News - Hummer
GM jettisons niche brands
Sell or shut for Saab, Saturn and Hummer, says GM
18 Feb 2009
By IAN PORTER
GENERAL Motors’ 24-year attempt to turn the tables on Japanese car-makers will end after a decision to let the US-only Saturn division wither and die as the current model range reaches its use-by date in 2011.
GM is also taking a tough line on its Hummer and Saab divisions, saying that, while it will continue talks for a while, it basically has a plan to quit them and is going to pursue it.
Chairman and chief executive Rick Wagoner said GM would not be investing in any new Saturn models and was preparing to phase out the brand when its current models reach the end of their product cycle in 2011.
“In the interim, should Saturn retailers as a group or others investors, present a plan that would allow a spin off or a sale of the Saturn Distribution Corporation, we would be open to such a possibility,” Mr Wagoner said.
“If a spin off or sale does not occur, we plan to phase out the Saturn brand at the end of the current products’ life cycle.”
In a decision that could create problems for GM in a few years, Mr Wagoner said GM would be prepared to sell the Saturn distribution network to any interested party, leaving the door open a maker from the emerging industries in China and India to easily enter the US market.
“The unique structure of Saturn makes it a good distribution network. If someone gives us a good offer to buy the network, we’d be very co-operative, or if they are able to come up with an arrangement to distribute other products, we would be very open to that.”“It’s unfortunate and seems a cruel twist of fate at the time when Saturn is loaded up with a terrific product portfolio that the industry shrinks so much.”
Mr Wagoner said GM has asked the Swedish Government to support the ailing Saab operation but that “we haven’t found a solution yet”.
Burt he indicated that GM would not be dragging its feet and that it fully intended to meet the March 31 deadline set by the US Treasury Department for having its restructuring finalised.
“We have nothing but the highest regard for the officials we’ve been working with in Sweden,” he said.
“But we need to move, we need to do some things, to execute our plan, and if it doesn’t match with the objectives of the Swedish Government, we’ll understand that and we’ll have to take alternative action.”
He said GM had developed a specific proposal that would effectively cap GM’s financial support for Saab. After that, GM would walk away.
“If we can’t reach a mutually acceptable agreement promptly, Saab AB would likely have to file for re-organisation in Sweden.”
GM was talking with potential buyers for Hummer, but Mr Wagoner indicated that GM was losing patience with the protracted negotiations.
“We still have some people we are talking to, but we are going to try and draw that to a conclusion by the end of March.”
Mr Wagoner dismissed suggestions GM was contemplating selling its expanding China operation, and appeared to discount the idea that Opel might be sold.
“We think China is fundamental for our future and (selling it) would be a tough call to make. We haven’t had any discussions along those lines.”“With regard to Opel, we’re in the midst of working with various parties, including the German Government, on funding options for that subsidiary and we are going to have to listen to all options.
“At this point we don’t have anyone asking to buy Opel. I’m not sure that’s a realistic option,” he said.
The fate of GM Holden was never mentioned during the presentation.
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