GM; Chrysler Continue Path To Bankruptcy

General Motors (soon to be Government Motors) continues showing why it is in the position it is. They're looking to unload Saturn and Hummer and failing that, discontinue both brands.

GM has said it will decide this year whether to sell or discontinue both brands as part of the stringent cost-cutting measures aimed at trying to restore the ailing company’s financial stability. The overall effort also has created an uncertain future for two other GM divisions, Saab and Opel.

Even with such efforts, however, many believe the company will be forced to file for bankruptcy protection, perhaps as soon as Monday.
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GM spokesman John M. McDonald said this week the automaker has identified parties interested in purchasing Saturn and Hummer, but he would not provide specifics on who might be interested or when any deals might be reached.

“Obviously our interest is to have these brands find a home outside of GM and to continue as a business that can grow and flourish,” McDonald said. “At the same time, I don’t think there’s any illusion: We need to restructure GM, and as we restructure GM there’s no room for those brands.”

GM ran both brands into the ground, and I can only hope that Saturn finds a home somewhere.

Saturn was at one time considered the future of GM, but corporate culture destroyed Saturn by making it conform to the rest of the company, rather than the other way around. Saturn made some great products, and people bought into the no-hassle sales approach, but Saturn ended up on the rocks because the company didn't innovate and the corrosive attitudes from the rest of GM crept in.

Hummer is a different story. It succeeded at a time when SUVs were ascendant, and nothing beat a Hummer H1 on the road. The thing looked like it was from a different planet - modeled on the military version. The scaled down H2 and H3 were better proportioned to today's roads, but the moment the price of oil spiked, the company's fortunes sank.

Is there still a market for Saturns? I know there still was one for Saturn. Probably not much longer, especially if Saturn remains in the GM fold. If they get bought by another company, there's a chance that it and the GM European brand Opel are done as a package deal (which makes sense since many Saturns are restyled European GM offerings).

I say was, because if General Motors becomes nationalized in the course of the approach taken by the government, people aren't going to buy the resulting products because they'd much rather buy from Ford than either GM or Chrysler.

Is there still a market for Hummer? Probably not. They are the anti-green company, and there's something to be said for counterculture, but they are probably never going to be more than a niche business.

As for Chrysler, they too have been severely mismanaged for years, but the vehicle styling was as vibrant as ever, particularly on the Dodge line. The reliability issue remains a major problem with the company's image, and the merger with Daimler Benz didn't help.

Their position under Cerebus isn't any better.

Of course, all this talk of bankruptcy can't be concluded without noting all the billions the government sank into both companies to keep them afloat, and which will never be seen again. That policy started under President Bush and accelerated under President Obama, and it was an absolute mistake to have done so. It was a waste of taxpayer funds to try and prevent the bankruptcy and orderly reorganization of those businesses, but the political sign of not having those companies go into bankruptcy on their watch helped spur the "bailout" which really was little more than putting a band-aid on a fatal wound.