2008 Pontiac G8 GT, et al.: Textcast -- How To Fix GM, Part I

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Right on. I mistakenly published an early draft at 1:30 instead of 13:30 (we're on military time around here -- Austria's orders). Should be fixed now.

-JS

The yellow on that Camaro is truly amazing. Nice reflection, and contrasts the dark trim really really nicely.

I think the GMC Sierra looks 10x better than the Silverado. But both get low scores in truck comparison tests and need some updating.

Another idea for GM - get some design and engineering centers out of Detroit. Sorry but I know a lot of engineers (myself included) who would not want to live there. In the US, as a generic statement, the aerospace industry snags the top engineering talent (unlike Japan and Germany who don't have much aerospace going on). GM might be able to lure more in if it was somewhere cool.

Bill Simmons of ESPN calls that position the VP of Common Sense

@mthrizzle,

Re: Detroit, interesting you should bring that up. It's the centerpiece of the upcoming Part II.

I'm in an interesting position - I'm not a die-hard GM fan (OK, OK, I like the Camaro, Corvette, G8, CTS, and Malibu - a lot) and in fact my next car will probably be a GTI or Mazdaspeed3, but as I noted previously I do think GM makes some very compelling cars that are absolutely competitive, if not class leading. I am also a current GM owner and 3 years in have had only the most minor of issues, maybe 1/3rd of what an average LT fleet car, regardless of make, might get in a year. So here are my thoughts:

- Badge engineering: I think everyone is in pretty full agreement that GMC simply needs to go. Trucks and SUVs aren't the unquestioned default transportation choice they once were, and while still very relevant market segment they don't warrant their own brand. The reason GMC is still around can probably be chalked up 100% to politically powerful dealer networks. Killing both Pontiac and GMC would leave Buick alone from the former BPG channel, and that simply wouldn't work. Buick is a little harder to justify killing (actually more likely a China only brand) because a near-luxury brand does have market support and their product pipeline has some good stuff in it. Still, the death of B-P-G would doubtlessly lead to dealer owner opposition to GM's bankruptcy. For better or for worse, GM decided a quick, clean bankruptcy was better than a full cleansing.

- Hybrids: Yes, we know hybrids rarely make economic sense, are environmentally damaging when their batteries and transportation are taken into account, and don't make very good cars, but an affordable mainstream hybrid is something the builds reputation in consumers' eyes. The Volt does a great job of doing what the Editors called for - leading instead of competing - but it should have been a Cadillac to justify its cost and Chevrolet should have had a full Malibu hybrid for the common man to compete with the Fusion and Camry hybrids. Its more of an image than sales thing, but it is important.

- Volume: Another GM image problem is the rental fleet stereotype. To support production overcapacity, antiquated, inferior cars (cough*Impala*cough) are sold for little to no profit as fleet orders. The Malibu is better than the Impala and about as big, but for some reason the current Impala isn't slated for replacement until 2013. That's right, GM's real CEO will either be in his second term or out of office by the time we have a modern Impala. Why not just kill it? Is there really a compelling market for a extra-large FWD sedan that can be pulled from the Taurus and Avalon?

- The rest is basically just following the Hyundai/Kia playbook. Both companies have a past history and stigma in consumers' minds of making cheap, inferior, unreliable products. Overcoming that takes time, patience, a continual stream of new cars, and unrelenting improvement in quality and reliability. As I said before, GM has closed the reliability gap. The only way to assure the consumer of that (who is understandably careful with a long-term investment and therefore likely to trust reputation over reality) is to stand behind the product with an extraordinary warranty.

No, GMC can be the commercial-market vehicles, and Chevy for the retail market. That will work.

Stovt, that has to be one of the most thought out, logical posts Ive seen here at Edmunds. Great post!

"No, GMC can be the commercial-market vehicles, and Chevy for the retail market. That will work."

Whoosierdaddy, that still makes no sense as the commercial vehicles as well as the tarted up versions of their own trucks/suvs (GMC) can be offered under the Chevy nameplate. GM, like every company needs to conserve cash while making logical sensible decisions when it comes to spending. Being lean is today's and TOMORROW's concept and it shouldnt be viewed as a trend but as a culture.

Just tell GM to keep hyping black Camaro SS's, which are now in such fiendishly short supply that the Canadian factory building them has had to add a third shift.

compliance, thank you, I was going to point that out. But why do we have to? Why do the Clippers and GM lack someone to tell them how to do their jobs? Stupid stupid stupid.

Jon Sewart accused someone else of "theater and not real news"? What a jackass.

I think GM will be alright. Chevy, anyway. They, like Ford, have plenty of very good mainstream products. Both only lack a best-in-class compact car. Their midsize and large cars and SUVs and trucks are just fine. Cadillac may never be a true equal to BMW, M-B, and Lexus. All they really have going for them is the CTS. When will the DTS ever be considered alongside an LS, S-class, or 7-series? But Chevy will be fine.

As for GMC, I agree there is too much overlap. We all assume that all GMC buyers would just get a Chevy instead. Maybe so. But it's got to be hard for GM to consider yanking the 3rd-best-selling pickup on the market just because some people on the internet think it's redundant. Fact is, it sells very well. (And it's better looking.)

Re: Volt as Caddy, that's a decent point, but I think GM needed it to be a Chevy in order to make it appear to be something for regular folks. Toyota could have made the Prius as a Lexus and charged more, but now everyone thinks all Toyotas are green. Honda is getting back in the game with the Insight on the low end. It wouldn't look good for GM to start with a Cadillac. Plus, nobody actually knows yet how well and smoothly this thing will actually work. If it turns out to be unrefined and have quality problems, that wouldn't do the Cadillac brand any favors.

I do think that Lincoln should have made a hybrid Zephyr/MKZ/whatever at the same time as the Fusion hybrid. That would have been pretty easy, wouldn't it?, and Lincoln who desperately needs a shot in the arm. Now Toyota wins again with the fugly HS250. (There were also the RX, GS, LS, and Escalade hybrids, but I'm referring to something that actually gets significantly high mpg.)

Sure. Keep GMC only if they are the Work Truck brand. Get rid of them as they are now. The Silverado as the #1 selling truck is a really compelling argument for GM. They should listen.

And again we come back to the obvious: the G8 must continue as a Chevy.

Heck, I even like the idea of a weak-sister G8 being a Buick. Give it two engine choices maybe, the regular 3.6 in the base G8 now, and that great DI V6 for the premium model. Interior colors from Holden (who has some lovely interiors) not the black-red or black-blacker available now.

For the Impala, make the base the DI V6, and then use either the 6.0L in the GT with the 6.2L in the GXP, or just skip the 6.0L altogether.

We need the VP of Common Sense on this. NOW! Well, actually about 6 weeks ago.

"Jon Sewart accused someone else of "theater and not real news"? What a jackass."

There's a big difference when your "theater" is shown on a serious news channel and is portrayed to viewers as "real news". 'The Daily Show' is on Comedy Central and clearly portrays itself as entertainment/satire.

Regarding the "VP of Common Sense" comments, if it were really that easy of course GM would have done a lot of this stuff years ago. Many of the ideas presented in this discussion I agree are great ideas, but there are of course numerous factors that come into play when it comes down to actually pulling the trigger. I bet a lot of these same discussions have already happened in the very halls of GM.

A lot have been calling for the G8 to be rebadged as a Chevy. Sure the G8 is a good car given some fixes, but it hasn't found a market so would it be cost-effective to re-engineer (read: rebadge) it as a Chevy? Will the market then respond to it? Nobody here knows if GM has even made a penny on it, which is likely expensive to manufacture. I'm guessing the financial outlook on the G8 program given the latest fuel efficiency pressures, low sales, and needed current and future updates simply didn't provide a soon enough payback period for it to be viable. It sucks but then if this is such a great car, why didn't more people buy it?

Why would GM do anything? They can just keep getting bailed out.

I think GM is on the right track. Their biggest obstacle is perception. They have competetive models, but there are a lot of people out there who refuse to give in to the notion that GM is no longer in the 1970's. Like Hyundai, if they keep building good cars people will start to notice.

GM made money on the G8 before it was the G8. It was successful with Holden before it even came to America. It hasn't found a market because it hasn't been aggressively marketed. Chevy could provide the marketing needed to sell a ton of G8s. There are a lot of older "chevy guys" who are dying for a real muscle car that is both brutal and refined. I know this because I've heard my dad and his buddies talk fondly about chevy bringing back a real rear wheel drive drivers car.

I don't think that GM makes enough models that appeal to younger generations. Cars that are cool that 20 yr olds can afford. People become brand loyal seemingly at a young age. As mentioned above, GM needs to become a class leader in the sub- compact and compact market. Younger kids seem to view the fit and civic, scion and yaris, among other cars as socially cool and acceptable where the aveo and cobalt and saturn are viewed as lame. Yeah, GM is making some really good products, many of which I would love to own (Camaro), but they need something to bring the masses into the showrooms. Hopefully the Chevy Cruze does just that.

"GM made money on the G8 before it was the G8. It was successful with Holden before it even came to America."

The G8 is no longer a Holden. It is sold at a different price, in a different currency, with different equipment, trim levels, and powertrains; and is shipped to the other side of the world. If they can turn a profit on the Commodore that's great, but that means nothing for the G8's business case.

"There are a lot of older "chevy guys" who are dying for a real muscle car that is both brutal and refined. I know this because I've heard my dad and his buddies talk fondly about chevy bringing back a real rear wheel drive drivers car."

Well first off, one of the points made in the textcast was that GM doesn't seem to be having trouble selling to people who already buy GM cars. It's not the "chevy guys" that they need to sell to - they've probably already bought one.

Second, I've been hearing this sentiment all the time here on IL and elsewhere that someone's uncle's buddy's friend would love to buy this car. So the question remains, if there are enough of these people, why haven't they marched into showrooms? How come your dad and his buddies don't have one?

REALLY?? You guys prefer black LCD displays over the pixilated vacuum flourescent display? You can even spell real looking words with LCD, the green is MUCH easier to see AND isnt the SAME cheap looking screen as a $5 Walmart LCD digital watch. I would pay a premium to have the vacuum flourescence over a cheap boring 90's LCD.

Edit:
"You CAN'T even spell real looking words with LCD"

Really, its like spelling 'boobies' with a calculator. How pathetic.

My dad and his friends don't have one because they did not want to buy a Pontiac. No one wants to buy a car from a dead company. I said my dad and his friends are "Chevy guys" not Pontiac guys. Bimmerjay, I don't get why you are hating on the G8 so much. I assume you drive a BMW, a rear wheel drive practical drivers car. I wish everyone could have a great car like a BMW, but the reality is few can afford them. That is why I like the G8 and don't want to see it go. It is rear wheel drive, it is practical, it is fun, and it is much more affordable than a BMW. That is why I like the car. I guess you don't like it because it doesn't compare to the loftiness of your current example of German efficiency.

I just bought a new car and my girlfriend is just going through the new car purchasing process.

Our market is small, cheap vehicles - under 20k CAD, bang for buck.

First off, I ended up with a KIA Soul. Its quirky, but not TOO weird (I'm looking at you Cube...). It has a great list of standard options, and an unbeatable warranty. Whats the GM equivalent? The HHR? Well, they don't really have an equivalent so maybe its not even a fair comment.

My gf is looking at small vars like Wave/Aveo, Accent, Rio5, etc. The option packaging on the Wave means that you have to get the higher priced model to get both auto and AC. This puts the price up several thousand over an Accent or Rio5. And if anything, the vehicle feels LESS solid then the other 2 options. And to top it off, the dealer won't negotiate at all. This is on a going-out-of-business Pontiac vehicle.

I'm not even really sure what my point is here, other then to convey my recent GM experiences. My gf WANTS to buy a North American vehicle but there is nothing out there to compare. Now we're looking in a cheap price range, but still....

I think if I was looking at a more expensive/larger vehicle, I would love to consider the G8/Malibu/Camaro, etc - these are great vehicles that I would be proud to own.

That being said, GM is in sad need of some cheaper priced, quality compact vehicles that appeal to a youth market. Perfect example - bluetooth, aux and USB now standard on all KIA models from the very cheapest Rio to the most expensive Borrago (or whatever its called). To a young buyer like myself who doesn't need to do burnouts, these standard goodies can make the sale. Forcing me to pay for a sunroof in order to get an automatic and AC (I'm looking at your, Wave...) is pathetic.

Also, how is it that KIA and Hyundai will offer 3% or less financing on the new vehicles I looked at, but GM would only give us 7.5%?? Isn't this a company that is looking to attract new buyers?

That may be so, but I went into this with a clean palate, willing to consider a vehicle from any manufacturer as long as I felt like a deal was there. I know there is a negative perception about KIA and Hyundai still, but the deals are hard to deny, especially and my price range.

*especially AT my price range.....

EDIT FUNCTION!!!

dougtheeng: I agree with you very much. GM really needs to attract young buyers. My siter and brother in law just bought a new Entourage mini-van and a Kia Spectra and were impressed by all that was offered. I was impressed at the deals they got. The Koreans are really bringing the heat, and I think shedding their negative stereotypes with great warranties and even better deals. I still wish Americans could regain the market though.

It took many articles (and this blog) to get me truly interested in the G8. I think it still has a stigma being a Pontiac, a name I like as much as Ahmedinejad. I think the G8 would do great as a Chevy because Chevy (despite their many awful products) still has cachet as a name.

I can see the marketing campaign myself (and I hate marketing): "The all-new Chevy Impala, available with either a 304 hp DI V6, or an optional 6.2L 415 hp V8. The legend is reborn as a world-class sports sedan." With the Impala name they can make it a bit more pricey too (to stay away from the excellent Malibu) so options like Nav and all the other goodies that Holden already has available can be added.

Market it just like the Charger.

I don't have to say someone I know is interested, I AM interested and I own one. But I STILL dislike Pontiac.

bimmerjay, I think the main reason I want so desperately for the G8 to become a Chevy is because I think it is so simple, and cheap compared to anything else GM can do to keep a world-class sports sedan on the market. The car is there, the tooling is there, the logistics are there, but what isn't is a marketing push.

I think the biggest obstacle is that the current (embarrassing) Impala is supposed to stay around for years.

Thanks Fuhteng, my feeling exactly.

@powell_jr,

I'm not hating on the G8, I actually like the car from what I know about it, as I haven't driven one yet.

My comments are directed towards the sentiments that it should be easy for this car to be adopted as a Chevy and that there is a sufficient continued customer base for it. $28-37K for a price range is a difficult spot to be for a premium midsize for one thing. I just priced a GT and the TMV is actually $1,000 BELOW invoice, plus another $1,500 off in customer cash. This car just isn't selling - and wasn't even before GM announced Pontiac was being canned. I have yet to see anything subjective/substantial that suggests this car would be successful simply re-marketed as a Chevy.

I am putting aside my feelings that this is a good car and suggesting that GM is not able to make a profit on it, plain and simple.

Full disclosure: My profession is corporate finance. I am experienced in valuating projects/business cases using discounted cash flow analysis and return on investment methods, among other things. The decision to cancel the G8 must have taken into account its future market potential given the investments required (re-engineering, marketing support, mid-cycle changes, currency hedges, etc) AND hit GM's ROI requirements. What those are is anybody's guess, my sources at GM are always mum on the financials.

"bimmerjay, I think the main reason I want so desperately for the G8 to become a Chevy is because I think it is so simple, and cheap compared to anything else GM can do to keep a world-class sports sedan on the market. The car is there, the tooling is there, the logistics are there, but what isn't is a marketing push."

You're right. The car itself is here. But is the car itself, and its future potential, enough as it is financially? GM can't afford loss leaders anymore.