GM Plans to Streamline Offerings From Its Eight Brands Only Part of Solution, Analysts Say

DETROIT May 20, 2005; Dee-Ann Durbin writing for the AP reported that General Motors Corp.'s plan to streamline offerings from its eight brands won't be easy and is only part of what the automaker needs to do to turn itself around, some industry analysts said Friday.

Mark LaNeve, GM's North American sales and marketing chief, said in a speech Thursday that GM wants Cadillac and Chevrolet to be its only brands with a full lineup of vehicles. The company's other brands -- Buick, GMC, Pontiac, Hummer, Saturn and Saab -- should have limited offerings that fit within their distinct brand identity.

"I'd rather have four great Pontiacs that are really distinct and stand for athletic design and performance, than seven or eight capable but indistinguishable Pontiacs that fail to fully deliver on the brand's promise," LaNeve told a meeting of the International Motor Press Association in New York.

LaNeve reiterated that GM plans to keep its full lineup of brands. Earlier this spring, GM vice chairman Bob Lutz suggested the automaker could phase out some of its "undernourished" brands, such as Pontiac and Buick.

"Far from being a liability, we believe GM's eight brands constitute one of our greatest assets, giving us market coverage no other carmaker can touch," LaNeve said.

LaNeve said GM has successfully established Hummer as "a daring, go-anywhere brand," while GMC is a leader in trucks. Buick needs to be the company's affordable, near-luxury brand, while Saturn will double its vehicle portfolio over the next few years to capitalize on its customer-friendly image.

Art Spinella, an automotive analyst with Oregon-based CNW Marketing Research, said GM has talked for years about streamlining brands, and it has already taken steps like removing the Bonneville sedan from the sporty Pontiac lineup.

"We've heard this story before. Quite honestly, I'm not sure that anybody internally has the fortitude or the weight to actually do it," Spinella said.

Spinella said GM needs to make sure everyone at the company is working toward GM's goal. For example, Toyota Motor Corp. has a huge staff visiting dealers to make sure the company's messages get out. GM isn't matching that effort, he said.

LaNeve addressed that criticism, saying GM dealers haven't been competitive in the look and location of their facilities. But he said dealers are trying to change that. Between 2003 and 2006, Cadillac dealers will spend $200 million on new dealerships across the country, LaNeve said.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, agreed that GM's product plans aren't new but said the company may be trying to accelerate them.

"Everyone is paying more attention to it with the current travails of GM, but this stuff has been in the pipeline for a long time," Cole said.

Cole suspects GM is focusing on the product plans to deflect attention from more difficult issues, including negotiations with the United Auto Workers over health care costs and declining U.S. sales and market share.

GM saw its sales fall 5 percent in the first four months of the year, and its market share fell in April to 25.1 percent from 27.7 percent the year before. The world's largest automaker posted a $1.1 billion loss in the first quarter.

Cole said he expects GM to announce restructuring plans in the next few weeks, including possible plant closings.