• GM pushes faster plan to cut U.S. dealers: sources
  • GM pushes faster plan to cut U.S. dealers: sources
  • GM pushes faster plan to cut U.S. dealers: sources
  • GM pushes faster plan to cut U.S. dealers: sources

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  1. #1
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    :G GM pushes faster plan to cut U.S. dealers: sources

    GM pushes faster plan to cut U.S. dealers: sources

    Thu Apr 16, 2009 12:11am ED
    By Kevin Krolicki, David Bailey and Soyoung Kim

    DETROIT (Reuters) - General Motors Corp has told U.S. dealers it is accelerating its timetable for closing about 1,700 dealerships as it rushes to meet a June 1 deadline to restructure under U.S. government oversight, people with knowledge of the discussions said.

    In a series of meetings with key dealers including representatives of the National Automobile Dealers Association, GM executives also said about 200 dealerships had closed in the first quarter, according to people briefed on those talks.

    The sources asked not to be named because of the sensitive nature of GM's discussions with its cash-strapped dealers.

    Dealer representatives met on Tuesday in Detroit with GM Chief Executive Fritz Henderson and on Wednesday with GM sales chief Mark LaNeve, the sources said.

    A GM spokesman confirmed that the meetings had taken place but declined to comment on the closed-door discussions.

    Separately, Chrysler LLC executives, including sales chief Jim Press, held a conference call for dealers on Tuesday and met with key dealers on Wednesday, sources said.

    "The message was that all the balls are in the air, but they were committed to trying to reach a deal with Fiat," one Chrysler dealer who participated in the briefing said.

    Chrysler could not be immediately reached for comment.

    Both embattled automakers were meeting with dealers, with just weeks remaining to hammer out new concessionary deals with creditors and their major union under the threat of a government-sponsored bankruptcy.

    Chrysler has until the end of April to conclude a deal with Italy's Fiat SpA and win other needed concessions. GM has been given until June 1 to attempt its own out-of-court restructuring by U.S. officials.

    GM dealers who met with executives in Detroit this week were told that the automaker has several interested potential investors in its troubled Hummer SUV brand and expected to have an offer that would keep the brand running, one of the people familiar with the discussions said.

    GM's Henderson had said in late March that a decision on Hummer could come within weeks. Henderson took over as CEO when the government ousted Rick Wagoner amid criticism he had moved too slowly on the automaker's restructuring.

    HOT BUTTON ISSUE

    The issue of how many U.S. dealerships GM can support has been one of the hot-button issues for U.S. officials as they drive GM toward a stepped-up restructuring that many observers have now concluded will include a bankruptcy filing.

    GM ended 2008 with over 6,200 dealers in the United States and had presented a plan to the U.S. autos task force, run by former investment banker Steve Rattner, that would have cut that by about 25 percent to near 4,100 over the next five years as dealers shut down or merged.

    The task force rejected GM's dealer consolidation plan as one element of a turnaround that officials said did not go far enough or move fast enough.

    Since delivering that verdict on GM's plan late last month, the autos task force has told the automaker to go to work on an expedited dealer consolidation plan that would not rely on attrition alone, people briefed on those discussions said.

    As a result, GM officials have told dealers that they would identify underperforming locations and could move to terminate franchise agreements by June 1, a dealer who had received such a notice said on Wednesday.

    GM is counting on the spin-off or closure of its Saturn and Hummer brands -- combined with dealership closures because of declining business conditions and tight credit -- to deliver about half of its targeted cuts, according to the dealer.

    For the remainder, GM is preparing to terminate franchise agreements without the kind of payouts that it made when it shut down its Oldsmobile division and closed some 2,800 dealerships. That process cost GM more than $1 billion.

    Representatives of U.S. auto dealers, including the NADA trade group, have met at least four times with members of the U.S. autos task force since last month, including discussions of the financing pressure on both dealers and car shoppers, the sources said.

    (Reporting by Kevin Krolicki, David Bailey and Soyoung Kim; Additional reporting by Poornima Gupta; Editing by Richard Chang)
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    Site Administrator Rob's Avatar
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    Default GM Said to Study Dropping Pontiac, GMC in Savings Bid (Update1)

    GM Said to Study Dropping Pontiac, GMC in Savings Bid (Update1)

    By Jeff Green and Serena Saitto

    April 16 (Bloomberg)
    -- General Motors Corp., facing a June 1 U.S.-backed bankruptcy, may drop its Pontiac and GMC brands as part of broader cost-cutting moves, people familiar with the discussions said.

    GM’s Chevrolet, Cadillac and Buick brands are likely safe, said the people, who asked not to be named because decisions aren’t final. GMC and Pontiac are being studied as part of talks with an Obama administration task force assessing whether GM can be restructured without bankruptcy, the people said.

    Shedding Pontiac or GMC would mean a deeper bite into GM’s portfolio of eight U.S. brands than in its Feb. 17 blueprint for keeping $13.4 billion in federal loans. GM said then it would keep Chevrolet, Cadillac, Buick and GMC and retain Pontiac as a niche line while selling or closing Hummer, Saab and Saturn.

    GMC has a better chance of surviving than Pontiac, one of the people said. GMC sells only light trucks such as the Sierra pickup, while Pontiac’s offerings include the descendants of the brand’s high-performance models from the 1960s and 1970s.

    Among the decisions yet to be reached is what would happen to Pontiac or GMC should Detroit-based GM opt not to keep them, the people said.

    President Barack Obama set the June time limit for GM to revamp its survival plan to find more savings from unions, creditors and operations. Chrysler LLC, which borrowed $4 billion, was given a May 1 deadline to reorganize and merge with Italy’s Fiat SpA.

    ‘Aggressively Restructure’

    “We are continuing to assess our global operations, brand portfolio and nameplates, and will take further actions to more aggressively restructure our business,” Renee Rashid-Merem, a GM spokeswoman, said yesterday. “It’s premature to comment on what those actions could entail.”

    A Treasury spokeswoman, Jenni Engebretsen, had no comment.

    The reassessment of GM’s earlier decision to keep Pontiac and the future of all of the brands are among topics in meetings this week between executives of the biggest U.S. automaker and a Treasury team led by adviser Harry J. Wilson, the people said.

    The number of brands is also part of a discussion on how to speed up the winnowing of GM’s 6,200 dealer locations to 4,100 sites, said one person.

    Franchise agreements with some underperforming dealers may be ended by June 1 to hasten the shrinkage, Reuters reported late yesterday, quoting an unnamed dealer who received a notice.

    GM gained 5 cents, or 2.5 percent, to $1.94 at 9:38 a.m. in New York Stock Exchange composite trading. The shares have tumbled 90 percent in the past year amid fears of a collapse by the company, which has posted $82 billion in losses since 2004.

    Bankruptcy Preparation

    GM has stepped up planning for both a new business model and a potential bankruptcy since March 29, when Obama asked Rick Wagoner to leave as chief executive officer and said he would back a “quick-rinse” bankruptcy to cut debt and other costs.

    New CEO Fritz Henderson has said that while GM would prefer restructuring without a bankruptcy, Obama’s new demand makes a filing more probable. A GM bankruptcy probably would spur creation of a new company that keeps only the best brands and other assets, people familiar with those plans have said.

    To avoid bankruptcy, Henderson needs agreements from unions and debt holders for savings beyond GM’s February proposal for slashing $47 billion in unsecured claims by 59 percent. He said last month that GM also may need to eliminate more jobs than the 47,000 set for this year and shut more factories than planned.

    The review of Pontiac and GMC clouds the future for brands dating to the earliest years of GM, which turned 100 in September.

    Coupes, Pickups

    The Pontiac division was created by GM in 1926 and posted peak U.S. sales of 896,980 in 1978, according to trade publication Automotive News. GM sold a record 9.55 million vehicles worldwide that year, which came at the end of an era when Pontiac won notice for sports coupes such as the Firebird.

    Pontiac’s domestic deliveries fell 25 percent to 267,348 in 2008.

    GMC’s truck-building history dates to 1902, when brothers Max and Morris Grabowsky sold their first commercial model to a Detroit dry cleaner, according to GM’s Web site. Their Rapid Motor Vehicle Co. was absorbed by GM in 1912, along with two other Detroit-based commercial-vehicle makers, GM said.

    By 1915, GMC produced the first light-duty vehicle with the basic configuration of a modern pickup, according to the automaker. GMC’s U.S. sales fell 26 percent last year to 376,996, making it GM’s second-largest brand after Chevrolet.

    Chevrolet and Cadillac are GM’s strongest brands and Buick is popular in China, said the people familiar with the automaker’s discussions.

    GM said yesterday it has “multiple bidders” for its Saturn dealer network, including a group led by Oklahoma City private-equity firm Black Oak Partners LLC. Potential buyers for Hummer also have signaled their interest, Henderson said in March.

    Saab, based in Trollhaettan, Sweden, filed for protection from creditors on Feb. 20 after GM said it will cut ties by the end of the year.

    To contact the reporters on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net
    Last Updated: April 16, 2009 09:44 EDT
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    thanks for the email notification to come check this thread out..

    Lots of eye opening information..

    Much appreciated.

    Have a good one..

    JB

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    Yes thanks!

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    Good info--Small town dealers are going away just like small farmers years ago--for that mater so are small towns--pack your bags and head to the city nearest you--meet all your friends at your neighbor hood applebees and enjoy a six pack--life has changed--enjoy

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    It would be interesting to see the names of the dealerships to be closed. We've had three in our area close already. I'd like to know if more would be closing. In my opinion, I'd get rid of Buick before Pontiac. But that's just what I'd prefer.

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    I would have maybe liked to seen Buick merge somehow with cadillac. Pontiac to stay and only focus on being a sports car division some how. But I guess pontiac always was a clone to chevy?

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    Seeing 1700 businesses being eliminated is scary enough, but when the "task force" says GM isn't "moving fast enough" really makes me nervous. When the Gov't does things in haste, they ALWAYS screw it up. In fact, the Gov't doesn't do anything very well (except create misery.)

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    Default Applebee's ?

    Quote Originally Posted by bobby777 View Post
    Good info--Small town dealers are going away just like small farmers years ago--for that mater so are small towns--pack your bags and head to the city nearest you--meet all your friends at your neighbor hood applebees and enjoy a six pack--life has changed--enjoy
    Omg, No!

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    Default Excellent read

    Too many dealers w cr*py customer service for starters. Then, GM puts it's cracker jack Holden line into Pontiac instead of Chevy. Go figure.

  11. #11
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    Default GM to keep GMC, Pontiac; no plans to quicken dealer consolidation

    GM to keep GMC, Pontiac; no plans to quicken dealer consolidation

    Jamie LaReau
    Automotive News
    April 16, 2009 - 3:26 pm ET
    UPDATED: 4/16/09 4:48 p.m. ET

    DETROIT -- A senior General Motors executive today denied reports that President Barack Obama's automotive task force has pressured the automaker to dump GMC and Pontiac.

    Company sales chief Mark LaNeve also denied rumors that GM plans to terminate the franchise agreements of poorly performing dealers before June 1 to accelerate its dealership consolidation campaign.

    "The strategy we laid out for you [in February] is still the strategy," LaNeve, GM's vice president of vehicle sales, service and marketing, said today in an interview with Automotive News.

    "Are we working it, tweaking it, examining every aspect of it? Yes, but nothing has changed with our strategy," he said. Reports that "GMC is going away are just unfounded, unsubstantiated and untrue," LaNeve said.

    In a Feb. 17 report to the U.S. Treasury Department, GM said it planned to go to market with four core brands: Chevrolet, Cadillac, Buick and GMC. Pontiac would remain as a much smaller brand. GM is trying to sell Hummer, Saab and Saturn.

    And that is still the plan, LaNeve said. "They're not pressuring us to give up on anything," he said. "Buick and GMC are very profitable brands, and we have plans to make them even more profitable."

    Targeting metro markets

    LaNeve confirmed that GM will target metro markets to consolidate dealerships, but the company does not have a June 1 timetable to do so.

    As part of its consolidation effort, GM will consider such criteria as operator's effectiveness, location and working capital when it targets those stores for closure.

    Meanwhile, GM's new CEO Fritz Henderson has scheduled a conference call with journalists tomorrow at 10:15 a.m. to update the company's restructuring plans.

    "We anticipate that this will be the first of a series of updates designed to provide perspective on GM's situation, decisions and actions," according to a statement released by GM.

    Philip Nussel contributed to this report
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    As if I'd believe the spin monsters at GM. The entire dealer network is running scared. They should be !

  13. #13
    GM pushes faster plan to cut U.S. dealers: sources vett boy's Avatar
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    Quote Originally Posted by MikeyTX View Post
    As if I'd believe the spin monsters at GM. The entire dealer network is running scared. They should be !
    You are correct .Now that it's Obama Motors who knows .

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    Quote Originally Posted by entropy454 View Post
    ... But I guess pontiac always was a clone to chevy?
    For the most part.

    It's all about the business model, products, and brand... balanced against costs.

    IMHO, Pontiac could survive - and thrive - if it could offer something special. Special... I wonder if that was why 1978 was a great year for Ponchos. They were selling Trans Ams hand over fist in those days. There was a screaming chicken on every street it seemed.

    Scion has done exactly that for Toyota. Toyota has Lexus, Toyota, and Scion as part of their line up. With Caddys competing for luxury (Lexus), Chevy for value (Scion + some of the other two), Pontiac could balance out as an intermediate level between Chevy and Cadillac.

    Wait. That is what Pontiac was supposed to do. Actually- it is a great business model if GM can keep costs down.

    I still think it comes back to the cost. If GM could find a way to drop their costs below their competitors- they would be UNSTOPPABLE.

    Creating brands that deliver amazing quality at low cost would reengage the public. Labor and healthcare costs have turned the big three into healthcare plans that so happen to make cars.

    I'd vote first for dumping the unions as unnecessary operating cost that has outlived its usefulness.
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