Saving the US Auto Industry

[tw]

From Bloomberg News of 27 Nov 2008

GM Said to Study Shedding Saturn, Saab, Pontiac to Win U.S. Aid

General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer, people familiar with the matter said.

Selling or dropping brands would save money and reduce overlap as the biggest U.S. automaker struggles to avoid running out of operating cash by year’s end, said the people, who didn’t want to be identified because no decision has been made. GM’s other U.S. brands are Chevrolet, GMC, Buick and Cadillac.

A GM that wants to survive should be terminating half its SUVs and either the Corvette (that does not earn a profit) or a rediculous new 400 Hp Camaro. Also eliminate most V-8 powered products. Benchmarks for what a responsible Rick Wagoner will declare next week if he has any balls and any interest in saving GM.

I seriously doubt Wagoner will do even half this. It would require him to make hard decisions. He has a long history of simply throwing money at problems.

U.S. operations should be restructured to a maximum of four brands with a 17 percent to 18 percent U.S. market share from the current 8 brands and 22 percent market share, a Deutsche Bank AG analyst wrote in a report yesterday.