[BigAls87Z28]

Originally Posted by Blacdout96

No, they would of stil fell into the were going to make 4 different versions of the same vehicle and hope the public doesn't catch on deal, and like what Nasty said ,they hopped onto the FWD and SUV craze.

You and Nasty would be wrong on the SUV thing.
SUV's made money. Tons. Its what made GM, Ford and Chrysler money.
They could never make money on small cars due to cost structure, especially when compared to the Japanese.
Its a reason why cars didnt get much attention, but trucks did. GM and Ford were 50% into the market that people wanted.
GM and the others didnt force people into SUV's. And if you are the owner of a business, and your most profitable product is selling like gangbusters, in a segment you dominate in, why would you not invest more into them then your other lesser, non-profitable products?

Toyota saw this, as did Honda, Nissian, and even VW was developing a pick up truck, to be made in America. I think its still on the books somewhere....
Truck idea and its profitability isnt linked to just the domestics.

Originally Posted by LS1Hawk

I like to think that I am pretty knowledgeable about the automotive industry and General Motors. However, I am no expert. The other day a question sprung up in my mind and I don't think I've seen it brought anywhere in the automotive press, blogs, etc. So I am going to throw it up here and see what kind of traction it generates.

The scenario is this: Let's imagine that "Old GM" never took on any expansion brands over the course of its history. By that I mean Saturn, Hummer, Saab, and even Geo. Let's imagine that all these years they had just remained Chevy, Pontiac, Buick, Olds, Cadillac and GMC...call them the Classic 6 (not counting LaSalle or Oakland).

The question is this: If GM never took on the above expansion brands and remained with just the Classic 6 brands, would they have stayed profitable? Would they have been able to avoid bankruptcy/government assistance?

How was GM doing before they took on the first of these expansion brands? It can be argued that if GM never had the expansion brands, they would have had more resources available to the Classic 6 for product development, marketing, etc. Perhaps Olds would have survived. But say if they still faced bankruptcy, maybe we would have lost only one Classic brand rather than two.

What are your thoughts?

The question has been raised before. Why did gm make more brands when they already had enough?
Geo was a brand where GM could use its vast empire of automaker friendships to form a sales channel to sell the cars here in the US.
Saturn was formed around the idea of making a non-GM GM brand. It served the basis for a lot of other automakers, and its job was to tackle the imports head on since at the time they only made small, 4cyl mostly economical and low maint. cars. If anyone remembers old Saturn commercials and dealers, it was a family. They would invite you to the Spring Hill plant in Tenn, where all Saturns were built for a family party! You would take a picture with your car and the staff of the dealer when you took delivery! No haggle pricing! This from GM? Old, stodgy GM?
Hummer was just a means of making more money and selling more trucks. But there was also an established name and an image that is still intact today, for the most part.
Now...
GM went bankrupt for something totally different and nothing really to do with what brands they had. The cutting of the brands is something different.

You have to understand what happened and the steps that took place to get us to where we were in late 2008.
In 2006/2007, GM made had been making huge strides in quality, design, and fuel economy. Solid powertrains and better vehicles were coming out every time you turned around. The return of Camaro, 505hp Z06's, the award winning Saturn Aura, Chevy Malibu, and Cadillac CTS all were bringing in praise. On top of that, GM made HUGE strides with the UAW to cut costs of manufacturing that would take place on Jan 1st, 2010. GM also debuted the most advanced hybrid technology with the two-mode system for its trucks, on top of the Chevy Volt, an all electric car with extended range, something that people said GM would never build again. And with all this, they had more coming. Higher quality sedans, better technology, advanced powertrains, a renewed focus on cars and crossovers.
All this costs money. Billions. Just an idea, the Zeta/VE platform, the one that sits under all the Holden cars, cost GM 1 billion dollars. And thats cheap, for a low volume car, built on an island. Throw in another 300m and you get a Camaro. Now thats cheaper then say, the 98 4th gen revision that cost a little more then the whole 5th gen program did.
When trucks stopped selling, or selling at slower rates, plus the fact that GM put a TON of money into the GMT900 trucks and suv's, which were nto going to give the same high returns as the last generation truck, you have a drop in income.
Plus, GM still didnt make money on cars, and they had to spread any and all development costs across several brands. This hurt the cars individually.
So GM took out loans from large banks.
Well those banks took a ****, as well all know, and GM was left with no where to draw money from.

Now, Ford did the complete and total opposite. Ford, running blind, looked like they would dissolve by the end of 2007. They had just spent a crap ton of money revamping the Focus, more money then it would have cost them to bring over the fantastic European spec Focus. Instead, we got what we currently see on the roads.
Ford has lackluster sedans, its F150 was its only hope,a nd the Mustang was counting its days till Camaro and Challenger both showed up.
Bill Ford Jr, stepped down from being CEO, and in came Allan Mullaly, former CEO of Boeing. His first move was to halt everything, haulting the flow of money. He then went to the banks and mortgaged the whole Ford company, down to every pencil and staple. They said they were not going to focus on sales numbers, which traditionally the Big 3 needed to make any money on cars, and they would focus on increasing the income per car. Once Mullaly sorted things out, he handpicked certain programs to move ahead, and canned others, The programs were vital to Ford moving ahead, and not frilly stuff (like Mustang getting a new platform for 2010, but just a redesign, and then a year later launch the new powertrains)
Now, GM made the big strides with the UAW, that also helped out Ford and Chrysler since GM usually sets the tone, then the other two go in and change a few things for thier respective companies.
So, here we are, mid 2008. Banks are falling fast, and GM is burning through development money trying to get these programs launched. Ford on the other hand, sits back and waits it out with the money they got before the banks could no longer lend and/or fail. GM needed money, so they went to the only game left in town, the Government.
Now, it was brought up that GM had way too much debt (a reason that any bank still alive would not give them a loan when things were getting bad). Ford also still has a lot of debit, and so did Chrysler, so its not just a GM thing. GM just happened, as being the largest automaker, the most debt.
GM could not get the money they needed to keep vehicle development going, keep the lights on, and pay the bills. They were given money to keep afloat till the next administration could figure it out.

Hind-sight:
You could say that keeping the old brands is what put GM where it was. GM should have started to shed brands quickly once its market share could n o longer support it. GM was too full of pride to do that. Olds should have been cut loose in the 80's. As the market got smaller, the room between the brands disappeared. By the mid 90's, and market share dipping now into the 20's, it should have dropped more brands. But with the SUV craze, it gave GM more reason to find brands that make more trucks.

Originally Posted by SmokingSS

from what i remember reading, Saturn was in the red from day 1, that was a company that never made money for GM.

Im sure Al will be able to verify or dismiss that.

Saturn did make money for a few years, want to say mid 90's. It was really amazing that GM was making any money off any sedan! Especially a brand like Saturn that had no history, its unique high tech plant, doing the things they were doing.
Chevy killed Saturn, and there is no other way around it. Chevy stopped the development dollars going into making them better and keeping up with the imports.
Saturn's move upmarket was a noble one, but after 10 years of pushing saturn as the small, fun, plastic brand, it started to get more mainstream GM parts and chassis. It was the best time to own a Saturn with better cars, but the feeling was gone.
Old was a big money loser for GM once the 90's came. Olds payed for development of the Quad4, 3.5 Shortstar, and 4.0 mini Northstar. While the Quad4 made it to other brands, the 3.5 and the 4.0 didnt, so Old had to take the hit. Both of those motors were supposed to be an across the board engine. It didnt make it out of Old.
Same with the Aurora platform. High quality, but too expensive.


So yes...GM would be in the same place, probably worse, then if they kept the brands. FYI, Pontiac was slated to die in 2013, but was rushed foward as BK became more of a reality.