By Poornima Gupta
Reuters
Monday, February 27, 2006; 1:46 PM
GENEVA (Reuters) - General Motors Corp. <GM.N> Director Jerry York is now convinced the Saab and Hummer brands are good for the automaker, a month after he suggested GM get rid of them, GM's vice chairman of global product development, Bob Lutz, said.
York, adviser to GM's largest individual investor, billionaire Kirk Kerkorian, joined the company's board earlier this month.
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"Saab has really turned the corner," Lutz said at a Saab event a day ahead of the Geneva Auto Show, where the division took the wraps off a futuristic-looking sports car concept called Aero X. "It is close to making money as a brand."
"Jerry made all those comments before he joined the board," he added. "He realizes that it was a suggestion he wouldn't have made if he knew all the facts."
York urged the No. 1 automaker in January to consider eliminating Saab and possibly Hummer in order to focus attention on turning around its money-losing U.S. manufacturing operations.
He had also asked GM to cut its dividend in half and slash executive pay as part of a broader restructuring effort.
GM in February halved its dividend and cut executive pay, but said nothing about its brands.
Lutz said GM's drive to share vehicle platforms, or underpinnings, across its global brands is showing positive results at Saab.
"Because of Saab being able to share architecture with other GM products ... it very much lowers the investment and the cost compared to when Saab was this independent company," he said.
GM acquired the Scandinavian brand in 2000.
Lutz declined to say if Saab will be profitable this year.
Saab saw U.S. sales rise 0.5 percent to 38,343 vehicles last year, but the brand underperformed other luxury nameplates such as BMW.
There are signs of optimism, however. U.S. sales rose 34.1 percent in January, led by new products like the 9-3 sedan launched last fall.
"GM is definitely better off with Saab brand," Lutz said.
GM's product chief also on Monday said York is now convinced about the Hummer brand as well.
"Hummer is a very profitable brand for General Motors, very profitable," Lutz added.
