GM’s Buick Said to Be Poised to Add Models as Other Brands Fall
April 17 (Bloomberg) -- General Motors Corp.’s Buick, the 106-year-old
luxury brand fighting dwindling U.S. sales, may add models as the
automaker sheds Saturn and reviews the future of Pontiac, people
familiar with the plans said.
The options include making a Buick version of Saturn’s Vue sport-utility
vehicle, said the people, who asked not to be identified because no
decision has been reached. A Buick Regal designed by GM’s Opel unit in
Europe and now set for China also might be offered in the U.S., the
“It’s an opportunity for Buick, but it’s very narrow,” Alan Baum,
director of automotive forecasting for Planning Edge in Birmingham,
Michigan, said in an interview. “The more brands you cut, the more
market share you lose. GM is going to get smaller.”
Buick would be a winner in GM’s bid to cull its eight U.S. brands to
help avoid bankruptcy. GM is unloading Hummer, Saab and Saturn, and
studying whether to keep Pontiac and GMC, people familiar with the talks
said this week.
Until deciding last year to abandon Saturn, GM had plans to develop more
of the brand’s models from Opel designs, as it did with Saturn’s Astra
and Vue. The people familiar with GM’s plans said that without Saturn,
more Opel engineering may be shared with Buick, which now has just three
models in the U.S.
GM has declined to comment on specific changes to its brands. Chief
Executive Officer Fritz Henderson is holding a briefing for reporters
today on the Detroit-based automaker’s restructuring.
Automakers try to assemble multiple models using the same underlying
engineering designs, sometimes called architectures. While the bodies
may look different, such models can share parts such as engines or
axles, trimming costs.
GM has been designing all of its new models on shared, global
architectures of varying sizes over the last several years to close a
gap with Japan’s Toyota Motor Corp. and Honda Motor Co., which are among
the leaders in such engineering.
Buick’s U.S. sales peaked in 1984 at 941,611, according to trade
publication Automotive News. By 2008, that total had dwindled to 137,197
units, a 26 percent drop from a year earlier. The brand had about eight
models earlier this decade.
One of the main reasons GM has pushed to keep Buick is its popularity in
China, the people said. Sales surged almost tenfold from 2000 through
last year to 280,255, consulting firm IHS Global Insight Inc. said.
Buyers there coveted Buicks because they were the cars in which
Communist Party leaders were chauffeured. Buick sells nine models in the
world’s most-populous country, where dealerships include private clubs
and other customer perks associated with higher-end luxury brands in the
“Buick has some nice products in China, and it doesn’t have the baggage
as an old-person’s car that it has in the U.S.,” said Rebecca Lindland,
an IHS analyst in Lexington, Massachusetts. “It’s seen as an iconic
GM’s brand shuffling, which envisions the survival of at least
Chevrolet, Buick and Cadillac, is part of talks with the Obama
administration task force studying whether restructuring the largest
U.S. automaker is possible outside bankruptcy, people familiar with the
matter have said.
Besides Pontiac, GMC has been added to the discussions of brands that
might be cut, people have said. No decisions have been made.
To stay out of court protection, CEO Henderson needs agreements from
unions and debt holders for savings beyond GM’s Feb. 17 proposal for
slashing $47 billion in unsecured claims by 59 percent.
GM plans to make a formal offer to bondholders on April 27 to exchange
their $27.5 billion in claims for equity, according to a person with
knowledge of the discussions. The auto task force told GM to try to
restructure its debt out of court, people familiar with the matter said.
GM gained 5 cents, or 2.7 percent, to $1.94 yesterday in New York Stock
Exchange composite trading. The shares have tumbled 90 percent in the
past year amid fears of a collapse by the company, which has posted $82
billion in losses since 2004.
The first auto labeled as a Buick was built in 1900 by an engineer
working for David Dunbar Buick, who formed the company bearing his name
in 1903, according to a GM history. A year later, the initial 37
production models were built in Flint, Michigan, GM said. Buick was the
cornerstone brand for GM when it started in 1908.
Its history includes nameplates such as Skylark and LeSabre and
style-setting models such as the 1949 Riviera, which featured trademark
“VentiPorts” on the front fenders directing air to the engine compartment.
GM said this week it has “multiple bidders” for its Saturn dealer
network, including a group led by Oklahoma City private-equity firm
Black Oak Partners LLC. Potential buyers for Hummer also have signaled
their interest, Henderson said in March.
About a half-dozen serious parties have expressed interest in
Trollhaettan, Sweden-based Saab, a person familiar with the negotiations
said. Saab filed for protection from creditors on Feb. 20 after GM said
it will cut ties by the end of the year.