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The real issue was GM transfer pricing - they couldn't charge enough to make money after the mid-70s

Full-size product from the home plant kept the lights on for years. But, as former General Manager Bill Hoglund noted in the excellent Bonsall book, by the '70s a Chevy dealer could sell a Camaro at retail for less than a Pontiac dealer could buy one wholesale from the factory. If it was loaded with options, it might break even, but, in the year when they sold nearly 200K (after Bandit) they still lost money on every one.

In the 80s, when GM undertook the CPC/BOC re-organization, I worked on the pitch to sell the re-org through. The zinger: BOC sold about 23-24% of the Corporation's product, and accounted for over 80% of the profit. The inverse is the shocker - the bulk of the business was only turning in 20%, and if not for Truck, would have probably been zero. There was trouble long before bankruptcy.

Later, GM needed Pontiac to dump small cars like Sunfire and Grand Am with the base powertrain to get much-needed fuel economy credits for half-ton trucks and utilities which watered down the brand, and yes, the cladding that began modestly went full blown tacky. The inability to land on a really smart, distinctive SUV and get it through the system to production was the death knell - they got stuck with the horrid Aztek, a concept that started unlike it finished to say the least. The damage to the brand from that mistake was incalculable.

Bob Lutz went all in to pitch a rescue plan to go "American BMW" but In the end, the rescue team was not signing on to 'eventually' make money againt. Lots of great moments, but in the end, it's all about the money.

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