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Bob Lutz Explains How GM Decided Which Brands to Kill in 2008

It’s been 15 years since General Motors pulled the plug on Pontiac and Saturn. The government bailout forced GM executives to make tough decisions about the brands under its purview, shaping the future of the American automotive industry in the process.

Bob Lutz was one of those executives. We recently talked about those tough decisions leading to Pontiac’s demise, but Lutz also had thoughts about the other brands on the chopping block.

Here’s what he said, in his own words.

Chapter 11 intervened and the Obama-appointed, all-New York finance guys—who didn’t have a clue about the automobile industry—said, ‘General Motors is going to be Chevrolet and Cadillac only.’ We argued and said we’ve got to keep Buick because if you drop Buick in the US, it’s going to die in China, and it’s one of the leading brands in China. So don’t do that. So we were able to save Buick.

GMC they wanted to drop because it was a version of Chevrolet. And we showed them the profitability of the GMC brand and the GMC brand health. Many people would not own any other GM brand, they had a very high opinion and owned a GMC sport utility or truck.

We could not save Hummer, which was a mistake going in. Hummer never should have been a brand, it should have been a vehicle in the GMC lineup. It should have been Hummer by GMC, and that way you could have added one to the GMC dealer body, and when that one was worn out, you could replace it.

But the minute we made Hummer a separate franchise we had to feed it with a full lineup of vehicles. We had the H1, which never sold in any significant number. The H3 did well. The H2, which was Wrangler and Bronco-sized, it would have been a smash hit. But I had to admit Hummer the brand was a mistake going in.

Pontiac, I dug my heels in. But their hearing aids were turned off, they said, ‘It’s a lousy brand, it’s been unprofitable for years.’ I pointed to all the signs of brand health; Youthful buyer enthusiasm for the brand, etc. I just wasn’t able to put it over the goal line. So unfortunately it died. I still consider that to be borderline a tragedy.

I had been trying to convince my boss at GM for years we should get rid of Saab, and it was always wait until next year, wait until the next year, wait until next year—and next year never came. It was a goofy brand that was off the mainstream, and every time it was made more mainstream, we didn’t sell any. And when it was goofy, which the automotive press loved, there were only 100,000 people in the whole freakin’ world that wanted one.

Saturn I was glad to be rid of. There was no longer any reason for the Saturn brand. Chevrolet was just as good and just as reliable. And all of the dealer networks had learned in the meantime that you don’t screw the customer if you want to stay in business. The reason Saturn was formed kind of went away. Saturn was another mouth that we had to feed with limited capital. So okay, Saturn can go.

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