Editorial: GM Deathwatch 229: Opel For Opel's Sake

Motorauthority reports that the long-rumored Buick C-segment sedan will probably be built at Opel’s Rüsselsheim plant. The new, entry-level Buick will utilize production capacity freed by plans to produce the Delta II-based Saab 9-3 at Saab’s Trollhättan plant. Since the American Astra experiment has gone so badly, GM needs a higher-margin Delta II vehicle to justify expensive tooling efforts at Rüsselsheim. Hence the plan for a Buick compact for the U.S. market. It’s a deeply misguided project, yet another sign of GM’s chronic, ongoing, multi-national mismanagement of its models, brands and [dwindling] resources. What is it with these people?With the future of Saturn and Saab up in the air, with the HUMMER brand on death row, GM is trying to chart a course to “viability” based on constantly-changing assumptions. One of those: Buick should be a “core brand.” God knows where GM got that idea. Buick is one of the two rotting limbs on the corpse currently known as the Buick, Pontiac and GMC (BPG) “channel.” Buick hasn’t had a hit product since… wait… I’m thinking. The Lambda-based Buick Enclave was supposed to be one of GM’s Next Big Things. The CUV never found its stride. A year ago, TTAC’s Frank Williams wrote Buick sales suck. A s you can imagine, they went downhill from there. At the time, Williams wondered if GM was trying to starve Buick to death. Perhaps they were. And changed their mind. Several times. Anyone familiar with GM’s on-again, off-again, we don’t know yet (a.k.a. “strategic review”) product plans knows that indecision and paralysis is GM’s leitmotif. GM’s new plan: between now and 2012, Buick will offer Americans a thin diet of me-too rebrand jobs: the new LaCrosse, this Delta II whatever and a Lambda CUV (Enclave). Needless to say, these examples of cost-cutting platform-sharing badge engineering will continue to debase whatever appeal the Buick brand once held for its loyal customer base. Or anyone else.And yet, Buick somehow remains one of GM’s four “core brands.” There’s only one remotely plausible explanation: Buick’s success in China has convinced RenCen that the brand has a future. Of course, Buick doesn’t mean anything in particular in China. So why should it mean anything stateside? That would explain the plan to build a compact Buick for the U.S. market. The funny thing is it just might work. By now, nobody anywhere expects a Buick to be anything more than an up-optioned Chevy.Even if we accept the fantastic possibility that when better Buicks are built someone will buy them, the real problem is building them in Germany. First, there’s an issue of cost. Thanks to higher labor costs, building in the Eurozone is an expensive business. And then there’s the fact that GM doesn’t sell Buicks in Europe. The cost of shipping vehicles to the US (China?) will hurt both profitability and sales. And don’t forget about the currency issue. If the Pontiac G8 and Saturn Astra experiences taught GM anything, there’s no way this idea will work. Then there’s the branding opportunity cost. Understandably enough, Opel’s bosses feel that branding GM’s best products as weaker marques hurts GM as a whole. “Only under the Opel brand can Opel products profit from their heritage, as it lends the ‘German Engineering’ appeal,” Opel boss Klaus Franz tells Handelsblatt.Indeed, GM has sunk considerable amounts of cash into Opel in hopes of bringing the brand upmarket. It appears to be working. So why hide this success behind a brand that (outside of China) represents a tarted-up Chevy?Why bother? In the U.S. and elsewhere, Opels could be sold as Opels, replacing GM’s confused mid-market branding “strategy.” With Chevy (Korean budget), Opel (German engineered, efficient, tech-y mid-level) and Cadillac (American luxury) GM can cut its portfolio to three complimentary global brands.Pontiac, Saab, Saturn and Buick have to go. The fact that each of these four brand fiefdoms are fighting for Opel underpinnings for their products says everything. At this point, what does GM have to gain by holding onto the past with these useless antibrands? Opel can (and does) do everything these four brands do, only with a glint of European luster. Introducing the Opel brand in the US would have its risks. But at least it’s a fresh start. Selling its superior products under its real name helps GM considerably more than hiding them under the sheetmetal of a dead brand walking.This strategy is similar to the approach that Ford is taking by bringing the Euro-spec Fiesta, Focus, C-Max and Kuga stateside. Ford’s job just happens to be easier, thanks to being called “Ford” in Europe. Like Ford’s plan, an Opel revamp of GM’s mid-market vehicles would have to involve local production to avoid Astra/G8 redux. And it wouldn’t be easy with the General’s current cash position. But at least it would be a “viable” strategy.