Saturday, February 21, 2009

The truth hurts

Matthew DeBord says that GM is finally painting an honest picture of its future. Key to their restructuring is a realignment of their brands: GM knows it must leave its tiered-branding strategy ("When you outgrew your Chevy, you graduated to Pontiac. Then Olds. Then Buick. Finally, you arrived at the glistening pinnacle, Cadillac.").

[W]hen forced to tell the truth about its destiny, GM doesn't see itself any longer as the postwar colossus that delivered a car for "every purse and purpose" but, instead, a leaner outfit with, for all practical purposes, two major brands: Chevy for volume sales and trucks, and Cadillac for luxury rides. (It's worth noting that Ford, which has declined bailout funds so far, is also saddled with redundant brands and may be following GM down this road in the future.)

Savvy observers will recognize that this is how the domestic carmakers' Japanese rivals do business. Toyota is ... Toyota and Lexus. Honda is ... Honda and Acura. (Toyota also has its Scion youth brand, but the vehicles it sells actually mirror many of the cars GM badges as Chevys.) The emergence of a North American vehicle monoculture, with Detroit's output more closely resembling that of the Asian-American transplants, signals a much more practical, less emotional future for U.S. drivers.

He also says GM won't be able to pay back its debts until well after 2012, when it will be a markedly different company. It's time for everyone in Michigan to realize the old monolith isn't coming back.

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