If GM/Ford/Chrsyler go down, what brands to keep?

In My Humble Opinion
1

Things look bad for the American auto industry, folks. Chrysler is already on the selling block, with no apparent takers. Both GM and Ford are in disastrous financial shape.

Should any or all of these companies be sold or split up, however, some pieces of them will survive, just as Jeep survived the demise of AMC. So, what should stay, and what should go?

The following are my opinions; I’d like to hear yours. One argument I’d like to preempt (you’re free to argue back, if you like), though, is this: “X brand should survive because they have lots of good, medium-priced sedans/SUVs/etc.” IOW, they offer a good value.

IMO, the fact that the market is so saturated with good deals from the US, Japan, Korea, and Europe (and soon China), combined with the fact that the Big Three have failed to differentiate themselves in the brand area, is the cause of their demise.

So, which brands are keepers, and which are junk heapers? Read on!

GM Keepers

Cadillac. I really don’t like Caddy’s offerings right now, but the name is synonymous with “American luxury car.” An intelligent consortium should be able to do something with it.

Chevrolet. Another all-American classic, which also comprises the classic subbrands “Corvette” and “Camero.” If any American brand is a keeper, this is it.

Hummer. I hate Hummers. But it will survive, at least in the short term as the ultimate testosterone toy, especially because it’s not a home-grown GM marque.

Pontiac. This one is a squeaker, but there is enough GTO/Firebird nostalgia behind it to keep it going. Plus, it has a name and logo that have stood the test of time.

GM Junk Heapers

The name “General Motors” itself. “GM” has never become a beloved brand in itself, unlike Ford. It will go bye bye.

Buick. I’ve never understood the place Buick was supposed to hold in the brandspace (Cadillac wannabe?), and I’m surprised that it hasn’t been ditched by now like Oldsmobile. It has no classic subbrands, so sayonara.

GMC. I’m not a truck lover, so maybe someone can set me aright, but why have both Chevy trucks and GMC trucks? Chevy is “like a rock,” but what is GMC? What a boring brand, goodbye.

Saab. My guess is that the Swedish government will do what it has to to prevent Saab from disintegrating, but GM has, IMO, cheapened this brand beyond repair. You can’t take Scandanavian mystery and stick it in your portfolio and pretend people won’t notice a difference. A shame, really.

Saturn. My readings indicate that Saturn is a failed experiment. The “company” never achieved the kind of Toyota-esque production excellency that was intended, and overall results have been lackluster. I think it has poor positioning in the brandspace, too. Is it a performance car? No. Especially safe? Hmm. A good value? Not sure. But I’m sure it’s going away.

GM certainly has a lot going on the trash heap, but it looks a lot better than the remaining two…

Ford Keepers

Ford. Unlike GM, “Ford” is a brand in its own right. To me, Ford was a fascist nutjob, but I’ll grant he did a thing or two to advance the auto industry. In any case, the name Ford and the logo are classic. Still, perhaps the Mustang is Ford’s only classic subbrand, but “Ford” as a brand will be used by someone for a long time.

Land Rover. Pretty much analagous to Hummer and will survive for the same reasons. Not a fan, though.

Volvo. Unlike Saab, Volvo still has meaning in the brandspace: safety and stability. It also maintains a classic look. I’m not saying it’s any great shakes, but it’s still viable, I think. Barely.

Ford Junk Heapers

Mercury. Meaningless!

Lincoln. Does anyone think of Lincoln as a luxury brand any more? Does anyone think of Ricardo Montalban as a major star any more? My point exactly.

Mazda. Don’t know why Ford ever fooled around with this one. The rotary engine is a neat-o technology, but a failing Japanese brand is something to be extra wary of, no?

Jaguar. Only the incompetence of Ford could have taken this fine old British brand and turned it into the laughing stock of the auto industry. “Ford-u-ar,” indeed. But hey, at least Jaguar keeps alive the legacy of the Taurus. snicker

But there is something even more pathetic than Ford…

Chrysler (= AMC) Keepers

Jeep. Jeep remains cool.

Chrysler Junk Heapers

Chrysler and Dodge. Yow, what junk. Looking at their website you realize what a small company this has become, brandwise. Just two little brands, neither of them worth a damn. Oh sure, the Viper is cool, but that’s just one highly expensive specialty car.

“Crossfire” is just about the dumbest name ever. Hey, we’re getting shot at–it’s the crossfire! And it’s just a cheapo Corvette, anyway.

Look at Chrysler’s brands these days: LaCrosse, Lucerne, Enclave. Enclave?!

No wonder no one wants that shitpile!

The implication shouldn’t be that other brands around the world are doing fine. I think Mercedes is in big trouble–how can something so expensive look so cheap? BMW is hardly better. Japan also has brands that really don’t mean anything any more: Mitsubishi, Suzuki. Nissan remains troubled despite its “salvation” by Ghosn. Hyundai of Korean offers nice cars at a nice price, but I still don’t think their brand means anything.

But the US auto industry is at a sad crossroads. Years of mismanagement and marketing hubris have brought here. My best guess is that Ford and GM will enter Chapter 11 within five years, dick around for a decade or more in that state (hey, it’s fun not to have to pay your creditors fully while still doing business!), and eventually be broken up such that certain brands and certain factories are owned by a US consortium. It may very well be that GM, Ford, and Chrysler brands are all mixed together under new management. At that point, we can only hope, that they will be good stewards of American intellectual and physical capital, as they have failed to be for decades.

2

GM. Ford and Chrysler can’t and won’t all go down. The US Government can’t afford to assume the pension liability and the economic implications. At a certain point it becomes cheaper to bail them out than to let them fail.

It’s like the airline industry. American, United, and Delta all can’t fail at once. Someone has to fly.

That doesn’t mean that there won’t be a crisis mode and some serious restructuring won’t take place. The automakers are more than just cars. The Germans own Crysler so their government has a stake in this too. Somehow, it will get worked out but, that being said, the auto industry could look a whole lot different in 10-20 years.

3

Not sure I understand. If the companies fail, they fail. They are already bleeding billions per year. The government can’t just make it better.

And you ignore the possibility that the assets of these companies could be redistributed. Or not?

Not really, there are alternatives. We could all drive Japanese cars and be happy.

4

[Ricardo Montalbam](Lincoln. Does anyone think of Lincoln as a luxury brand any more? Does anyone think of Ricardo Montalban as a major star any more? My point exactly.)

Wait a minute, wasn’t he pimping the Chrysler Cordoba with Corinthian leather?

As for Jaguar, before Ford the Jaguar quality was absolutely abysmal. At least Ford has brought some semblence of quality to the brand.

5

Oh yeah, you’re right!

Wow, that’s saying a lot!

6

Proud Chrysler owner here. From my perspective, Chrysler is the only American brand that is doing things right and not cutting corners and making cheap cars. I don’t need a Japanese car to be happy. Chysler and Dodge are certainly not “junk” or “shit piles.”

7

Those are Buick cars.

8

Whoops. Chrysler’s brands are just as generic. Sebring? 300?

9

Remember the argument I attempted to preempt? I don’t doubt that they are good cars. But in the brandspace, what meaning do they have?

Why by Chrysler instead of any other decent car?

10

GM showed a profit last quarter. Amazingly, P&L statements can have remarkably little to do with a company’s actual health. If you are marginally profitable you swing things to show as much profit as possible and bonuses are paid accordingly. If you know you are going to show a loss you write down everything you possibly can that is sitting inventory. Parts and machinery that were an asset suddenly become obsolete and are a liability. You write off every restucturing cost and future liability you can possibly find. Rectify all of the past accounting gymnastics and plan for the future. It allows you to turn things around quickly and show a profit in the next quarter or year.

These companies are sitting on huge assets. Just because they are showing a loss doesn’t mean that they are not viable or will continue to hemmorage money. If it really comes to the point that they are no longer viable and massive unemployment will ensue the political pressure will take over and suddenly there will be loans, incentives, tarrifs, subsidies and abatements that never existed before.

11

My experience suggests otherwise. The experience of myself, neighbors and family with Chyslers over the past fifteen years is enough to confirm for me that they are in fact junk and very much piles of shit. It is an embarassment that the contrast with our experience of Toyotas and Volvos has been so starkly favorable.

12

Dodge trucks are popular as hell where I am, just as much as Chevy or Ford. The PT Cruiser, although I personally hate how it looks, is also very popular.

I say bring back Eagle!

13

It’s odd that you referred to it as a classic, yet can’t be bothered to spell “Camaro” correctly.

14

Chrysler will rebound. As the smallest of the “Big 3” automakers, it is the easiest to turn around. Don’t forget, they went from rags to riches before, in the early 80s. A couple of hit cars, and Chrysler will be back in the game.

When Daimler took over in 98, Chrysler had 5 billion in cash reserves, and some highly profitable cars. Now Daimler is saying it’s only worth 5 Billion total. Those stupid Daimler dummies ran it into the ground, and sent Bob Lutz away, and that was probably one of their worst mistakes.

With a few goivernment loans, some labor conessions, and some good designs, Chrysler will be back in the running again soon. They have always been more of a niche player and need to focus on that more than on taking back the #3 spot.

15

While I think Ford is the most in trouble of the three, it is also the one with the most identifiable brands worth saving. Their entire truck line is massively popular, the Mustang is a classic, and the Lincoln not only is a true luxury line, but it has very strong fleet sales and a historic connection to the limousine industry.

They need to reestablish a midsize sedan presence (where they used to be quite strong), establish some credibility in their economy offerings, compete well in the crossover segment (which they actually show some signs of doing) and jettison the whole Mercury line.

16

The US and Korea just signed a trade bill-and in echange for lowered the Korean tariff on rice, the Koreans get to ship all the cars they want to the USA. this truly will mean the death of FORD and GM-watch for re-badged chevrolets built in korea. the USA has become the dumping ground for the auto mfgs. of the world-but Congress doesn’t care-those free golf weekends paid for by Toyota and Hyundai really are appreciated! What amazes me; as we cede our industry of China, japan, Korea, they still take dollars! at some point, the Chinese will realize they have a pile of worthless paper-then watch out!

17

AFAIK, Mazda isn’t failing. True, their sales volume was down one percent in the last quarter, but that was because of Japanese demand. US volume was actually up four percent y-t-y.

18

Sorry if you think that way.
You can say I’m a little biased because I have a 300C, but it’s hardly a generic car. I think Chrysler’s vehicles are more unique than most automakers on the planet. Although, I have to admit I don’t care for the hood strake(?) design.

Do you really think the 300 is generic? Hmm… :dubious:

To each his own.

19

I was surprised to learn that Chrysler isn’t doing at least passably well. Of all the American brands, they have (IMO) the most interesting and varied models to choose from–coupes, convertibles, sedans, medium and large SUVs, and so on–something for everyone basically. But I’m judging only by what I see on the road; I’ve never owned or even driven a Chrysler.

20

To be clear, I don’t consider myself any kind of macro expert on the auto industry. I’m just giving my more or less {un}informed opinions and encouraging discussion.

It may be that I’m totally missing some great things about these companies and their brands.