buyacargetacheck

I don't think there's a long-term sustainable need for a "middle" brand in the American market like there used to be. But, whatever you call it (Saturn, Buick, Pontiac, Opel) the cars must be made in North America or they will fail a la Astra. The currency swings are a real problem and always have been. Look at the most successful premium volume European car, Volkswagen, which sells more cars than either Buick or Pontiac and still struggles. Do you think GMNA can do a better job of selling a "German" car than Volkswagen? BTW, I'm surprised there's so much discussion and reverence on this board for Holden, a "company" that only sold 150,000 vehicles and produced 100,000 in 2007. Peanuts!

As I remember the Catera got pretty good reviews from the press. The main problem was that it didn't look like a Cadillac. And the advertising was embarrassing. I've never driven a Catera but I doubt they were any more floaty than the M-B W124s I've driven.

That would not be enough as the Catera showed.

I hardly hear anyone say "X is the Cadillac of Y" anymore. It's totally anachronistic. Tell that to the 20-30 something crowd buying Audi A4s, BMWs, Mercedes, or Lexus IS and you're likely to either hear crickets or a smirking "yeah right" as they roll their eyes. That ship has sailed. For GM to make Cadillac a Mercedes-Benz would require extricating Cadillac from GMNA, building an organization with a chief executive officer with complete operational control, and capitalizing such a company with 10s of billions of dollars. This is simply not going to happen.

Agreed. And a 3-series sized car (Alpha?) with a cramped rear seat will not fly as a Cadillac in the US. There's a real difference between Cadillac buyers and Audi/BMW/MB buyers despite GM's dreams. BTW, the 3 Series has become a volume car in the US. They're selling them in my town with Monday Night Football TV commercial gimmicks ("come on down and score at ____ BMW, your number one area BMW volume dealer, etc, etc"). It's embarrassing but necessary because the 3 Series are stacked up at the dealer lots like they were Camrys or Malibus. Why GM would want to enter this highly competitive market is a mystery.

They're doing this now. There's not one single Cadillac produced today that's not excellent in its own way. Even the G DTS. Cadillac is GM's "premium" brand. A car line that shares a lot of bits with Chevy but has its own style and focus on comfort and presence.

The last time Cadillac was even close to "Standard" was when the Germans were just starting to rebuild after WWII. That's a long time ago -- a vastly different time that has no relevance to today's reality. And even then, nobody but Americans were driving such tanks. Lexus competes starting where Buick's top-end used to be and ending somewhere between Mercedes' middle and top of the line. That's why I still believe that for GM to get the most bang for their advertising and brand equity buck they need to expand Cadillac downward to compete with the ES and RX and ditch Buick. At least in the US where Buick can never regain what it once had. Just think about it. GM has to spend twice the bucks in advertising two brands whereas everytime Lexus advertises one model they get a multiplier effect across the whole brand.

There's nothing wrong with that. That's what Cadillac has always been. There are a whole host of reasons why Cadillac will never match the Germans starting with it's not German. For a lot of luxury buyers (most of whom want snob appeal whether they admit it or not) the fact that the car is expensive and is perceived as being built in the Old World tradition (whether or not that's true) and then was carefully shipped over the North Atlantic means something. Cadillac should play to its traditional strengths: comfort, style and relative value. "Standard of the World" is never coming back.

I think you might be right about the Cadillac lineup. I do think the old DTS customer is slowly fading while the ES350-type buyer is taking its place for those who want a luxury badge and traditional comfort. GM should celebrate Cadillac for what it is (a comfortable car with style and flash) and not worry about the Germans. Because Cadillac is not a separate company and only sells 200K worldwide there will always be a little "Chevy" under the skin. Hey, that's OK -- Chevys are pretty good nowadays. But BMW and Mercedes buyers worldwide know the difference. Conventional wisdom says that it's all blue skies and prosperous days for Buick in China, but I don't believe that. China has a tendency to surprise and contradict the conventional thinking.

Well, this just in... http://money.cnn.com/news/newsfeeds/articl...35_FORTUNE5.htm People close to the situation expect GM to announce plant closures on February 17th when GM presents its plan to the government. One analyst expects 2 closures coming: Pontiac Truck and either Oshawa Car or Orion. The article reiterates the importance of factory utilization to profitability: To be profitable, an auto plant typically needs to use at least 80% of its capacity. Half-empty plants are a major cost drain because of the massive overhead involved in running a factory, from paying property taxes to maintenance to white-collar support staff.

No, the 347,214 sales include what the Traverse, Malibu, Equinox, and Pontiac Torrent (soon to be Terrain) are already selling today + what Buick is selling now but badged as Cadillacs in my plan + the marginal sales Malibu, Traverse, Equinox and Terrain would pick up from G6/Aura (4,242), Outlook (1,588), Vue (8,500), and Vue (8,500) respectively. The Malibu today is on an annual run rate of 111,744. Chevy will pick up some Aura and G6 (which I originally forgot to include) sales. So to be very conservative, let's say that the 4,242 is the total sales the Malibu would pick up from the G6 and the Aura (9%). That's very realistic. The Cadillac TRX and LTS sales are simply the replacements for the LaCrosse and Enclave. I am assuming the EpII LaX will do better than the current product (30,000 versus 17,868 currently). This is also conservative: similar product, same price, "better" nameplate. This is not overly optimistic. Ever since the Traverse was introduced, Saturn Outlook sales have been down in the 50% to 60% range month after month. This is no coincidence. Saturn dealers are pointing at the Traverse as the cause. I believe one of the Detroit papers carried a story about this. So, it's no big leap to say that Chevy might be able to capture 25% of the remaining Outlook volume if the Outlook were cancelled (1,588 additional annual sales). Maybe it is unreasonable to assume that the Terrain would pick up 25% of the Vue sales, but it would pick up some. So, only 34,962 sales of the 347,214 sales you're questioning are really in question. GM might or might not pick up these sales depending on how good they market the products. Based on what they've done with the Malibu they know how to do it right -- they just have to get focused. I'm trying to show a scenario where GM could leverage its brands and plants better. What they're doing now isn't working.

See Oldsmoboi's answer. We won't see 15M for a very long time. Even if we did, GM would be running at 100% capacity, profitable, with demand higher than supply. That's good for GM and its remaining brands. Excellent, again demand slightly exceeding supply helps polish the Cadillac, Chevrolet and GMC brands. At $40,000 the Volt won't "take off." It will be a plaything for rich greenies. Even if it did, there's plenty of capacity at Lordstown. All true. I don't claim to be a GM accounting/finance insider. Just a fun exercise to contemplate. That said, I don't believe anything in business is mysterious or impossible. GM can be fixed. However, that requires leadership and guts, 2 things that seem to be missing amongst GM's largest shareholders, directors and C-level management.

Because GM is effectively buying that 21% market share with $3,000 on the hood per vehicle on average while not effectively utilizing their plants. Costs increase even further per vehicle when you have to advertise and promote 2 similar vehicles, priced similarly, made in different plants, but one sells 5-6 times better (Malibu vs G6 for example). When companies are overwrought with capacity and low ROI projects/businesses they CAN cut their way to profitability. General Electric was famous for this. Retrenching to a sustainable position and growing from there is what GM needs to do. Cadillac has tremendous potential for growth, but they're pissing away resources with Buick at Cadillac's expense. BTW, I love Buick but I realize that it doesn't have the cache of Cadillac in the US, is less popular with buyers every year, and doesn't have a ghost of a chance competing with any other similarly-priced line except to its own customer base (which is declining). Cadillac, on the other hand, has the potential to sell more Enclave and LaCrosse equivalents at a slightly higher profit on the name alone.

I have most of the plants running at 80% in a 10M market and 100% in a 13M market. It would be nice, for a change, if GM actually built just slightly fewer vehicles than were demanded, say, 1 to 3% under demand. That's the kind of thing that improves residual values as BMW, Toyota and Honda have shown.

It looks like GM has left you based on your last 2 car choices. Bonneville was cancelled and Terrain has a date with death. What Pontiac do you have your eye on this summer to purchase?

BTW, there are plenty of potential moves in this proposal that may not be realistic. For example... 1) How much would it cost to move large van production to Arlington? Could the vans and SUVs be run on the same line without major reconstruction? 2) It would take 4-5 years at the earliest to develop a new EpII Impala, the Cadillac LTS, the Cadillac TRX. Where is the capital coming from? 3) If you move the Volt to Lordstown you increase the cost of shipping the engines which are to be built in Flint. 4) Is it possible to build Thetas and Lambdas on the same line? How much investment would that require? 5) Unlikely that it would be worth stopping Camaro production to move it to the underutilized Cadillac factory. 6) Would Suzuki buy GM's interest in CAMI? 7) Would Toyota be willing to provide Tacomas for GM? 8 A 4-year phaseout of Saturn, Buick and Pontiac as well as a GMC switch for the Vibe would be ideal as many of the models are new or early in their lifecycles. It would take that long for GM to recoup at least some of its investment in those programs. Less harsh for the dealers too.

What do you mean by "too many?" No need to cut more models if the plants are running at or near capacity as shown in the proposal. The scope of this exercise is plant capacity utilization only. If the plants could be run at or near capacity in this downturn then they'll be spectacularly profitable when the economy recovers. It's all about recovering fixed costs. That's how you make a profit in a capital-intensive business like this one. I'm not making any statements about how good the products actually are or how good GM's sales and marketing effort is. You're right, those are factors to consider. But not in this little exercise.

No worries. Granted, it's not well organized. Yes, a proper analysis would require more information than I have access to. Since I don't have inside info on GM's plant capacity I simply assumed each plant (except maybe Grand River and definitely Bowling Green) has a maximum 3 shift capacity of about 250,000 units. This seems to be industry-standard for large volume vehicles. Granted, some of them might be 2 shift operations but the output is roughly the same. Profit at these plants is highly dependent on keeping them running at or near 100% capacity to reduce the fixed costs (tooling, building, etc) per unit produced. That $28/hour paid to the line worker is very expensive if only 1 car an hour is produced instead of 25 (an extreme example for the sake of argument). That's why even Toyota is losing its shirt right now. Obviously some older platforms/plants/tooling have been amortized longer than others. For example, the DTS and Lucerne might have been profitable at 100,000 units a year even though Hamtramck can produce far more than that. But 49,000 units? Doubtful. Volume is even more important for the newer products whose tooling is new. In the case of Lambda, not only is volume low there are 2 plants allocated to production. It's just hard to believe that GM needs two Lambda plants for the kind sales they are making now or even that they would make in a 13M unit market. Bottomline, if GM is serious about becoming viable they're going to have to get rid of nearly half of their assembly plants and start building different kinds of vehicles in the same plants.

Nice looking car. Reminds me of the CTS wagon.

To put GM’s situation in perspective, here is a list of assembly plants along with their respective product’s 2009 sales run rate based on US January 2009 numbers. Mexican, Canadian and export sales are not included so there’s some need for adjustment there. Assuming each plant has a 250,000 unit capacity with 3 shifts and that we might see US market sales in the 10-11M unit range this year and next, it’s clear GM needs to rid more facilities and people to become profitable. Below that list is a plant outline for a new GM made up of Cadillac, Chevrolet and GMC at 100% capacity utilization at a 10-11M market sales rate. Enough capacity is left to allow for a 30% increase in sales should the economy recover to the 13M unit level. GMNA Today: Arlington Assembly, Silao Assembly, Fort Wayne Assembly, Pontiac Truck Assembly: 46,188 Chevrolet Tahoe 16,236 Cadillac Escalade 27,156 GMC Yukon 8,064 Cadillac Escalade ESV 21,324 GMC Yukon XL 25,656 Chevrolet Suburban 4,020 Cadillac Escalade EXT 17,772 Chevrolet Avalanche 287,844 Chevrolet Silverado 96,240 GMC Sierra 550,500 total Fairfax Assembly, Orion Assembly 111,744 Chevrolet Malibu 16,056 Saturn Aura 17,868 Buick LaCrosse/Allure EpII 29,616 Pontiac G6 175,284 total Wentzville Assembly 32,616 Chevrolet Express Van 14,640 GMC Savana Van 47,256 total Shreveport Operations 40,932 Chevrolet Colorado 12,144 Hummer H3 14,136 GMC Canyon 67,212 total Bowling Green Assembly 10,104 Chevrolet Corvette 696 Cadillac XLR 10,800 total Lordstown Complex 62,292 Chevrolet Cobalt 9,204 Pontiac G5 71,496 total Wilmington Assembly 3,648 Pontiac Solstice 2,328 Saturn Sky 5,976 total Detroit/Hamtramck Assembly 33,108 Buick Lucerne 16,344 Cadillac DTS 49,452 total Flint Truck Assembly Selling to Isuzu Lansing Delta Township Assembly 32,544 Buick Enclave 38,796 GMC Acadia 11,328 Saturn Outlook 82,668 total Spring Hill Manufacturing Operations 65,580 Chevy Traverse Lansing Grand River 41,016 Cadillac CTS 10,656 Cadillac SRX 4,956 Cadillac STS 56,628 total Ramos Arizpe, Mexico 34,452 Saturn Vue 20,400 Chevrolet HHR 54,852 total CAMI 64,836 Chevrolet Equinox 19,680 Pontiac Torrent/GMC Terrain 84,516 total Oshawa Car Assembly Plant 84,720 Chevrolet Impala 35,000 (same as Mustang?) Chevrolet Camaro 119,720 total NEW GMNA: Arlington Assembly 46,188 Chevrolet Tahoe 16,236 Cadillac Escalade 27,156 GMC Yukon 8,064 Cadillac Escalade ESV 21,324 GMC Yukon XL 25,656 Chevrolet Suburban 32,616 Chevrolet Express Van 14,640 GMC Savana Van 191,880 total Silao Assembly 17,772 Chevrolet Avalanche 143,922 Chevrolet Silverado 48,120 GMC Sierra 209,814 total Fort Wayne Assembly 143,922 Chevrolet Silverado 48,120 GMC Sierra 192,042 total Fairfax Assembly 115,986 Chevrolet Malibu (picks up 25% Saturn Aura sales) 60,000 Chevrolet Impala (EpII) 30,000 Cadillac LTS ($30K LaCrosse replacement) 205,986 total Bowling Green Assembly 10,104 Chevrolet Corvette Lordstown Complex 175,000 Chevrolet Cruze 20,400 Chevrolet HHR 20,000 Chevrolet Orlando 10,000 Chevrolet Volt 225,000 total Spring Hill Manufacturing Operations 67,168 Chevy Traverse (picks up 25% of Outlook sales) 38,796 GMC Acadia 32,544 Cadillac TRX (replacement for Buick Enclave priced the same) 73,336 Chevrolet Equinox (picks up 25% of Saturn Vue sales) 10,000 Cadillac SRX (Theta) 28,180 GMC Terrain (picks up 25% of Saturn Vue sales) 250,024 total Lansing Grand River 41,016 Cadillac CTS 10,000 Cadillac CTS Coupe and Wagon 35,000 Chevrolet Camaro 86,016 total TOTAL PRODUCTION/SALES: 1,370,866 ABOUT A 13.7% MARKET SHARE AND PROFITABLE Close: Pontiac Truck Assembly Orion Assembly Wentzville Assembly Shreveport Operations Wilmington Assembly Detroit/Hamtramck Assembly Lansing Delta Township Assembly Ramos Arizpe, Mexico Oshawa Car Assembly Plant Saab Hummer Saturn Pontiac Buick in the US Sell: Flint Truck Assembly to Isuzu CAMI to Suzuki Expand: NUMMI relationship by selling a version of the Tacoma and cancelling the Colorado and Canyon. Vibe could continue to be sold as a GMC “small crossover.” Cancel: Colorado, Canyon, DTS, XLR, Escalade EXT, STS, LaCrosse/Allure, Lucerne, Enclave, Aura, Outlook, Vue, Astra, Sky, Solstice, G5, G6, G8, H2, H3, 9-3, 9-5

The lack of fleet sales reveals GM's "true" size. Too much capacity and too many weak brands dividing the remaining sales. GM doesn't need 2 Lambda plants or 2 Epsilon plants. Cobalt down 70%? Why are you surprised? It's into its 6th year in a very competitive segment. And it looked too much like its predecessor when it was new. Is Hamtramck profitable at a 50K run rate? Too many plants, too many workers, no vision, no urgency.

Hmmmmm. Let's see. Build a small car in Europe, price it high because of the Euro-$ exchange, slap a bunch of $$$ on the hood because it's not what Americans want. Lose money. Haven't we seen this movie before??? Maybe it's just a headfake to appease Opel's union bec of the loss of Saab production in Russelsheim? GM can't be that dumb can they?

The problem is that they're not "doomed" quick enough. Unfortunately, they're wasting their time with Buick too. GM needs to find a way to consolidate everything into Chevy and Cadillac (and probably GMC since they sell with very little differentiation) and about a 17% NA market share.

You're probably right about Cadillac staying in $35K-$50K range. And why not? There's zero chance Cadillac will rival BMW and Mercedes across the board consistently. They're handicapped in too many ways. For starters, luxury buyers view expensive European cars through a different lens -- they're "luxury" because they're expensive and European (preceived images of old world craftsmanship). On the other hand, "American" and "luxury" are cultural opposites. Add to that GM's lack of capital, it's lack of persistence, and Cadillac's integration into the rest of GMNA. BUT, Cadillac has excellent potential to expand down into Buick's territory. The Enclave and new LaCrosse would make excellent "comfort" Cadillacs. There's no reason why the slightly more expensive CTS variants couldn't also remain as a rear-drive BMW challenger. As much as I like Buick I think the name is irreversibly tarnished and will have trouble "out-cache'ing" Lexus and Lincoln. Maybe GM should encourage Cadillac and PBG dealers to merge with the goal of phasing out Pontiac and Buick as their individual models run out their lifecycles?

Another dud. First, "modern" and "elegance" are incongruous. "Elegance" is a concept alien to America since the art deco 1930s. "Redefined" sounds arrogant, overstated, and smug. Kind of like Saturn's "Rethink." Well, at the least the cars are getting better.