GM Doesn't Make Mistakes, It Just Fixes Them

And so it has come to pass...The official proposal from GM to Congress on how it is going to get its mojo back was announced to the world on Tuesday. How does the plan look?

Selling Saab: Well you can't say that you GM didn't give the brand a chance. I'd say that GM has given it a go and simply cannot make a business out of Saab. One scenario that I have would be to pull Saab from the U.S. and tailor Saab's offerings exclusively for the European market as an upscale compliment to Opel/Vauxhall. However I totally understand GM wanting/needing to dump the brand, it's been far too long and cost way too much for very little market share.

Pontiac As Niche Brand: GM had very little in the way of savings to kill the brand completely unless it also phased out GMC and Buick. Leave Pontiac with the G8, Solstice and maybe the Vibe and dump everything else.

Keeping GMC: I don't know about this one. Yes, it is the truck/suv component of the Buick-Pontiac-GMC trifecta, but I really don't see the point. However, GM seems to feel that this strategy works. At least dump the Acadia so that the Enclave has one less internal competitor.

Selling/Killing Saturn: This is the heart breaker for me. GM really screwed Saturn for awhile with offerings like the awful Ion. Buyers are like elephants, they don't forget easily. Saturn needs time with its current lineup and a healthy marketing budget to really win buyers back. Just like the Fiero, it might be the case that just as GM finally perfects something, it euthanizes it. On the flip side, Saturn has very little in the way of exclusive offerings and when push comes to shove, tough decisions have to be made: Saturn simply hasn't posted winning numbers.

Keeping Buick: Well, the brand has made it big in China. Why not just sell it to them, then? GM probably sees a lot of potential in China and doesn't want to sell it at fire sale prices. Fair enough, but why not make it an Asia only brand? This would enable GM to kill Buick, Pontiac and GMC in the States. The downside is that GM would have a lot of dealer trouble on its hands, especially after it begged them to channelize. Here's a crazy idea: rebrand the Saturn Astra and the Buick Skyhawk :-)

Selling Hummer: Good luck with this one. Definitely the right move, but who is going to buy this stinker? Sorry Brian AKA "Hummer Guy" :-)

More Hybrids/Flex-Fuel Vehicles: Yeah, you and everybody else. You can't "not" say that you're going to do this, that's just the current political environment we're in--you have to appear green to get some green.

Trim Dealerships: Given the way they are folding in the Bay Area, that shouldn't be much of a problem. It looks like the economy is going to take care of a lot of the weaklings without GM having to intervene.

Concessions From the UAW: This has to be done, if for no other reason that the public's perception. Axe the jobs bank and a couple of other perks and folks will settle down.

Lender Negotiations: Banks probably realize by now that something is better than nothing and will be eager to sit down with GM and talk turkey.

Overall the plan has a lot to commend it, but I have to wonder if it is enough? I would have been tempted to axe more upfront even if in the final analysis it was proven to be too much. What would I have done? To chew my way out of this financial trap, I might have axed everything but Cadillac and Chevrolet in the USA. Yeah, that's heavy handed, but none of the other brands have performed here. I would have negotiated something in the bridge loan package to assist with the massive payments that would be made to dealers. At no other time would folks be as amenable and understanding of such a bold move. Oh sure, dealers would be pissed, but in the back of their minds they would understand and perhaps even be grateful to have been put out of their misery. As I mentioned earlier, GM could retain Buick in China and perhaps Saab in Europe. The risk here is that GM isn't cutting enough and can't make a go of it even with a bridge loan. It is pretty much guaranteed that if GM gets the full amount it's asking for, it will not have the opportunity to come asking again.