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GM is revamping its Saturn brand.
When GM unveiled the Saturn brand in the 90’s, it was marketed as “a different kind of car company.” Although that slogan was dropped a few years ago, Saturn will once again be a different kind of company. This time it will be because GM is finally revamping its image and lineup.
Saturn grew quickly in the early 90’s as a semi-independent branch of GM. The idea was for them to compete with smaller foreign cars. However the brand has long since passed its prime. As Brett Clanton of the Detroit News put it,
its sales peaked a dozen years ago and its entire lineup was outsold by the Honda Accord last year.
With GM’s financial problems well known, it seriously had to evaluate the Saturn brand and decide if it was worth keeping. They decided to make the necessary changes and hopefully move the brand forward. Maybe Saturn won’t go the way of Oldsmobile. GM tried a similar re-invention of the Oldsmobile brand in the late 90’s but then phased out the brand ending in 2004. (Side note: I currently drive a 98 Oldsmobile Intrigue which was one of the “new” Oldsmobiles)
The New look of Saturn will be much more European and upscale. Check out their website at Saturn.com to see four of the new models. The SKY Red Line looks especially spiffy.
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The popularity of sub-compact cars is on the rise.
Until recently, sub-compact cars have not fared very well in America. The SUV has been king for some time now but its position of dominance might not be as secure as it used to be. This does not mean that small cars will come to dominate American highways the way they have in Europe, but they are getting a lot more respect these days.
It’s not hard to figure out the reason behind the rise in popularity of the smaller cars. It’s the rise in gas prices. It’s not uncommon for motorists to turn to smaller cars when gas prices increase because smaller cars tend to get better gas milage. Car manufacturers are wise to provide affordable cars at the smaller size not only for this reason but it is a great way to get young, first time car owners. This can help build up your brand, especially if these young buyers are loyal later in life.
Many foreign car manufacturers started out primarily making sub-compacts and still excel at doing it today. However, the North American “Big Three” (GM, Ford, Daimler Chrysler) have a lot to learn. Peter Johnson pointed out some shortcomings in a recent article.
Toyota has introduced the Yaris, Hyundai has significantly revised the Accent, Kia has updated the Rio, Honda has just introduced the Fit, and Nissan will introduce the Versa in May of this year. And let’s not forget Scion with the xA and xB.
The Chevrolet Aveo is essentially a re-badged Daewoo and doesn’t offer the level of refinement as the others. The Ford Focus is larger and more expensive, as is the new for ’06 Dodge Caliber.
Many of our North American manufacturers have been in decline recently. Maybe a new fleet of small fuel-efficient cars could be a step in the right direction for these companies. I want to see them succeed, but if they don’t provide consumers with what they need, the consumers will go elsewhere.
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Fast cash for world’s largest automaker
GM is heads over heals right now trying to figure out how to make their company profitable. They’re laying employees off, closing plants, cutting pension plans, and selling their cornerstone stock in GMAC for a quick $14 billion.
Rick Wagoner, GM Chairman and Chief Executive, believes this move will sustain the company for a turn around from its $10.6 billion loss in 2005. However, many investors still don’t believe this "quick fix" will actually fix anything in the long run.
GM had to have been in one of the tightest corners ever to sell their stake in GMAC. So, I’m starting to believe that things are worse than they seem.
In the context of history, the last six months are going to prove to be pivotal," Wagoner said at a news conference. "This is about restructuring our business so we can be robustly profitable in the future, so we’re not so balanced on a razor’s edge (that) if gas prices go up, you don’t make any money, if your sales go down 10 percent you don’t make (any money)."
But GM’s shares sank more than 3 percent after the announcement as analysts questioned whether the cash infusion would have a lasting impact on GM’s outlook and major credit ratings agencies indicated the deal may not lead to an investment-grade rating for the finance arm.
Nothing is looking good for GM at the moment. I surely hope this $14billion is enough to get them back up and running.
I know this is an extremely serious matter and I don’t mean to lighten it at all, but I can’t help but wonder how a company gets in such a bad position where $14 billion is not enough to ensure success?
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Auto News: GM sticks with plan
GM will continue to lower prices instead of offering discounts and incentives for the next year.
GM began of lowering the price of their cars with the "American Revolution" ad campagn. Now, instead of offering rebates and extras with their vehicles, GM’s vehicles will actually be cheaper than the competition.
GM announced this news while they continue to lose market share against fierce competitors.
General Motors Corp. expects its U.S. market share to continue to fall in the first quarter of this year due to aggressive competition, but said that won’t reverse its strategy of lowering prices and relying less heavily on discounts, GM marketing officials said Monday.
"We’re certainly not pleased with current share levels and we’re not satisfied with it, but we have to run this play," said Paul Ballew, GM’s executive director of market and industry analysis, in a teleconference with analysts.
GM is in the same boat as the rest of the American auto world. Maybe, once this pricing program matures, there will be forbearance of profit, eventually.
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GM cuts employee’s pension plans
After a difficult year, GM is announcing changes in employee’s pension plans. This should come as no surprise, almost all companies that "restructure" cut their employee’s pensions to save money.
Effective Jan. 1, GM will freeze the accrued pension benefits for approximately 40,000 U.S. salaried employees. The change won’t affect retirees.Salaried employees hired on or after Jan. 1, 2001, will move exclusively to a defined contribution plan. Those employees currently have a cash balance plan, which works like a traditional defined benefit plan but allows participants to collect their benefits in a lump sum at retirement instead of in monthly checks. GM said those employees will continue to earn annual interest on the balance in their plans. Those employees also will get a contribution of 4 percent of their annual pay to their 401(k) program."These changes will reduce financial risks and future costs for GM, while protecting current retirees’ and employees’ earned pension benefits and providing competitive and fair retirement benefits going forward," Wagoner said in a statement.
Restructuring is a difficult process. The company must decide either to lose a few employees/benefits or lose the company.
Even though I don’t like to admit it, GM may be doing the right thing to save the company.
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GM announces mass production of hydrogen cars until 2010
We’ve been waiting for an alternative fuel source to come
available for awhile. Well, GM is now placing a time period on when we can see new hydrogen based vehicles.
On Thursday, the automaker announced that while it will continue its tie-up with Toyota on other advanced technologies, it will no longer be sharing its fuel-cell research.
‘Because of the advances we made that type of technology is passing from the research phase to development,’ Fosgard said.
Fuel cells produce electricity through a chemical reaction between hydrogen and oxygen, leaving water as the only by-product. They are far more environmentally friendly than the currently popular hybrid gas-electric engines which merely reduce the amount of gas needed to power the vehicle.
I’m so excited to see the mainstream car manufacturers embrace this technology. Hybrids are here to stay!
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The auto-giant may have reason to smile
We’re all pretty much in limbo when it comes to the American auto industry. We want the companies to do well and succeed, because we’ll end up with less competition and higher prices, and a drop in GDP, if they fail.
But, with recent news from Ford and GM, much still looks bleak. On a good note, however, Chrysler’s sales went up 2.5% in February, while Ford and GM both reported sales decreases.
While the Auburn Hills-based Chrysler Group reported a sales gain of 2.5% last month, consumers bought fewer new cars and trucks from both Ford Motor Co. and General Motors Corp.
Sales declined 4% at Ford and 2.6% at GM, the companies reported Wednesday. Other automakers were slated to release their results later in the day.
Analysts are expecting industry-wide sales in February to be strong compared to the same month a year ago.
Three of GM’s eight brands – Buick, Hummer and Saab – reported gains, while the other five posted declines. Sales of the company’s big Hummer SUVs more than doubled in February compared to a year ago.
Six of Ford’s brands reported sales declines. Only Land Rover was up, by 27.8% compared to the same month a year ago.
Chrysler also had a mixed result, with Chrysler and Jeep sales up, and Dodge sales down a slight 1%.
Auto analyst Himanshu Patel of JP Morgan Securities Inc. said Ford outperformed expectations.
“We expect a neutral to modestly positive reaction to the company’s release,” he wrote in a research note to investors.
GM’s performance, however, was “modestly below expectations.”
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A big investment amidst troubling times for the car giant
General Motors Corp. will be investing $545 million in five different production plants in the Michigan area. This seems odd for GM, considering that they lost $8.6 billion last year alone and have already ditched 27,000 employees since 2000. However, Joel Spielman, general manager of GM’s North American manufacturing operations, seems to think that this investment may boost moral.
Jennifer Granholm, the Governor of Michigan, had a few things to say about the investment and the restructuring of Detroit’s largest automaker.
"We want you to know that your success-and we know GM will have success in turning it around – is our success," Gov. Jenifer Granholm Said. "There is no vision of Michigan’s future that does not include a vibrant and growing auto industry."
GM also shared three improvement projects that stem from the large investment.
The company is investing $152 million in its Ypsilanti transmission plant to increase production capacity for rear-wheel drive, six-speed transmissions. It is investing $60 million in its Romulus engine plant for making the small-block V8 engines that will go into its new full-size trucks. It is also spending $32 million to update the hydroforming equipment in its pontiac metal stamping plant, which uses water to help make the unique curves on the Pontiac Solstice and Saturn Sky roadsters.
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Small Increase In US Auto Sales for Japan for the Month of January
This month US car sales in Japan were higher than this time last year. However the increase was only a slight one according to Edmunds.com:
Edmunds.com says the increase will come entirely from non-U.S. companies: Sales by General Motors Corp., Ford Motor Co. and the Chrysler Group of Germany’s DaimlerChrysler AG will be less than year-earlier levels, Automotive News said Thursday.
Ford sales will fall 8 percent, GM sales by 5 percent and Chrysler sales by 3 percent, Edmunds.com predicts.
Meanwhile, Honda and Toyota sales will be higher, with Honda sales in January up 18 percent to 96,000 vehicles and Toyota sales up 16 percent to 164,000 vehicles.
Auto sales in the US are expected to see high Japanese car numbers this year, with Toyota possibly surpassing GM for the first time.
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Car Buyers Won’t Purchase From a Shaky Company
When Daewoo folded years ago, many customers were left with cars they were still financing that could not be fixed when they stalled because parts were not available. Warranty’s purchased from the manufacturer were voided and the buyers were left to bear the burden of a car that no longer had a parent company to back it.
A recent survey suggests buyers won’t enter into a similar situation this year.
There’s been talk in automotive circles that General Motors may be on the road to bankruptcy court. But GM executives may do a U-turn after reading the results of a new study that finds car buyers wary of buying a car from a bankrupt company.
The survey by Directions Research, Inc., found that only 26 percent of respondents said they would buy or lease a car manufactured by a company that was in bankruptcy.
GM will probably not collapse, but bankruptcy might be an option they choose. This survey may discourage that once attractive alternative.
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- AutoWarranties.com
Warranties available on any year, make, or model vehicle with any mileage
