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Kerkorian Calls for Drastic GM Overhaul


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Kerkorian Calls for Drastic GM Overhaul

The Daily Auto Insider

Thursday, January 12, 2006

January 2006

Jerome York, investor Kirk Kerkorian's top lieutenant, urged General Motors to speed up and expand its restructuring, The Wall Street Journal reported.

York, an adviser to Kerkorian's Tracinda Corp., which owns 7.8% of GM, said GM should immediately do the following: Cut its $2 a share annual dividend in half to save $566 million a year; cut pay significantly for top executives and directors; drop salaries for lower-level employees; trim GM's lineup of more than 80 U.S. models; and get rid of the Saab and Hummer brands to focus on core, high-volume brands.

"This situation calls for the company's going into crisis mode, adopting a degree of urgency that recognizes if things don't break right, the unthinkable could happen," York said.

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If he was so concerned then he shouldn't have invested his money OR he should have bought a controlling stake and implemented his plan.

He's just a greedy S.O.B. looking to make a quick buck as usual. He is exactly what is wrong with American society today.

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You are absolutely correct. He's voicing his opinion and in doing so, is trying to rally support from other shareholders to put pressure on GM management.

These statements are being made from one perspective only: the perspective of making IMMEDIATE profit. The Hummer brand is far too profitable for GM to sell off. It's image alone is worth something. A large chunk of it's platform/engineering costs is shared across other model lines. Killing the brand would be stupid. Selling the brand would generate a one-time blip on your income sheet, but you'd lose image, and more importantly, you'd lose sales and the large profit that these models generate. You could successfully make the case that Saab offers far too little return on it's investment for GM to keep the brand under it's current porfoilio.

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You are absolutely correct.  He's voicing his opinion and in doing so, is trying to rally support from other shareholders to put pressure on GM management.

These statements are being made from one perspective only: the perspective of making IMMEDIATE profit.  The Hummer brand is far too profitable for GM to sell off.  It's image alone is worth something.  A large chunk of it's platform/engineering costs is shared across other model lines.  Killing the brand would be stupid.  Selling the brand would generate a one-time blip on your income sheet, but you'd lose image, and more importantly, you'd lose sales and the large profit that these models generate.  You could successfully make the case that Saab offers far too little return on it's investment for GM to keep the brand under it's current porfoilio.

Please re-read York's entire prepared speech. It softened my opinion after reading it.

I too am concerned about the "IMMEDIATE" profit tactic, but in his speech he cites his strategy, and then goes on to show how well it worked for Chrysler and IBM. He goes on to say that the turnaround wasn't immediate, but took a few years to complete.

...and not that I agree with everything he offers as "advice", such as dumping Hummer. But even so, I am no business guru. Perhaps he knows more than we do.

Edited by greg_nate
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Eh... I'm torn by his advice.

I can see justification in cutting the dividend. GM is losing money. Stockholders need to look at long-term benefit also. I'd give up 50% of the dividend if it will eventually lead to GM's stock price increasing (back up) to $40-$60 a share.

SAAB... SAAB has burned through a lot of GM dollars. SAAB loyalists don't even want GM owning SAAB. It would be a win/win if GM would just sell (or even give) SAAB away to someone. Even if SAAB is profitable this year or next, GM will probably never recover the costs that it took to get SAAB back in the black. Subaru would be the best pairing up IMO.

HUMMER... yes, right now it seems NUTS to sell HUMMER but where will it go from here? A Wrangler competitor and then what? If GM wants to sell HUMMER, then this is the time to do it. Not after it becomes dated and ideas run dry. HUMMER's appeal can disappear in a heartbeat if GM lets it languish at any point. I'm sure DCX would be there to buy HUMMER at a premium if GM would sell it.

GM could give the Wrangler competitor (and a spin-off for an FJ Cruiser competitor) to GMC and call it a day.

Don't know... I'm still torn.

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How much money of GM's has SAAB "burned through"? See, I take exception to that. I would like to see an allocation of this money that SAAB has just "burned."

Since GM took over SAAB (wholly owned), I would like to see the dollar figure of all GM's SAAB expenditures. I would then like to see where this money went. Obviously, if SAAB spent it, it had to go somewhere. Now, I would like to see how much money other GM divisions "burned through."

What has GM done for SAAB?

9-3

9-3 SportCombi

9-3 Convertible

9-5 Refreshes

9-7X

9-2X

ok now let's put on the serious caps here for a minute:

How much money do you think the SAAB 9-5, 9-7X and 9-2X really cost GM? Were these big investments?

What about the 9-3? Was this a big investment? Was it a good use of money? Has the 9-3 lineup increased SAAB sales?

Now...these are just questions to ponder, but for the short time GM has had SAAB, I really don't think the money SAAB just "burned through" is really all that much. I also think that when GM does invest in SAAB, the results pay off. The SAAB Epsilons are proof of this IMO.

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If he was so concerned then he shouldn't have invested his money OR he should have bought a controlling stake and implemented his plan.

He's just a greedy S.O.B. looking to make a quick buck as usual. He is exactly what is wrong with American society today.

Shouldn't he just shut up and retire to a nursing home (he's like 90 or something, isn't he?)

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How much money of GM's has SAAB "burned through"?  See, I take exception to that.  I would like to see an allocation of this money that SAAB has just "burned."

Since GM took over SAAB (wholly owned), I would like to see the dollar figure of all GM's SAAB expenditures.  I would then like to see where this money went.  Obviously, if SAAB spent it, it had to go somewhere.  Now, I would like to see how much money other GM divisions "burned through."

What has GM done for SAAB?

9-3

9-3 SportCombi

9-3 Convertible

9-5 Refreshes

9-7X

9-2X

ok now let's put on the serious caps here for a minute:

How much money do you think the SAAB 9-5, 9-7X and 9-2X really cost GM?  Were these big investments?

What about the 9-3?  Was this a big investment?  Was it a good use of money?  Has the 9-3 lineup increased SAAB sales?

Now...these are just questions to ponder, but for the short time GM has had SAAB, I really don't think the money SAAB just "burned through" is really all that much.  I also think that when GM does invest in SAAB, the results pay off.  The SAAB Epsilons are proof of this IMO.

The exact figures would be good to know. Maybe you should find out before taking exception to it... :)

Looks like you have some research ahead of you.

Most of GM's NA divisions have been profitable over the past several years... only SAAB, Saturn, & Oldsmobile haven't been.

Although GM bought 100% of SAAB in 2000, GM has owned 50% of SAAB since 1990.

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I don't have access to that information.  Maybe one of our insiders can oblige?

That said...IMO if you want to accuse SAAB of "burning through" GM's cash you should at least have some proof of those allegations.

GM has been very open about SAAB being unprofitable... that's common knowledge. I believe SAAB has been unprofitable 13 years out of the past 15 years. Someone has to pay for being in the "red" and that's been GM. Tack on the investment amount of 50% back in 1989/1990 ($600 million) & the final 50% in 2000 ($125 million) and you've got even more "red" to add to the bottom line.

So, if you want to "take exception" to my post, then at least have justification. :P

Here's one article I found that helps in answering your questions...

Many of these issues are apparent in GM's forays in Europe. Witness Saab. GM bought half of the struggling Swedish carmaker in 1990. A decade later, Saab still has a measly two-car lineup, and it has lost $1 billion since GM bought it. In all, say sources close to the deal, GM spent nearly $1 billion to get all of Saab. Yet GM often let the operation sputter along without giving Saab the new products it needed to transcend its status as a niche player. Undaunted, GM plans to double Saab sales, to 250,000 a year, by 2005.

The cost is at least in the Billions so far, because GM's been paying every penny since 2000. GM hasn't broken even on the investments to develop the new 9-3, refreshed 9-5, rebadged 9-7x or 9-2x.

Oh... and not to mention the costs to maintain "SAAB specific" facilities and the annual salaries of all the "SAAB specific" employees in Sweden (between 5,500-6,000 employees)

Edited by VenSeattle
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I'm pretty sure GM has broken even on the GMT-360s and the Epsilons. Your quote really proved my point...that GM isn't doing anything with SAAB, therefore SAAB is not the problem, GM is. Why would SAAB sales jump dramatically with the same lineup just because GM bought them?

Now GM is finally starting to do stuff with SAAB. The results should be good...

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I'm pretty sure GM has broken even on the GMT-360s and the Epsilons.  Your quote really proved my point...that GM isn't doing anything with SAAB, therefore SAAB is not the problem, GM is.  Why would SAAB sales jump dramatically with the same lineup just because GM bought them?

Now GM is finally starting to do stuff with SAAB.  The results should be good...

I haven't proved any point that you've made. I have answered some of your questions though...

The losses are still from the SAAB division. Neglect does not make the red ink disappear. If that was the case, then Oldsmobile & Saturn's losses would be completely excused as well. No one here is denying neglect or mismanagement... you just couldn't accept that SAAB is costing GM money.

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I'm pretty sure GM has broken even on the GMT-360s and the Epsilons. 

If that's the case, then why is SAAB unprofitable? What (of any consequence) has GM spent money on in the past 5 years? I think the investment costs for SAAB's versions are attached to the SAAB division... and SAAB still isn't turning a profit so all the costs haven't been recouped.

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Saab cerainly isn't turning a profit in the US. If it was, we'd be hearing about it.

Saab should just be removed from the the US, IMO, and GM can offer the dealers Saturn because most likely the dealers are relatively upscale if they're selling Saab so it wouldn't affect Saturn's rep as having good service. Saab must be making a profit in Europe because we've heard some rumors that Saab globally is going to turn a profit. But, I wonder how much more that profit would be if you didn't have some of it removed from the loss in the US.

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I think SAAB should stay in the U.S.; I just think it is ridiculous how some people are almost making it out that selling SAAB will return GM to profitability. The only changes GM needs to make with regards to SAAB is to keep developing vehicles! SAAB really needs something like the recently-cancelled 9-6X. GM should have waited longer on the whole Subaru thing just for that reason IMO. The Tribeca is a great vehicle if you can get past the grille, and a SAAB version would have been extremely competent as well.

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I haven't proved any point that you've made. I have answered some of your questions though...

The losses are still from the SAAB division. Neglect does not make the red ink disappear. If that was the case, then Oldsmobile & Saturn's losses would be completely excused as well. No one here is denying neglect or mismanagement... you just couldn't accept that SAAB is costing GM money.

He's not necesarely "not accepting that Saab is losing money" we have all realized that a loooong time ago that Saab isnt realy a money maker for GM but you can't take a beaten horse and expect great results from it.

Look at Oldsmobile. It got a WOPING 3 new models wich 2 were rebadges in it's last 6 years of operation!

With Saab, this year is the first year of profit. How the f@#k did they get out of the gutter with a 7 year old, continuously refreshed 9-5?

So lets get it straight here:

Saab was un profitable for it's 15 years with GM as GM invests tiny amounts of cash into it and refreshing the lineup with new models.

All of a sudden, they decide to start managing Saab properly and give it a bit more advertising as well as a fine tuned 9-3 lineup and yet another refresh of the 9-5 but that's all Saab needed to come out on top!

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He's not necesarely "not accepting that Saab is losing money"

Uhm... he said...

How much money of GM's has SAAB "burned through"?  See, I take exception to that.  I would like to see an allocation of this money that SAAB has just "burned."

Since GM took over SAAB (wholly owned), I would like to see the dollar figure of all GM's SAAB expenditures. 

...for the short time GM has had SAAB, I really don't think the money SAAB just "burned through" is really all that much.

...That said...IMO if you want to accuse SAAB of "burning through" GM's cash you should at least have some proof of those allegations.

Uhm... and I replied...

Here's one article I found that helps in answering your questions...

Many of these issues are apparent in GM's forays in Europe. Witness Saab. GM bought half of the struggling Swedish carmaker in 1990. A decade later, Saab still has a measly two-car lineup, and it has lost $1 billion since GM bought it. In all, say sources close to the deal, GM spent nearly $1 billion to get all of Saab. Yet GM often let the operation sputter along without giving Saab the new products it needed to transcend its status as a niche player. Undaunted, GM plans to double Saab sales, to 250,000 a year, by 2005.

The cost is at least in the Billions so far, because GM's been paying every penny since 2000. GM hasn't broken even on the investments to develop the new 9-3, refreshed 9-5, rebadged 9-7x or 9-2x.

Oh... and not to mention the costs to maintain "SAAB specific" facilities and the annual salaries of all the "SAAB specific" employees in Sweden (between 5,500-6,000 employees)

My original post had nothing to do with GM's mismanagement of SAAB or neglect of SAAB's line-up. He only took exception the the "SAAB has burned through a lot of GM dollars" comment. Please reread my original post for verification.

Your point is different from his "exception".

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Uhm... he said...

Uhm... and I replied...

The cost is at least in the Billions so far, because GM's been paying every penny since 2000. GM hasn't broken even on the investments to develop the new 9-3, refreshed 9-5, rebadged 9-7x or 9-2x.

Oh... and not to mention the costs to maintain "SAAB specific" facilities and the annual salaries of all the "SAAB specific" employees in Sweden (between 5,500-6,000 employees)

My original post had nothing to do with GM's mismanagement of SAAB or neglect of SAAB's line-up. He only took exception the the "SAAB has burned through a lot of GM dollars" comment. Please reread my original post for verification.

Your point is different from his "exception".

No, Turbo is correct. "SAAB burning through GM cash" sounds like SAAB is receiving money from GM with unprofitable results. The reality is that GM hasn't done hardly anything with SAAB, and that any money SAAB has "cost" GM is because GM has made such a ridiculously minimal investment in SAAB and SAAB is still unprofitable, just like they were when GM bought them! Again, the Epsilons, 9-7X, and 9-5 refresh are maybe enough to push SAAB into the black...and that STILL is a pretty minimal investment. Think what SAAB could do for GM if actually given the chance!

In other words, SAAB isn't "burning through GM's cash" like a teenaged Beverly Hills girl with an extension on daddy's credit card; rather, GM keeps paying the hospital to keep the patient on life support.

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Wait, so Kirk wants to get rid of Hummer?

Hummer is exploding as jeep did for Chrysler?

did he cry about Jeep when he was digging in Chryslers piggy bank?

He wants to dump that sweetish brand

I had some customers that drove a saab... they wanted to purchase a Trailblazer SS or the Saab version of the Trailblazer... the reason i'm bringing this up is because when their lease was up, they picked the saab...

many people love their saab... and if marketed correctly could be a highly profitable unit...

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many people love their saab... and if marketed correctly could be a highly profitable unit...

the key is in the execution and the investment GM offers them. Saab has long suffered simply because as Croc above has stated the investment GM has offered it has been next to nothing. When the 9-3 was released, in it's second model year, Saab had a record year because of it. The car was newer then, competition was not as intense, and Saab is a luxury alternative with a cool image many seek. Momentum was going and GM sabbotaged it with no products or updates. Now we have a refreshing of a car that is at least ten years old and widely recognized as uncompetitive due to that fact. We also have a new wagon. A wagon in market that categorizes wagons in an unflattering manner. 9-3 languishes in one of the most intense and scrutinized segments in the industry. basically, all bad news and an aging, but still somewhat appealing thanks to great styling, lineup.

Saab suffers due to lack of investment. Execution has not been there in recent times, but this goes back to the lack of newer platforms. 9-3 with one model sold 30k units in one year, and that is fantastic if you consider Saab's limited marketing and limited dealer body.

As for burning through GM's cash, I agree with Croc's assessment. If GM had the foresight when they saw how good a product the new 3-series sedan was in 1999 and the 5-series, they could have really put some dollars into Saab and would currently have a hot property. The way I see it now, Saab has no ill will for it, except from enthusiasts who don't know any better, but the general public would have no problem accepting Saab products, replete with good styling

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Well this is fine and all for him to say because he does not work here!! I am a lowly contract worker so who do you think this is going to affect the most... hmmm...ME! Make the biggest cuts at the top and leave the small fish alone. As a contract worker we are hardly paid anything to begin with. I work from paycheck to paycheck literally, I am not joking! When overtime becomes available it is like feeding time in the shark tank because that money is more vaulable than anything. It is hard enough to get a raise out of your contract house, again I should know! You could hold a gun to their head and they would say 'go ahead and pull the trigger'. Well enough of that.

As for York's brilliant idea of getting rid of Saab and Hummer, get rid of Saab and keep Hummer. Hummer is actually making some money where as Saab is bleeding from everywhere. Thats my 2 cents.

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In other words, SAAB isn't "burning through GM's cash" like a teenaged Beverly Hills girl with an extension on daddy's credit card; rather, GM keeps paying the hospital to keep the patient on life support.

Semantics... either way: 1) a Bev Hill's teen with a credit card or 2) a terminally ill patient on life support they both burn through cash... so WHY are you taking exception to my comment? :rolleyes: You can try putting words in my mouth but I never indicated a bias towards SAAB or GM being the problem.

Besides, you were originally using the "lack of GM product investment" as a defense to your assumption that SAAB hasn't cost GM a lot of money over the past several years, when I've shown you that SAAB has cost GM quite a bit.

If your point was what Turborush said then you should have said it instead of "taking an exception" to something you yourself have finally conceded to (see quote). Turborush's post had no contradiction to my post. It just helped in explaining why SAAB isn't profitable.

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:rolleyes: The difference is in the semantics. One is active voice, the other is passive. World of difference between SAAB spending GM's money with no result (in which case I would agree with selling SAAB) versus GM losing money on it.

It's an investment: If an investor has an investment and the stock price keeps going down, the company isn't spending the investor's money, the investor is losing money on the investment.

BIG DIFFERENCE (IMO)

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Guest flowmotion

SAAB could have huge potential upside -- the brandname still has enough reputation, that given the right cars, they could sell them to Volvo and Audi customers. The question is, why keep SAAB if you aren't going to give them the product they need to live up to the nameplate?

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:rolleyes: The difference is in the semantics.  One is active voice, the other is passive.  World of difference between SAAB spending GM's money with no result (in which case I would agree with selling SAAB) versus GM losing money on it.

It's an investment: If an investor has an investment and the stock price keeps going down, the company isn't spending the investor's money, the investor is losing money on the investment.

BIG DIFFERENCE (IMO)

I didn't indicate which side I was on. I left it undecided. I was not defaming SAAB or blaming it for its current state. I merely commented that SAAB is burning money... "the reason why" did not pertain to my point.

But I will go ahead and state my position:

GM has obviously been investing in SAAB. The last two generations of 900s/9-3s were on GM platforms. The 9-5 was mostly new as recently as the 1999MY and received a facelift for 2006. SAAB was never more than a niche premium brand and has been a two product line-up for as long as I can remember. SAAB has had several "slogan/tag lines" and numerous marketing attempts trying to promote the "SAAB-ness" of the brand while playing down GM's roll. GM added free mainenance for SAAB owners. SAAB has also maintained their own staff of SAAB engineers and designers to oversee product development. All this takes money.

The market didn't bite. The all new 9-3 product line didn't set sales on fire. GM added a couple new products: 9-2x & 9-7x. Market still didn't bite.

I came across this article that mentioned a $530 million upgrade GM paid for SAAB's Trollhattan plant. It also discussed a now defunct $3-Billion product plan that GM had for SAAB. GM originally wanted SAAB to become equal to Cadillac, at least in Europe... that was a blast from the past. I almost forgot about that. It was so long ago, and hard to believe now.

But, proof of investment is there. You may disagree with the decisions (allocation, reallocation, cancellations, etc) but it's there. SAAB didn't get the entire $3-Billion investment (which the current 9-3 sedan, convertible, and now wagon were part of) but the product didn't meet sales expectations either and SAAB's expenses continue to be paid for out of the GM corporate account which is running dry at the moment.

A 38,000 customer base in the US isn't anything to be proud of... especially when it involves a 4 vehicle product line to manufacture (two exclusive to the US) in order to reach those 38,000 buyers.

GM's primary reason to hold onto SAAB is because SAAB's "international/European" reputation as a premium/luxury brand. SAAB only sold 82,000 in Europe for 2005... that was a good year. Toyota, Nissan, & Honda are all preparing to launch their luxury brands (or already have) in Europe which have no pre-established presence. Since GM has decided to push for Cadillac to go global, I'd prefer GM concentrate on Cadillac's performance in Europe's Luxury market and Buick & Cadillac in the US luxury market. GM already has a head start with Cadillac in Europe compared to the Japanese premium brands.

Yes, I say GM should sell SAAB. As originally stated, SAAB loyalists don't even want GM to own SAAB... so it would be a win/win if GM would sell it to someone else. I don't think SAAB is a lost cause. I just think someone else can do better. GM doesn't need SAAB to accomplish its goals and SAAB shouldn't continue to suffer while finding its place in GM.

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No, the 9-5 is not on a GM platform, and the last-gen 9-3/900 was not either.  To be sure I do not know what platform it was, my guess being something related to either FIAT or Alfa Romeo.

Yes they are... the last gen 900/9-3 and current 9-5 are on the last gen Opel Vectra platform which also became the Saturn L-Series. The 9-5 platform is an extended wheelbase version of the old Vectra platform.

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Since I don't have any data of my own I will take your word for it, though those two cars don't LOOK to me like they are on that platform...

Simple google search should suffice for credibility at the moment (remember SAAB has their own engineering & design teams. The SAAB 900/9-3 & 9-5 aren't simply rebadged GM products.)...

A review on the 1996 SAAB 900:

It scared some loyalists when the new 900 arrived on an Opel platform withan optional V-6 engine in S and SE trim levels, three- or five-door. (Opel isGerman for GM of Europe). But Opel is one of Europe's best automakers. So, ifyou look closely under the hood, you'll find GM parts with the name Saabplastered over it.

SAAB 9-5:

The 9-5s chassis is, much as Saab hate us noting, based on an extended Vauxhall Vectra platform, itself not the first place youd start to build a credible executive express. Over the years however, Saab have fettled this pigs ear into something that may not feel like a silk purse but comes laudably close.

Epinions review...

The automotive press has made much of the new 9-3’s use of GM’s Epsilon platform (along with the Opel Vectra and 2004 Chevrolet Malibu) and its lack of a hatch. Both points have been overblown. The last time Saab developed an all-new sedan platform independently was in the late 1960s. The 1986 Saab 9000 shared a platform with three Fiat sedans, and both the previous 9-3 and current 9-5 had an earlier Opel Vectra (a compact sedan not offered in the U.S.) as their basis.

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Bob Lutz on Saab and Hummer:

.........see, it's easy for someone to say "well......sell off Saab and Hummer"...I mean, we all can agree that Jerry York is a very intelligent guy, right? The problem is it isn't that simple.

In an interview with Bob Lutz, Mr. Lutz had this to say about that:

"Lutz shot down several of York's recommendations, including singling out the elimination of the Saab and Hummer brands as unnecessary or unrealistic.

".............The Saab and Hummer brands are too integrated in the company, using GM parts and rolling down GM assembly lines, to ax them without vast cost penalties, he said. Killing the Oldsmobile brand, for example, cost GM about $2 billion and thousands of vehicle sales, Lutz said.

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The actual presentation isn't as bad as this article (Intentionally) makes it sound.

As for Hummer... Well, GM owns the rights to the name, NOT the overhead or pre buy-out employees, all of the vehicles are shared engineering with high volume products and all of the vehicles are high profit and image vehicles... AND they have would could arguably be considered GM's hottest model right now (in sales) If all my info is correct, then common sense says it (Hummer) will stay.

As for Saab... Wasn't it evok that once said Saab had more potential with american buyers than MOST of GM's traditional brands back during the Oldsmobile phase out? (Don't forget---they're an all mighty import--well, at least until the media ruins their reputation too or either enlightens enough people of the GM ownership)

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FOG, don't worry... the mass media hasn't clued in that SAAB is OWNED by GM. I heard it refered as "GM has a stake in SAAB" by media yesterday. I think 100% ownership is more than a stake.

And I believe what others have said - It's not the amount of brands that were killing GM, it was the senseless overlap. You have to make sure that brands are completely separated.

Why did my wife want a G6 over a Malibu even though they were the same underneath? The Malibu was too bland and she wanted the panoramic sunroof.

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Kerkorian suggestion to sell Saab and Hummer is really not a feasible proposition and here is why:

Hummer: Hummer has no assests. AM General builds the H1 and H2 and GM build the H3. Hummer does not have a manufacturing plant of its own or tech facility/people. If GM were to sell the brand because Hummer is not a company or division, whoever bought it would have to invest billions in new product. GM would have to sell the current product to the suiter until the time that product was ready. An example is what BMW was forced to do with Roll Royce.

Saab: Much like Hummer, Saab is in the same situation. From a corporate perspective it is just a brand without a dedicated corporate structure of its own. Saab was integrated into GME a few years ago. About the only asset that I am aware of is the Swedish plant. Again, whoever bought it would have to spend money on product.

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Saab:  Much like Hummer, Saab is in the same situation.  From a corporate perspective it is just a brand without a dedicated corporate structure of its own.  Saab was integrated into GME a few years ago.  About the only asset that I am aware of is the Swedish plant.  Again, whoever bought it would have to spend money on product.

And IIRC, SAAB Automobile has no tangible corporate relationship with SAAB Defence besides the obvious marketing angles and common history as SAAB Auto was purchased from SAAB.

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Kerkorian suggestion to sell Saab and Hummer is really not a feasible proposition and here is why:

Hummer:  Hummer has no assests.  AM General builds the H1 and H2 and GM build the H3.  Hummer does not have a manufacturing plant of its own or tech facility/people.  If GM were to sell the brand because Hummer is not a company or division, whoever bought it would have to invest billions in new product.  GM would have to sell the current product to the suiter until the time that product was ready.  An example is what BMW was forced to do with Roll Royce.

Saab:  Much like Hummer, Saab is in the same situation.  From a corporate perspective it is just a brand without a dedicated corporate structure of its own.  Saab was integrated into GME a few years ago.  About the only asset that I am aware of is the Swedish plant.  Again, whoever bought it would have to spend money on product.

and i think lutz or wagooner mentioned that that plant would be phased out...

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And IIRC, SAAB Automobile has no tangible corporate relationship with SAAB Defence besides the obvious marketing angles and common history as SAAB Auto was purchased from SAAB.

The Saab story is more complex than that if I remember right. GM bought Saab from Investor AB I believe but I think Investor AB pick the auto group up from Defence. I would have to search the net to be sure.

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On the SAAB issue :

SAAB has certainly lost a fortune up to now, because GM was trying to run it as a stand alone company - thousands of employees in Sweden and the 9-3 could not be inter-built with other Epsilons.

but that was old SAAB

New SAAB is basically a brand owned by GM Europe. Engineering is integrated with the mainstream Epsilon 2 work and the cars are going to be built in Opel factories - therefore adding good incremental premium volume.

I think this "new SAAB" model is going to be very profitable, in fact they have already broken even.

Also remember that in Europe the premium segment is the strongest growth part of the market, and the Opel badge has never cut it against Audis and BMWs - it's too mainstream. So GM needs a premium badge in Europe. SAAB is it. Cadillac could never be it - they dont even have a diesel and most of their cars are too big.

So in Europe they now have a nice progression :

Chevy / Opel (Vauxhall in UK) / SAAB + a few Cadillacs

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GM doesn't need to invest much more in Hummer.

Jeep went on for years and years with a basically unchanged Wrangler. Hummer could get minor updates on the headlights/grill and interior every few years but other than that the designs are classic enough to just leave alone.

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On the SAAB issue :

SAAB has certainly lost a fortune up to now, because GM was trying to run it as a stand alone company - thousands of employees in Sweden and the 9-3 could not be inter-built with other Epsilons.

but that was old SAAB

New SAAB is basically a brand owned by GM Europe.  Engineering is integrated with the mainstream Epsilon 2 work and the cars are going to be built in Opel factories - therefore adding good incremental premium volume.

I think this "new SAAB" model is going to be very profitable, in fact they have already broken even.

Also remember that in Europe the premium segment is the strongest growth part of the market, and the Opel badge has never cut it against Audis and BMWs  - it's too mainstream.  So GM needs a premium badge in Europe.  SAAB is it.  Cadillac could never be it - they dont even have a diesel and most of their cars are too big. 

So in Europe they now have a nice progression :

Chevy / Opel (Vauxhall in UK) / SAAB  + a few Cadillacs

You are bang on!

And Ven, I know that the OG 9-3 and 900 as well as the 9-5 came from the Vectra platform. This is one contributing reason why Saab may not have been as succesful as GM wanted it to be in the past.

What if I gave you the Chevy cavalier's platform to work with for a "Premium" car? You'd have to invest quite a bit into making it better handling and who knows if you'd even be up to par with competition. GM should have thrown it a new platform or at least a better one that did not need a considerable amount of modification.

Also, in the post that I am quoting, it is nice to know that GM had the intention of keeping Saab an independant brand and GM probably had the right intentions but if you come and think of it, Saab wanted to sell and partner up with a big company because they saw their future not evolve as fast as other brands... and naybe a fiew other reasons but the point is that GM didn't do with Saab what it should have to keep it profitable wich would have been to incorporate it with it's GM europe like recently.

And again, they are now breaking even.

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I did not read this entire topic so I have no idea what anyone else posted

You all know Im down with this part "Cut its $2 a share annual dividend in half to save $566 million a year; cut pay significantly for top executives and directors" followed by - job banks gone as soon as legally possible or the Union could take care of it now and not pay for the ignorance come 07 contract time.

However cutting off limbs is a great way to bleed to death, see year 2000 when we began elimination of nearly half a million model and brand sales.

so what color is saturin ????? pink ? like a salmon up the creek :rolleyes: 22_,000 sales :blink:

sorry that just slipped out.

They ought to be out, concentrating on perception & quality instead of sitting in a board room all day long trying to figure out how to chop chop chop. But that would be like moving the tides. Easier to chop than hit the floors and see whats up.

the only thing they can do now is sell the cars and make sure owners are happy with the product and give it time to turn around. Chop chop is only going to send message that theres a madman in the henhouse and we all know everyone smiles at the madman as they turn and briskly walk in opposite direction.

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