By on August 18, 2009

While driving the Buick LaCrosse, I asked Line Director Jeanne Merchant a question: what could she tell me about reliability that would persuade me, a satisfied Toyota owner, to jump ship? Merchant gave a pretty good answer, but I was busy trying not to run over traffic cones. In a subsequent phone interview, Merchant said reliability starts early in the process. From design to component testing, from durability tests to audits and feedback, from computer modeling to real world testing, they make sure every part of the car and all its systems are built right and performing to specification. And they take it very, very seriously. “The LaCrosse is very personal to me,” Merchant said. “I’ve worked with it for years. Everybody else involved feels the same way. And the same goes for the other product lines.” Process and passion. Is it enough?

After hanging-out with the front line troops, I believe GM’s employees are fully committed to product excellence. But the product, manufacturing and service providers all depend on GM’s top management for critical support in delivering customer satisfaction and value. They’ve got to have top management support to make the hard decisions to put customer satisfaction and value first—even if it’s going to cost GM some money.

I asked two of the product managers, “Does Bob Lutz help you build better cars?” The first one I asked was taken aback. There was a moment of silence. He swallowed, started to speak, stopped and then, slowly, said, “Y-e-s.” I waited a minute. He didn’t elaborate.

The second manager I asked leaned back in his seat, tipped his head to the side, looked thoughtfully at me for a moment and then said, “Yes and no.” Apparently, there are things the troops want and don’t want in the vehicle. And then there are things top management wants and doesn’t want. Two guesses who wins that debate.

Lutz is just the most visible and outspoken GM executive. But he’s symbolic of GM’s top down management style. CEO Fritz Henderson told us the New GM would put the customer first. But the morning’s events left me with the overwhelming impression that nothing has changed at GM, and nothing is likely to change. The good people at the sharp end must still bend their will to executives; heavy hitters with a tin ear for the advice given by the people who really know how to make great cars.

Did GM Win Me Over?

To get an actual sale from me would be tough. I want a very quiet car with exceptional fuel economy and good interior room at a good price. I want a decade of reliable, trouble-free motoring, because that’s what I have now and it’s worth a lot of money to me to keep it. Dave wants the same things, too.

GM employees were only happy to address these issues. But finding a way to reassure me that GM is on track for Prius-beating answers was not an official part of the days’ events.

Dave is a very focused guy. His benchmark is Hyundai’s 10/100 warranty. He won’t have to worry about his two cars for quite some years after they’re paid off and he likes it that way. He mentioned this requirement to GM people at the track or whenever the opportunity presented itself.

He sat beside me through Lutz’ talk and heard Lutz say, “I get letters telling me, ‘you should offer a 100 thousand mile warranty.’ I tell them, ‘We have a [five year] 100 thousand mile warranty!’” I actually heard Dave snort. Maybe I don’t know Dave as well as I think I do, but I’d bet his decision didn’t take very long. “No 10/100? Well, thanks for the rides. Be seein’ ya.”

GM didn’t win Dave over.

The people I talked to at the Proving Ground made a very favorable impression on me. Most of the cars made a very favorable impression on me. I liked the LaCrosse quite a bit. I liked the Cruze interior very much, and I’m sorry the car couldn’t be driven. In a world without a Prius, I would be the target market for that car. Yes, I’d rate the Malibu “not as good” as the Camry, but it’s still pretty good. There are cars in the GM lineup that appeal to me.

If GM had flown me from the Twin Cities to Detroit at lunchtime, brought me straight to the Proving Ground and walked me right out to the cars, GM would have won. But GM brought me to Detroit twenty-one hours early and exposed me to GM’s top management.

Lutz seemed convinced that five years coverage is as good as 10. He wanted me believe that GM is a victim of a “perception gap”— when we know that GM is actually a victim of its own reputation and many years of failing to put the customer first. The party line is that GM quality is right up there with the leaders, but GM won’t back the cars as though they believe it. Henderson didn’t add anything concrete.

GM failed to provide a compelling reason to believe that GM products will deliver the 10 year reliability that I, and millions of other motorists, expect. They could have shown me some engineering excellence up close and personal. See? This is where we beat the competition. This is the difference between us and them. They didn’t.

The message I received from my junket: GM’s top management doesn’t think they have to deliver the goods on customer satisfaction. They believe I can be manipulated into believing whatever they want me to believe about GM, and that the appearance of caring for the customer is more important than the care the customer actually receives.

GM didn’t win me over, and, frankly, I feel pretty bad about it.

While I was on the phone with Jeanne Merchant and Randy Fox, Randy asked a couple of leading questions. I told them how the story was going to end. I explained my lack of confidence in GM’s top management. I didn’t feel that they would leap on an opportunity to fully resolve—and learn from—a customer satisfaction problem. I asked Merchant what she thought about that.

What’s most painful to me is the feeling that we’ve let the customers down. I’ve been involved in recalls and they’re painful but we do the right thing. I keep pushing until we do the right thing.

No wonder the real journalists drink. You meet some great people on these junkets, but if you pay attention, the story just doesn’t go their way. Maybe GM will call in a crack re-write team. Meanwhile, no sale.

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124 Comments on “Editorial: How GM Tried to Win Me Over, Part Three...”


  • avatar
    WetWilly

    Sort of amazing and sort of sad.

    1) How thick does GM have to be to ignore the Hyundai 10/100 warranty lesson?

    2) Re Jeanne Merchant’s comment I keep pushing until we do the right thing. At some point doesn’t the recognition sink in that further “pushing” is an exercise in futility?

  • avatar
    V6

    Malibu not as good as Camry? After renting a Camry, the Malibu must be appalling.

    What engine is the North American Cruz getting? the 1.8l non turbo we get offers abismal performance and the fuel consumption is awful

  • avatar
    ajla-

    Great editorial.

    Fritz seems like a nice enough guy, but the fact that he believes Lutz, LaNeve, and Docherty can be successful and deserve to still work at GM absolutely boggles my mind.

  • avatar
    reclusive_in_nature

    I wonder if a different author would have a different opinion if he/she didn’t need to be assured that “GM is on track for Prius-beating answers”?
    Lets say yours truly was there. I’d be looking for the most horsepower/speed for the least amount of cash possible. Interior be damned. I need assured that GM isn’t becoming a CAFE enslaved bitch.
    I was able to buy my 08 Impala SS for $15K. What does GM have on the horizon that produces that kind of HP, has 4 doors, and can be bought for that kind of money?
    As a consumer that refuses to accept the pussification of the automobile I know I represent a minority, but damn it, I’ve been loyal to GM in my auto buying history. So if I was there how would GM win me over? Where’s my assurance?

  • avatar
    AndyR

    Keep writing more, Darwin. You convey your opinions well, and seem to represent what you’ve seen without spin or un-disclosed bias.

    It was a brilliant idea to ask the product managers about Lutz… For all the outward facing PR we get, there isn’t a truer representation of how well GM manages than from the inside.

    Any chance you could get invited to a Ford junket sometime soon?

  • avatar
    Ronman

    Great set of editorials,

    I really respect your stance to be as objective as possible to the ongoings of the event, and yet be very balanced in your verdict in respect to what you actually feel for GM as a whole and what you discovered of GM at the event.

    I’m not related to GM in anyway shape or form. as an outsider (non american) i sense that a whole lot of americans have negative feelings towards the company, and more so now after they have been dragged, nails scratching the floor, into lending money to a company that still seems to ignore the true core of the bussiness.

    i think the philosophy at GM will remain unchanged until a new generation takes over the helm.

    i have been making this observation in many aspects of economy, the older generations, despite having built humongous companies with immense hope on their part gave the reigns to a certain generation (now in charge). That certain generation has derailed the train, evident in many corporations, banks, etc… greedie, and thursty for profit, they forgot why the companies were actually so big and what made them get to the top.

    in the future, hopefully within 5 years, a more responsible generation will take over, and the worries of people like “Merchant’s” will be addressed, and maybe eventually the Americans will get what they want from the company they have always owned, even before their billions were injected in it.

  • avatar
    Ronman

    By the way,,, where are the BS Autobiographies
    ?

  • avatar
    TomJones

    So much needs to change. GM’s management culture, GM’s understanding of customer expectations, GM’s treatment of their suppliers…

    Will we ever see this change in our lifetime???

  • avatar
    Ingvar

    Ronman:

    I thought BS was hooked up with some business deal these last few weeks? I would not be surprised if he wasn’t in some way personally involved in all that Volkswagen/Porsche conundrum right now. Time will tell.

  • avatar
    Ingvar

    I have a question for Mr Hatheway. And this is no sort of flaming, even if it can be seen as such.

    But, would you have percieved the marketing event in a more favourable way, hadn’t you been so negatively biased in the first place? I know the whole event was meant to win those people over, the problem is, if there is a negative bias, that bias will continue even after the fact. What I wonder is, will those bad feelings that people righteously harvest ever fade away? Or is it a lost cause to even try? Is GM doomed, no matter what?

  • avatar
    TonyJZX

    there’s a few ways i heard of people ‘spinning’ the 10yr/100,000 mile warranty?

    are the cars that crappy that they need them?

    why do porsches and bmws only have a 3 yr warranty?

    GM have obviously done their MTBF tables and worked out they can’t do a like warranty?

    i would also like to put forward that even with a matching warranty to Hyundai you wouldn’t buy a lot of their cars because many of them just aren’t that good…

  • avatar
    prthug

    I appreciate these insights…a good read in all three parts. But in reading between the lines, I don’t get the impression that anything Fritz or the other leaders might have said would have worked with our friend here. The new GM leadership team has been in place for all of four weeks, throws open the doors for people to come in and see the good and the bad…and they’re declared to be not listening and essentially the “old” GM. If this article says anything it’s that for a significant number of people, it won’t matter at all what GM does…those people are gone and they ain’t comin’ back. Thanks for all the time and effort…a good read.

  • avatar
    grobby2

    I can appreciate the need and desire to have a reliable car that is affordable and quiet. If you have a car that has all of these things then by all means keep it. I am not sure that Toyota or any other car company is going to be perfect all of the time.

    My family has owned two Toyota’s. One Tercel, the other a Corolla. Both cars were purchased in the 90′s brand new. We had to get rid of the Tercel because of quality(it kept breaking down, engine issues) and the Corolla was traded in with 90,000 miles because the engine was leaking oil and the exhaust system was shot.

    We have recently purchased two Ford products( Ford Freestyle Limited 07) and a 09 Ford Escape XLT. Of course time will tell if both of these products do any better than our Toyota experience.

    I have enjoyed reading these blogs and getting the inside scoop on the production teams within GM. I am wondering however, if at some point the allure or even legend of one car marker over another is just that, legend and allure.

    I do not own any GM products so I can not speak to the long term reliablity of the “new” GM. I do believe however, that it is impossible to predict an auto makers future soley based on its past. The past can certainly give us clues to the future, but it can never fully provide us the crystal ball that we would like for it to.

  • avatar
    Bunter1

    Thanks for sharing Darwin. These were well written.

    Gm still does not realize that the “perception gap” is more on their side than the publics.

    Bunter

  • avatar

    TrueDelta’s research process will make quick reliability stats possible for the LaCrosse and Cruze. Unknown, though, is how easy it will be to find participants for these cars.

    Good point on GM’s top-down management style. I studied GM from the inside a decade ago, and this was a focus of my critique. At least two people forwarded my conclusions to Lutz. I did not expect him to act upon them, and was not surprised.

    The executive summary:

    http://www.truedelta.com/execsum.php

  • avatar
    Detroit-X

    A star is born. Great writing style Darwin. (Robert, hook this guy up.)

    As for the content: 100% accurate to what my GM friends tell me about their jobs.

    The insular, ego-clown GM execs and managers are the problem. Nearly all high-ups got promoted by the old boys club, and it’s their duty not to turn on it. It’s scary, what they don’t know, and they’re mean and vindictive toward dissenting opinion. Still. Today.

  • avatar
    Mark MacInnis

    GM will have a prayer if people like Merchant and Fox get their due and get promoted to the top ranks. They sound like passionate, committed, talented and engaged people.

    Will they?

    Doubt it.

    add:

    Move along. Nothing else to see here.

    Add: Thanks, Mr. Hatheway. The first objective piece on GM I’ve seen on this site. Well written, well thought-out from the consumer’s point of view. In a just world, links to this article will FLOOD the GM mail server for the top-ranked guys to read. You’ve held up the mirror to their faces. Will they have the guts to look in and see the truth?

    Doubt it. But a noble effort, anyway.

  • avatar
    commando1

    As long as GM keeps scolding us that we are wrong in our perception that GM quality is inferior, I will still walk away befuddled by the fact that they think they can shame me into parting with my money. When they go on the offensive like that, all it tells me is that they have run out of options and are in panic mode to do something fast.

    I truely feel sorry for all the worker bees at GM. I know that they really care and bust their hump to do the best they can. But all their dedication and hard work is smothered by inept management that is still without a clue. The old management went out the front door and reentered through the back door and announce that they were different people with a different way of thinking. Pulling off this ruse could only be accomplished by old style thinking, i.e. “I must save my own hide at any cost and I will say anything that they want to hear”.

    I can hear John Delorean either laughing his ass off or crying at lost opportunities.

    So far, they couldn’t come up with a business model where they G8 was viable but came up with one that has them rallying around the Impala even longer…

    I am so disgusted at GM (and the U.S. automotive industry), that they alone have destroyed my belief in free enterprise.

  • avatar
    Robstar

    I also liked the article.

    When I bought my new car 5 years ago I was undecided if I should get a neat looking fuel sipper (at that time I was looking at the “insight”) or a rally style sports car (as I used to like rally racing).

    Nothing by any of the American manufacturers could approach the insight in fuel mileage (I was single, no gf, no plans to get married), or fit the rally car requirements (4 door, awd, sub 5 second 0-60).

    4 years later, nothing STILL approaches either of those that I know about.

    For her next car, my wife wants a 6 seater minivan that is small. Do any American manufacturers make anything similar to the mazda5? This is what we are looking at.

    In shopping, I believe you need to fill requirements first, then compare pricing, reliability, incentives, etc.

    if the American manufacturers can’t even put a product on the table that I want to buy, the reliability, incentives, and pricing of products I _don’t_ want to buy simply don’t matter.

  • avatar

    prthug:

    The new GM leadership team has been in place for all of four weeks,

    What “new” GM leadership team? All they’ve done, in typical GM style, is take the existing substandard models, rebadge them and spin them as “all new.”

    Yeah, there may be some new job titles and shuffling of offices, but it’s still the same old executives, steeped in the same GM corporate culture, running the show. And as long as they’re the ones ultimately calling the shots, all the Merchants and Foxes in the world won’t make a bit of difference in the end.

  • avatar
    Detroit-Iron

    What’s most painful to me is the feeling that we’ve let the customers down. I’ve been involved in recalls and they’re painful but we do the right thing. I keep pushing until we do the right thing.

    It is no use saying “We are doing our best.” You have to to succeed in doing what is necessary.

    Churchill

  • avatar
    BuzzDog

    GM’s (and others’) business model seems to still be based upon building vehicles for the market of a bygone era – one in which people trade for a new model every two to four years.

    Instead of so many press junkets, I challenge GM senior leaders to obtain some Toyotas, Nissans and Hondas and travel away from the Detroit metro area to a variety of middle class suburban communities throughout the U.S. Spend some time in the parking lots of malls and big-box retailers and see how your target buyers spend their money, both on their vehicles and on what goes into them.

    As car nuts, we can say that more horsepower, better handling or improved quality are the holy grail, but in reality the mass-market purchasers of “bread and butter” vehicles should be the ones that pay the bills for any mainstream automaker. That’s the key to long-term sustainability for any business.

  • avatar
    newfdawg

    Excellent article by Mr. Hatheway; GM’s top management still obviously believes that the “perception gap” in regard to quality issues with
    their vehicles is the public’s problem and not General Motors. The statement by Lutz that he felt no need to match Hyundai’s 10/100K warranty tells
    me very little has changed at GM and won’t until the old guard is gone. It is still the same old GM executives and the same old GM culture running the show. As long as they remain, all the efforts of individuals like Merchant and Fox are essentially for naught.

  • avatar
    golden2husky

    As car nuts, we can say that more horsepower, better handling or improved quality are the holy grail, but in reality the mass-market purchasers of “bread and butter” vehicles should be the ones that pay the bills for any mainstream automaker. That’s the key to long-term sustainability for any business.…

    As sad as that statement is, it is the absolute truth. Camrys pay the bills. GT-R’s don’t. I love performance probably more than most, even here, but you must offer desirable appliance grade cars for the masses. Flush with these sales, you make the fun stuff. Of all the people I associate with, I am one of the few who have/had some American branded cars (trucks seem to be much better accepted). Most won’t even look, let alone buy. I have the odometer readings to counter their “they are all junk” mentality, but if the vast majority of the population have crossed you off their shopping list, failure is certain. GM should be eating some serious humble pie, and offer the warranty as a vote of confidence…

  • avatar
    mikey

    From my perspective as an hourly retiree,Darwins articles have restored a lot of my confidence.Sure, GM didn’t turn him or his friend into GM buyers. But they did come away with a different point of view.

    Reading between the lines,it looks to me like GM
    has some good dedicated people in the right place.

    GM will survive, and the taxpayers of the US and Canada will get paid back.

    BTW Count me as one who believes,the “perception gap” is very much in existence.

  • avatar
    threeer

    Agreed that it will take something approaching a full decade of stellar reliability reviews before GM has a snowball’s chance at closing the gap with Honda and Toyota. Say what you will, but the reputation has been well earned, and while GM vehicles (well, some of them) have improved, they cannot undo what they’ve buried themselves in overnight. I’ve driven a few new Malibus, and they are a step in the right direction. Heck, even the Impala, when properly configured, makes a nice family hauler. And as far as the warranty goes, it’s a matter of showing the consumer that you (the manufacturer) have so much confidence in what you produce that you are willing to completely stand behind that product. I don’t think Hyundai’s warranty is a matter of “gee, our cars are so bad we have to do this” as it is a showing of confidence in their cars.

    And Grobby…kind of surprised at your experiences with Toyotas of the 90s…I’m driving my son’s 1997 Tercel which is now pushing 200k…I cannot say enough good about this little car! I’m actually considering keeping it until the engine (some day, maybe) dies, and simply dropping another one into it. Compared to the new stuff Toyota is putting out, I prefer the old Tercel…at least that one still has cloth on the door inserts! Matter of fact, the family has pretty much had nothing but Toyota since my parents bought a new Corolla back in 1981…and we haven’t looked back. Now THAT is building a customer base!

  • avatar
    Monty

    Ingvar :
    August 18th, 2009 at 5:28 am

    I have a question for Mr Hatheway. And this is no sort of flaming, even if it can be seen as such.

    But, would you have percieved the marketing event in a more favourable way, hadn’t you been so negatively biased in the first place? I know the whole event was meant to win those people over, the problem is, if there is a negative bias, that bias will continue even after the fact. What I wonder is, will those bad feelings that people righteously harvest ever fade away? Or is it a lost cause to even try? Is GM doomed, no matter what?

    Ingvar, that’s an awesome question, and I doubt that Mr. Hatheway would perceive it as flaming.

    This is exactly the demographic that GM needs to “seduce”. The car buyer that GM antagonized with substandard product, sales and service that has, at some point, turned to the Asian manufacturers. GM can’t just build better cars, GM has to build the best in every class and warranty them as such. Should GM offer a 10/100,000 warranty, and honour legitimate warranty claims and actually complete satisfactory repairs, it would go a long way to reclaiming the traditional buyers that were alienated over the past 30 years.

    Most of us have that bias, and it’s not a “perception gap”, as Bob Lutz would have us believe. Most of the 30 or 40 million customers that GM has alienated will only start to change their beliefs when GM vehicles are at the top of every CR category. Like it or not, CR’s ratings are the most influential benchmark in the marketplace, and until GM can top every single segment, we will still hold onto our biases.

  • avatar

    Thank you, Darwin, for the well-written and interesting articles. As to the 10/100 warranty: the ’10′ part of it is a marketing trick. Most people put 20 thousand miles on their cars in a year easily; thus ten years of warranty is meaningless.

  • avatar
    rpol35

    Perception is everything and it creeps into our psyche whether we want it to or not. My perception of Toyota isn’t good, I’ve owned three and don’t ever want another. GM, not a particularly positive perception there either as I swore off of them a long time ago. Things change however and it is important to keep an open mind regardless of what side of the perceptual gap you reside. I’ve driven both the new Camry and the new Malibu; pretty much flip a coin in my estimation; I like them both but not enough to own either.

    It almost seems like the author was expecting GM to do everything to please him including scratching his butt and putting a tiara on his head to get him to that “won over” side of the gap. I think the decision needs to be more objective than that. Perhaps Toyota’s entrenched position makes that leap harder to do; I don’t know.

    I do think Mr. Hatheway hit on a solid point however and that is the dedication of the managers and workers. It is an essential ingredient to success but it will take more than that; it takes committed buy-in from the top management to do the right things and I doubt that will ever occur at GM with Henderson and Lutz running the show. I agree that Mr. Henderson seems like a nice guy but all I ever hear him say is the same sad sack, chiseling, weasel words most top execs mutter when their companies have been caught in the wrong and they are trying to be contrite. He sounds like a graduate of the Bob Nardelli school of corporate horse$hit and I don’t believe him. Prove yourself first!

    Big corporations, including Toyota, have big personalities at the top that have a tendency to muck up the works. I know, I have worked for Fortune 200 companies and know precisely how it goes. In GM’s case, the executive level is insular and intransigent. It needs to go for a full metamorphosis to occur. Wagoner was the start and rightly needed to exit; a few more are going to have to follow in his departing foot steps before “right think” takes over and permeates GM in a constructive manner.

  • avatar
    segfault

    Also not mentioned: Hyundai’s standard bumper-to-bumper warranty is 5 years, 60,000 miles; GM’s is 3/36 on their bread-and-butter cars.

    What’s with all this chest-thumping about “we always do the right thing?” Did they do the right thing by refusing to repair the thousands of full-size trucks with the piston slap problem? Did Lutz do the right thing by flip-flopping on safety features (deleting them in 2003 then recommitting to include them by 2010)? Did they do the right thing for each and every one of the tens of thousands of customers who had an intake manifold gasket failure?

  • avatar
    Robstar

    Michael Blue> Where do you live???? I can name maybe ONE person out of hundreds that I know that do 20k/year.

    My wifes car is right at 12k a year and that is a pretty heavy use. My subaru is at 7k a year, and my bike is 3k/year.

  • avatar
    TomH

    I think the article nailed a couple of the big problems New GM is facing. (or more accurately, failing to address.)

    On the one hand they are committed to listening to the customer, but on the other the customer’s voice is hard to hear over Lutz’s pronouncements. New GM continues to claim that there is a perception gap yet, unlike Hyundai, they fail to capitalize on that by offering a warranty that the customer would value far more than it would cost. They call it “New GM,” but it’s the same guys at the top and the same cars in the showroom, less some abandoned car lines and dealerships.

    At some point, the New GM will have to realize that in driving away a generation or three of buyers being just as good as… isn’t going to get it; there needs to be a compelling value proposition to conquest loyal Toyota, Honda, et al owners and to this point it’s simply not there.

  • avatar
    velvet fog

    The “perception gap” only exists between Bob Lutz’s ears. It’s the gap between what customers want and what Bob wants to give them.

    I’ve owned 3 GMs, 3 Fords, 2 Toyotas, 1 BMW and 2 Mercedes. Frankly, most were pieces of junk. I won’t bore you with the details, but it’s the repeated repairs and visits to the dealers later in the vehicle’s life that really get expensive and painful.

    Unfortunately, later in life for my GM vehicles was about 40k miles. I would like to keep my vehicles 10 years and 200,000 trouble free miles, so far the only vehicle to live up to that standard is our 1995 Toyota Celica which I still own and my 1985 Ford F-150. All the others were traded in or sold with 60-80k on the odometer after demonstrating less than acceptable reliability for the first part of their lives.

  • avatar
    jpcavanaugh

    I too enjoyed these articles. I think the mindset is quite fair. And I agree that so long as GM tries to win us over with appearance over substance, it will never work.

    I agree that the warranty extension would be a good move (unless their internal studies indicate that many of the components will not survive 10 years in typical service).

    I am prepared to believe that there is at least something to the perception gap if their new cars are better than their older ones. However, they need to understand that all through the 70s and 80s GM was the beneficiary of a Reverse perception gap. GM sold a lot of substandard cars while free-riding off of a reputation for quality earned from the 20s through the mid 60s.

  • avatar
    ttacfan

    @segfault

    I’ve got compensated for 50% of my intake manifold gasket repair bill via dexcool settlement.

  • avatar
    Tommy Boy

    It sounds as if there are some very, very good “worker bees” at GM. My heart bleeds for them. How frustrating to have a good work ethic and sense of responsibility, only to be stifled from above.

    >>there’s a few ways i heard of people ’spinning’ the 10yr/100,000 mile warranty? are the cars that crappy that they need them? why do porsches and bmws only have a 3 yr warranty

    Unlike GM, Porsche and BMW don’t have to overcome a “perception gap” (though I believe their reliability / cost of repair to be atrocious). Also, they’re boutique items, for which people don’t “depend” as do regular people buying regular cars.

    Hyundai had a poor reputation among regular people, and introduced the warranty to tangible demonstrate their improved quality (also a necessary ingredient).

    GM is in the same fix, but won’t tangibly demonstrate. Let’s face it, for many (if not most of us) purchasing a GM product is deemed risky. An extended bumper-to-bumper warranty would shift the risk to the manufacturer, which eliminates the risk and prompts a “well, I’ve got nothing to lose so I can take the risk.”

    Personally I doubt that GM can produce the quality and back it up with a suitable warranty. The extra costs it incurs because of the UAW mean that it must cut content, quality and/or warranty in order to peddle a product at going market rates (i.e., in the ballpark with the UAW-free competitors who also happen to have better quality reputations). In fact, because of its reputation GM has to, and will continue to have to, offer its products at a discount to its UAW-free competitors, even as it has a higher cost structure.

    This is why I believe that long-term all of the UAW manufacturers are doomed. Like giving an oxygen tank to an emphysema patient, the taxpayer bailout has merely bought some time, but won’t change the end result.

  • avatar
    Dynamic88

    I keep hearing the same stories from people –

    My dad had an ’83 GM-Somethingorother,and it was a POS, so I always buy Toyota. My Mom had an ’97 GM-Whatever, and it always had problems with the gaskets, that’s why I stick with Honda. On and on in the same vein. And I live in Michigan.

    GM would be well advised to embrace the fact that there is a gap, and it is not perceptual. They should quit talking about it and start working on it.

    Even if the gap were solely one of perception, it takes about a decade for perceptions to change. People are avoiding GM not because of their own experience, but because of their parent’s experiences. If they still want to sell cars in 2021 they better make a very reliable car in 2011.

  • avatar
    njdave

    My wife owns a Hyundai Sonata. When a Jeep knocked off her side mirror in a parking lot, she took it to the dealer. She was given a really nice fully loaded loaner car, kept up to date with status phone calls, the dealer kept the car an extra day because the new mirror housing did not match the color of the door due to weathering. They did not charge extra for a repaint job on the mirror to make it match, or extra labor to remove/reinstall it. That is a dealer experience that makes me want to buy another Hyundai. That is the standard the GM has at least meet, better yet exceed, if they want to get me back as a customer. I am in my 40′s and have never considered a GM car due to all the bad experiences my parents had when I was a kid. GM can win me over, but they have to really work at it. Other manufacturers have won me over in the past after bad experiences. They worked at it, and they made really significant changes. GM is making insignificant, surface changes so far.

  • avatar
    midelectric

    What’s most painful to me is the feeling that we’ve let the customers down. I’ve been involved in recalls and they’re painful but we do the right thing. I keep pushing until we do the right thing.

    That’s the key statement to me, it shows that management’s default position is to get away with what they can rather than do what’s right. Instead of rewarding those who are looking out for the customer’s best interest, management appears to be content to let them burn out battling management’s recalcitrance.

  • avatar
    Lokkii

    Quote #1.
    It almost seems like the author was expecting GM to do everything to please him including scratching his butt and putting a tiara on his head to get him to that “won over” side of the gap.

    Quote #2.
    …[T]he whole event was meant to win those people over, the problem is, if there is a negative bias, that bias will continue even after the fact. What I wonder is, will those bad feelings that people righteously harvest ever fade away?

    This was an excellent honestly written article, and I’d like to see more from this writer. I can’t say that it was objective, because like a large percentage of the American buying public, he can’t bring himself to trust GM. However, openly admitting a bias is the best approach, as it allows the reader to filter accordingly.

    Now the question that is bothering me:

    What CAN GM do to win over us doubters? Is there anything that will work? “…including scratching his butt and putting a tiara on his head”.

    Talk no matter how sweet or loud isn’t going to get it. GM has cried (and lied) about “New and Improved!” too many times in the past.

    I think that the problem we doubters are having is that we don’t see ANYTHING that can be perceived as a serious change to the old way of doing things. “Meet the new GM – he’s the same as the old GM”. It’s going to require a dramatic gesture -something that will make me think that the risks of buying a GM car have been minimized.

    Hyundai made a dramatic gesture in their 5 year/50K bumper-to-bumper or 10/100 warranty.

    :[T]here’s a few ways i heard of people ’spinning’ the 10yr/100,000 mile warranty?
    Are the cars that crappy that they need them?
    Why do porsches and bmws only have a 3 yr warranty?

    Hyundai’s cars WERE perceived as that crappy. So Hyundai put the warranty out there as a declaration of faith.

    Porsche doesn’t need to offer a long warranty because they have a reputation that sells cars. People want the cars enough to take a risk on problems. Who wants a GM car that much? Maybe new Camaro buyers – for a year – until they become common.

    BMW cars are durable but not particularly reliable. BMW solves that problem by giving a 4 year/ 50K mile bumper to bumper warranty including light bulbs and wiper blades. Oh- and an extended warranty with a $50 deductible can be purchased out to 100K miles for a few $K. Are you paying for it? Yes, but BMW is in the middle ground between Porsche and GM – They have a desirable sports/luxury reputation, but must still offer some reassurance.

    Right now GM has a bad reputation and offers very little reassurance. 5yr 50K drivetrain warranty? Please. I expect ANY modern car to go 5 years without drivetrain problems. Oh, wait. Maybe not GM cars…. See where we are?

    Come ON GM! Show me what’s changed. Something? Anything? Bueller?

  • avatar
    yankinwaoz

    GM… put your money where your mouth is. Give ALL your cars the best warranty on the planet. Seriously, how are we supposed to believe you when you don’t even believe yourself?

  • avatar
    afabbro

    Three questions on warranties:

    (1) Were Hyundai cars really perceived as being crappy, or were they just perceived as being an unknown risk? There’s a difference between (a) buying a car from a company with a history of making junk, and (b) buying a car from a company that you’ve never heard of.

    (2) If memory serves, the Hyundai warranty is the usual drivetrain only. It doesn’t cover alternators, water pumps, etc. Sure, it’s better to have a car that has a 10/100 warranty on the drivetrain than one that doesn’t, but the warranty itself wouldn’t convince me to buy a Hyundai…lots of other things could break.

    (3) If GM offered a 10-year/100K warranty, would it matter? GM is also fighting the perception that they might not be around in 10 years.

  • avatar
    psarhjinian

    i think the philosophy at GM will remain unchanged until a new generation takes over the helm.

    Won’t happen. GM’s management is designed in such a way that, no matter how talented, innovative and forward-thinking you are, ten to thirty years of being pounded on the corporate anvil will ensure that, if you don’t break, you’ll end up looking like the next Rick Wagoner.

    GM has been doing this to it’s lower- middle management since Sloan turned it from a carmaker into a giant process and accounting exercise.

    I’m sure these people are good—but after a few years of having to sublimate what you think is best, or worse: being told by your underlings that what you do is automatically correct—you’re damaged goods.

  • avatar
    segfault

    @ttacfan:
    It shouldn’t take a class action lawsuit to get GM to “do the right thing” to correct a design flaw.

  • avatar
    nino

    BTW Count me as one who believes,the “perception gap” is very much in existence.

    My dad was a GM customer for more than 40 years. His last car was a Cadillac STS that he leased for $511 a month. He died earlier this year three months before the lease was up on the car. We asked GMAC if we could return the car early. They told us that by all means to return the car along with a copy of the death certificate and that everything would be all right. The car was in pristine condition and with very low mileage as my dad was able to drive the car very little. Two months after we returned the car, my dad’s estate has been sued by GM for $3500 due on the car, the reason being is that the car didn’t get its residual value at auction. We’ve offered to pay the remaining lease payments ($1533), but no, we can’t. I finally got our attorney to send them a sternly worded letter (along with a copy of the final agreement) that has stopped the process.

    If by the “perception gap”, you mean that GM pays attention to their customers and is driven to serve them, then I submit that it isn’t a perception that they don’t, even now.

    BTW, I received in the mail, a letter sent to my dad from GM that is offering him a $2500 voucher towards the purchase or lease of any GM car. They must really be paying attention.

  • avatar
    slateslate

    GM has been subpar on two different definitions of quality:

    1. does the machine work without breaking down? many of us have all heard of/seen this first hand–the busted gaskets, Dexcool problems, electrical problems, etc.

    this should be easy to fix…..increase the quality tolerances and pay-up for better OEM parts

    2. does the interior/drive/panel gaps give off an aura of quality?

    this too should be easy to fix….less hard plastic, more pleather, better instrument panels, well-designed ergonomics.

    People aren’t making this “perception gap” up…..it’s pretty straightforward to fix if management is willing to put the money behind its talk.

  • avatar
    dhathewa

    AndyR: “It was a brilliant idea to ask the product managers about Lutz…”

    Truth to tell, I thought I was being sort of obnoxious. But I did want to know what people thought about the leadership and Lutz is supposed to be the car czar, so what’s his real effect on the cars?

    Ingvar: “But, would you have percieved the marketing event in a more favourable way, hadn’t you been so negatively biased in the first place?”

    In spite of your concern, as Monty said, that’s not a flame at all. It’s a good question. Yes, I wonder exactly how steep my bias hill is. Of course, if I already had faith in GM, we wouldn’t be having this conversation, would we? And there’s plenty more people like me out there. GM’s got some work to do and there are some cases that are going to be tougher than others.

    I think, though, it went down exactly as I said… If GM had flown me straight to the cars, they would have won. But they figured it was important to get a message to me from top management. Well, they were right that it was important.

    grobby2: “I do believe however, that it is impossible to predict an auto makers future soley based on its past.”

    As long as you’re not implying the change can be instantaneous, I agree with you and there’s reason to hope that GM’s products, today, are really hitting the mark.

    But priorities come from the top. Even the best processes break down and a clunker hits the streets. What’s the company’s reaction then, when customer satisfaction costs extra money? That comes from the top. The processes that lead to superior products are dependent on significant ongoing investments. This takes resources, which also rely on priorities set at the top. I came away with a disappointing appraisal of the priorties at the top.

    Michael Blue: “Most people put 20 thousand miles on their cars in a year easily; thus ten years of warranty is meaningless.”

    An EPA report I glanced at suggests an average of 12K miles per year. We do perhaps 9K per car. Dave does something like 12K. The flip side of your observation is that a 5/100 warranty is actually a 5/45 warranty for me. Everybody offers at least that, so GM’s 5/100 has no competitive advantage with me.

  • avatar
    psarhjinian

    If GM offered a 10-year/100K warranty, would it matter? GM is also fighting the perception that they might not be around in 10 years.

    That’s a good point. GM ought to have offered such a warranty a long time ago when they had the money and Hyundai was making hay on the promise.

    They also ought to have backed it up with generous claims fulfilling rate, as Ford did. For reference, Ford’s improvement in quality and warranty performance precisely coincides with their rise through CR’s ranks.

    Now it may be too late. GM has not the money to backstop their existing obligations, let alone a 10/100.

  • avatar

    As long as GM keeps scolding us that we are wrong in our perception that GM quality is inferior, I will still walk away befuddled by the fact that they think they can shame me into parting with my money. When they go on the offensive like that, all it tells me is that they have run out of options and are in panic mode to do something fast.

    Precisely. It reminds me of that old adage “the more he talked of his honor, the faster I counted my spoons.”

    John

  • avatar
    Johnny Canada

    Was there any discussion about improving the buying experience at GM dealerships?

  • avatar

    GM has been doing this to it’s lower- middle management since Sloan turned it from a carmaker into a giant process and accounting exercise.

    Actually, GM made a huge amount of money and produced some pretty successful cars under Sloan and his disciples. I’m not sure how well functioning GM was under Billy Durant.

  • avatar
    brettc

    Good series of articles. I don’t get why the Cruze wasn’t driveable. Makes no sense at all. But we are talking about GM here, so I guess that explains it.

    The only thing GM could do to get me to even consider looking at their products is to start offering a warranty that either meets or exceeds what Hyundai is offering. Hyundai has been offering that warranty for at least 9 years that I know of, and it seems to have helped them quite a bit. People are going to associate GM products as shitmobiles for a long time unless GM does something major to fix the “perception gap”.

    GM can make the nicest looking cars and most efficient cars in the world (they won’t), but if I have to worry about fighting with the service department about something that fails prematurely out of warranty, I’d rather go buy a Hyundai or a Kia. They need to get the long warranty program started, and advertise the crap out of it.

    Obviously Dave couldn’t care less about GM once he heard what Minimum Bob said. There are a lot of guys out there like Dave, and that’s going to kill the “new” GM’s prospects for any success.

  • avatar
    psarhjinian

    Actually, GM made a huge amount of money and produced some pretty successful cars under Sloan and his disciples. I’m not sure how well functioning GM was under Billy Durant.

    I don’t dispute that Sloan made money and brought in the discipline that Durant sorely lacked, but he also saddled the company with a crushingly complex accounting and process-based management system that turned it into the dinosaur** it is today.

    Sloan fixed the tactical problems caused by Durant, but the inability to move past Sloan crippled GM to this day.

    ** Except that dinosaurs had an auxiliary nerve cluster to speed up reaction time. GM had no such thing.

  • avatar
    Pch101

    Lutz seemed convinced that five years coverage is as good as 10. He wanted me believe that GM is a victim of a “perception gap”— when we know that GM is actually a victim of its own reputation and many years of failing to put the customer first.

    That’s a classic management mistake. It would be a mistake even if Lutz was right.

    Let’s say for the sake of argument that Bob Lutz was absolutely right, and that the entire problem was due to a perception gap. Even if that was true, no company could fix the perception gap by telling customers that they suffer from a perception gap.

    The words coming out of his mouth may be “perception gap.” But the customer hears something else, namely that they are either being lied to or insulted by the company. “Perception gap” translates as “You’re stupid!” Any good marketer knows that you don’t want to tell your customers that they’re stupid.

    They have to earn the sale. If this junket is representative of anything, it’s that they don’t see that the burden for earning it is entirely on them. They need to prove that they have earned the business, rather than claim that they’re entitled to it.

    Not that anyone will take this advice, but if I was GM management, I’d offer a five-year full warranty with a free service package, which should be promoted heavily. Use the service intervals as a means to get customers back into the dealership often enough that they create a relationship with the retailer. Make the service painless and positive enough that customer problems are resolved in advance, such as using the oil change intervals as times to fix TSB’s, defects and pending problems as they crop up so that the customer is not inconvenienced by them.

    BMW is able to sell a lot of cars of questionable reliability in part by using this strategy. The car may not be particularly reliable, but when you get a latte and a loaner, it’s no big deal, while the dealer gets to fix other things before they get worse. Same old, same old isn’t going to cut it, and as a reluctant investor, I’d like to see a positive outcome.

  • avatar
    gohorns

    When Hyundai put its over the top warrenty out there it was mostly because it was new and an unkown quantity. The warrenty worked and the rest is history so to speak. GM is actually in a very similar place they are an unkown or worse even by some they are “known”. So you say you have a perception gap okay then fine. Put out a warrenty, no fine print BS, that resets the bar for the whole industry. GM spends a lot of time talking about “as good as” no successful business talks like that. Be the best. Be so painfully and obviously better than your competition that they run in fear. If you think you are that good put your money where your mouth is or just shut the hell up already.

  • avatar
    slateslate

    A question I’ve always wondered….

    which mass market brands’ owners do the best job keep up with scheduled maintenance?

    which mass market brand has the most owners who do their maintenance at a dealer?

    Sorry to pick on GM, but if the data shows that a lot of Aveo/G6 owners skimp on maintenance, maybe GM should follow BMW’s lead and offer some sort of complimentary maintenance program. Though to be fair free maintenance doesn’t seem to be pushing that many VWs.

  • avatar
    ChristyGarwood

    dhathewa – as I said previously, excellent, candid review!!! Did you foreshadow the end result in Part One when your wife told you to not come home with a GM car? There is a statistic floating around that says 80% of new car purchases in the USA are influenced by women…(please forgive me, I like to tease a little)

    @Mark MacInnis – I work at GM and I have no idea if the link to this series will flood our executive ranks’ email. But I would suggest that all of you here go to gmreinvention.com and post it to the Tell Fritz portion.

    I would guess that the planners of the event are compiling responses from the participants and will conduct a review of some sort with the managers and leaders, including the ones with names ending in ‘tz’.

    Only time will tell if this activity will result in changed behaviors at GM. But I do know this:
    In June, employees were solicited for ideas on how to win back our customers and a resounding number suggested to get non-GM buyers into our vehicles for test drives. The event DH attended is evidence that leadership listened to employees’ suggestions. Perhaps they will also listen to these non-GM customers.

    I would love to get my hands on the responses from all of the other participants and I hope DH and his friend Dave are the only two who will not buy GM. Without sales, GM cannot pay back loans from the US and Canadian taxpayers.

  • avatar
    cdotson

    Robstar:

    There’s the Dodge Journey. I’m not saying it’s good, or that I even like it (I’m undecided), I’m just saying it seems Mazda5-ish. I’m equally cramped and uncomfortable in both when perusing car shows. Of course if sliding doors are a prerequisite you’ve taken everything else short of a “full-size” mini-van off the table.

  • avatar
    kurtamaxxguy

    Darwin’s done a fine job describing this GM Tech event.

    As for his story’s title “How GM tried to win me over”, IMHO GM did a fine job hosting us, presented interesting technology and repeatedly said they planned to be more customer focused.

    However, GM’s present day vehicles, while much improved, didn’t deliver knockouts to their competition. The rushed schedule often had GM talking to us rather than with us. Nor was there any impression GM’s mediocre (in my experiences, anyway) after-sales experience will change anytime soon.

    In summary, they “won me over” to watch them more closely, offer comments and opinions when asked, and check out the better of their upcoming vehicles.

  • avatar
    WildBill

    An extended warranty and better dealer experiences might, and I say might get me to at least look at them. Until then, no looky. We are averaging over 23,000 miles on our primary driver so even at 100K, a warranty takes us out a little over 4 yrs. I expect a vehicle to last much longer, 8 – 10 yrs. minimum. Only yrs. of experience will tell that tale.

    Good series of articles, I enjoyed the honest report.

  • avatar
    M1EK

    Actually, Hyundai’s over-the-top warranty did NOT come when they were an unknown quantity; it came when they tried to improve their reputation after people became quite familiar with their $4995 Excel (similar in proportional-to-competitors quality as the current Cobalt, better than the Aveo).

  • avatar
    yankinwaoz

    PCH101 has the answer.

    It is well known (but not practiced) in the health care industry that in the long run, prevention is far cheaper than cure. Hence was born the idea of HMOs that were supposed to catch problems before they blossom in to expensive catastrophies.

    So rather than trying to be “just as good” as your competition, grab the high ground and redefine the car industry on your terms. Create an “HMO” for your cars.

    Issue a no BS 10y/100k comprehensive warranty with your cars. Then cover your ass by including, in fact requiring, free heath checks every 3-6 months on your cars. Make it painless, if not enjoyable. Give the customer a loaner car for the day. Even offer to pick up/drop off at their home or work so that they don’t have to even step foot in the service area.

    You can take advantage of these service visits to install corrections before parts fail. You can inspect parts for upcoming problems before they fail. You can notice problem trends before they turn into recalls or upset customers.

    You could even get away with a monthly “insurance” premium, of lets say $50, for 10 years, to help pay for all this. As long as the “insurance” covered normal wear-n-tear and kept the car running. Have it cover tires, oil, parts and service.

    What people want is dependability. They do not want surprises. They don’t want to be hit with expensive repair bills from time to time. Most people get paid a regular fixed amount on a regular schedule. If you can make the ownership experience sync well with their paychecks so that they can predict exactly what owning the car will cost, then they will be very happy.

    Lastly, issue a sell price guarantee that when they get ready to sell, you will offer a floor price for the car. They way they don’t get burned so bad on depreciation because no one wants your used cars. Like the warranty, if you cover your ass with proactive service, then the market demand for your used cars will rise and cover you on this exposure.

  • avatar
    Robert Schwartz

    “nothing has changed at GM, and nothing is likely to change. The good people at the sharp end must still bend their will to executives; heavy hitters with a tin ear for the advice given by the people who really know how to make great cars.

    Yup. Just like Dr. Farago, and numerous other writers on this site have analyzed over the last few months. Nothing has changed at GM, nothing will change. They are doomed.

    It reminds me of when I was in High School in a previous millennium. I was kind of an assistant manager and water boy for the track team. One year, I was at the first spring practice holding the clipboard for Coach Mechling, a crusty old guy. McCarty was the teams most talented and least disciplined athlete, he smoked and never worked out on his own. Coach lined up the boys for the first practice 440, and fired his starter’s pistol to start the race. He put the pistol away, pointed to a light pole on the other side of the track and said “McCarty is going to drop about there.” And sure enough, when McCarty, who had been far ahead of the other boys, got to the pole, he slowed to a jog.

  • avatar
    yankinwaoz

    One other point, GM. If you like the car HMO idea:

    After three years of ownership, when you provide a day loaner car during service, give the customer the next car up your ownership hierarchy. This becomes the perfect marketing opportunity to get them experiencing and thinking about their next car, and you have them driving exactly what you want to sell them next. That alone would be worth millions in advertising.

  • avatar
    Guzzi

    The perception gap is more than reliabilty. It is a perceived status gap as well. At least where I live: If I buy a Japanese brand car, even if it is built in the US, I’d be thought of as sensible. If I bought a Hyundai. I might be though of as smart, at least on the value for dollar equation. If I bought Euro-lux, well then I want to tell people I’ve arrived, but 50% of the time I’d be thought of as arrogant (why didn’t he buy the Lexus?).

    Where I live, if I bought an American car now, I’d be dumb or trashy, or both. And I doubt a 10/100,000 warantee would make any difference. For most of us, as much as we all like to say what other people think doesn’t matter, well, of course it does.

  • avatar

    Robstar, I live in Toronto. I easily put 24 thousand km on my car and I actually limit my driving because I’m leasing it and don’t want to pay extra. I could put 30 thousand km on my car a year (about 20 thousand miles). I know other people who put plenty of km on their cars, too.
    All you need to do is to drive to work every day and make weekend trips to provincial parks and campgrounds, and go on vacation with your car.

  • avatar
    zaitcev

    I put about 18-20k miles on the car across the last 12 years pretty reliably. The amazing part is, I stopped commuting somewhere in the middle, moved states, and yet…

    As far as warranty goes, it is only important as a statement of faith of the company in its products, or in its coffers. Doing warranty work is the same pain in the ass for me as non-warranty. I’m not on welfare, I can pay for my cars. I would buy the same Lexus even if they offered 1 year warranty, as long as expected reliability was there. Conversely, Hyunday’s 10/100 warranty does absolutely nothing to me. So they are ready to pay for warranty work, does it help me in any way?

    This discussion reminds me about Kel-Tec, the makers of innovative firearms. They employ manufacturing processes that let them make guns cheap, but there’s a higher initial failure rate than, say, with Ruger. Examples of failures would be: a gas piston of wrong diameter, so it does not fit its tube, or a bolt that had incorrect heat treatment and then shears off at the cam pin. In the same time, they offer an excellent, outstanding customer service, and a LIFETIME warranty (eat this, Hyundai). Anything bad happens to your gun, you ship it to factory in Florida, they fix it free of charge, no questions asked. Who is to say that Hyundai didn’t make exactly the same business decision: not to fix the quality, but fix the customer relations?

    Given that I’m extremely happy with my Kel-Tec SU-16CA and it had absolutely no issues whatsoever (so far), is it hypocritical of me not to give the same chance to Hyundai? Quite possibly! All I’m trying to say, the 10/100 warranty is not some kind of magic wand GM could weave and have all problems go away.

  • avatar
    GS650G

    Gm is terrified of a 10 year warranty with no strings because of past experiences. Many of the drivelines are too new to trust that long in their opinion. Headgaskets are expensive to replace, along with transmissions. You lose all profit on a car when that happens.

    But you earn the trust of the consumer. And when the owner goes to work the next day co workers will hear about how the powertrain crapped out, But The Dealer Is Fixing It For Free. And GM would learn quickly that not designing, building or spec’ing parts properly gets expensive. It would not happen twice.

    Maybe GM leadership thinks consumers ask for too much in a 100K warranty over 10 years. Well plenty of people drive 200K miles without transmission or engine failure and they tell their friends about it.

    Elitists feel they know better and that the standards should be whatever they feel is appropriate. Unfortunately they do not get to decide the standards at all.

    I owned a GM car, a 91 saturn SL1, and while the car got high marks for gas mileage, style, ergonomics and reliability, it still had brake problems, broken motor mount at 8000 miles, rough idle quality, noisy plastic interior pieces, and the seatbelt sensors in the buckles had cold solder joints that I fixed because the service department could not figure out what the problem was.

    But the service department was courteous, and did not lie to me about the problems or blame me. I got back a cleaned and waxed car every time. Despite issues with the product at least that dealer was able to meet my expectations.

    Fast forward to today and the brutal market means it’s dog eat dog for profits at the dealers. And GM is squeezing them to death. I think the dealer experience is also a big part of the customer opinion, and it may contribute to lower resale since you don’t take the GM car to a Lexus dealer for service. What good is a transferred warranty that puts you at the mercy of Mr. Goodwrench?

  • avatar
    vvk

    “I want a very quiet car with exceptional fuel economy and good interior room at a good price.”

    I am sorry, but a 1996 Prism is NOT a quiet car. It is OK and has very good attention to detail and NVH issues. But it lacks good sound insulation. You can hear the engine strain under heavy load. You can hear tire noise. You can hear rocks hitting wheel arches. You can hear wind noise. You can tell it is a cheap car, built to a low price point.

    In addition to two 3-series BMWs, I own a 2003 Buick LeSabre and a 2007 Toyota Corolla. The Buick is a wonderful car — extremely quiet and comfortable, excellent brakes, great HVAC, superb engine and transmission. It is also impressively fuel efficient. Corolla is so much worse in every way, except one — fuel economy. It is noisy and uncomfortable, has poor driver seating position, terrible brakes, fussy ride, jerky transmission and gutless engine.

  • avatar
    postjosh

    when an executive of a bankrupt car company whines about a perception gap, i perceive that the only person he is fooling is himself.

  • avatar
    Pch101

    Issue a no BS 10y/100k comprehensive warranty with your cars.

    We mostly agree (obviously), but no automaker could make money on a ten-year warranty, not even Toyota. And if the goal is to offer it temporarily to lure them in, then I would pity the dealers who have to deal with the first customers who learn that they aren’t being offered the same deal.

    GM has a lot of atonement in its future, but that’s going a bit far. Make the first five years fantastic, and that will go a long way. Instead of powertrain only, make it bumper to bumper, with the service including the little stuff like wiper blades. The goal should be to have the customer pay for only fuel and whatever accidents that they may have (hopefully not) been involved in during the service period.

    You could even get away with a monthly “insurance” premium

    In my view, that would be a total buzzkill and remove a lot of the benefit to the company. The service should be included free of charge, and used as an opportunity to build goodwill at every turn.

    After three years of ownership, when you provide a day loaner car during service, give the customer the next car up your ownership hierarchy.

    Funny, I was going to make a similar comment. Definitely provide loaner upgrades whenever possible so that the customer can develop an interest in a vehicle that matches their next logical step.

    Not that any of this is going to happen. It’s apparently considered to be better form to complain about “perception gaps” than it is to make sales and keep customers, and poach them from the competition. Do they even know that they have competition?

  • avatar
    ajla-

    @Guzzi:

    Where I live, if I bought an American car now, I’d be dumb or trashy, or both. And I doubt a 10/100,000 warantee would make any difference. For most of us, as much as we all like to say what other people think doesn’t matter, well, of course it does.

    Thank you for bringing this up. I know plenty of import owners that wanted to buy a Pontiac G8 (by all accounts a great product) but didn’t because they didn’t want to be thought of as toothless backwoods trailer trash. Just read the comments on General Motors Death Watch 252.

  • avatar
    njdave

    @pch101
    Hyundai’s 10/100000 warranty is only on the powertrain. The rest of the car is 5/50. It is still a good warranty, and GM could match it if they want to.

  • avatar
    psarhjinian

    Hence was born the idea of HMOs that were supposed to catch problems before they blossom in to expensive catastrophies.

    HMOs are like BMW’s preventative maintenance: the minimum possible to make it look like something is being done, while stonewalling and denying the big-ticket items in hopes the customer will “go away”.

  • avatar
    njdave

    with an HMO if you only delay long enough, the patient dies and your problem goes away. Cynical perhaps, but the basis of a lot of HMO decisions.

  • avatar
    CanadaCarMark

    Excellent but sad report, i read TTAC almost every day at work and while it’s endlessly negative in most regards it’s also mostly correct in placing blame. Keep up the great work. Mark

  • avatar
    josho

    As others have said, excellent article – you can tell by the number and quality of comments.

    I think it’s a mistake to compare GM to BMW, Merc, or Porsche. Though they all sell cars, they are operating in different markets and appealing to different audiences – that is, they are positioned differently, and aren’t directly competitive.

    It’s the same thing when you decide on a restaurant – McDonalds, Applebees, and your local fancy restaurant all offer food, but they aren’t directly competitive. McDonalds competes with Burger King and Jack in the Box; Applebees competes with Olive Garden and Chili’s; nice restaurants compete with each other, and they compete on different things.

    BWM doesn’t have to compete on warranty length because that’s not why customers are buying their cars.

    As Farago has said over and over, GM doesn’t have a quality problem, it has a brand problem, one that’s been reinforced for decades, and continues to be reinforced today, every time they make a mistake.

    It’s not enough to have a few cars in a full lineup be high-quality. When you have the distance to go that GM has, every car has to be high-quality. I had the misfortune of renting a Hummer a couple weeks ago (it was the last car they had available), and had to laugh when I couldn’t open the glove box because it ran into the door. How typical of GM, I thought. If I had the same problem with a Toyota or BMW, I would have thought how atypical. This is my bias, and it’s not my responsibility to change it; it’s theirs.

  • avatar
    Gardiner Westbound

    General Motors has good reason to jawbone and stonewall calls for an honest, comprehensive, 10-year factory warranty. The cars won’t last that long. it engineers key parts to fail earlier.

    BusinessWeek

  • avatar
    alexndr333

    As GM moves further and further away from its awful past, it’s getting harder and harder for critics to find reasons to fault them. The “Ten Year or Nothing” warranty argument is a case-in-point: It allows one to criticize GM today based on ten-year-old models. No matter that the General has a bunch of good product out there, the ten year old stuff can still be trotted out as a reason to say, “No Sale”.

    Another is GM management. Since we love the hard-working American factory employee, it must be those few executives that are to blame. No matter that we have no such access to the executives in Japan or Korea to find their faults or learn of their imperfect decisions. The unbridled access to American executives turns out to be a means for criticism.

    Just put the cars against each other and let it go at that. All the rest is just argument for its own sake.

  • avatar
    yankinwaoz

    alexndr333,

    No. You are wrong. GM (actually any car company) want a customer to take an expensive gamble on their product. You are asking people to ignore the past and bet on the future.

    Line workers, dealers, executives, or factory floor mop up guy. It doesn’t matter who is to blame. The end result is that if someone in the chain f**ks up, we end up with a crappy product in our driveway.

    Bottom line: We have to make a decision on where to spend our transporation dollars. Making an expensive bet on a vendor that has burned you, or people you know, in the past and more than once, will make anyone reluctant to take the chance.

    Regarding blaming management. These are all just constructive criticism.

  • avatar
    Joe Chiaramonte

    This set of articles, in my mind, is at the core of what TTAC is all about.

    Darwin, you say you feel bad that GM didn’t win you over, but that’s solely their responsibility. It’s not your responsibility to meet them halfway. You did that when you earned the money you’ll spend on your next car.

    I do feel bad for GM employees, almost as bad as I feel for us taxpayers who will support them financially for decades to come. GM as an entity is doomed to repeat its own failure, until and unless there is a new board, a complete management sweep and a re-build of the company from nuts and bolts, not just the trimming of brands.

    The excellence in this series came directly to focus when you asked the Lutz question of the two product managers. I’m sure that the silent pause after the slow “y-e-s” was deafening – and telling. It’s representative of management that will sell out many hundreds (or they’d hope many thousands) of consumers to save 50 cents per vehicle by including a shoddy cheap part, rather than the best they can design and build. I am quite sure they will never find their way out of that dilemma. It’s a business model destined for failure, and it is the antithesis of the development of a high-reliability product model.

    I would hope the PTFOA is paying attention, but I’m pragmatic. There’s too much political capital at stake here for anything to result but dithering and extended pain.

  • avatar
    gohorns

    alexndr333 you are so wrong. Fool me once shame on you fool me twice shame on me. Consumers are jaded, rightfully so, because GM created cars that were junk. So now they are not junk how do you propose to get that burned consumer to trust you again? The obvious answer is build a better car (duh) and back it up with a warranty that boldly proclaims we are the best most reliable maker of cars in the world.

    Consumers fear risk and seek value and this company has a track record of offering the exact opposite.

  • avatar
    oms

    josho :
    August 18th, 2009 at 3:12 pm

    I think it’s a mistake to compare GM to BMW, Merc, or Porsche. Though they all sell cars, they are operating in different markets and appealing to different audiences – that is, they are positioned differently, and aren’t directly competitive…

    josho, GM has traditionally aimed to sell a car for every customer. Given that there are other choices out there, GM needs be able to face the competition in each segment. In the bread-and-butter segment, Chevy has to be able to lure away typical Camry/Corolla/Prius or Accord/Civic shoppers or give up completely as Kia and Hyundai make further inroads. Cadillac, on the other hand, might just have to grab some potential BMW/Merc/Lexus customers.

    BWM doesn’t have to compete on warranty length because that’s not why customers are buying their cars.

    Even BMW and Porsche had to improve their reliability as competitors such as Acura/Lexus/Infiniti began offering attractive alternatives that cost less to buy and run.

  • avatar
    Lokkii

    @alexndr333

    Just put the cars against each other and let it go at that.

    Uhm, we did… GM went bankrupt after years and years of declining sales.

    All the rest is just argument for its own sake

    It would be if they weren’t using our tax money to stay in business.

    Since we love the hard-working American factory employee

    Ain’t been in town long, have ya kid?

  • avatar
    dhathewa

    Joe Chiaramonte: “Darwin, you say you feel bad that GM didn’t win you over, but that’s solely their responsibility.”

    Yes, I know that. But I still feel like I’ve just run over somebody’s dog.

  • avatar
    ChristyGarwood

    Darwin, you provided a spectacular account of your experience and your truthful opinion about why you won’t buy GM. I realize your feelings can’t be denied but, don’t bear GM’s guilt for them!!!!

    My opinion only, GM, like any company is responsible to sell and support products that keep customers coming back and to manage the financial side of the business well, i.e. don’t get overburdened with debt based on overly optimistic sales forecasts.

    If in a few years you need a new car, check out that truedelta.com site first and see if GM’s performance has changed, then go to a dealer and test drive a La Crosse, Malibu, Cruze, Equinox or dare I say it, the Terrain. Don’t let a few canapes make you feel indebted.

    On the other hand, if you really feel guilty about the free (probably paid for by the US and Canadian taxpayers)airfare and hotel, I think I can still get you the equivalent of an employee discount as a conquest sale (please smile at my attempt to sell a car ;-)

  • avatar
    jtk

    This was a great series of articles.

    It sort of reminds me of the Catera event I went to years ago. They had other cars for you to drive, plus the Catera. I drove a BMW 325 first, on their little road course. No limits on what I could do with it. When I drove the Catera I started out the same way, but the GM guy in the car asked me to “tone it down so the Catera doesn’t break”. Gee… what’s the point then? To me this is the same as having an undriveable Cruze. The Cruze is probably more important than the Volt, and they won’t let you drive it.

    I currently (unfortunately) drive a Buick Regal. On paper it has competitive near-luxury features. But the execution is absolutely piss-poor. It has leather… but the leather feels more like vinyl. The dash is a huge expanse of cheap black plastic that scratched when my sister bumped it with her knee. It rattles, clunks, shakes, grinds, and makes terrible burning smells. And I have Dexcool in it and unreplaced intake manifold gaskets. And I just passed 40,000 miles. After this experience, the only way I would buy another GM is if they have a great warranty or a significantly lower price.

    I admit I’m biased because I hate my car. But to me Lutz’s perception gap is between what he thinks his cars are and what they really are.

  • avatar
    akear

    There is no perception gap. However, there is a lot of mediocre GM cars like the, Cobalt, Aveo, Cruze(mediocre reviews in Europe), G3, and Malibu.

  • avatar
    Bruce from DC

    So, first, Mr. H, let me join the chorus in thanking you for a nice set of articles. We all carry biases and prejudices, it’s just that some of us have a hard time owning up to the fact!

    I have to say, based on all the reportage of his comments, that it’s time for Mr. Lutz to retire. If you’re in a business of selling a product or (as I am) a service, there’s no such thing as a “perception gap.” Perception is reality, and you have to deal with it. For just about everyone, a car is the second biggest single expenditure they will make; and for a lot of people, it is the biggest single expenditure they will make. So, it’s understandable that they’re going to be risk-averse. And the risk here is that their expectations about the car going in will be disappointed. It is not a given that every buyer’s expectation is bullet-proof reliability. I don’t think people buy Porsches, BMWs or Benzes with that expectation; and certainly, for decades, people didn’t buy Jaguars with that expectation. But purchasers of these cars are buying something other than just transportation; they’re buying status, prestige, an enhanced driving experience, etc.

    That’s not the fat part of the market. The fat part of the market is buying transportation. That means reliability and reasonably low operating cost. That’s the core value. Sure, if the car looks nice and drives well, that’s a plus. But that’s not the core value. So only a shopper who perceives the core value of two cars to be equal will then make his decision based on the other factors.

    So, if you’re a mass market car manufacturer (as the Detroit 3 are), then you have to focus on that core value. Sure, if you’re Chevrolet, you can sell a number of Corvettes that may not be totally reliable, may have some quality issues, but deliver a driving experience that requires spending 40 percent more to get in any other car. Because Corvette buyers aren’t buying transportation; they’re buying the driving experience. But if you’re GM, you can’t live on selling Corvettes, no matter how successful they may be in their market (any more than Chrysler could live on selling Vipers).

    Without yapping about it, if you’re GM or Ford or Chrysler, you have to internalize the concept that you’re selling transportation, and your customers expect reliability, and low and predictable operating costs over the time that they plan to own the vehicle. Fix that, and there will be no “perception gap” vis-a-vis the Asian brands. Then add the flash and the spiff.

  • avatar
    RogerB34

    Nice summary, enjoyed the read.
    Nothing on the Ecotec powered vehicles.
    GM is still building dinosaurs gussied up with hybrid drives.
    Won’t work.

  • avatar

    GM is not worth taking the time to write about as long as the aforementioned management remains. too bad, great company…just wrong people at the top.

  • avatar
    ra_pro

    Darwin, is that your real name? If so it appears to be very apt for this series.

    Alas GM; was hoping feds would push for brand new managenment but like a lot of things coming from the Pres, a lot of talk about change and little action.

    GM RIP.

  • avatar
    Tommy Boy

    >As GM moves further and further away from its awful past, it’s getting harder and harder for critics to find reasons to fault them. The “Ten Year or Nothing” warranty argument is a case-in-point: It allows one to criticize GM today based on ten-year-old models. No matter that the General has a bunch of good product out there, the ten year old stuff can still be trotted out as a reason to say, “No Sale”.

    You’re stating as proven fact that GM “has a bunch of good product out there.”

    Really?

    Compared to what?

    Says who?

    We have no way of knowing that a current GM product, in 7-10 years time, will have provided service equivalent to a current Toyota or Honda or even Hyundai / KIA.

    For millions of Americans buying a GM product is still a five-figure gamble, and Bob Lutz’s preaching to the choir about perception gaps ain’t gonna change that.

    Somebody posted a link to a 2006 BusinessWeek article. I’ll provide the relevant quote below, but we’re supposed to be impressed that GM SAYS it is now spec-ing parts to last 100,000 miles instead of 80,000. Does anyone think that Toyota or Honda spec that low?

    BusinessWeek:

    “GM’s warranty costs have fallen 40% in the last five years as GM has, among other things, increased the durability specifications on its cars. It used to be, for example, that key parts were designed to last only 80,000 miles. That has increased, say GM executives, to well over 100,000 miles, with many parts specified to last 120,000 miles.

    “In J.D. Power & Associates’ Vehicle Dependability Study, which measures problems reported by customers over three years, GM has just two of its current brands, Buick and Cadillac, above industry average. Lexus leads the study. Toyota (TM), Honda (HMC), Acura, Ford, Mercury, and luxury brands such as BMW and Jaguar all rank well ahead of high-volume GM brands such as Chevrolet, Pontiac, and Saturn.”

  • avatar
    Dave M.

    For me to sniff around a GM dealership (I really like the new Equinox), prices would have to undercut the competition by 23-30%. That’ll never happen.

  • avatar
    John Horner

    I first started making the argument that GM needed to match Hyundai’s warranty on alt.autos.gm and other usenet groups sometime back in the stone age. GM loyalists shouted the idea down back then as being unnecessary. Why should GM stoop to the level of Hyundai?

    But the point remains. A well engineered, well built, properly maintained, non-abused new car should be able to go at least 10 years and/or 100,000 miles without any failures beyond normal wear items. If it can’t, then the mfg. screwed up. The cost of this screw up should be on the mfg., not the poor sap who bought the thing. GM, Ford and Chrysler have all created a legion of NEVER AGAIN ex-customers, and it will take dramatic action to win them back.

    “The new GM leadership team has been in place for all of four weeks”

    There is nothing new about the “new” GM leadership team. Same old same old people.

  • avatar
    agenthex

    Why should GM stoop to the level of Hyundai?

    But the point remains. A well engineered, well built, properly maintained, non-abused new car should be able to go at least 10 years and/or 100,000 miles without any failures beyond normal wear items.

    It still costs money, money that is better spent on more upward mobile goals.

    They actually have a decent point in that if you’re spending the money anyway, copying BMW looks better than copying Hyundai.

  • avatar
    John Horner

    Bravo Darwin for an excellent piece. This is the kind of honest and detailed writing of which automotive journalism should be made. Sure you have your biases, but you are upfront about them. Everyone has biases based on their own experiences.

    Encore!

  • avatar
    Pch101

    I first started making the argument that GM needed to match Hyundai’s warranty on alt.autos.gm and other usenet groups sometime back in the stone age. GM loyalists shouted the idea down back then as being unnecessary. Why should GM stoop to the level of Hyundai?

    I’d say that it’s a mistake to benchmark Hyundai. Hyundai has a strategy that is suitable to them, but that won’t necessarily work for GM.

    You have to understand Hyundai’s business model. Hyundai is trying to do what Toyota did, but in half the time. Instead of following the organic growth model of the Japanese, Hyundai created substantial production capacity — far more than what was needed — to support large volumes that the company hopes to get. So in the meantime, they sell at low prices with substantial fleet sales, with the goal of creating retail volume that can offset or replace the fleet business that is used to keep the lights on.

    Hyundai can do this because it is a large conglomerate that does a lot more than just make cars. I wouldn’t be shocked if they cooked the books in order to show profits on the car side of the income statement that aren’t actually there. (If they showed steady losses, that would suggest dumping, which would violate trade rules.)

    GM is not in that position. It is not a diversified company, and it has to make money from selling vehicles. It has limited time to hit breakeven, lest it fail entirely.

    Doing exactly what Hyundai does just because Hyundai does it is just walking into the fan blades. This is a war, and during a war, you must attack the flank. Head on assaults end up looking like WWI trench warfare: ugly, bloody, and costly, with no results.

    The flank is to be found in service and the intangibles. While a longer warranty should help a bit, it’s not even close to being enough. They don’t have time to out-Toyota Toyota. People who want Toyotas will just buy Toyotas.

  • avatar
    loverofcars1969

    Ditch the nearly dead and dying market (65 yrs +), offer fresh balls to wall American styling or some of their better European design, and lastly offer 5 yr 100K bumper to bumper and GM could sell me a car.

  • avatar
    dougjp

    Why are you asking GM marketing types questions? There is no conceivable practical point to doing that. Unless you are a masochist and like to hear those painful stereotypical noises all of us have become so used to. Or perhaps this is a pointless academic exercise to test response speeds and quality. Maybe you plan on hiring these people for some reason, and that’s why you do this to yourself? I just don’t get it.

  • avatar
    Matt51

    The entire auto industry is a house of cards waiting (or has started) to collapse. As Americans struggle in a failing economy, they no longer want, or are able to, buy new $30,000-40,000-50,000 cars and trucks. They want a $10K Versa or a $15K Kia Forte. People have been paying a large premium for lifestyle statements. All the car companies are in trouble. Maybe the Koreans/Chinese will inherit the automotive world with low cost transportation. GM, Ford, Chrysler, do not make much profit on their low end cars, which is where the market is headed.
    I would vote with Lutz, there is a perception gap. GM cars are as nice as anyone’s out there. There just are not enough buyers who can afford a Buick or Cadillac, and there are many alternative choices for those who can afford one.

  • avatar
    Geotpf

    nino :
    August 18th, 2009 at 11:41 am

    BTW Count me as one who believes,the “perception gap” is very much in existence.

    My dad was a GM customer for more than 40 years. His last car was a Cadillac STS that he leased for $511 a month. He died earlier this year three months before the lease was up on the car. We asked GMAC if we could return the car early. They told us that by all means to return the car along with a copy of the death certificate and that everything would be all right. The car was in pristine condition and with very low mileage as my dad was able to drive the car very little. Two months after we returned the car, my dad’s estate has been sued by GM for $3500 due on the car, the reason being is that the car didn’t get its residual value at auction. We’ve offered to pay the remaining lease payments ($1533), but no, we can’t. I finally got our attorney to send them a sternly worded letter (along with a copy of the final agreement) that has stopped the process.

    If by the “perception gap”, you mean that GM pays attention to their customers and is driven to serve them, then I submit that it isn’t a perception that they don’t, even now.

    BTW, I received in the mail, a letter sent to my dad from GM that is offering him a $2500 voucher towards the purchase or lease of any GM car. They must really be paying attention.

    I’m sorry for your loss. Your case is a non-reliability example of how to lose a customer, probably multiple customers, for life. I’m willing to bet that neither you nor anybody in your close family will ever even consider purchasing a GM vehicle for as long as you live.

    It should be pointed out, however, that it appears you were screwed by GMAC, not GM. GMAC is no longer part of GM. In fact, the Federal government currently holds a majority stake in GMAC. Maybe you should write a letter to Obama. Of course, the Feds own a majority stake in GM as well, but the companies are seperate.

  • avatar
    Geotpf

    agenthex :
    August 19th, 2009 at 4:05 am

    They actually have a decent point in that if you’re spending the money anyway, copying BMW looks better than copying Hyundai.

    If GM was just Cadillac, this would work. But it isn’t. BMW doesn’t sell pickups. BMW doesn’t sell economy cars. BMW doesn’t sell work vans. GM has to sell all of those things and more to survive.

  • avatar
    agenthex

    If GM was just Cadillac, this would work. But it isn’t. BMW doesn’t sell pickups. BMW doesn’t sell economy cars. BMW doesn’t sell work vans. GM has to sell all of those things and more to survive.

    What does that have to do with anything?

    I was comparing doing a 10yr warranty vs free maintenance.

  • avatar
    european

    i fully agree with MAtt51

    and as for agenthex, how dont u get it?

    GM can never have the status like bmws or merc.
    not with their lineup, coz its not “prestige”. i think thats what Geotpf was trying to point out.

    besides that, theres the thing what matt51 mentioned:
    ordinary folks wont have and will not have the money to buy GM priced cars, and the affluent ppl wont buy one coz GM divisions cannibalizing themselves.
    the malibu, lacross, and cts all have almost the same interiors. so imagine one affluent buyer
    wanting a cts only to see that the interior is
    the same as his e.g. janitors malibu. he’ll say fook it, and go off buy a bmw or merc.

    you know just a few new techs inside, like cams n stuff, that wont do, coz as i know a chip cost like less then a $1 mass produces, how can they charge thousands for that and call it upscale/luxury? insane

  • avatar
    european

    well to add to my previous post,

    gm is crazy to scrap saturn, bcoz they dont need more luxury divisions like the revived buick that was almost dead, but a cheap affordable division.

    the could make chevys the regular ones, and keep saturn as a more exotic one, with the opel imports
    and transfered scraps of pontiac like g8 and solice. and keep it cheap.

    GM is assuming that ppl will have the money to buy their products, i think they didnt even consider it, but it will be their greatest mistake.

  • avatar
    agenthex

    and as for agenthex, how dont u get it?

    GM can never have the status like bmws or merc.

    Did anyone say it’s an attempt to reach the status of BMW or Mercedes?

    BTW, the “prestige” of euro brands is a marketing stunt. They sell the SAME model (don’t even bother with a rebadge) with the same dials, cloth seats, tiny engines, and same crap reliability back home. Of course the cheap models won’t compete well in NA, so presto, a “luxury” brand for the snobs.

  • avatar
    european

    @agenthex

    well, i think its smart.
    if someone wants luxury he pays more and gets real luxury (in europe).

    not like in the US, where if you want luxury,
    you either

    1. pay more and get to buy asian/euro
    2. pay more and get a rebadged POS with
    best regards from GM/Chrysler

  • avatar
    european

    btw, i dont think that cadillac badge cost more than a chevys one. just a diff shape.

    so, why again are you paying premium money for
    a caddy??? whos the snob now?

  • avatar
    agenthex

    not like in the US, where if you want luxury,

    You’re not getting it. When you “upgrade” from the el-cheapo 3 series in europe, you get the same 3 series with leather and climate control and sunroof or whatever. At least with GM, you get a half-ass attempt at making the car different.

    You don’t get the (relatively) el-cheapo 3 series here, which is why you think the knobs are so special.

  • avatar
    golden2husky

    ordinary folks wont have and will not have the money to buy GM priced cars, and the affluent ppl wont buy one coz GM divisions cannibalizing themselves.
    the malibu, lacross, and cts all have almost the same interiors. so imagine one affluent buyer
    wanting a cts only to see that the interior is
    the same as his e.g. janitors malibu. he’ll say fook it, and go off buy a bmw or merc.…

    It’s worth noting that the reliability of many BMW’s and virtually all Mercedes models is far worse than that of your average GM product. Now in this case reliability and durability are not the same. A BMW should have no problem lasting 200K miles, but imagine the repair bills…

    GM must make the plunge and offer a real bumper to bumper warranty that beats Hyundai. If they don’t, it means that their statistical analysis indicates that it would be too costly. To rectify that, it means an improvement in parts must be made. I don’t buy that Businessweek story that major parts are designed to fail at 100K. What does that mean? at 100K 50% of the parts have failed? Nothing I have owned has had “major” parts fail in such a short life…

  • avatar
    FreedMike

    european :
    August 20th, 2009 at 10:06 pm

    ordinary folks wont have and will not have the money to buy GM priced cars, and the affluent ppl wont buy one coz GM divisions cannibalizing themselves.
    the malibu, lacross, and cts all have almost the same interiors. so imagine one affluent buyer
    wanting a cts only to see that the interior is
    the same as his e.g. janitors malibu. he’ll say fook it, and go off buy a bmw or merc.

    The only way you could possibly make that statement about the interior of these cars is if you have never actually been in them.

    As far as “cannibalizing” cheaper cars, Lexus, Audi, and Acura all do it…but do they get crap for it?

  • avatar
    kowsnofskia

    GM must make the plunge and offer a real bumper to bumper warranty that beats Hyundai. If they don’t, it means that their statistical analysis indicates that it would be too costly. To rectify that, it means an improvement in parts must be made. I don’t buy that Businessweek story that major parts are designed to fail at 100K. What does that mean? at 100K 50% of the parts have failed? Nothing I have owned has had “major” parts fail in such a short life…

    Interestingly enough, Chrysler’s “lifetime” powertrain warranty seems like it actually was a Big Three attempt at “out-warrantying” Hyundai. However, I’m not sure how well it worked, or how well this “long warranty” strategy has ever worked for anyone but Hyundai. Remember Isuzu? Didn’t they have a 10/120 warranty for a time right before they croaked in the US?

  • avatar
    pman

    GM really needs to stop all the blather about the “perception gap”. It’s just a polite sounding way to blame the customer for GM’s shortcomings. GM has blamed the customer for its problems before, but did it using more direct language. Now they’re softening their tone, but the message is the same: “the consumer doesn’t know what he’s doing when he perceives that our cars don’t measure up to the competition”.

  • avatar
    gslippy

    @pman: You’re exactly right on GM’s idea of the ‘perception gap’.

    That gap was created over generations of bad vehicles, poor service, and terrible resale values. You don’t fix that in one or two model years.

    Toyota/Honda/Hyundai/Nissan built their reputation in the US over a whole generation. Their earliest models were rust buckets, but they succeeded in part because the Big 3 were so bad.

    Now, GM truly has an uphill battle because their competition is so good. But they won’t have enough time or money to ever be perceived in the same way as their competitors.

  • avatar
    ZoomZoom

    I’m late to this little tea party, but I wanted to add my compliments on a series well done.

    I could not take the time to read all of the responses; sorry about that.

    I did catch a few comments regarding “perception gap”, and I did want to respond to that.

    I fly and rent cars often enough to occasionally get a GM. I’ve sworn off GM for buying, and none of my rental car experiences have changed my mind.

    The last time I rented a car, I asked for “anything but a GM.” I will probably continue this practice now that GM is government run.

    Perception “gap?” No, this is reality. I make my judgement calls based on my common sense and my experiences. I’ve had awful experiences with Pontiacs, Oldsmobiles, Chevrolets. Cars AND dealerships AND service departments. And after all was said and done, GM took the government handout and they did the President’s bidding.

    So now they have to live with my decision. If they want to call this a “perception gap,” fine. Denial is their loss.

    Over the course of the last couple decades, I’ve seen my family, formerly all-GM, migrate mostly to Fords, but a couple of them still drive old beater Caddies. And they spend a lot of time fixing stuff that doesn’t break down on Toyondas.

    I was in that same rat-race. Now I am out of it, and I am very very happy!

  • avatar
    JSF22

    What a well written series of articles … thank you, Darwin, for the truly excellent work.

    At several points I had no idea whether to laugh or cry. I know many people in the trenches at GM. Those on the product side almost all strike me as earnest and talented, as you found. Those on the sales and marketing side unfortunately almost all strike me as political weenies. It sounds as though they’re the ones still rising to the top.

    I want GM to succeed again and I want to like their newest offerings. The CTS and the LaCrosse both looked tremendously appealing to me; unfortunately, driving both left me with the feeling that the car guys were told to stop when they got to about 80 percent. Too bad the finance guys priced them at about 95 percent.

    I’m not a GM hater, and I’m willing to go back to them after 30 years away. But they will have to do better than this, and frankly I doubt they will.

  • avatar
    Giltibo

    In the 25 years I have been driving I have owned mostly GM cars, as did my father, for more than 45 years. On the last few, we both noticed an ever-diminishing reliability and initial quality. My last GM, a Buick Regal cost me and GM over 13 000$ in repairs in and out of warranty between 60K and 160K km (Or roughly 30K to 100K miles). I was on a first-name basis with the service advisers at my dealership (My dad meanwhile, had about the same problems with his own Grand Prix). Then my wife purchased a Civic, then a CR-V (after the Civic got totaled) and in 8 years and over 200 000 km. Her two Hondas cost less in repairs and maintenance than any 12 months of ownership of my Regal or my dad’s Grand Prix. So when I shopped for a new car in 2008, guess what? I had lost my confidence in GM! I went for a Honda (An I-4 5MT Accord Coupe) and after 19 months of ownership, it has been boringly reliable. I only went to the dealership for lube-oil-filters, that’s all. I am satisfied with Honda. Why go back to GM? Many people have the same experience with Toyota, Hyundai and others. Too little too late IMHO for Chrysler and GM. Rest In Peace

  • avatar
    Phil Ressler

    For most of us, as much as we all like to say what other people think doesn’t matter, well, of course it does.

    America is a resilient and resourceful country whose setbacks have so far never proven permanent. So the current swelling of fright and pessimism over confidence and optimism will fade. But if anything leads to a debut moment of permanent cultural and economic arrest, it will be this sentiment.

    The country’s culture once cared what other people thought with respect to one’s manners, education and comport. And now we have substantial numbers of people who not only let peer perception influence an economic decision that runs for or against their individual and communitarian self-interest, but they also freely admit this frailty. My Dad would be rolling his eyes, shaking his head and cussing under his breath. Wait….me too.

    Personally, I think Mr. Hatheway isn’t remotely correct in deeming a Camry a better car than the current Malibu, but I’m not a customer for either of them though I’ve driven both enough to compare objectively.

    Still, I imagine any neighbor of mine who brings home a new Camry will be surprised it’s them whom I think of as “… dumb or trashy, or both…” And if they care, I’ll think even less.

    Phil

  • avatar
    Buckwheat

    After reading Mr. Hathaway’s three articles and the comments that follow, I’ve concluded that my GM experience is apparently not typical.

    In 27 years of driving many brands of personal and company cars, my GM vehicles have needed the least amount of unscheduled maintenance of any. My current Buick had a 3/36 warranty on it, which seemed short at the time since I put on 38,000 miles the first year I owned it (but with no warranty repairs required). In 304,000 miles I have spent less than $2300 on non-maintenance repairs. The other two GM vehicles in my garage have racked up one unsheduled maintenance repair each. One needed a $580 repair at 97,000 miles, the other needed a $67 repair at 68,000 miles.

    The worst car I’ve had was a “premium” Japanese brand, that needed five warranty repairs in two years. This was quite inconvenient as the closest dealer was 140 miles away, and I sold the car with less than 60,000 miles on it because of my lack of confidence in it’s long term durability.

  • avatar
    KixStart

    Ressler,

    Are you serious? American marketing is all about image and peers.

    And, fyi, the “communitarian” self-interest dollars are far smaller than the “individual” self-interest dollars. If I save $1 on a quality car from overseas, that’s $1 NPV. Any extra $1 on a car that supports some vaguely defined “communitarian” self-interest certainly has a much smaller NPV.

    Some months ago, one of the regular NYT columnists, Friedman or Krugman, I forget which, mentioned GM as a destroyer of wealth. The amount of wealth that GM has destroyed in the past decades is absolutely staggering. How would our “communitarian” self-interest be enhanced by shovelling money into an organization that destroys money?

    Thanks but no thanks. I’ll see if I can take my $1 and send it towards some potential future economic powerhouse.

    It also strikes me as entirely ridiculous that you deride people who succumb to peer pressure yet consider someone dumb or trashy merely for buying a car with a history of above average satisfaction.

  • avatar
    Jim Cherry

    Great article, if depressing to hear that GM’s cult of isolated bean counters still has the company in a death grip. I wrote a column laying out this problem in GM history: http://www.examiner.com/examiner/x-6882-Classic-Autos-Examiner~y2009m4d17-GM-near-bankruptcywhat-happened

  • avatar
    jmatt

    >>> “I believe GM’s employees are fully committed to product excellence.”

    It’s a little late, ain’t it? If they had been committed to product excellence twenty or thirty years ago, people might still consider them when purchasing a vehicle.

    I’m sure the workers are all fine people but let’s face it, the union destroyed those companies.

    Instead of the company being run for the satisfaction of its shareholders or its customers, it was run for the benefit of the UAW who never missed an opportunity to demand more for less.

    While you won’t be shedding a tear for management when this experiment reaches its final conclusion, I’ll be laughing my arse off at all the unemployed UAW hacks. The freaking industry is on life support and the Ford workers today rejected the contract.

    No, when they all end up unemployed, it won’t have been management’s fault. Chalk it up to the Wagner Act.

  • avatar
    olddavid

    I have enjoyed reading the content of the commentary as much as the articles. I grew up in the business, and consequently have a long history of personal observation. I believe that the decline of the domestic auto business is directly related to dealer saturation policies practiced post WWII. The customer’s experience is completely in the hands of the man who takes their money. However, when said dealers are attempting to make a go of it in an environment of the $25 net-net sale it is hard to justify having a driver – let alone a fleet of loaners. The city that I live in has at least 10 Chevrolet dealers and four Toyota. You don’t need an MBA to see who makes more profit. When making payroll ceases to be a white-knuckle exercise, your CSI numbers rise accordingly. I believe that the domestic sales price focus misses the mark. When you are talking about the second largest purchase to most individuals, I think that most would opt for after sale service and attention and sacrifice a few hundred dollars to get that security. But, when staring at 120-day supply at $200 per month, it is hard to remember the long term goals. I guess what I am trying to say is that in the current marketplace- with the quality parity that I have observed- the dealer experience you have has the ability to swing the bar higher- or lower- in a dramatic way. Therefore, shouldn’t Maximum Bob and his Merry Men use their newly slimmed-down network to improve customer relations? How about something simple, like allocating enough $$ to give every current owner of your brand an oil change and car wash? Or use those same dollars to make sure each store has at least staff to drive every service customer to work and back? Preferably, have at least 3-4 loaners available at all times. I was always amazed at the small cost these practices had- especially in relation to the goodwill they brought about. When talking about money in the tens of BILLIONS, surely making everyone who has already spent money with you smile has to be a worthy goal. That, and get rid of the adversarial sale technique……………but that would be a thousand more words.


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