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Oracle of Delphi

Report: GM mulls job cuts, sale of brands

95 posts in this topic

July 7, 2008 07:15 CET

UPDATED: 0/07/08 11:33 CET

LONDON (Thomson Financial) -- General Motors could shed thousands of white-collar jobs and sell or cease producing certain brands as part of a strategy reevaluation, said the Wall Street Journal, citing people familiar with the matter.

The job cuts are expected to be approved at a meeting of the GM board in early August. The management may also suggest options for raising additional cash to help GM make it through the downturn, and may discuss cutting certain brands, the sources said.

A company spokesman declined to comment on either the job or brand cuts, said the report.

GM sells under eight different brands, but most, including Buick, Saturn and Saab, struggle to attract buyers. The company has already decided to put its Hummer division up for sale and prospective buyers are thought to include Mahindra & Mahindra.

On the job cuts, GM employs 76,000 white-collar workers globally, with the bulk of the force based in North America, said the report.

In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by CEO Rick Wagoner, the paper said.

The company, hit by rising oil and raw material prices, the credit crunch and the housing downturn, will need to raise as much as $15 billion (9.6 billion euros) in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said last week.

Link: http://www.autonews.com/article/20080707/A...238376/1128/ANE

I doubt it will be any of the brands mentioned other than HUMMER, conventional wisdom inside GM says it will be Pontiac and GMC, but August is only a month away, hopefully we'll all know by then.

Edited by Pontiac Custom-S
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In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by Chief Executive Rick Wagoner, the paper said, citing people familiar with the matter.

Looks like it's about to hit the fan at GM...

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Many companys have gone through this as they just did not evolve enough over time.

The good news is GM will remain with us and be much stronger. The bad news is some history and tradition will be gone.

GMC needs to be cut. Pontiac has little to offer and will take a lot of money to repair. Buick is left for the Chinese. Saab is best sold off with Hummer.

A Chevy Cadillac and Satun may be all we are left with and while it is sad these cars will get the money and attention to bring GM to where it needs to be.

You can raise 12 ok on you single pay check but you can better afford to provide for 3.

I have seen Goodyear sell off their oil pipe line, Aerospace, Belt and hose, Chemical and other divisions. This was a sad day but if it was not done Goodyear would have been gone altogher. Today Goodyear is back to it's core and making money.

We can all cry point fingers and complain but the time has come to play ball and the name of the game is to make money. GM will but there are going to have to be some painful changes. Better to have three stong NA divisions vs 5-6 weak ones that die together.

I have a garage of Pontiac and GMC's so don't think I hate to see this. But it is time to think with our brains not our hearts. Heritage does not pay the bills anymore in this what have you done for me latley scociety.

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Well, if 2009 will be GMCs last year of production, I will ask GMAC to allow me to get out of my lease early without penalty, and regardless of gas prices, get the GMC Sierra I've always wanted. I will hate to see it go, and have no option but to sit on the sidelines (like my fellow Oldsmobile friends) and watch GM destroy my favorite division. Like FOG mentioned in another thread, GM is in panic mode due to the current economical situation and they're making rash decisions to "save" money. I guess the fact that being the #2 volume seller for GM doesn't matter once your market shrinks as other factors come into play <_<

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Saab is doing nothing for GM, and to have both Chevy and GMC trucks is kinda rediculas. I can see both of them going away. Hummer is pretty much worthless (dollar wise) with today's gas. Might as well just keep Hummer and focus on them making the high price hybrid trucks that nobody is looking at on the Chevy lots (tahoe hybrid). Hummer is a premium truck brand and would make sense to put the high price "premium" hybrid drive in those units.

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Many companys have gone through this as they just did not evolve enough over time.

The good news is GM will remain with us and be much stronger. The bad news is some history and tradition will be gone.

GMC needs to be cut. Pontiac has little to offer and will take a lot of money to repair. Buick is left for the Chinese. Saab is best sold off with Hummer.

A Chevy Cadillac and Satun may be all we are left with and while it is sad these cars will get the money and attention to bring GM to where it needs to be.

You can raise 12 ok on you single pay check but you can better afford to provide for 3.

I have seen Goodyear sell off their oil pipe line, Aerospace, Belt and hose, Chemical and other divisions. This was a sad day but if it was not done Goodyear would have been gone altogher. Today Goodyear is back to it's core and making money.

We can all cry point fingers and complain but the time has come to play ball and the name of the game is to make money. GM will but there are going to have to be some painful changes. Better to have three stong NA divisions vs 5-6 weak ones that die together.

I have a garage of Pontiac and GMC's so don't think I hate to see this. But it is time to think with our brains not our hearts. Heritage does not pay the bills anymore in this what have you done for me latley scociety.

Good post. GM NEEDS MONEY. That's the only reason they exist. Anything they do to return to profitability must be done as quickly as possible.

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Not sure how much of this I would take heed to. It IS the WSJ afterall. Same paper who said the Volt will get 16mpg if lucky.... :rolleyes:

Edited by deftonesfan867
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Here's a thought: Invest real money into class leading products, advertsiements for them, and don't take 10 years to develope them...rather than trying to save a buck and continue down the road with mostly mediocre to average product.

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Many companys have gone through this as they just did not evolve enough over time.

The good news is GM will remain with us and be much stronger. The bad news is some history and tradition will be gone.

GMC needs to be cut. Pontiac has little to offer and will take a lot of money to repair. Buick is left for the Chinese. Saab is best sold off with Hummer.

A Chevy Cadillac and Satun may be all we are left with and while it is sad these cars will get the money and attention to bring GM to where it needs to be.

You can raise 12 ok on you single pay check but you can better afford to provide for 3.

I have seen Goodyear sell off their oil pipe line, Aerospace, Belt and hose, Chemical and other divisions. This was a sad day but if it was not done Goodyear would have been gone altogher. Today Goodyear is back to it's core and making money.

We can all cry point fingers and complain but the time has come to play ball and the name of the game is to make money. GM will but there are going to have to be some painful changes. Better to have three stong NA divisions vs 5-6 weak ones that die together.

I have a garage of Pontiac and GMC's so don't think I hate to see this. But it is time to think with our brains not our hearts. Heritage does not pay the bills anymore in this what have you done for me latley scociety.

QFT

GM is in a lot worse shape then people realize....and wall street has them by the balls...So, what do you think they are going to do?

Things are set in motion that will cause people to leave this board in digust......

Then again, the car we know will change so much....

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i'm guessing gm might be regretting selling GMAC....

With the mortgage meltdown, selling off 51% of GMAC looks like the BEST thing GM has done in the past couple years. Cerebrus must be the one doing the regretting here.

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I don't see a future for HUMMER, simply because the name itself is associated with 'gas-guzzling' and excess. I'm sure GM could have remedied that with a product like the H4, or more efficient engines, but instead, they just had to go and make an H3 with a useless box.

Whatever brand goes, here's hoping SAAB goes away with it.

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a couple of points come to my mind

- GM needs a great PR dept, especially in these times, they need creative formulated messages that are focused at improving all the chatter. it's probably too late coming to avoid this negative discussion, and there probably isn't a cogent message that would stem all the negative talk, giving GM's own admission all options were under consideration, but I think they could really still benefit from a little positive talk. [ to the many who hate the media, GM's own mouthpiece fails to deflect any attention]

- the strategy going forward is crucial. I'm not saying this from a brand-biased perspective, but there really has to be clear thinking and not panic mode mindset on what makes to stick with going down the line, what markets have been proven to be there already, the most critical points for each brnad. for example, GMC has proven a great ability to attract luxury truck buyers, a la Denali, does that mean downsizing and focusing only on that market would be a bad thing? pontiac has proven they can attract buyers in the mainstream market. buick doens't have much of a market presence anymore. saab is a niche force, but especially consistent over the years in design theme so they are immediately recognizable as well as being well regarded as a premium product. saturn has only proven able to attract in volume numbers, at volume prices, in small cars and SUVs; they have a limited history and incosistent product message, which can both be bad things when you're trying to set up a brand and legacy, in the face of all the competing brands with market presence today. hummer is somewhat of an overlap division given GMC should be there already, but have proven adept at crafting a unique styling presence.

in the face of mounting pressures, decisions i guess will have to made, whatever needs to happen to keep GM alive. but they consider their options carefully. I don't mean to make my stance into an anti-Saturn one, but it seems foolish to make an assumption like if we build the product, under an unknown brand, they will come, and then to say if we just distribute the brand as much as the others, it will be able to attract more people. Saturn is cheap because it's just Opel, but this should not be the strongest rationalization for keeping it around.

my bottom line about this situation. it's much easier to move forward with an established entity and just remake it then it is to establish an identity. check all the brands in the past ten years. and look how long it's taken someone like hyundai and kia to move forward, at that with a complete budget-priced model. establishing a brand here in a time when there are too many brands, too many competing for floor space, mental share, too many branding concepts to deal with already seems foolish to me. go with the one that's already there.

Edited by turbo200
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>>"...I have seen Goodyear sell off their oil pipe line, Aerospace, Belt and hose, Chemical and other divisions. This was a sad day but if it was not done Goodyear would have been gone altogher. Today Goodyear is back to it's core and making money."<<

Just pointing out RE your example: Pontiac & GMC, etc ARE GM's core. GM has already 'reverse-diversified' (Hughes, EDS, Euclid, Terex, ElectroMotive, GMAC, etc). If Goodyear did what GM is supposedly considering, it would be discontinuing/ selling off 60% of it's lines of tires.

Edited by balthazar
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GM is denying any brand is under review except for Hummer.

At automotivenews.com, the headline reads "GM denies any more brands under review," but the text of the story states, "A General Motors spokesman today denied the automaker is reviewing any more brands besides Hummer for possible sale."

I added the bold, suspecting it means they won't be selling GMC and Pontiac, but will instead just close them.

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Pure foolishness to kill GMC or Pontiac - Buick, Saturn,Saab and Hummer are the marginal sellers in our market.

So how can it make any sense whatsoever to consider GMC or Pontiac for elimination?

Just stupid to even entertain such a "plan". :rolleyes:

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So how can it make any sense whatsoever to consider GMC or Pontiac for elimination?

They can roll *most* of Pontiac and GMC's customers over to Chevy. I'm sure 85% of those Grand Am buyers (aka Pontiac buyers) would have bought GM regardless.

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They can roll *most* of Pontiac and GMC's customers over to Chevy. I'm sure 85% of those Grand Am buyers (aka Pontiac buyers) would have bought GM regardless.

That's garbage, Satty.

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They can roll *most* of Pontiac and GMC's customers over to Chevy. I'm sure 85% of those Grand Am buyers (aka Pontiac buyers) would have bought GM regardless.

on the pontiac front, these are cars that have worn distinct fascias over the years. yes, the differentiation of content wasn't strong, yes the product message wasn't consistent, but it's still there to the layman that these cars wore wrappers that were distinctive and aggressive. i don't think this buyer is the same as the everyday casual now and used to be just plain generic and sometimes ugly Chevy guy. i don't disagree with the premise that many will shift over to Chevy; but I also think many would go for a sporty car from some other place. rather than the casual chevy in the mold of upcoming malibu [especially].

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That's garbage, Satty.

No, the badge engineered crap that sold solely on incentives over the last 20 years that put Pontiac in this situation was garbage.

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No, the badge engineered crap that sold solely on incentives over the last 20 years that put Pontiac in this situation was garbage.

Now that is somewhat true.

But Grand Ams are not in any way relevent anymore, and the lesson of Oldsmobile is.

Close Pontiac, and GM will suffer for it: guaranteed.

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