Blog: GM to axe a brand?
Dave Leggett | 24 March 2005
The situation at GM right now sounds pretty serious. Contacts inside the company tell me that a head of steam is building under the need to do something radical and quickly about the worsening financial performance. Axing a brand (maybe two) is certainly one obvious option for discussion, however unpalatable it may seem. It could come down to 'least worst' options (given new model cycles and already incurred investment in new product which is in the pipeline), with carrying on as now ruled out.
Rob Golding noted in his management briefing for us this month that there appears to be a direct correlation between the number of brands and a lack of group profitability. Among the major eleven carmaking groups studied GM has the most number of brands (15) and is second bottom – the wooden spoon goes to Fiat – in terms of operating margin.
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