Industry Report: GM's Bob Lutz Considers Dumping One Brand to Curb Losses

It does make a lot of sense, actually, and if GM can do it, it might work. Still, it's up against brands such as Toyota,

If GM eliminated a brand it would also most likely be able to close down one or two unprofitable manufacturing plants, which would not only cut salaries, but health care costs. (Photo: General Motors of Canada)

which manage to sell conservative sedans, sporty cars, trucks, SUVs, etcetera, under the Toyota, Lexus and Scion (U.S. only) banners. Honda does the same, while adding motorcycles, ATVs, power generators, and just about everything else to its portfolio. This allows it to market one powerful brand, seen just about everywhere. While this works for Honda, mind you, it surely doens't for Mitsubishi.

Like Mitsubishi, GM faces other challenges that only make weaker sales more difficult to deal with. It's the largest private provider of health care in the U.S., which puts the automaker under tremendous strain. If it eliminated a brand it would also most likely be able to close down one or two unprofitable manufacturing plants, which would not only cut salaries, but health care costs.

"An across-the-board competitive health care plan for salaried and hourly employees could literally save us

Putting further pressure on the company, GM also faces $300 billion in outstanding debt. (Photo: Shawn Pisio, Canadian Auto Press)

billions," said Gary Cowger, GM's president and CEO. Health care costs, added Lutz, are "a huge albatross hanging over American industry today."

The automaker also faces $300 billion in outstanding debt. It may sell a stake in its GMAC Commercial Mortgage division, now that potential investors have shown interest, but being a highly profitable subsidiary, which has supported GM's poor vehicle profits, it would be a hard pill to swallow.