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    General Motors Plans More Cuts


    • The sale of Opel/Vauxhall was only the beginning

    General Motors seems being in a cutting mood as it drives to improve its profit margins and stock price. Last week saw the sale of Opel and Vauxhall to PSA Group and it's only the beginning said GM CEO Mary Barra.

    Automotive News reports that GM is considering reducing investments in North American cars and "select" international markets according to a chart that was shared during a conference call with analysts last week. The chart says these two earned a spot on the chopping block due to low profit potential and weak strength in franchises.

    "There's a little bit more work that we're doing in the international markets. Our overall philosophy is that every country, every market segment has to earn its cost of capital," Barra said on the conference call. 

    Barra and GM President Dan Ammann declined to go into details about these plans.

    GM has already made significant changes in terms of their international operations by ending or reducing operations Australia, Indonesia, Russia, and Thailand. The automaker has also scaled back plans in India. The comments made during the call suggest more cuts could take place here and possibly elsewhere.

    As for 'reducing investments in North American cars', this likely means GM is taking a hard look at various segments in passenger car segment. With consumers trending towards utility vehicles and trucks, sales of passenger cars have been falling precipitously. As of March 1st, dealers had four month's worth of inventory of cars, compared to an 81-day supply for light trucks and less than 60-days for full-size SUVs. GM could walk away from certain segments such as compacts or full-size sedans, or delay investments in certain models.

    These moves will allow GM to funnel money into models that make more money, and returning capital to shareholders.

    "That's an immediate opportunity for us to reward shareholders without changing the risk profile of the company or our ability to manage through a downturn," GM CFO Chuck Stevens said.

    Analysts are mixed on GM's plans.

    "It takes a lot of discipline to shift away from a volume-is-king kind of mentality," she said. "In the end, that's going to make a better GM -- a longer-standing company that's not only more profitable but more relevant," said Rebecca Lindland, a senior analyst with Kelley Blue Book to Automotive News.

    John Murphy, an analyst with Bank of America Merrill Lynch isn't so sure about this plan.

    "It appears that GM's recent decision-making has become much more short-term-focused and, in our opinion, could create challenges for the company in the coming years," Murphy wrote in a report.

    Source: Automotive News (Subscription Required)



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    Low ass margin on India. Seriously. Their population is less than China's but their condensing of the population requires mostly small cars.. and it isn't exactly the luxury car capitol either.. S.America political BS is hurting its economy. 

    Its hard to speculate on this. GM does not want to get caught in the legendary 1996 debacle where they cut all their full-size cars and moved to SUVs.. of course back then no one had really heard of a car based SUV called CUV. Not to mention at this point CUVs are getting similar fuel economy as their counterparts in cars. I could see the Impala being merged into a niche RWD vehicle.. (Chevy Impala merges with Chevy SS anyone?) The Lacrosse and Regal become one.. with the Regal being the loser since the PSA deal.. but then again they have gone on record as saying that this next gen Regal/Commodore would not be affected. The Sonic/Spark thing I saw coming. Seriously.. why buy the tweener Sonic when U could buy the actual smaller and cheaper Spark or the Sonic's taller self Trax? I called this hard.. and said it on GMI and MTForum that it made no sense from a marketing point of view to not simply call the TRAX the SONIC TRX (trim) and reap the reward of sales being a marketer.  The Sonic is a cool as lil whip.. but I'm sure GM is making more off the Spark (and Trax) because it is being built by non-UAW labor while the Sonic is being built here. 

    Buick.. I could see after the NG Regal (if it still comes) runs its course, the Buick line-up being one LaX, a global Hatchback, and at least two more CUVs to go along with the Encore, Envision, and Enclave. Why???

    Quote

    Cars accounted for 38.3 percent of GM's U.S. sales in 2013 but just 25.3 percent in the first two months of this year. 

    Chevy.. The nixing of the Impala or merging it into a RWD based Omega (or AlphaL [current CTS]), death of Sonic or merging of it with Spark... I kinda see these two like I saw the insanity back in the day of having the Beretta and Corsica in the same line-up. I can see a fleshing out of the EV Bolt and PHEV Volt into another sized variant. Expect to see one more CUV or SUV coming in between the Nox and Traverse.

    Cadillac is , ironically, safe in GROWING its line-up.. the necessity of it in GM's portfolio is pure profit and legitimacy. Expect ATS to become CT3, CTS to become CT5, CT6 to get even more plush, CT8 to arrive, and possibly still a CT7.. all by 2020. CUVs? XT4 is already running around, XT5 doing great.. XT7 is supposed to be coming, and of course I can't see them touching the Escalade formula

    GMC. I could see a rethink on  the BIG Acadia.. maybe a new name or Acadia XL.. I can still envision a revisit to the H3. 

     

     

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    This is good news, cut profit losing departments, scale down and consolidate the cars. Improve the CUV and SUV / Trucks are fine for GM. Build and grow a Wrangler competitor and bring back a few hot SUV/CUV's like the Trailblazer SS, Syclone and Typhoon.

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    75 % of sales being truck and utility is a telling number, and that could grow too.  If only 20% of their sales are passenger car by 2020, then a lot of passenger car lines are going to get dumped.  Sonic, Impala, Regal, ATS would be easy cuts.   Or merge Spark and Sonic into one vehicle some how.  Even Lacrosse is in a rapidly shrinking segment, the next Gen Lacrosse maybe goes down in size to become their version of the Malibu if Buick is to have only 1 car, it probably has to be more middle sized. 

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    2 hours ago, smk4565 said:

    75 % of sales being truck and utility is a telling number, and that could grow too.  If only 20% of their sales are passenger car by 2020, then a lot of passenger car lines are going to get dumped.  Sonic, Impala, Regal, ATS would be easy cuts.   Or merge Spark and Sonic into one vehicle some how.  Even Lacrosse is in a rapidly shrinking segment, the next Gen Lacrosse maybe goes down in size to become their version of the Malibu if Buick is to have only 1 car, it probably has to be more middle sized. 

    Thanks for pretty much repeating my every word/

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    11 hours ago, daves87rs said:

    Not surprised, As rumors have been floating around for a while..

     

    Goodbye Impy, Sonic.

    Also expecting some factory closings as well........

     

    I just don't see the Impala going away again.. It would be foolish to concede the large car crown to Taurus or Avalon. Especially when it is just so damn great of a car. Again.. I see platform sharing with the CT6 or CTS being the absolute best way to further economies of scale within the company. Frankly I would have already had the rumors swirling about a RWD Impala as the SS was being killed. It really makes no financial sense to have one vehicle sitting on a doable platform like Omega. U already have under utilization of one platform over at team Corvette. The Omega based Impala with a 2.0L, 3.6L and TT 3.6L (420HP) or LT1 SS and.. an LT4 650HP SSR would be the stuff of dreams. It would effectively wear a Hellcat's ass out.

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    I hope CAFE standards are relaxed soon.  I would love to see Americans be able to purchase a Bolt and an Impala SS with LT4 engine out of the same showroom... along with a diesel Colorado and a 6.2L Silverado shortbed regular cab sport truck.

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    I question how relaxed they would be, I actually expect them to stay the same but have the time to meet the higher numbers pushed out.

    NY is doing free 220V home charger, no sales tax and $2K rebate for buying an EV. The push is on as I expect more states to push to get people out of ICE and into EV.

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    I honestly don't think they should be relaxed as much as push the dates back. I think the goals and standards should be kept high to push a high standard but I also think companies need the time and market to change enough to even have a chance. If nobody wants to buy an EV because they're too scared of change then it's awfully difficult to push a company to make something people are too scared to buy.

    15 minutes ago, dfelt said:

    I question how relaxed they would be, I actually expect them to stay the same but have the time to meet the higher numbers pushed out.

    NY is doing free 220V home charger, no sales tax and $2K rebate for buying an EV. The push is on as I expect more states to push to get people out of ICE and into EV.

    Completely agree. I should have just read your post before typing, lol.

    • Upvote 1

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    The following states have no sales tax:

    Alaska, Delaware, Montana, New Hampshire, Oregon

    The following states have sales tax but you do not pay when you buy an EV.

    Washington, California, New York, Florida, Arizona, Oklahoma, New Jersey, Colorado, Connecticut, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia

    Amazing how many states allow you to buy an EV and not pay sales tax plus have plenty of other incentives. 

    Full list of incentives here:

    http://www.ncsl.org/research/energy/state-electric-vehicle-incentives-state-chart.aspx

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    9 hours ago, Cmicasa the Great said:

    I just don't see the Impala going away again.. It would be foolish to concede the large car crown to Taurus or Avalon. Especially when it is just so damn great of a car. Again.. I see platform sharing with the CT6 or CTS being the absolute best way to further economies of scale within the company. Frankly I would have already had the rumors swirling about a RWD Impala as the SS was being killed. It really makes no financial sense to have one vehicle sitting on a doable platform like Omega. U already have under utilization of one platform over at team Corvette. The Omega based Impala with a 2.0L, 3.6L and TT 3.6L (420HP) or LT1 SS and.. an LT4 650HP SSR would be the stuff of dreams. It would effectively wear a Hellcat's ass out.

    Big cars are dead my friend. It's called saving money at this point....the other two mentioned are on their out as well, most likely replaced by CUVs. I agree, I like the Impy a lot, and would love to see an SS version...would be nice if they could treat us to the old holden parts bin...... But-there are no plans for the Impala past 2019.....same as the Sonic....

    I would also think that one of those two caddies are gone as well.....

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    7 hours ago, dfelt said:

    NY is doing free 220V home charger, no sales tax and $2K rebate for buying an EV. 

    All that cash coming out of the state transportation fund?
    That's like $4K/car.

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    1 hour ago, daves87rs said:

    Big cars are dead my friend. It's called saving money at this point....the other two mentioned are on their out as well, most likely replaced by CUVs. I agree, I like the Impy a lot, and would love to see an SS version...would be nice if they could treat us to the old holden parts bin...... But-there are no plans for the Impala past 2019.....same as the Sonic....

    I would also think that one of those two caddies are gone as well.....

    Hold up.. U are saying U thing either the CTS or CT6 is dead NG??? Doubt it seriously. The CTS certainly is in for a name change but Cadillavc knows that a 5series competitor is a necessity... The CT8 will remain while I could see the XTS dying. The Impala.. I'm not sure, but optimistic that GM doesn't pull a 1996 all over again.. because whether they are efficient as or not, CUVs are not perceived as such, thus GM would be foolish to put all those eggs in a brittle basket. Its literally the reason why we have the Avalon today.. an answer to the question that GM thought it had answered when it killed the Fleetwood, Roadmaster, Impala/Caprice, and Olds Cruiser

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    The future is going to be all about being efficient and cost effective. 

    The keys will be to do more with less and make it so you can make changes even faster.

    I fear companies like PSA and VW will at some point collapse under their own weight. 

    Note we already saw GM, Chrysler and even Ford do this already. A large economic down turn will kill the largest company.

    while it is cool to have a zillion models and address every segment this path is no longer sustainable. Development cast are too high as are operating cost. 

    Edited by hyperv6
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    Just taking the Sonic, for example.  Instead of a comprehensive redesign like the Spark and Cruze enjoy, the Sonic was given a half-hearted facelift that has been panned by fans of the car (although I think it's an improvement).  You know GM is aware of the unique design features that made the car a hit, so they erased those features... and they're building the Bolt in the same plant... coincidence?  It could be argued they're purposely sabotaging the Sonic in order to make room for the Bolt.

    With the Impala... it got a knock-out beautiful design as a send-off, so people would remember it fondly... you know GM is tuned into future trends many years in advance... the migration to CUV's was expected... maybe not to the extent and the speed at which people turned, but they knew it was coming.

    Edited by ocnblu

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    12 hours ago, daves87rs said:

    Big cars are dead my friend. It's called saving money at this point....the other two mentioned are on their out as well, most likely replaced by CUVs. I agree, I like the Impy a lot, and would love to see an SS version...would be nice if they could treat us to the old holden parts bin...... But-there are no plans for the Impala past 2019.....same as the Sonic....

    I would also think that one of those two caddies are gone as well.....

     

    11 hours ago, Cmicasa the Great said:

    Hold up.. U are saying U thing either the CTS or CT6 is dead NG??? Doubt it seriously. The CTS certainly is in for a name change but Cadillavc knows that a 5series competitor is a necessity... The CT8 will remain while I could see the XTS dying. The Impala.. I'm not sure, but optimistic that GM doesn't pull a 1996 all over again.. because whether they are efficient as or not, CUVs are not perceived as such, thus GM would be foolish to put all those eggs in a brittle basket. Its literally the reason why we have the Avalon today.. an answer to the question that GM thought it had answered when it killed the Fleetwood, Roadmaster, Impala/Caprice, and Olds Cruiser

    If Cadillac was to kill off a big car, I would say the XTS would go as they bring in more CUVs. ATS & CTS will stay and become a CT#, CT6 is here to stay also.

    9 hours ago, hyperv6 said:

    The future is going to be all about being efficient and cost effective. 

    The keys will be to do more with less and make it so you can make changes even faster.

    I fear companies like PSA and VW will at some point collapse under their own weight. 

    Note we already saw GM, Chrysler and even Ford do this already. A large economic down turn will kill the largest company.

    while it is cool to have a zillion models and address every segment this path is no longer sustainable. Development cast are too high as are operating cost. 

    :roflmao: You right CAST cost way too much money!

    • Thanks for the laugh as I really needed it this morning for HUMP Day! :P 

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    2 hours ago, dfelt said:

     

    If Cadillac was to kill off a big car, I would say the XTS would go as they bring in more CUVs. ATS & CTS will stay and become a CT#, CT6 is here to stay also.

    :roflmao: You right CAST cost way too much money!

    • Thanks for the laugh as I really needed it this morning for HUMP Day! :P 

    Thanks my pad auto incorrect.

    53 minutes ago, FordCosworth said:

    Why would Cadillac cancel the XTS, their top selling Sedan? 

    That makes as much sense as someone driving an XA10 

    Because that does not represent the kind of product Cadillac wants or needs to improve their image.

    Also you have the Lacrosse sitting there ready to take that segment as it is already in that price and segment.

    Just because it is selling does not mean it is really repairing the image of Cadillac.

    While it may appear counter productive to do in the short term it will fix the long term problem of perceived image and also help funnel customers to Buick for this kind of car.

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    1 hour ago, FordCosworth said:

    Why would Cadillac cancel the XTS, their top selling Sedan? 

    That makes as much sense as someone driving an XA10 

    Because in the end scenario the XTS's sales could be sent over to the CT6. People aren't buying the XTS over the CT6 because its a better car.. nor is it really a "softer" cushier ride. Anyone who has been in a CT6 will attest to it being the right up there with any other as far as ride.. with handling to boot

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    2 hours ago, FordCosworth said:

    Why would Cadillac cancel the XTS, their top selling Sedan? 

    That makes as much sense as someone driving an XA10 

    Simple, the XTS does not meet the future long term plans of Cadillac and their product line. Many other products can cover the XTS sales plus the CT# product line will take over for this any way. 

    ATS, CTS, XTS are all dead in the near term replaced by the much better planned CT# product line which will have a much more uniform marketing plan.

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    The XTS and Impala being on the chopping block is fairly obvious. If the XTS goes, so does the Impala... and probably Lacrosse next time around.  Think about it, the Epsilon chassis can't have that much life left to it. It's solid, but exceptionally heavy for the class even after the latest round of weight cutting, and too narrow for the cars they are trying to use it on.  This is my own conjecture but, I'd expect one last refresh for the Impala and XTS, while the Lacrosse is already on it's last iteration on this platform before all three head off to the great used car lot in the sky.   After that, who knows?  Maybe greater use of the next generation of Alpha or Omega?

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    The main problem I see with this plan is that it means that GM might be moving away from models that only sell in one market (like the US) in favor of models that sell globally.  While that might work for something like a Cruze or Encore, some models are very market specific... like Suburban and Tahoe.  The fascination with high volumes at the expense of variety greatly hurts consumer choice.

    Yes... I'm still stewing about the cancelation of the Avalanche.... it still makes no sense.

     

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    1 hour ago, Drew Dowdell said:

    The main problem I see with this plan is that it means that GM might be moving away from models that only sell in one market (like the US) in favor of models that sell globally.  While that might work for something like a Cruze or Encore, some models are very market specific... like Suburban and Tahoe.  The fascination with high volumes at the expense of variety greatly hurts consumer choice.

    Yes... I'm still stewing about the cancelation of the Avalanche.... it still makes no sense.

     

    None at all.. except for some reason I think that the Avalanche had a HUMMER-ISH perception about it. Makes no sense I kno.. but some people saw it and instantly thought DINOSAUR and not in terms of age.. but heft. Ironically it is no smaller than the Suburban it was built off. Sales, along with the EXT were phenomenal in fact.. as was Hummer overall. GM could have spent less simply marketing them as efficient as the competition or even its own platform mates, but it chopped them instead. AGAIN.. who couldn't see a positive reception for a H3 and H3T with a Diesel in it getting 28MPG? How about a Duramax powered Avy or EXT?

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