GM CEO Henderson "No Fan" of Rebadging, but...
June 24, 2009
By Bill Visnic
During a recent Webcast with reporters, General Motors Corp. CEO Fritz Henderson said that when the Pontiac division turns out the lights at year-end, its critically acclaimed G8 sedan won't be picked up by any of GM's four remaining brands.
The CEO added: "I'm not a fan of rebadging."
If that's one of the reasons the G8 won't be seen wearing another division's crest, then Henderson has long suffered his distaste for rebadging: almost from its origin, GM's modus operandi has been rebadging, probably the most callous examples coming in the 1980s, when precious little in the way of genuine engineering differentiated one brand's vehicle from another.
And rebadging looks to be at least part of the modus operandi of the "new" GM to emerge from Chapter 11 bankruptcy.
A History of Rebadge Engineering
Henderson has worked for GM for a quarter century, and although his career is biased heavily toward the financial side, he has held positions of overall operational responsibility, including for GM Brasil and GM Europe, so it must be assumed Henderson at times was asked for his opinion at least on broad product decisions.
Critics often point to the company's perpetual reliance on "badge-engineering" as a key factor for the company's long decline toward bankruptcy, an end that justified rebadging as a means to retain too many marketing divisions with too many models little different from badge-engineered counterparts in other GM showrooms.
Henderson has long been a cog -- albeit more at arm's length than many, perhaps -- of the GM executive culture that could not and would not recognize its historic foundation of rebadging as a strategy that became antiquated and counterproductive the day after GM attained its market share zenith in 1962.
That year, GM accounted for 51 percent of all the new cars sold in the nation. That kind of dominance supported multiple divisions selling essentially the same car -- rebadging. With market share now shriveled to 18 percent in the first quarter of this year, trying to sell four different versions of the same vehicle is a fool's errand. It was 20 years ago, but GM management persisted.
Rebadging Lives On
So maybe now that Henderson's at the wheel and GM's divisions have finally been pared, Henderson and GM are insinuating rebadging is a thing of the past -- case in point, the Pontiac G8, right?
Not really. Henderson said in the same media exchange that he thinks GM can do a good job of "differentiating" GMC models, and points to the new GMC Terrain and Chevrolet Equinox compact crossovers as the example.
Unfortunately, few in the media who have been exposed to those models see much to
support Henderson's contention.
And few really see the point of continuing the GMC division at all. GM claims it's profitable. Maybe so. But going forward into an era with tightened fuel-economy standards and presumably less emphasis on the "trucks" that have been GMC's part and parcel, GMC's warmed-over variants of other divisions' models don't really compute.
Sales of body-on-frame pickups and SUVs are on the decline -- likely forever -- so the Chevy unit can handle that, even the "upscale" end of the
spectrum GMC allegedly addresses. And what's the point of GMC-badged mommy-mobiles like the Terrain? Look no further than the Jeep Compass for a lesson in how that brand's tough image mated with the "soft" crossover buyer.
And as much as Henderson expresses disdain for rebadging, GM's most egregious new
example is launching on his watch. The Cadillac division's all-new SRX is yet another variant of the midsize crossover architecture, just like the Equinox and Terrain. 
But most unfortunately for Cadillac, GM planners and engineers quickly and conveniently forgot the division's late-'90s pledge to sell vehicles based exclusively on rear-wheel-drive underpinnings, the better to win the perception war with the German luxury-class heavyweights.
Cadillac almost slid by with the front-drive (and transverse-engined) SRX, a badge-engineering lie. But we were paying attention. Those all-important post-bankruptcy customers just might, too.
Photos by GM
1 - The 2010 Cadillac SRX (top left), 2010 Chevrolet Equinox (top right) and GMC Terrain (lower left) share the same underpinnings.
2 - The Pontiac G8 will not be rebadged as a Chevrolet as many enthusiasts had hoped.
3 - 2010 Chevrolet Equinox.
4 - 2010 GMC Terrain.
5 - 2010 Cadillac SRX.
Posted by Michelle Krebs at 5:59 AM under Commentary , Featured , GM , In the Media | Comments (15) | digg this | Seed Newsvine
Gosh. Thanks for the uninformed and, frankly, highly biased commentary. Henderson's comment on rebadging came when folks asked if he'd slap a Chevy badge (and, I guess) wheels & trim on the Pontiac G8 to make a Chevy Impala SS. When two vehicles share nothing except the stuff you don't see--eg, all the sheetmetal and interior bits are unique--that's not rebadging. Some call it 'different top hats' or 'platform sharing'. So if you're going to eviscerate GM for this strategy, you might as well do the same for Ford (Taurus and MKS), Toyota (Camry and Lexus ES) and Honda (Accord and Acura TL).
Posted by: adb4 | June 24, 2009 at 6:55 AM
The G8 saga makes me sick. It's an outstanding car--the first desireable, reasonably-priced 4-door from GM in years. As for rebadging, that's only a bad thing if you sell the same car at multiple outlets in the same country, like the Traverse/Enclave/Outlook/Acadia.
Sure, the G8 is also badged 4 different ways, but no two of them are sold in the same country. From any one sales market's point of view, it's not rebadging at all. So what's wrong with selling it as a Chevy here? With Pontiac dead and gone, there's nothing wrong with it. Why flush a good product that has developed a following despite being ignored by the advertising department?
Posted by: actualsize | June 24, 2009 at 7:11 AM
adb4: The issue is that GM was the most egregious of the bunch in badge engineering, particularly in the 80's and 90's. Ford would do it across 3 models (Ford, Mercury, Lincoln), Chrysler 3 (Chrysler, Dodge, Plymouth) but GM would do it across 5 (Chevy, Pontiac, Buick, Olds, Cadillac). That's 5 models aimed at almost the same price bracket (and the cars pricing was identical). And it wasn't that there were a few models: every line had practically the identical mix of products. At least Ford stopped making Mercury trucks, and Mercury didn't get every SUV that was also a Ford.
To be fair to GM in its new state, at least with Buick, Chevy and Cadillac the overlap is reduced. Yes, Chevy and Buick share a crossover, as does Cadillac. Buick might share 1 car platform. But the car lines are distinguishing themselves, and there are brand-unique models for each.
Where the problem lies now is with GMC: with the exception of the Denali trim level on the Yukon and Sierra, everything they make can be bought with a bowtie for the exact same price. The Sierra is a Silverado. The Terrain is an Equinox. The Yukon is a Tahoe/Suburban. The Envoy is a Trailblazer. The Acadia is a Traverse. The Canyon is a Colorado. All with the same features and same prices, just different sheetmetal. As a consumer, the choice is nice (I personally like the look of the Sierra more than the Silverado), but not having the choice won't turn customers away (if I only had the Sliverado to choose from, that I would still buy it).
Like it or not, GM was the posterboy of badge engineering, and they still wear that crown whether it is fair or not. Yes, most other companies do this today (Honda/Acura, Nissan/Infiniti, Toyota/Lexus, Ford/Mercury/Lincoln, Chrysler/Dodge/Jeep). Its a question of how you do it, and how you position the product. GM isn't even making an effort in most cases to differentiate the product.
Posted by: pushrod | June 24, 2009 at 8:16 AM
actualize: I agree, it is sad about the G8. I think that GM has a chance to have a nice, 3-car stable for performance junkies. The Corvette as the high-perf sports car, the Camaro as the muscle car/coupe and some kind of high-performance sports sedan. Impala SS would be cool (and using the G8 instead of the current platform would be a nice switch for the line overall). Maybe they could resurrect some other name from the past. Maybe a Bel Aire SS? Make a wagon version and call it the Nomad?
Posted by: pushrod | June 24, 2009 at 8:21 AM
pushrod: No disagreement about GM's history, and no disagreement that GMC's current body-on-frame vehicles are rebadged Chevrolets (although I'll point out the Acadia and Traverse are as different as Pilot and Acura MDX). I do take issue with flagging Equinox, Terrain, and SRX as 'rebadging'. Saying "rebadging looks to be at least part of the modus operandi of the "new" GM" is factually inaccurate, given the vehicles highlighted here are no more 'rebadged' than the aforementioned Honda, Nissan, and Toyota products. And using the argument of history is like saying all of Hyundai's future vehicles will be crap because they used to exhibit extremely poor quality.
Posted by: adb4 | June 24, 2009 at 9:16 AM
adb4 is exactly right. And doesn't the media praise Toyota etc for platform sharing which also permits "flexible manufacturing"?
I'm amazed that Auto Observer would write such a biased and misleading piece. I guess it's easier when the author knows the story outcome sought, then creates a story around that thought
Posted by: uponfurtherrev | June 24, 2009 at 10:30 AM
Hmmm... The feed for this article just re-appeared in my Bloglines. It appears to have been modified somehow after the various comments were reviewed, since the link from the original feed (five hours earlier) is now a dead link. Or am I getting paranoid in my old age? It looks as though some additional paragraphs about GM history were added up front. Unfortunately, the other inaccuracies and oversights remain...
Posted by: adb4 | June 24, 2009 at 12:02 PM
I've never purchased a GM car, and probably won't. It seems to me that when you have multiple vehicles targeting the same buyer that unless you have massive sales (and market share) the tactic will produce losses, not profits.
Right now, GM has neither massive market share nor sales. The strategy is based on a premise that you have 50% of 14 million sales annually, not 20% of 9 million sales.
It seems to me that targeting one or two platforms would make more sense from a production point of view. True, unit costs would be spread over fewer vehicles, lowering their per vehicle gross margins, but the expense of continuing to manufacture the same platform for multiple car lines could be slashed.
Will someone explain to me why GM has a Chevy Suburban, a GMC Suburban, a Chevy Tahoe, a GMC Yukon, and Silverado trucks in both portfolios?
Posted by: billddrummer | June 24, 2009 at 12:36 PM
Actually, the SRX is not really a Theta rebadge of the Equinox and Terrain. It's technically a Theta/Epsilon II hybrid. Please do some research before posting erroneous information.
Posted by: chavis10 | June 24, 2009 at 12:38 PM
Bill should do some research before posting BS articles like this. The SRX is not based on the same platform as the Equinox and Terrain. In any case it wouldn't be a rebadge because the SRX shares NOTHING with the other two SUVs. Does Bill understand the definition of rebadge? Apparently not. When two vehicles have totally different interiors and exteriors they do not represent a rebadge in the minds of logical people. Even the Terrain and Equinox do not count even though they share a platform. They share no exterior panels. The Cobalt and G5 represented badge engineering. Not the Terrain and Equinox.
Its a shame that someone on a site like this can post such unedited rubbish and face no consequences. Shouldn't a "car guy" know some of this stuff? The information about the SRX is clearly laid out in GM press materials. Henderson was talking about simply rebadging the G8 as a Chevy and continuing to bring it here to the US.
Also, GMC exits because it sells higher margin vehicles. The upcoming CAFE rules have different targets for cars and trucks and allows larger vehicles to shoot for lower targets. The notion that pick up sales will decline forever or that GMC has no place in the market due to CAFE is pure foolishness when you understand how CAFE works. Futhermore, CAFE gives bonus points for E85 compatibility and most GMC models run on E85. Use common sense.
Posted by: 1487 | June 24, 2009 at 1:28 PM
When nearly everything you see is unique, it's not badge engineering.
That said, it is clear that Cadillac is no longer pursuing BMW, but will now aim for the low end of the Lexus line. Given the funds shortage and their limited success with RWD--CTS succeeded, XLR, SRX, STS failed--this change of course was perhaps inevitable.
Posted by: mkaresh | June 24, 2009 at 7:23 PM
We just had our 34th annual Back to the 50's car show at the Minnesota State Fairgrounds. An estimated 11,400 vehicles were on hand. Like, endsville, daddio!
Not long after the cut-off year for this event, 1964, GM and others were moving away from divisions to just brands. True,'55 Chevys, Pontiacs, Oldsmobiles, Buicks and Cadillacs shared some pieces and stuff like trunk lid frames etc. But the \powertrains\ were different; from the radiator cores to the rear axle inspection covers. Ford and Chrysler were also more differentiated though to a lesser degree.
I think the beginning of the end started with the 1961 Pontiac Tempest, Olds F85, Buick Skylark.
These were far more similar to each other than their bigger brothers at the time.
GM needs to get back to division think. And the only way to do that is axe GMC and move Buick totally to China. With just Chevrolet and Cadillac, they would be profitable in North America.
.
Posted by: fulcrumb | June 24, 2009 at 8:43 PM
The rwd SRX did not sell well and got poor mileage. The new SRX has a conventional crossover profile and better fuel economy which means that in spite of the protests from Bill and other RWD fans the new SRX will be more successful. At the end of the day this is about selling vehicles. The RWD ML and MX have never come close to outselling the RX350 and thus Cadillac must have determined that FWD was not a deal killer for buyers in this segment. The MDX is also based on a FWD platform. In addition only an idiot would say Cadillac made pledge in the 90s to sell only RWD vehicles because the DTS is still on sale and it's FWD. Cadillac never completely abandonded FWD- they established a RWD platform to compete with the Germans in driving dynamics but they naver said all of their offerings would mimic German luxury brand offerings. If they were intent on copying the Germans the Escalade and DTS would not exist.
Posted by: 1487 | June 25, 2009 at 6:25 AM
Amen; it is all about sales. Most buyers in the CUV segment do not want BMW handling. The new SRX is probably a better compromise for the segment than the old SRX, which never sold well, even though it handled great. Contrary to what auto journalists would like to believe, many people DO want a car/CUV/truck that is little more than an appliance. And that is not such a bad thing, having a car that works well when you need it.
@Actualsize: Other than auto journalists, where is the "following" that the G8 has developed? I like the car too, and hope it stays as a Chevy. And I agree that the people that bought the car probably love it. But where are the sales to justify it?
And since when has any "journalist" on the internet given a rat's ass about being "informed"?
Posted by: rlg86 | June 25, 2009 at 9:55 AM
Now the killing the G8 makes no sense based on any rebadging concerns because if Pontiac dies there is no rebadging taking place! How can there be rebadging if the G8 becomes a Chevy Chevelle SS or Impala SS since Pontiac is soon to be dead? Thus there must be an alternate reason for killing the G8 platform. Is GM trying to offer future products that are more “green” with much higher mpg to meet EPA standards, and thus the G8 won’t fit in here in USA? Whatever, it appears that Henderson simply doesn’t want to answer.
Now we all know GMC’s are mostly rebadged Chevy trucks, as stated. However in this case GM is holding onto GMC only because their inept business plan always recognizes short term profit but can’t figure out long term profit and does not recognize developing a rock solid philosophy and sticking to it which IS CRITICAL TO LONG TERM STRENGTH. The fact is GM still has one too many divisions—the redundant GMC division needs to go. GM has got to learn not to bamboozle the public with warmed over versions of the same vehicle that they have dishonestly advertised as “Professional Grade” for what –like forever? Heck-- the vehicles have been mostly Chevy Clones for a long, long time! Good vehicles but why the bull? Yes many ads have some baloney in them but they are never the best unless they are genuine…
If GM decided to sell a version of the GMC product line within the Chevy division (because there were too many folks who just had to have a GMC grill, meaning extra cash income for GM) BUT not change anything except the front end style, taillights, nameplate, and that’s about it—it may make money and wouldn’t be disingenuous. —It would be an honest “styling option” with almost no costly advertising, marketing, PR, separate brochures, etc. There would be no need to create expensive false advertising like “We are Professional Grade,” or try to figure out what they are because they would be Chevy vehicles with the “GMC style option group Z.” But you’ve got to be careful here that the company does not start doing the GM bamboozle and try to sell vehicles as specially different, when they are mainly styled differently.
Posted by: garypaul1 | July 07, 2009 at 6:03 PM