After months of buildup, loans, headlines, anticipation and more speculation about the what-ifs than one could ever have predicted, General Motors, the 102-year-old preeminent U.S. automaker, once holder of more than half of all U.S. domestic marketshare, innovator of countless technologies, has filed for bankruptcy protection under Chapter 11.
It’s about time.
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While bankruptcy talk has been in the mainstream media for the past several months, a colleague of mine once quipped that GM had been going bankrupt for the past 30 years. At the time, I was quite a bit younger, and thought she was just being a smartass. However, over the years I realized that she was absolutely correct.
GM posted it’s first loss for 59 years in 1980, after the dismal decade of the 70s tanked car sales and left the company with an uncompetitive lineup of cars. During the 80s, it’s market share plummeted from 45 percent to less than 35 percent thanks to lousy products like the Chevy Citation and it’s offspring, the Pontiac Fiero, craptacular minivans and tons of other woefully uncompetitive products. At the same time, the company wasted billions launching Saturn, a wholly redundant car company that was in many ways an admission that GM’s existing five divisions we’re so hidebound in the way they did things that they we’re incapable of building a decent small car.
Of course, that’s all history. One can talk about lousy GM cars until the end of time; the Corvair, the Vega, the Fiero, the Aztek, and countless other flops. Tons of pundits are weighing in of course, and the New York Times has a great timeline of GM’s success, and failures, along with relevant articles.
However, despite all the talk of “Government Motors,” the death of capitalism, taxpayers on the hook and tons of other doomsday scenarios, I think GM’s bankruptcy is the best news to come out of the company in decades. The company will be smaller, leaner, have a new board of directors and the best of it’s current product lineup. Problem is, it doesn’t go far enough.
The good news is that GM will finally approximate the size it should have been for the past 30 years. Look, nobody wants to admit failure or kill a storied brand, so one can almost forgive the company’s series of weak-kneed CEOs for failing to make the necessary decision to cut the company’s redundant divisions. But let’s face it: There was so little differentiation between the divisions for the past 30 years that even die-hard car guys sometimes have trouble telling the product apart. What was the difference between a Pontiac Trans Sport and a Chevy Lumina minivan? An Oldsmobile Intrigue and a Buick Century? Still, when some crappy cars the Pontiac Sunfire seem to exist only to make other cars look less crappy the Chevy Cavalier didn’t anybody sitting in the big chair sit up and take notice?
The “new” GM will be pared down to only four brands: Chevrolet, Buick, GMC and Cadillac. The other brands will either be sold or killed outright in an effort to fund GM’s legacy obligations. It’s all a good start, but in my opinion the brand slaughter doesn’t go far enough. One of the biggest complaints about GM’s product lineup, as I mentioned, was redundancy. Yet can anybody point to a GM division that is more redundant than GMC? Yes, GMC makes money, but with zero unique product, I have a very hard time believing that, upon finding that a GMC Sierra or Acadia was no longer available, a shopper wouldn’t simply cross the street to a Chevy dealership and buy the equivalent Silverado or Traverse. What’s that you say? GMC’s are marginally nicer inside? Then make the Chevy’s just as nice!
The case for killing Buick is a little tougher, but not impossible to make if you simply look at the Toyota/Lexus model. There’s no half-step brand between the two, and not a lot of overlap on product, either. However, a Chevy/Buick/Cadillac scenario will inevitably lead to overlap, and already does. Kill Buick and you could make the Chevy Impala more luxurious, reestablishing the car’s heritage of luxury on a budget. The Buick Enclave is a great car, and with a few styling tweaks could easily fit into Cadillac’s lineup, possibly even replacing the Escalade. Rebadge the upcoming Buick LaCrosse as a Caddy and the luxury division would have a direct competitor to the Lexus ES sedan. And don’t give me that old saw about front-drive cars hurting Cadillac’s image; the Lexus ES, RX and hew HS hybrid are all either front-drive or front-drive based, and it hasn’t hurt that brand’s image in the least. Some will say that the brand is big in China. That’s trueso let China have it.
Still, this is a radical move for GM, and definitely several steps in the right direction. Lest you think this is an anti-GM screed, it’s not. The company arguably has the strongest product lineup in it’s history. The Cadillac CTS is on par, and superior to, most of it’s Japanese and European luxury competitors. I’d recommend a Chevy Malibu before a Toyota Camry or Nissan Altima, and if the upcoming Cruze is as good as it’s pre-launch hype, then I’ll recommend it over Corollas and Sentras, too. Despite my ragging, even Buick has some great cars; the aforementioned Enclave is already great, and the upcoming LaCrosse looks spectacular. In a lot of ways, that’s the shame of it: Just as GM finally got it’s product act together, decades of pissing away brand equity with lousy cars, bad decisions and, let’s be honest, ridiculous labor contracts finally came home to roost. Will the new version of GM be successful? I don’t know for certain, but it has a much better chance than the one that filed for bankruptcy this morning.
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Posted in Auto sales Post Date 09/26/2025
