GM Goes From Crisis to Chaos
By Brendan Moore
When I was at the Detroit Auto Show in January, I was impressed with the organization and focus of the many General Motors executives that I talked to during the show. Despite the reeling auto market, their looming financial insolvency and the tenuous status of government aid, the people at GM seemed to have a plan and seemed intent on executing it; the situation was seen as temporary until the plan started working.
But, now, I just don’t know. Crisis planning seems to have given way to the chaos of little or no planning.
The wind-down of different businesses and the shedding of brands is happening, but in the instance of the brands, GM seems to have decided to just basically cut those brands loose without a lot of effort to make their landing a little easier. This is understandable with Hummer, but the sorry way GM has booted Saab and left them twisting in the wind is unbelievably careless, to say the least.
Pontiac is going to be….what? No one knows, no one seems to have any ideas (that they’re saying out loud, anyway) about what Pontiac might be, and what the future might hold. All that anyone at GM will say is that Pontiac will be a boutique brand, and what a boutique brand is to GM is anyone’s guess.
But apparently the worst of it has been saved up for Opel, a company and brand that GM has owned since 1929. 1929! A great brand with some great cars, cars that could be sold in the US and everywhere else. Opel is also GM Europe, more or less. Chevrolet is making inroads in Europe, but Opel is the king for GM in that region. Vauxhall has become the British version of Opel, for all intents and purposes, so if GM loses Opel, then they also lose a chunk of the UK market.
Yet, every day that goes by shows that GM’s actions concerning Opel and it’s future corporate independence become more and more slapdash. They issue contradictory statements about the shares of Opel they want to keep, what other investors they are pursuing, etc. All this while Opel’s burn rate accelerates and the company is projected to run out of money in the first part of the second quarter of 2009. Yes, that’s right – anywhere from three weeks from now to six weeks from now.
Opel is key to GM’s long-term survival, and GM needs to come up with a short-term plan and a strategy in order to make sure Opel is still an integral part of GM five years from now, provided, of course that GM is still a viable entity in 2014.
It looks like Saab is going to have to fend for itself, away from GM, and Pontiac may well end up as the red-headed step-child in the GM corporate family, but neither of those brands is going to make a material difference in GM’s future. Opel, on the other hand, will make a difference.
GM has got to get rid of the chaos currently around Opel, and move on to a plan that makes some strategic sense.
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