GM is reportedly considering dropping a number of brands, including Saab , as part of its plan to secure USD12bn in US government loans.
 
A Bloomberg report said that GM is mulling whether to drop its Saab, Pontiac and Saturn brands, as well as its already for sale Hummer brand. Such a move would take cost out.
 
The report cited as source ‘people familiar with the matter’.
 
US lawmakers last week rejected immediate pleas from GM, Ford and Chrysler for USD25bn of so-called ‘bailout’ loans.


The Detroit 3 have been asked to submit ‘path to viability’ plans ahead of a bridging loans decision next week. A big element in the plans will inevitably be taking operating costs out wherever possible. Dropping brands is one obvious course of action.
 
GM directors are scheduled to review a proposal November 30 and December 1, the Bloomberg article said, again citing people familiar with the plans.


As well as taking cost out, GM may feel that a sale of Saab to generate cash is possible, though an obvious difficulty may be finding a buyer in current market conditions.


However, there has been speculation that the Swedish government will take a very keen interest in any possible change in the status of either Saab or Volvo Cars , should their financially challenged parents be forced to attempt further asset sales (possibly just to get loss-making units of their books).


Research undertaken by financial analyst Rob Golding exclusively for just-auto in 2005 found a clear link between volume manufacturers’ profitability and the number of brands they own. Some will say that GM dumping under-performing brands is something that is well overdue.


See also:


SWEDEN: Government eyes local carmakers’ plight


COMMENT: Volvo AB ‘eyes acquisitions’ (Volvo Cars?)


Rob Golding: The consequences of GM’s brand muddle


PARIS SHOW OCT 2008 INTERVIEW: Saab is key to GM but has to perform – GM’s Henderson