust

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The GM restructuring plan is now expected to be rather bold, and many are predicting that the Saturn brand will not survive.

“I haven’t heard about what is in General Motors’ plan in detail, but it looks like it will be more maximum than minimum. In other words, it will be quite aggressive, and I don’t know whether this will include plant closings or elimination of brands,” said David Cole, head of the Institute for Automotive Research in Ann Arbor, Mich.

Meanwhile, Bob Lutz, who is slated to retire as GM’s vice president of product development, told the Automotive News that Saturn likely would not survive the restructuring plan.

“My personal favorite would be to see Saturn survive and prosper. But frankly, the reality is that that is probably not going to be the outcome,” Mr. Lutz said. Neither he, nor other GM officials could be reached for comment on Saturn’s future.

“We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It’s our duty,” Mr. Lutz told Automotive News.

Working against the idea of axing Saturn is the enormous amount of money that would have to be spent to settle with dealers and the potential lawsuits from them that would probably follow. That happened with Oldsmobile.

Rob Cochran of No. 1 Cochran in Monroeville and Robinson said he held out hope that Saturn would continue as a brand.

“I know that Saturn is … exploring a lot of options. The dealers met last month in New Orleans and there were three or four options on the table,” Mr. Cochran said. “We are waiting to see what those alternatives are.”

He added, “Mr. Lutz is famous — or depending on your viewpoint, infamous — for just winging it. He’s a great product person, but a challenge from a PR standpoint.”

Saab is expected to survive, as the Swedish government will likely invest billions to make sure Saab and Volvo remain viable, though details are not yet clear.

  

GM and UAW negotiations revolve around retiree health care trust

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This should be a pretty eventful week in the auto industry.

The terms of the federal loans set “targets” for concessions, largely from debt-holders and the United Auto Workers union, but concession talks have made little progress with just a couple of days left before the initial deadline.

Negotiations between GM and the UAW broke off Friday night but resumed Sunday, still focusing on exchanging the company’s cash payments into a union-run retiree health care trust for GM stock, according to a person briefed on the talks who didn’t want to be identified because the bargaining is private.

GM and UAW officials declined comment.

GM and Chrysler do not need to have everything nailed down for Tuesday’s progress reports, but the companies are expected to detail concessions along with plant closures, the potential elimination of brands and thousands of job cuts.

After Tuesday there will be several weeks of intense negotiations ahead of a March 31 deadline for the final versions of the plans.

  

GM will threaten bankruptcy if it doesn’t get more aid

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The auto bailout helped to keep GM and Chrysler on life support, but GM will make it clear in it’s plan to be filed this week with the government that more money will be needed in order to avert bankruptcy.

General Motors Corp. will offer the government the choice of giving it billions more in bailout money or seeing it file for bankruptcy when it presents a restructuring plan next week, according to a report published Saturday.

The online edition of The Wall Street Journal, citing unnamed sources, said the competing choices present a dilemma for the Obama administration, which may fear seeing the industrial icon carmaker fall into bankruptcy and cut more jobs if it’s refused more aid.

The government has already committed $13.4 billion to GM as part of a federally-funded bailout. The automaker is expected to include its call for more funds in a restructuring plan it’s required to submit to the Treasury Department by Tuesday, though the company isn’t expected to include a dollar amount, according to the Wall Street Journal report.

However, Treasury Department officials believe GM needs at least $5 billion more in loans to keep operating beyond the first quarter, according to the report.

The key will be the plan laid out by GM. Will it have real concessions from bondholders and the union?

  

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