Despite recent reports to the contrary in the Wall Street Journal, General Motors (GM) is not considering discontinuing or selling any of its brands other than Hummer, according to a meeting Mark LaNeve, VP of Sales for North America, had with its dealers. Regardless of its official position on the matter, there are definitely some major changes on the horizon for GM. It is faced with a 16 percent decline in sales this year (compared with an industry-wide decline of 10 percent). Stock analysts believe the company needs to raise $5 billion to $15 billion in cash in order to stem its ongoing losses and high expenses, and if it doesn't, bankruptcy is a possibility.
General Motors has put its Hummer brand up for sale.
In yesterday's post, I addressed whether you should be concerned if you are buying a car from one of GM's eight brands. As serious as GM's problems sound, my answer is still no. Brands have been sold to other automakers throughout the industry's history and consumers are largely unaffected by these changes. Jaguar was purchased by Ford Motor Company in 1989, while another British brand, Land Rover, was sold to BMW in 1994, which in turn sold it to Ford in 2000. Ford recently sold both brands to India's Tata Motors, and most industry experts agree that the two brands will remain true to their British heritage under Tata's umbrella, due to Chairman Ratan Tata's interest in letting Jaguar and Land Rover operate largely independently. Throughout all the sales of these brands, each company has continued to honor its car warranties and access to dealers for car maintenance has remained constant, leaving many owners unaware of the changes in ownership. See NADAguides.com for more information on car warranties.