The BIG 3 Bailout...

[Falc'man]

Ford Might Be the Winner if the Auto Bailout Fails

"Ford CEO Alan Mulally could be forgiven if he thought, The heck with this — don't give us any money, as he and fellow auto bosses Rick Wagoner and Robert Nardelli took a beating from unfriendly Senators at a hearing in Washington on Tuesday.



The reason is that Ford alone among the Detroit Three has enough dry powder to get through what will be a very difficult 2009, when car sales aren't expected to top the 11.8 million units sold this year. (In 2007, 16 million cars and light trucks were sold.) General Motor's Wagoner and Chrysler's Nardelli made it pretty clear that without a government bridge loan — $12 billion in GM's case, $7 or $8 billion for Chrysler — there isn't going to be a 2010 for these companies, at least not without a pit stop in bankruptcy. Chrysler ended its third quarter with $6.1 billion in cash — but it's burning through $1 billion a month. Without federal money, Nardelli told the Senate Committee on Banking, Housing and Urban Affairs, "we become dangerously close to minimum liquidity level by the end of the year." (See pictures of the global financial crisis.)

Ford, relatively speaking, is loaded. The company still had $18.9 billion in cash at the end of the third quarter despite having burned through $7.7 billion in that period — half of which was tied to halting the production of F Series pickups because of slow sales. The company recently introduced a new version. Ford Credit, the company's finance arm, remains profitable because, unlike GM's 49%-owned bank, GMAC, it doesn't have a subprime mortgage business. On top of that, Ford can still draw on credit lines totaling $10.1 billion. "We are doing everything we can to create a relevant company for the long term," Mulally told the committee.

That includes balancing out Ford's U.S. product line by importing small, fuel-efficient models that have been doing well in Europe, where high fuel costs have been a constant for decades. European auto sales have also declined this year, but Ford has picked up market share. "We are shifting from an emphasis on large trucks and SUVs to a more balanced portfolio that also emphasizes smaller and more fuel-efficient vehicles here in the U.S.," Mulally said. "By the end of 2010, two-thirds of our spending here will be on cars and crossovers — up from one-half today." So if Congress doesn't pass an auto bailout plan, Ford could actually prosper by not failing. (See the 50 worst cars of all time.)

Ford is by no means wishing doom on its fellow Detroiters. It shares most of the same big parts suppliers, so a disruption in the supply chain that a bankruptcy would invariably cause would hurt Ford too, and even halt production temporarily. But longer term, customers might flock to a U.S. company that isn't in bankruptcy and thus stands 100% behind its products — and is free to operate without court supervision.

The Republicans on the committee were highly unimpressed by the performance of the Detroit Three, openly questioning why the government shouldn't let them fail, if that was what was needed to bring costs down, and whether the proposed $25 billion in bridge loans wasn't simply a down payment. But several noted that Ford is at the head of the class. "My sense is that Ford has done a better job," said Senator Bob Corker, who added that "GM is spiraling downward and in serious trouble" and that Chrysler "barely has a heartbeat." He then called on Ron Gettelfinger, president of the United Auto Workers, to rate the companies. "I'd rank 'em Ford, Chrysler and General Motors," the union man responded. That won't get Mulally any more money, but at least he knows where he stands in the halls of Congress and the union."

http://www.time.com/time/business/ar...,00.html?imw=Y

[zetec]

Gives a slight sense of hope, at least more so than GM. As Ford fans, none of us want to see anything happen to GM or Chrysler, but to at least hear that Ford AND the public's view of Ford remains more positive, it gives us all some hope.

[Swordsman88]

This report confirms what many here in australia (some of which aren't as clued up to what is going on the US) have suspected - Ford isn't nearly as stuffed as the media makes out. Sure no-one in the car business is making much cash (hell even toyota is starting to bleed) but it is clear that with Ford of Europe producing great product, Ford Aus surviving on meagre sales/budgets and mullaly and kuzack creating a 'one ford' things aint too bad. It was always Ford US that was bringing the ship down, but by investing in new product (global platforms), bringing forward the euro based small cars and making the tough decisions RE workers/plants they are starting to make some headway. The recent drop in fuel prices might help keep F series sales trickling along in the short term also.

Chrysler i think will amost certainly go under - even with government money it is headed for bankruptcy. GM might survive with government aid, but god knows how many jobs they will cut and projects canned. Ford might just make it, and with government aid almost certainly.

I think it was the many profitable business units Ford had overseas that helped too. Selling off aston, land rover, jag and part of mazda gave them the cash to invest in new product. Funny thing is ford saved pretty much all those manufacturers form their own dramas years ago, invested heavilly and now they sold them to save themselves. Oh the irony!!!!

[Falc'man]

Banks ask for 700 billion...
"Yeah, no worries mate, here you go"


Car makers ask for 25 billion...
"What? Why!?!?! No way!! You're incompetent, and you deserve to go broke"



Something doesn't look right in that picture.

[Paxton]

Originally Posted by Falc'man

Banks ask for 700 billion...
"Yeah, no worries mate, here you go"


Car makers ask for 25 billion...
"What? Why!?!?! No way!! You're incompetent, and you deserve to go broke"



Something doesn't look right in that picture.

Nope. Not when there are more employees in Cars in the USA (both indirectly and directly) then there is in banks.

I'm surprised that it has taken this long for the naysayers to accept Mullally. He is the best thing that has ever happened to Ford. His early financing is what will fix Ford. Europe's products will help, but Ford won't run out of cash, as they already have products ready made. Just add water (US Spec Bumpers etc).

[Gobes32]

I placed a lot of praise on Mulally at the start of the year when it seemed Ford US was in a lot of trouble. When he was announced CEO of Ford a few years ago, I researched him on the net to see who he was and what he was all about. The impression i received was that he is a very intelligent man who saved Boeing from going under when no one else gave them hope. I really do think he is going to pull Ford out of this slump and re structure the company to become profitable now, and into the future,

[Bossxr8]

Originally Posted by Falc'man

Ford Might Be the Winner if the Auto Bailout Fails

"Ford CEO Alan Mulally could be forgiven if he thought, The heck with this — don't give us any money, as he and fellow auto bosses Rick Wagoner and Robert Nardelli took a beating from unfriendly Senators at a hearing in Washington on Tuesday.



The reason is that Ford alone among the Detroit Three has enough dry powder to get through what will be a very difficult 2009, when car sales aren't expected to top the 11.8 million units sold this year. (In 2007, 16 million cars and light trucks were sold.) General Motor's Wagoner and Chrysler's Nardelli made it pretty clear that without a government bridge loan — $12 billion in GM's case, $7 or $8 billion for Chrysler — there isn't going to be a 2010 for these companies, at least not without a pit stop in bankruptcy. Chrysler ended its third quarter with $6.1 billion in cash — but it's burning through $1 billion a month. Without federal money, Nardelli told the Senate Committee on Banking, Housing and Urban Affairs, "we become dangerously close to minimum liquidity level by the end of the year." (See pictures of the global financial crisis.)

Ford, relatively speaking, is loaded. The company still had $18.9 billion in cash at the end of the third quarter despite having burned through $7.7 billion in that period — half of which was tied to halting the production of F Series pickups because of slow sales. The company recently introduced a new version. Ford Credit, the company's finance arm, remains profitable because, unlike GM's 49%-owned bank, GMAC, it doesn't have a subprime mortgage business. On top of that, Ford can still draw on credit lines totaling $10.1 billion. "We are doing everything we can to create a relevant company for the long term," Mulally told the committee.

That includes balancing out Ford's U.S. product line by importing small, fuel-efficient models that have been doing well in Europe, where high fuel costs have been a constant for decades. European auto sales have also declined this year, but Ford has picked up market share. "We are shifting from an emphasis on large trucks and SUVs to a more balanced portfolio that also emphasizes smaller and more fuel-efficient vehicles here in the U.S.," Mulally said. "By the end of 2010, two-thirds of our spending here will be on cars and crossovers — up from one-half today." So if Congress doesn't pass an auto bailout plan, Ford could actually prosper by not failing. (See the 50 worst cars of all time.)

Ford is by no means wishing doom on its fellow Detroiters. It shares most of the same big parts suppliers, so a disruption in the supply chain that a bankruptcy would invariably cause would hurt Ford too, and even halt production temporarily. But longer term, customers might flock to a U.S. company that isn't in bankruptcy and thus stands 100% behind its products — and is free to operate without court supervision.

The Republicans on the committee were highly unimpressed by the performance of the Detroit Three, openly questioning why the government shouldn't let them fail, if that was what was needed to bring costs down, and whether the proposed $25 billion in bridge loans wasn't simply a down payment. But several noted that Ford is at the head of the class. "My sense is that Ford has done a better job," said Senator Bob Corker, who added that "GM is spiraling downward and in serious trouble" and that Chrysler "barely has a heartbeat." He then called on Ron Gettelfinger, president of the United Auto Workers, to rate the companies. "I'd rank 'em Ford, Chrysler and General Motors," the union man responded. That won't get Mulally any more money, but at least he knows where he stands in the halls of Congress and the union."

http://www.time.com/time/business/ar...,00.html?imw=Y

The problem for Ford is that if Chrysler and GM go bankrupt, is that they will have a fire sale on all their stock just to get whatever they can for them, and hundreds of thousands of cheap cars being thrown away for probably cost price is going to mean a hell of a lot less business for Ford, because why pay retail on a certain type of car when you could buy one from another company going bankrupt who will flog one off to you for a steal.

[Steve]

Originally Posted by Bossxr8

The problem for Ford is that if Chrysler and GM go bankrupt, is that they will have a fire sale on all their stock just to get whatever they can for them, and hundreds of thousands of cheap cars being thrown away for probably cost price is going to mean a hell of a lot less business for Ford, because why pay retail on a certain type of car when you could buy one from another company going bankrupt who will flog one off to you for a steal.

True but how long will their stock at hand last? Surely they won't keep producing cars at a loss? As long as Ford can survive that period, they should be ok. You'd think, anyway.

[slo_crossflow]

Chrysler are the fastest moving automaker in the world, if they are in real trouble everyone is doomed!.

[Fordman1]

Originally Posted by slo_crossflow

Chrysler are the fastest moving automaker in the world, if they are in real trouble everyone is doomed!.

Fastest moving ?

What.....fastest moving backwards ??

They are a complete basketcase, and are 'gone' if they don't get some money from the US Congress SOON as are GM.

[Gobes32]

I will go out on a limb and suggest that for the auto worlds best interest, GM need to fold. They cannot sustain the costs associated with running their everyday business. They have not tried to sell Saab, Holden or any other car manufacturers that come under their umbrella. Where is their sense of survival? Mulally was heavily criticized for selling Jag, Aston and now Mazda, BUT, Ford are the only manufacturer predicted to survive next year. Other companies will purchase Chevrolet, Hummer etc but GM as a large conglomerate cannot survive.

[Bossxr8]

Originally Posted by slo_crossflow

Chrysler are the fastest moving automaker in the world, if they are in real trouble everyone is doomed!.

What? Chrysler has been a basket case a lot of times in the past few decades, and has gone from owner to owner.

[Bossxr8]

Originally Posted by Steve

True but how long will their stock at hand last? Surely they won't keep producing cars at a loss? As long as Ford can survive that period, they should be ok. You'd think, anyway.

There is another post in the Pub somewhere that lists the days of stock GM have on some models, and some extend out to nearly a year. At a guess it may take 6 months or more to clear the unsold stock, thats if they can find customers as sales are down massively in the US due to the depression. Thats a long time to wether the strorm for Ford.

[Gobes32]

Chrysler have cash in the bank. Big deal. Does not mean nothing if you cannot sell cars. They are predicted to run out of cash next year too. Kind of embarrassing for Mulally to go begging for money when we are nowhere near the basket case the other two are.

[Bossxr8]

Originally Posted by Gobes32

Chrysler have cash in the bank. Big deal. Does not mean nothing if you cannot sell cars. They are predicted to run out of cash next year too. Kind of embarrassing for Mulally to go begging for money when we are nowhere near the basket case the other two are.

If in rome....

[Gobes32]

Originally Posted by Bossxr8

If in rome....

ha ha ha, I get it.

[Fordman1]

Originally Posted by Gobes32

Chrysler have cash in the bank. Big deal. Does not mean nothing if you cannot sell cars. They are predicted to run out of cash next year too. Kind of embarrassing for Mulally to go begging for money when we are nowhere near the basket case the other two are.

Chrysler and GM are Neck & neck heading for the 'finished' line.

Chrysler may have a few 'pennies' in the bank (so do GM), but not enough to stay in business beyond the next few months.

[Gobes32]

Maybe both companies need to crash and burn, there are too many manufacturers in the world anyway.

[Falc'man]

Originally Posted by Swordsman88

This report confirms what many here in australia (some of which aren't as clued up to what is going on the US) have suspected - Ford isn't nearly as stuffed as the media makes out. Sure no-one in the car business is making much cash (hell even toyota is starting to bleed) but it is clear that with Ford of Europe producing great product, Ford Aus surviving on meagre sales/budgets and mullaly and kuzack creating a 'one ford' things aint too bad. It was always Ford US that was bringing the ship down, but by investing in new product (global platforms), bringing forward the euro based small cars and making the tough decisions RE workers/plants they are starting to make some headway. The recent drop in fuel prices might help keep F series sales trickling along in the short term also.

Chrysler i think will amost certainly go under - even with government money it is headed for bankruptcy. GM might survive with government aid, but god knows how many jobs they will cut and projects canned. Ford might just make it, and with government aid almost certainly.

I think it was the many profitable business units Ford had overseas that helped too. Selling off aston, land rover, jag and part of mazda gave them the cash to invest in new product. Funny thing is ford saved pretty much all those manufacturers form their own dramas years ago, invested heavilly and now they sold them to save themselves. Oh the irony!!!!

Well said. I must admit, to me it didn't seem like a good decision to sell them all off. I guess that's why Mulally is the CEO of Fomoco, and I'm not. But the sense of security he gave Ford was profound, immediately questioning the "normal" way of their way of doing business. Let's hope he doesn't forget how enjoyable his drive in the G6ET was.

[EgoFG]

Originally Posted by Gobes32

Chrysler have cash in the bank. Big deal. Does not mean nothing if you cannot sell cars. They are predicted to run out of cash next year too. Kind of embarrassing for Mulally to go begging for money when we are nowhere near the basket case the other two are.

Actually a prudent move - there may be free money up for grabs - this would keep Ford ahead financially of the competition.

[FPV8U]

Certainly looks like Alan Mulally is turning ford around.. who would have thought GM would be on the verge of collapse.. another empire falls?

[Wally]

Don't get too far ahead of yourselves, Ford is by no means in a good position. You may find they go into chapter 11 first.

From today's Australian

............Financial stability is also threatened by the weakness of the US car makers, with General Motors conceding that it may run out of working capital before the end of the year while both it and Ford and Chrysler are considering their options under the US bankruptcy regime, Chapter 11.

The General Motors finance company, GMAC, has total assets of around $US160 billion, while Ford Credit has assets of about $US155 billion.

The direct economic effect of failures in the US motor industry would be huge, but fallout from their finance companies going into administration would ricochet around the banking world.............

The Times today:

Barack Obama will unveil his economic team formally today in response to mounting criticism that he can no longer wait until he takes office to confront the rapidly worsening financial crisis..............

Mr Axelrod also said that the “big three” car companies of Ford, Chrysler and General Motors, would get no bailout from Mr Obama – they asked for a $25 billion rescue package last week – unless they came up with a plan to reform the way they do business, and the cars they build..............

If GM go it will probably be the death of Ford.

[troppo]

I guess the author of that article in the Australian missed (or more likely ignored or did not understand) this key point...

Ford Credit, the company's finance arm, remains profitable because, unlike GM's 49%-owned bank, GMAC, it doesn't have a subprime mortgage business. On top of that, Ford can still draw on credit lines totaling $10.1 billion.

which more than offsets the $5 billion less in assets, particularly if those assets involve subprime mortgage in the case of GMAC.

[guzzis3]

For what it's worth, which isn't much...

I watch and read the business news both here and in the US. I've got a fair portfolio so I like to keep up.

The issues in the US car industry have been flagged both by media and industry analysts for many years now. While it's not an industry I watch super closely I have had the impression time and again that Ford realised they had a problem earlier than the others, and genuinely tried to do something about it. They had a series of CEO's and some real restructuring. You may disagree with what they did, but at least it was clear they were trying..

Conversely GM, and Wagoner who has been CEO there longer than the current CEO of the other two, just sat on their hands. They just didn't seem to get it. Crysler for their part have been beaten from pillar to post by a series of buyouts and takeovers. No chance to formulate any sort of strategy.

It will be interesting to see how it pans out.

[Bossxr8]

Originally Posted by Wally

Don't get too far ahead of yourselves, Ford is by no means in a good position. You may find they go into chapter 11 first.

What are you basing this on, it has been widely reported that Ford are in a much better position than the other 2. They have even said themselves they are positioned to survive the economic crisis. They have never even mentioned Chapter 11, GM have on numerous occasions.

Or is this just wishful thinking on your part because thats what you would rather see. Ford bashing seems to be a popular past time of yours.

[Fordman1]

Originally Posted by Bossxr8

Or is this just wishful thinking on your part because thats what you would rather see. Ford bashing seems to be a popular past time of yours.

I think you're right.

Mullaly has said openly that Ford don't need the money now, their biggest concern is the "two basket cases" that will bankrupt the supplier base for Ford.

Mullaly only wants the money to be available if the economic situation in the US worsens - he believes that the cash (and secured loans) Ford have in conjunction with their business plan will otherwise see them through.

It would be ironic if all the great work done by Mullaly and his team was undone by a bankrupt GM and Chrysler wouldn't it ?

[robjh80]

Interesting reading today's news

"Ford's US light vehicle sales tumbled 31 per cent in November, while Toyota's plunged 34 per cent and Honda's dropped 32 per cent."

"Toward the end of the month, Ford also announced offers of employee pricing, zero-per cent financing and cash incentives on a variety of its vehicles in a move to offset one of the worst sales declines in the industry's history."

"In midday trading, Ford shares rose 25 cents, or 9.8 per cent, to $2.80, while Toyota's US shares rose $3.76, or 6.4 per cent, to $62.32."

Full Story here ....

http://www.brisbanetimes.com.au/news...980052441.html

[burnz]

Originally Posted by Barraxr8

I think you're right.

Mullaly has said openly that Ford don't need the money now, their biggest concern is the "two basket cases" that will bankrupt the supplier base for Ford.

Mullaly only wants the money to be available if the economic situation in the US worsens - he believes that the cash (and secured loans) Ford have in conjunction with their business plan will otherwise see them through.

It would be ironic if all the great work done by Mullaly and his team was undone by a bankrupt GM and Chrysler wouldn't it ?

yep if GM and Chrysler go belly up, ford's minamal output will not keep the small supplier in buisness.

[Falc'man]

Is Ford the Best and the Brightest? Blue Oval Asks for $9-Billion Credit Line




DETROIT - First, the groveling. "As a company and as an industry, we readily admit that we have made our share of mistakes and miscalculations in the past. We would ask Congress to recognize, however, that Ford did not wait until the current crisis to begin our restructuring efforts, and that much of what we describe below are actions we have taken and decisions we have made about the future that have already put us on a path to long-term viability."


Thus begins the Ford Motor Company Business Plan, delivered to the Senate Banking Committee Tuesday. In it, Ford asks for a "stand-by" line of credit of up to $9 billion at government borrowing rates -- in other words, better than what it can get on the open market -- for a 10-year term, with Troubled Asset Relief Program (TARP) conditions, "to support our restructuring, including the acceleration of products that consumers want and value."

Such products include a "van-type" full battery electric vehicle (BEV) for commercial fleet use in calendar 2010, followed by a BEV sedan in calendar 2011, and plans to spend $14 billion in the U.S. on advanced technologies to improve fuel economy in the next seven years (spending new Corporate Average Fuel Economy standards would have required, anyway). The BEV van obviously will be based on the Transit, while the sedan could be a Fiesta or a new Focus.

Ford says it will break even, or be profitable, pre-tax, by calendar 2011, based on current business assumptions. And, it will sell its corporate aircraft to get there. General Motors just announced Tuesday morning that it would close its Air Transportation Service, known locally as GMATS, at Detroit's Metro Airport.

In its plan to the Senate Banking Committee, Ford touts restructuring to "One Ford" from four large, separate automotive companies around the globe. Its plans to sell about 1 million global Focuses worldwide beginning in 2010, and a total of 2 million vehicles based on the Focus' platform, plus its intentions to sell the B-car Fiesta everywhere including North America, will be a large contributor to its future profitability. Selling Aston Martin, Jaguar and Land Rover, and now maybe Volvo help.

So are Ford and its ex-Boeing exec, CEO Alan Mulally (who's driving to Washington in a Ford Escape Hybrid) smarter than GM, Wagoner, Chrysler, Nardelli, et. al.? The move that looked so foolish in December 2006 has put Ford in better position than its two crosstown rivals: raising $26.5-billion in liquidity, including $18.5 billion in senior secured debt and credit facilities, with virtually all of Ford's assets up as collateral. Another $5 billion is unsecured. Ford got these loans before the credit crisis hit, and before anybody knew how awful car sales would be in the second half of 2008.

It's asking the federal government to grant Ford Motor Credit Company bank status. And it expects to issue warrants and guarantee government loan payment before it issues any shareholder dividends. And Ford will limit executive compensation and "golden parachutes"... all things all the Detroit Three should have had in-pocket before last month's disastrous testimony before Senate and House committees.

Yeah, Ford appears a bit smarter than GM and Chrysler in what it has done so far. Here's hoping Rick Wagoner and Bob Nardelli grovel at least as much, and that they can convince Congress, this time, that much of the work it expects the D3 to do in order to change has already begun.

http://blogs.motortrend.com/6366593/...ine/index.html

[Falc'man]

$34 Billion for the Detroit Three; Options on Table For Saab, Pontiac, Saturn



DETROIT - Turns out that General Motors, Chrysler LLC and Ford Motor Company need $34 billion to get through the worst U.S. auto market in 50 years (measured by per capita sales). The base price is $19 billion, consisting of $12 billion for GM ($4 billion of which it needs right now to get through the next four weeks) and $7 billion for Chrysler. GM and Ford also have asked for credit lines -- just like you could get on your house two years ago! -- of $6 billion and $9 billion, respectively. Chrysler says it could fall below basic levels of liquidity by the first quarter of '09 and GM has -- what time is it? -- hours, maybe days.


They're selling their corporate jets. They're taking executive pay cuts. And if it looked like Rick Wagoner, Alan Mulally and Bob Nardelli didn't have a clue when they testified before Congress last month ... well, they didn't. Now they're asking for $9 billion more than the initial request, which apparently was an amount pulled out of thin air, based on the Energy Bill's $25 billion provision for green, fuel-efficient technology development.

Now all that's left is for Congress to say "yes!" The Three have a good shot. House Speaker Nancy Pelosi has indicated her support.

Chrysler's plan seems to rely on the downsizing it already has begun, including the move to sell Chryslers, Dodges and Jeeps through a single channel. Chrysler says it has eliminated more than 1.2 million units of capacity, reduced fixed costs by $2.4 billion and "separated" more than 32,000 "including 5,000 on the Wednesday before Thanksgiving." Maybe not the best way to highlight layoffs...

They're all talking up commitments to greener cars and trucks. GM says it will spend $2.9 billion between 2009 and '12 on alternative fuels and advanced propulsion technologies, expanding its Chevy Volt powertrain to other products, offering 15 hybrids. By 2012, more than half its fleet will be flex-fuel capable. As I reported in an earlier post, Ford says it'll spend $14 billion on such technologies in the next seven years. Chrysler says it's working to bring its ENVI electric and extended-range electric vehicles to market. Chrysler already sells more electrics than anyone in the form of the GEM glorified golf karts designed for planned and retirement communities.

Because GM needs the federal cash most, it has the most detailed and radical plan to present to Congress. It will conduct a "strategic review" of Saab, which means GM will try to sell it. While that seems unlikely in these cash-strapped times, GM insists that plans to sell Hummer are proceeding, and it thinks it can find a buyer for Saab, as well. Meanwhile, management will "explore alternatives for the Saturn brand," same thing GM said about Hummer earlier this year. That sounds like shutting down the brand to me. Saturn has just 400 dealers, fewer than any other full line. But they're some of GM's best, so it could become a channel for foreign models not otherwise sold here (see Toyota's Scion). Whatever happens, Saturn's future hasn't been thoroughly thought out, yet. In a conference call Tuesday night, GM brass admitted that they've only considered the more radical strategies as the U.S. market imploded.

This much is planned: GM will cut its nameplates in the U.S. from 48 this year to 40 by the 2012 model year. It has about 6,500 dealers now, and will cut that to 4,700 by '12.

And then there's Pontiac. It "will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel." Whatever happens to Saturn, GM's "core brands" in the U.S. will be Chevy, Buick, GMC and Cadillac. That's all.

Of course, making Pontiac "niche" could mean expansion of the Buick brand, which sells just three models in the U.S. now, and GMC, which will get more crossover utility vehicles. How will GMC be any different than Chevy truck? I'm not sure, but it looks like the Buick-Pontiac strategy fits in with what I've reported about a Buick-Opel design tie-up. It doesn't make sense for GM to make Buick more mainstream, and cheaper than Pontiac. One thing GM has to avoid is destruction of brand equity, built up over decades, just to make a cheap and expedient change.

So how does Buick's lineup expand without GM ending up with too many nameplates all over again? Buick in North America could closely reflect what Buick plans, and needs to sell in China. "Specialty" Pontiacs will include cars like the Solstice (though not necessarily the Solstice). Obviously, it's not thoroughly thought out, yet. On the face of it, Chevy-Buick-GMC-Cadillac does reduce the number of GM brands in North America to better reflect its 20-percent or so share of the market. Who knows? It might just let GM make it through another decade.

http://blogs.motortrend.com/6372643/...urn/index.html