Thursday, January 22, 2009

General Motors Pisses On Consumers Again

As part of the agreement made by Ex-President Bush to give General Motors part of an industry $17 billion bailout The Associate Press reports General Motors has yet to clean house of dunderheads who forget to engage brains before opening mouth.

According to an Associated Press article which sites GM's loss of the number one auto sales position to Toyota GM's Executive Director of global market and industry analysis Mike DiGiovanni downplayed the significance of the drop to number two saying the automaker is focused on profitability rather than sales volume. "I don't think being number one in vehicle sales means all that much at all to the American consumer. I think what matters most to the is consumer is strong brands and strong products..."

Jesus Mike! How do you have strong products and brands if you're not number one? Those are the strong products and brands! This statement is about as intelligent a move as your CEO flying to DC on a private jet asking for a handout. Seriously. It's in the same league. Did your PR department approve this statement before you let fly? Are your advertising agencies reviving an Avis like "We try harder" campaign? Mike, this type of thinking is why GM stock was trading around $3.50 yesterday. Oh, that's right Mike, I forgot. It's OK to say stupid things that influence consumer perception by telling us being a winner isn't important. Or did you never learn that Americans love winners? Your excuse for being stuck on stupid? ...GM is a penny stock company and penny stock companies don't employ the best, the brightest or those with much common sense. That's why they're penny stocks instead of corporate leaders. I won't even have to look today to know GM stock selling even lower.

But this type of gaff reminds me of another GM story years ago when GM hired a Deputy Director of the US Census named Vince Barabba to come in and give the company "a voice of the consumer." Vince met me in his office to explain he believed there was "a market for people who wanted cars that didn't look good." I had to ask Vince to repeat the objective of that new product assignment before I graciously declined to participate. I left. Vince stayed. Vince didn't last long at General Motors and neither did his Chevy Lumina.

If GM was Dorothy in The Wizard of Oz do you think they and CEO Rick Wagner wake up each morning tapping their heels together saying, "It's not about sales. It's not about sales."


Maria Raynal said...

I work for GM, and wonder if you've visited a GM dealership recently?

If not, I encourage you to test-drive award-winning vehicles like the Chevy Malibu, Buick Enclave and Cadillac CTS.

Take a look at the photos of the upcoming Buick LaCrosse, Chevy Equinox, Cadillac SRX and the Cadillac Converj concept shown at the Detroit auto show last week.

Vehicles like these have been extremely well received by the media and consumers, and are created for people who care deeply about beautiful design, reliable performance and fuel efficiency.

Your reasoning suggests that if you're not number one, why bother. So should Pepsi slink away into oblivion because it hasn't caught up to Coke?

By the way, GM led the U.S. auto industry by 750,000 vehicles in 2008, and is No. 1 in China, the world’s fastest growing market. But, eh, who’s counting, right?

H. Martin Calle said...

Thanks Maria,

I am so pleased that you came across my blog, MADISON AVENUE. I too hope for the best for all of GM. I grew up in a GM family and know for a fact that a close friend, the Chairman of Morgan Stanley's Advisory Committee also drives a 1984 Chevy just like mine. The saying does, "the people with the most money just don't show it." An automobile, like furniture, is simply a poor investment. That advice was given to me by J. Peter Grace, head of the Grace Commission, Grace Chemical and at one time owner of Marine Midland Bank in New York.

We all have better places to put our money.

I applaud your defense of your employer. One problem I found working for a long time, and at the highest levels at GM is that every system at GM is built to deflect responsibility away from individuals in charge. So you can't put your finger on anybody for a decision or inaction. In fact, we constantly found opportunities that scored in the high nineties for top two box intent to purchase - then GM and it's ad agency McCann-Erickson would inexplicably go 180 degrees in the opposite direction with a corresponding drop in sales. Let us at least for now agree that the decisions made by management are at best questionable.

Was George Bush a good President? Will GM pull out of its nose dive? Well, we are not talking about GM being #1 in China. I'm interested in GM being #1 in the US. We have more disposable income than any other nation. Yet GM keeps designing and marketing products more for rental fleets than for US consumers. To date, the company has still been unable to mimmick the preferred pedal feel of an Acura or Honda even though I gave them the part to copy myself. Just a small thing, but success is in the perceptions of consumer minds.

There isn't a problem in any company or Division that can't be fixed by a great new product. Yet, GM axes the people, like Mark Hans-Richter that brought about the Solstace - nice halo car. But halo cars, like the advice given me by the head of GM strategy prior to my last presentation said, "No one's going to fix GM - single-handedly. Which was the allure of why GM brought me in and has not done as well since.

Let me know who you are and how to reach you. As you go up the chain and increase your impact perhaps we can work together. Divisional, product line and dealer initiatives are all areas that need the most help where consumers would rather be pricked by a needle than go to a bank or visit an auto dealer. The concepts are outdated. Every finding of every study suggests that "people want products that say smart things about them." The problem we found with consumer's perceptions of GM products is that "Every design looks like it's ten years old before it's even new." Which renders auto shows and coverage by rags like Road & Track anti-climatic - regardless of award given. In that regard GM has only been able to fool some of the consumers some of the time. In the bread and butter segments GM is a distant second - just like Pepsi is to Coke.

I would definitely like to share with you what GM's upper management truly thinks about its dealerships. Drop me a line via the email link on the blog. Give me your phone number. Let's discuss. I am also curious if your last name currently or at one time began with the letter 'S'.

Martin Calle