No Easy Resolution For GM Brand Restructuring

Just weeks from now, General Motors will have to present its recovery plan to the U.S. government as part of keeping its side of the deal when the feds went ahead and loaned the automaker bailout money in December and in January. GM received billions of dollars of taxpayer money, but with one catch: they would have to present a recovery plan by March 31st, outlining the direction that the company plans to go.

Three Weak Brands

That direction for GM involves overhauling its bulky and costly brand structure, one that means shoring up several brands, shrinking at least one, and selling off two. As of now the shoring up side of things is progressing, but even that effort could be dragged down by the company’s inability to sell HUMMER and Saab.

Yesterday, Automotive News [subscription required] outlined the progress GM has been making with HUMMER, Saab and Saturn and the news isn’t pretty. GM has already committed to upholding Cadillac, Buick, GMC and Chevrolet while shrinking Pontiac down to a one or two model brand. Those plans are in place, but the automaker’s effort for the three remaining brands are not.

The Swedes Are Showing Little Interest

Reportedly, GM has been in talk with the Swedish government about finding a buyer or receiving aid, but neither a buyer nor aid have come forth. GM is attempting once again to make Saab an autonomous company by moving production, engineering and marketing to Sweden while pulling the brand out of GM’s vast global network.

HUMMER has been nothing but a headache for GM since last summer when the company announced that the niche sport/utility brand was for sale. High gas prices destroyed the brand’s appeal, which has kept potential buyers away. GM is asking $500 million for HUMMER, but would probably take significantly less for it if a buyer (Chinese manufactuer, perhaps?) stepped forward.

R.I.P. Saturn?

Saturn was at one time the most promising of all GM ventures, having got its start as a separate car company wholly owned by GM back in 1985. When its first model, the S Series, rolled off of a Tennessee assembly line in 1990, the brand was an immediate hit. Over time, GM neglected Saturn and eventually pulled the company into its brand network, supplying Saturn with a handful of unique vehicles or badge-engineered products from Opel and other U.S. brands.

Interest in Saturn has waned over the past few years, with GM considering blending Saturn into the Buick-GMC-Pontiac network, or finding a global partner, or even allowing dealers to purchase it. So far, none of these options has transpired, leaving Saturn hanging and vulnerable to closure.

Whatever direction GM chooses to take, a decision will have to be made soon. Shutting down all three brands is an option, a step which would invite debilitating lawsuits from dealers.

Clearly, the options for GM are quite limited when it comes to HUMMER, Saturn and Saab, three brands that no one wants and brands GM is unprepared to support. Taking taxpayer money has a price, something GM will have to pay in what could be a costly restructuring of the century old automaker.