GM's Plan To Save Pontiac And Buick
Jerry Flint, 05.31.05, 11:07 AM ET
NEW YORK - General Motors' new strategy for its six vehicle lines sandwiched between Chevrolet and Cadillac makes sense: narrowly focused lineups and fewer copycat models in each division. In some ways, this is already taking place. For example, U.S. Pontiac dealers are not getting a new small car to replace the Sunfire, nor am I aware of a big sedan in the works to replace the Bonneville when it is discontinued.
In truth, four of those six General Motors (nyse: GM - news - people ) divisions are no problem--if GM can use some common sense. Hummer is fine as Hummer. Of course, GM must realize that Hummers are for he-men. So it must stop doing dumb things, such as putting a weak five-cylinder engine in the new H3. And Hummer still needs a smaller, lower-priced model to take on the Jeep Wrangler.
Saturn has been starved for product all its life, but Vice Chairman Robert Lutz has some good cars coming to that division. Saab is too small to worry about. And GMC is trucks, plain and simple. GM's big problems: Pontiac and Buick.
Pontiac and Buick can be saved, but I'm not enthusiastic about one part of GM's new plan, which is to combine Pontiac, Buick and GMC dealerships. Even with smaller lineups, the dealers end up with too many models to display and stock. Another concern: The customers for such dealerships cover too broad a demographic range.
Next, GM can't avoid building different vehicles from common underbodies, but this shouldn't mean badge engineering. The trick is to give each vehicle a distinct identity while holding down costs with a common platform. GM once knew how to do this. It's what made it the great automaker that it was.
Last year, Pontiac sold 474,000 vehicles, and lots of other auto companies would love to have that volume. But in its best year ever, 1986, Pontiac moved 952,943 units.
When Pontiac was in trouble in the 1950s, Semon 'Bunkie' Knudsen took over the division and saved it. He built high performance cars, such as the first Bonneville, and took Pontiac racing to make the point. Pontiac became a winner. A quarter century later, Pontiac was in trouble again, but Bill Hoglund took over the division and brought it back to life. He figured out that Pontiac should be a "driver's car," meaning driving excitement. Again it worked. And in between Knudsen and Hoglund's reigns, there was John Delorean, who built the first GTO.
It's clear what Pontiac should be: a division that offers affordable performance and handling to a young, striving crowd. A recent Pontiac TV ad has a woman soothing a crying baby with the sound of a Pontiac engine. When Pontiac was a winner, the motto was: "We build excitement," not: "We put babies to sleep."
Let's say it another way: Pontiac's mission is to build a cheap BMW. Even the finance guys should be able to understand that sentence. To reach that goal, Pontiac needs a leader who knows cars and how to make them fast and muscular. I know one man at GM who could do it: Mark Reuss, who currently heads the GM performance group.
Second, they must give Reuss the proper rank: GM vice president and general manager of Pontiac. He needs that clout to ensure that the division gets the right platforms and powertrains and to muster the troops so that new vehicles are launched on time.
The Pontiac Solstice roadster, coming this fall, is a start in the right direction. The new GTO, a project pushed by GM product czar Robert Lutz, is off to a slow start, but it was the best he could do in a short amount of time. The GTO needs some looks and a lower price. Unfortunately, GM just canceled the rear-drive platform that would have gone into a new U.S.-built GTO. So it will be a tough job, but Reuss is the man to do it.
Pontiac also needs a rear-wheel-drive sedan and it needs upgrades for the dated engines and transmissions in its current models. The lineup should also include a sporty minivan and a racy crossover SUV.
What about Buick? Last year, Buick sold 310,000 vehicles. I don't have an executive in mind to head Buick, but it, too, needs to be headed by someone (a vice president, so he has some power) who understands and loves the auto business. That person should look into Buick's long history, to the time when it was a flashy, powerful, comfortable, soft-riding car for a successful, older person. I think there's still a market for such a car today--if it is done right.
Buick needs modern rear-wheel-drive and all-wheel-drive vehicles. It needs a state-of-the-art crossover wagon, and modern V-6s and V-8s throughout its lineup. Value, too, has to enter into the Buick equation. Consumers need a compelling reason to purchase a Buick over a Toyota (nyse: TM - news - people ), Lexus or Acura.
Long term, Buick and Pontiac should have exclusive dealerships. I say, get the product right and the excusive dealers will come.