'ponder'에 해당되는 글 2건

  1. 2008.11.29 GM Pondering Brand Cuts by CEOinIRVINE
  2. 2008.11.11 Obama team ponders what to do with Guantanamo inmates by CEOinIRVINE

GM Pondering Brand Cuts

Business 2008. 11. 29. 10:06

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The Detroit Free Press reported today that General Motors, in its attempt to put forth a workable restructuring plan to keep it from going bankrupt, is at least looking at killing off three brands—Pontiac, Saab and Hummer.

Everyone knows that GM is over-branded. The problem has long been that the company does not want to have to pay dealers to fold the brands it does not need as it did with Oldsmobile in 2001. State franchise laws prevent a car company from simply ending a brand. Closing down Oldsmobile cost the company around $2 billion.

It’s unclear how GM could avoid paying big money to shutter the three brands.

Hummer has been on the selling block for months. The automaker has circulated a document to prospective buyers, which have ranged from Russian business moguls to Turkish private equity groups.

Saab is not thought to have any hot buyers. According to past conversations with GM execs, Saab Cars has never turned an annual profit for GM. It has, at times, made money in Europe. But those gains have always been off-set by losses in the U.S.

Saab is one of two Swedish car companies with limited interest from both consumers and investors. Ford, too, tried to sell Volvo earlier this year, and found no takers willing to pay Ford’s asking price.

Both Saab and Volvo have a problem of not being quite luxury. Both premium brands have long had followings of people who place safety above all other vehicle characteristics. Saab has also attracted some performance-oriented buyers as the company has long offered turbo chargers in some of its models.

Volvo is on track to sell about 82,000 vehicles this year. Sales through October were down 28%. Saab is on track to sell about 20,000 vehicles this year. Sales were down 32% through October.

Earlier this year, GM CEO Rick Wagoner said GM did not have too many brands.

Pontiac has been starved of hot new products for two decades. The current lineup consists of the Vibe (a twin of the Toyota Matrix and engineered by Toyota, built at the joint-venture NUMMI plant in Calif.), the G6/G5, Pontiac Torrent (twin of the Chevy Equinox) and the G8 sedan. The G8 has been well received by auto journalists since its debut last year, but the large sedan category is so soft and sleepy that few have noticed. The Pontiac Solstice roadster convertible, while also well received by journalists, is such a niche product that it can’t hold up the whole brand.

Pontiac sales are on track to sell around 280K to 290K vehicles this year. Sales through October were down 21%. A hefty percentage of Pontiac sales, though, are fleet sales to rental agencies.

At the core of GM’s problems is that it does not have, and has not had, enough resources to feed eight brands with unique products, and then the resources to feed each brand with unique and competitive brand campaigns. Every industry analyst and consultant has told GM management that for 20 years. It is one of the reasons that Pontiac, Buick and Saturn in particular have had a revolving door of brand campaigns—each new brand chief groping in the dark for a new big idea that will kick-start bigger interest in these product portfolios.

The contrast with Toyota and Honda is astonishing. Toyota manages a 14.9% market share (throughOctober) with just its one brand. Yes, it has added Scion and Lexus. But the Toyota brand is amazingly efficient by putting so many efficiently produced vehicles under its flagship brand. Ditto Honda, whish has a 9.8% share.

Hummer, Pontiac and Saab together only manage a 2.5% share of the U.S. market, and I’m willing to bet at least .5 of that is rental fleet.

Nah….GM doesn’t have too many brands.

A few years ago, ad agency Deutsch, which currently handles advertising for the Saturn brand, cooked up a brand positioning for Pontiac that focused on the gritty side of Detroit, and surrounded the brand with music reminiscent of Bruce Springsteen. The strategy was centered on performance, street rods and American car culture. But the decision was made that while the positioning was attractive, GM couldn’t fund a product program that would live up to the ads.

GM has been merging dealerships into a single network of GMC/Buick/Pontiac stores wherever it can. That way, each dealer can manage a single showroom of products that has depth and breadth of sports cars, sedans, SUVs and trucks. But that strategy also depends on supporting three different, attractive brand strategies.

If GM can execute this plan, that would leave it with Chevy, Cadillac, Saturn, Buick and GMC. One of the arguments for keeping Buick is how well it sells in China. The Chinese are mad for the Buick brand. I’m not entirely sure, though, that GM would lose sales in China if it killed the brand in the U.S. Sure, some brands are global. But I’m thinking Buick would do just fine in China without U.S. sales.

Now, we are down to Chevy, Cadillac, Saturn and GMC. GMC sells well, and GM execs have long said there is now reason to kill it. There are a flock of consumers who go for the “Professional Grade” nonsense. GMC is, after, all just a slightly stepped of version of Chevy trucks and SUVs.

There is much argument for killing Saturn, too, leaving GM to concentrate in the U.S. on Chevy and Cadillac as the company. Indeed, without the GMC/Buick/Pontiac sales channel, I don’t know how you would support GMC as a brand, unless you engineered a rapid consolidation of retail distribution perhaps selling GMC through Chevy or Cadillac dealerships.

But, as I said earlier, the big barrier is the state franchise laws, which give dealers a lot of legal firepower to get paid off if GM moves to shutter these brands. It seems like a reach that it would just close Hummer anyway as it still sees a market to sell the brand. GMC/Pontiac/Buick dealers would surely miss the sales volume from Pontiac. But is a GMC/Buick network really worth keeping long term?

As GM faces its near-death experience, asking Congress for survival money, it has to make some moves that tell analysts and legislators that is doing the things to fix its operations that everybody in the room knows it has to do.

Posted by CEOinIRVINE
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From Kelli Arena
CNN Justice Correspondent
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WASHINGTON (CNN) -- President-elect Barack Obama's transition team has begun examining what to do with suspected terrorists at the U.S. prison camp at Guantanamo Bay, Cuba, which Obama has pledged to close, an aide said Monday.

Barack Obama said in an interview in October he would close the facility "as quickly as we can do prudently."

Barack Obama said in an interview in October he would close the facility "as quickly as we can do prudently."

Denis McDonough, a senior adviser to the incoming Democrat, said no decisions have been made about what to do with the 255 inmates there, "and there is no process in place to make that decision until his national security and legal teams are assembled."

But officials close to the Obama team said Monday that the incoming administration is pondering whether to try some of the Guantanamo Bay inmates in existing federal courts; set up a special national security court to deal with cases involving the most sensitive intelligence information; or release others.

The scenario would eliminate the military commissions set up by the Bush administration to prosecute some of the top al Qaeda figures held at the facility, such as Khalid Sheikh Mohammed -- the lead plotter of the September 11, 2001, attacks on New York and Washington.

The commissions have been delayed for years by legal challenges, and the U.S. Supreme Court ruled an earlier version of them unconstitutional in 2006. In a full-page ad in The New York Times on Monday, the American Civil Liberties Union urged Obama to close Guantanamo Bay on his first day in office, "with the stroke of a pen."

But in an October 31 interview with CNN, Obama said only that he would close the facility "as quickly as we can do prudently."

"I am not going to give a time certain because I think what we have to do is evaluate all those who are still being held in Gitmo," he said. "We have to put in place appropriate plans to make sure they are tried, convicted and punished to the full extent of the law, and that's going to require, I think, a review of the existing cases, which I have not had the opportunity to do."

President Bush said in 2006 that he would like to close the prison, but said it needed to remain open to house what he called "cold-blooded killers." In May, Defense Secretary Robert Gates told a Senate committee that efforts to shut down the facility were stuck over what to do with the inmates.

The Pentagon's chief prosecutor resigned in protest in 2007 after declaring the military commissions had become "deeply politicized." Critics say the camp has damaged the reputation of the United States overseas, with a U.N. report in 2006 declaring that interrogation techniques used on prisoners "amounted to torture."

"Some of those techniques clearly had a useful purpose for collecting intelligence -- but in my opinion, went too far for use in an American court of justice in a criminal proceeding," said the former prosecutor, now-retired Air Force Col. Morris Davis.

Jennifer Daskal, a lawyer for Human Rights Watch, said some of the prisoners who have been released have gone back to their home countries, where they "did bad things." But she said holding prisoners without charges "has caused the United States much more harm than it has good."

Some conservatives, however, don't like the idea of bringing suspected terrorists the government calls dangerous to the U.S. mainland.

"There's really no place in the United States that can replicate the sort of operational security features that Guantanamo has," said David Rivkin, a former Justice Department official.


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Posted by CEOinIRVINE
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