world automotive

The latest news coming out of Detroit regarding the long range plans for automotive producer General Motors could be some of the most encouraging information shared in the past several months. For years, GM has insisted that they could handle its many brands just fine, but in light of its coming request for government assistance, the automaker is looking at divesting itself of about half of its brands.

This change in GM strategy is welcome news, but not to everyone including dealers who could be left without any vehicles to sell as well as employees who likely will see massive layoffs. Still, if GM is to be a long term and viable player in the global marketplace, a certain amount of contraction is necessary if the automaker hopes to survive for the long term. Though GM hasn't finalized its plans as of this writing, the company is giving people a glimpse of just how everything will play out.

Let's take a look at an unfolding scenario for one of the largest auto producers in the world:

Brand Closings ' Months ago GM indicated that they would have a buyer for Hummer, its archaic bulky utility brand, but that likely will not happen. The brand's value has deteriorated considerably and, even with lower gas prices, will probably never regain its former glory. Hummer, along with Saturn, Pontiac and GMC will likely be shut down while Saab, its quintessential Swedish brand, may be sold to the Swedish government who has considered nationalizing Saab and Ford owned Volvo.

Buick/Pontiac/GMC ' Nearly two decades ago, General Motors began to unite three of its brands under one dealership umbrella. Today, if you visit a Buick showroom, you'll more than likely find Pontiacs and GMC models sitting nearby. Shedding two of the three brands could see to be a killer for dealers, but converting GMC to Chevrolet Trucks and moving the Pontiac G8 and perhaps the Solstice to Buick could resolve dealer concerns.

Cadillac and Chevrolet ' Cadillac and Chevrolet are the bookend brands for General Motors, but with Buick still in the mix, the automaker could have a nice segue brand to transition from Chevrolet to Cadillac. No longer would GM's two most important brands be drained by other divisions; instead Cadillac and Chevrolet would receive the full complement of models to compete on a world stage.

Opel, Holden and Others ' GM's non North American brands will likely survive, even thrive if excess stateside brands are closed down. Opel and Saturn were to share most of their products over the coming years, but some of that sharing can now be done between Buick and Opel. Holden can supply select models for Chevrolet as well as for Pontiac. GM Daewoo and the Chinese brands would continue as they have operated for the foreseeable future.

Obviously getting from its current set up to one where several brands are either sold or shut down won't be an easy process, one that Congress and the Obama administration will be overseeing for the good portion of 2009. Lawyers will jump in to defend the interests of dealers, states will weigh in on making sure that their constituents (GM employees and taxpayers) are represented, and suppliers will worry that they won't get paid from GM.

But, with the federal government waving billions of dollars of loan money at the problem and guaranteeing what will be an immensely costly transition, GM could emerge as a smaller, but much stronger company in 2010, one poised to regain lost ground in the next decade with fewer brands and more fuel efficient cars being made available to consumers.