New GM emerges and downsizes to 4 core brands

gm logoGeneral Motors (GM) has emerged from bankruptcy after filing for Chapter 11 administration in early June. Still called General Motors, the “new” auto maker is now 60.8% owned by the US Government, 11.7% by the governments of Canada and Ontario, 17.5% by UAW retirees, and another 10% is owned by bondholders from the “old GM”.

The auto maker also revealed that it will only maintain four vehicle brands in its group, including Chevrolet, Cadillac, Buick and GMC, as these four are more profitable than the rest. Other brands such as Saab and Saturn were put on sale, while the Pontiac brand name has been shelved.

The auto maker will still continue to scale down its operations by reducing plants, dealers and a portion of it’s workforce, in the name of improving efficiency. GM, which has Fritz Henderson as it’s President and CEO and Ed Whitacre from AT&T as it’s chairman, has also also cut lose a total of 54 advertising and marketing contracts.

Such contracts include the placement of a Chevrolet Clock at Times Square (since 1930’s), sponsorships for the Oakland Raiders (American football team) and the Arnold Palmer Invitational tournament (golf event) and more.

For the record, the so-called “struggling” auto maker has spent US$424 million in advertising and marketing just for the first three months of 2009! Although the figure is down by 20% from last year, it is still alot.

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • Jimmy Dean on Jul 15, 2009 at 11:24 pm

    Aiyya!!! 60% owned by Uncle Sam…. Just like Proton!

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  • Jimmy Dean on Jul 15, 2009 at 11:25 pm

    I mean 60% owned by government, just like Proton.

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  • bmpower on Jul 15, 2009 at 11:35 pm

    they should do marketing and advertising, because it's not about people not buying.. but peoples are not able to buy! no money, no job, no food no sex no bla bla bla..

    i think, they should doing product and market research this time not wasting money for adv and marketing, when their economy back on target, then they should offer the right product at the right time.

    oh! anyway paul, i'ved read somewhere.. there stupidest ever GM ads, they ruining Chevy Camaro good image to be…. a G.A.Y CAR!!!.. seriously!

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  • p4k4bu on Jul 15, 2009 at 11:37 pm

    Jimmy,

    you're worried people will mistaken it for some other Uncle Sam?

    ;-)

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  • its Goverment Motors (GM)

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  • Caddilac Wong on Jul 15, 2009 at 11:48 pm

    Good news… Hope they can get on the track ASAP then start cracking…

    Stop letting the Japanese to invade their country and fill China up with their Buick and Chevy…

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  • l3ryan on Jul 16, 2009 at 12:34 am

    there goes the demise of the legendary Pontiac Firebird.

    sad enough seeing knight rider's ride being changed from the firebird to a mustang, now we cannot see further new firebirds in the future anymore.

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  • JULIAN_LEE on Jul 16, 2009 at 1:24 am

    Boikot American, Buy German, Get a BMW

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  • sorry off topic ,but when will the fiat500 arrive in malaysia ha?

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  • Calvin De La Rosa on Jul 16, 2009 at 4:12 am

    Paul, advertising is important. U get tax deduction. might as well get some air time mileage. No pun intended.

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  • mystvearn (Member) on Jul 16, 2009 at 4:49 am

    So what is going to happen to Vauxhall?

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  • like a phoenix rising from the ashes, maybe GM will be better now, but who knows, with similar management style, maybe history will repeat itself.

    Pontiac classics will probably fetch a high price now considering the entire brand is extinct.

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  • peroempat on Jul 16, 2009 at 6:17 am

    Die to born, got another fresh one… huh?

    Nevermind to gameover, can continue with unlimited credit. Uncle Sam.

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  • Reliance on Jul 16, 2009 at 6:30 am

    It's unfortunate that they'll lose all the momentum that Pontiac had built up over the past year. While I agree with streamlining, there are some definite drawbacks to letting some of these brands go on the cheap.

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  • mitlanevo on Jul 16, 2009 at 8:26 am

    so that means no more Pontiac GTO ?

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  • r b darby on Jul 16, 2009 at 9:42 am

    doesn't really matter what gm does, americans will not support their recovery. all expenses from this point will just be more tax dollars going to waste. go away gm.

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  • p1basher on Jul 16, 2009 at 6:27 pm

    great, p1 can buy the car brand they wanna sell. it is interesting if we got saturn sky or pontiac solstice here hahaha. can even get saturn vue hybrid technology.

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  • Tiadaid on Jul 16, 2009 at 7:38 pm

    bmpower said,

    July 15, 2009 @ 3:35 pm

    i think, they should doing product and market research this time not wasting money for adv and marketing, when their economy back on target, then they should offer the right product at the right time.

    —————————————————-

    When in an economic downturn, companies always downsize their advertising budgets and marketing budgets. WRONG MOVE! They should maintain their spending so that when the market do pick up, the consumers are aware of their offerings and that may create buying intentions. But honestly, GM's advertising strategy, from what I can see is jumbled up too much. They are trying to be jack of all trades, master of none. That's why their ad spend is so high. They want to reach almost everyone in America, but comes up short. What they should have done is just find the right target market for their products and advertise to that market

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  • bmpower on Jul 16, 2009 at 8:10 pm

    Tiadaid said,

    July 16, 2009 @ 11:38 am

    I agree with that in the certain situation, however that move is unsuitable for current GM condition .

    Because of what?

    – because they didn't have a proper and good product to advertise.

    – their product not for their market target

    – most of their current product are fail.

    even their advertising and marketing are epic fail! they promote Camaro as a GAY car!… I feel so sorry for Bumble Bee.

    So why should them use massive advertising method since it wasn't good option for them at this moment!.

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  • It is okay to own by Uncle Sam, as long as long the car price is reasonable…

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