Ed Whitacre, the former AT&T (NYSE:T) CEO and current GM chairman, fired the car company’s chief and put himself in charge.
Whitacre said the he would shake up the old guard and get sales back on track for the No.1 US car company. His plan to move more units off dealer lots failed. Whitacre reasons that he could hasten the day when he could shut down Pontiac and Saturn by offering sharp discounts on their models in December. Whitacre also supported the GM programs to offer cash incentive and customer loyalty discounts to improve sales in the last month of the year.
Sales of GM’s remaining brands, GMAC, Cadillac, Buick, and Chevrolet were up 13% for December, but the company’s overall sales were down 6%. That contrasts to 32% increases at both Ford (NYSE:F) and Toyota (NYSE:TM). GM will completely discountinue sales of Pontiacs and Saturns sometime this year, which means it total sales will drop fairly sharply. That may allow Toyota and Ford to pass it in total unit sales in its home market.
The sales of cars and light truck will almost certainly accelerate in America this year. Pontiac and Saturn probably would have been beneficiaries of that, which would have given them a chance to be profitable. But, Whitacre would not take that gamble, and because of his aversion to risk, GM will probably end up being the N0.3 car company in the US.
Douglas A. McIntyre
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