Yesterday, Roger Penske backed out of the deal he had struck with General Motors to buy the Saturn brand, ultimately signaling the end of GM’s two-decades old import-fighting brand. The deal was clever: Penske would buy all 350 dealerships and the Saturn brand, and GM would continue to build the current Saturn lineup for the next year or so while Penske found another supplier (widely rumored to be Renault). However, the third supplier backed out, giving Penske no reason to go through with it. GM has little choice but to wind Saturn down.

At only 19-years-old, Saturn was one of the shortest-lived brands GM ever had. Yet it was also pivotal to the company’s current fortunes – or lack thereof – in myriad ways, from the promises made during its development to the billions of dollars poured into the brand that could very well have saved other divisions in the process. GM established Saturn to learn a new way of doing business. Instead, the business it already had was almost undone.
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When GM filed its history-making Chapter 11 bankruptcy back in June, a new plan was immediately announced that would eliminate four of the company’s eight brands, restructure with a ton of government assistance, and so on and so forth. At the time, I wrote that while the new GM was definitely a step in the right direction, the new company didn’t shed enough brands, and should have ditched GMC and Buick as well.

Not everyone agreed, and my friend and colleague Rich Truesdell at Automotive Traveler noted a conversation he had with AutoPacific’s Stephanie Brinley, who thinks the new GM is just the right size, with the right number of brands.

On the other hand, last week Advertising Age threw down on my side of the argument. According to consultant Maryann Keller, Susan Jacobs of Jacobs & Associates and AutoPacific president George Peterson, the article reaches the same basic conclusion that I did, that there are too many brands, even now, and that GM’s limited resources would be better spent on making Cadillac and Chevrolet great, rather than trying to keep GMC and Buick around for dubious reasons.

Peterson in particular points out GM’s marketing foibles, especially with regards to the Chevy Malibu and the Chevy Camaro. The Malibu hasn’t gotten much advertising love since its 2007 debut, and the Camaro has relied mostly on good press in buff books. The basic question is that if the Malibu is an anchor for the Chevy brand, why not advertise it? And with a traffic-driver like the Camaro on the floor, why not lift the whole brand with an aggressive ad campaign?

I guess it’s true: The more things change, the more they stay the same.

Advertising Age

Well, so much for that. Only days after announcing that the Pontiac G8 would return to the U.S. market as a Chevrolet Caprice, General Motors vice chairman Bob Lutz has announced that the rear-drive sport sedan is well and truly dead for the U.S. market after all. Sounds like the right hand gave the left one a smackdown, if you ask me.

Posting on GM’s Fast Lane blog, Lutz said that with his new “marketing hat” on, he couldn’t make the case for a high-level sedan for Chevrolet, considering that the company is in a cost-cutting and fuel-efficiency-enhancing mode.

In the meantime, if you’re a fan of the Pontiac G8 GXP, you’d better get one quickly. According to Jalopnik, Pontiac marketing chief Cheryl Catton has said that only 2000 of the sport sedans will be built, along with 2000 examples of the Pontiac Solstice Coupe GXP. If you like hot Pontiacs (and maybe want to gamble on a future classic), you’d better get one pronto.

Automotive News reports that General Motors is strong-arming dealers into signing a statement opposing congressional legislation that would reverse the company’s decision to close more than a thousand of its dealerships. AN quotes a letter Sen. Charles Grassley, R-Iowa sent to GM CEO Fritz Henderson as saying “It’s alarming to have GM corporate leaders force dealers — some who are losing everything they worked hard to build — to take an active stand against it.”

The bills would restore the eliminated dealerships of GM and Chrysler, forcing the companies to work through state courts rather than the U.S. Bankruptcy court to close the dealerships. Complaints have come in all across the country of GM district offices pressuring the surviving dealerships to sign the statement. It’s not really surprising that GM is playing hardball with its remaining dealers, and maybe they should back off a little.

To me, the bigger problem is that such legislation exists in the first place. It’s hard to see this as little more than a purely political move on par with Rush Limbaugh’s ludicrous call to boycott GM altogether. Partisanship in Congress and across the nation has reached such a fever pitch that opponents of the GM bailout would rather see the company fail — and have absolutely no prospect of recovering any of the bailout money, which is supposed to be repaid by 2015 — than have it succeed and have a manufacturing giant restored to at least some of its former glory. A strong manufacturing base is critical to the U.S. economy, and it has been slipping away for decades. Are short-term political goals more important than the long-term health of one of our major industries? At the very least, isn’t it worth it for the company to be successful enough to repay its debt to American taxpayers?

In all honesty, I’ve been on the fence about this whole bailout thing from the beginning, unsure if throwing billions of dollars at a company with such deeply ingrained problems was a good idea. However, what’s done is done, and it seems to me as though voices calling for the failure of the GM bailout are similar in tenor to those on the left who hoped the U.S. effort in Iraq would fail just because it would make Bush look bad. I’ll leave the hard-core political punditry to those on the left and right who have much more practice than I do. Instead, I’ll just see this legislation for what it is: Opposition for the sake of opposition, rather than an attempt to actually do any good.

A new General Motors was born yesterday, shedding debt, dealers, disastrous products and I’m sure a few other alliterative entities I can’t think of right now. The new company is leaner, greener, less burdened by debt and with an even labor playing field that should — in theory — allow the automaker to compete in the toughest market it has ever seen.

So after all this cutting and shedding and contracting, what’s left? Quite a bit, really. With four brands the company will have a product portfolio of 34 nameplates. That’s a lot, but no more than Toyota, depending on how you count it. New, better stuff is in the pipeline, and it’s a good bet that even the lowball GM products — such as the Chevy Cobalt — will be replaced within the next 18 to 24 months.

Still, there’s a lot for GM to do, and I’m not just talking about consolidating management structures or reshuffling the titles on various business cards (like retaining Bob Lutz as product czar). There’s still one more huge mountain GM has to climb, one that even this new and improved company may not be able to manage: convincing people my age to buy its cars.
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This just in: the Pontiac Vibe, a car that should have sold better than it did, will no longer be produced after August, 2009. In a statement just released, GM declared, “As part of its long-term viability plan and recent decision to phase out the Pontiac brand, General Motors has decided to discontinue production of the Pontiac Vibe.” This is a somewhat abrupt — but not wholly unexpected — turnaround, considering that other sources had indicated that the Vibe would last through the 2010 model year.

The Vibe was produced in Fremont, Calif. at the New United Motor Manufacturing Inc. plant, better known as NUMMI. This joint venture between GM and Toyota was established in the 1980s and has since then concentrated largely on producing rebadged Toyota Corollas and Matrixes (Matrices?) for the Chevrolet and Pontiac divisions, respectively. At the time, GM CEO Roger Smith had hoped to get a peek under the veil of what made Toyotas so darn good; he thought it was robots, but it turned out that Toyota was simply better at using ordinary people to put cars together. GM, having failed to learn the lesson it had hoped to, instead learned almost nothing from the NUMMI plant. Toyota, meanwhile, found a neat way to skirt “voluntary” import restrictions.

Anyhow, so much for the Vibe. If you want this nifty looking, practical and inexpensive five-door hatchback, you’d better get one quick.

After months of buildup, loans, headlines, anticipation and more speculation about the what-ifs than one could ever have predicted, General Motors, the 102-year-old preeminent U.S. automaker, once holder of more than half of all U.S. domestic marketshare, innovator of countless technologies, has filed for bankruptcy protection under Chapter 11.

It’s about time.

While bankruptcy talk has been in the mainstream media for the past several months, a colleague of mine once quipped that GM had been going bankrupt for the past 30 years. At the time, I was quite a bit younger, and thought she was just being a smartass. However, over the years I realized that she was absolutely correct.

GM posted its first loss for 59 years in 1980, after the dismal decade of the 70s tanked car sales and left the company with an uncompetitive lineup of cars. During the 80s, its market share plummeted from 45 percent to less than 35 percent thanks to lousy products like the Chevy Citation and its offspring, the Pontiac Fiero, craptacular minivans and tons of other woefully uncompetitive  products. At the same time, the company wasted billions launching Saturn, a wholly redundant car company that was in many ways an admission that GM’s existing five divisions were so hidebound in the way they did things that they were incapable of building a decent small car.

Of course, that’s all history. One can talk about lousy GM cars until the end of time; the Corvair, the Vega, the Fiero, the Aztek, and countless other flops. Tons of pundits are weighing in of course, and the New York Times has a great timeline of GM’s success, and failures, along with relevant articles.

However, despite all the talk of “Government Motors,” the death of capitalism, taxpayers on the hook and tons of other doomsday scenarios, I think GM’s bankruptcy is the best news to come out of the company in decades. The company will be smaller, leaner, have a new board of directors and the best of its current product lineup. Problem is, it doesn’t go far enough.

read more from "GM Finally Declares Bankruptcy; New GM Doesn’t Go Far Enough"

Automotive News is reporting that Chrysler will eliminate 789 of its dealerships by June 9 according to bankruptcy court filings. This represents 25 percent of Chrysler’s current dealerships, and thousands of jobs. Furthermore, Chrysler will not be buying back the vehicles, parts or tools, but will instead find dealerships that are remaining open to buy the inventory. The more than 4 million customers of these dealerships will be notified on June 9, when the stores close. While the rejected dealers won’t get new cars, they will still sell the cars they have until June 9, and any incentives and warranties will remain intact.

The impact on employment numbers is potentially big as well. AN quotes Steven Landry, Chrysler’s executive vice president of sales, as saying that the majority of the dealerships will continue on, either as used car stores or selling a competing product, and Chrysler co-president Jim Press says that many of the targeted dealerships are below the national average of 48 employees per dealership. However, if even 10 percent of the dealerships close outright, that’s potentially thousands of jobs lost.

Why these dealers? AN reports that 658 of the dealers — more than 80 percent — already sell more used vehicles than new ones. In addition, 345 of them are under the same roof as a competitive dealership that is stronger than the Chrysler one. Many of them don’t conform to Project Genesis, a consolidation process to put all three Chrysler brands (Chrysler, Dodge and Jeep) under one roof. Landry says that many of them sell fewer than 100 new vehicles a year.

Is your local dealership affected? If you can’t wait for the June 9 letter, the full list is below in PDF format.

List of closing Chrysler dealerships (PDF)

Among the many things announced today concerning Chrysler’s future is the news that CEO Bob Nardelli will retire as soon as the bankruptcy is over. In a statement, Nardelli said “Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat,” continuing to say that “I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance.”

Nardelli has been captain of this floundering ship since August of 2007, when Cerberus Captial Management took over 80 percent of Chrysler from Daimler, and the mess he inherited surely makes him a empathetic favorite for the Obama administration. Still, he’s been successful in that the company has managed to stay afloat, and in the Automotive News article, he is being praised for steering the company toward its current bankruptcy filing and alliance with Fiat. A backhanded compliment, maybe, but hey, at least there will still be a Chrysler.

Was Nardelli a good CEO? A bad one? Somewhere in the middle? Sound off in the comments!