During 2008 and 2009, Detroit’s big carmakers, including Ford, had a tough time. GM and Chrysler even filed for bankruptcy. GM had to let go of four of its divisions to recover. Why did GM choose those four? Bob Lutz, a former GM executive, recently explained the thinking behind the decision.
The media talked to Lutz about why GM decided to discontinue Saab, Saturn, Pontiac, and Hummer instead of keeping Chevrolet, Buick, GMC, or Cadillac. Lutz explained the arguments and the details behind ending each brand.
Regarding Pontiac, Lutz said he fought for the brand, but higher-ups disagreed. “I dug my heels in,” he said. “But they weren’t listening. They said, ‘It’s a lousy brand, it’s been unprofitable for years.'” Lutz believes it was a tragic loss.
Lutz had been pushing to get rid of Saab for years. He called it a “goofy” brand that was not popular. He wanted to mainstream it, but sales didn’t improve.
Regarding Saturn, Lutz said there was no reason for it to exist anymore. Chevy offered similar cars, and there was overlap between the brands. Saturn was another mouth to feed, he said.
Lutz believes GM made a mistake with Hummer. Instead of making it a separate brand, it should have been part of GMC. Separating Hummer meant GM had to create more vehicles for the brand, which was unnecessary.
Buick was nearly axed. The Obama administration wanted GM to keep only Chevy and Cadillac. But GM argued that Buick was popular in China and dropping it would harm sales there.
GMC was almost cut too, as it was seen as similar to Chevy. But its profitability changed minds.
Understanding why these brands were cut gives insight into GM’s past decisions and how the company might have looked if things had gone differently.
