Posted by: David Kiley on April 28, 2009
This is essentially a transcript of a National Public Radio commentary I recorded for Marketplace on April 27.
In the parlance of corporate restructuring, GM is aiming to get “lean and mean.” Assuming it stays in business, these cutbacks would leave the company with Chevrolet, Cadillac, Buick and GMC trucks — four brands, down from the eight that it has now.
But is that still too many? After all, GM’s fiercest competitor, Toyota, does better with just three brands now than GM does with the four it plans to keep.
So, no surprise some are questioning whether GM has cut enough. Does it really need Buick and GMC? Who is really buying these brands anyway? I mean Buick? Seriously? I don’t know anyone under 60 who says they gotta have the new Buick.
And as GMC trucks and SUVs are really just Chevrolets with different paint colors and the GMC logo, what’s the point?
Don’t ask me why? But Buick is big in China. It’s like how Jerry Lewis is huge is in France. No one knows why. It just is. And the theory goes that if GM kills Buick in the U.S., the Chinese will want it less. And China figures big in GM’s future.
GMC is another story. New ads for GMC are pitching the brand, and I’m not kidding, as the unofficial truck of America’s infrastructure rebuilding. I used to work in the ad business. I never thought I would see the word infrastructure in TV ad copy. But so help me there are a couple of hundred thousand consumers a year who, if you took GMC away, would not by the same vehicles sold at a Chevy outlet. They’d go to Ford, Dodge or Toyota.
So, the four brand strategy at GM seems right to me for GM’s growth.
The important thing in all this is that the other four parasite brands that only hold 3.2% of the market are finally leaving the host body. What GM has been trying to do for too long is spread its limited resources and management attention across too many brands. It’s been the equivalent of trying to stretch rations for three or four people to feed eight for too long on a lifeboat.
The result is mal-nourishment, sickness and eventual death for all. Or, what you have at GM right now.