Autoextremist: GM Is Screwed After All

Autoextremist Peter DeLorenzo is an interesting figure in the auto commentary landscape. Though TTAC has often taken the pioneering car blogger to task for inconsistencies (especially during bailout mania), it’s no surprise that DeLorenzo’s ability to see things as they are comes and goes. After all, the guy is the quintessential insider’s outsider: as a former marketing and ad man, the Autoextremist is always in the Detroit tent… the only question week-to-week is whether he’s going to be pissing out or pissing in. Well, this week the deluge is headed straight for the part of the tent occupied by GM’s new CEO Ed Whitacre and his activist board. And it smells of well-aged vintage Deathwatch.

But before I get into Whitacre’s executive moves, you’re probably gathering I’m not buying “Big Ed’s” act, and you’d be right. After doing some digging around Whitacre’s previous executive life at AT&T, it’s easy to come away with a highly unflattering portrayal of GM’s “interim” CEO. First of all, the “aw shucks I’m just a country boy who has a few good ideas” persona is total bullshit. In his previous executive life Whitacre was known as an arrogant know-it-all who was never wrong, never listened to reasoned advice and who brought absolutely nothing to the table of his own on a day-in, day-out basis. Shocking? Hardly. Anyone who thinks The Peter Principle isn’t alive and well in corporate America today is kidding themselves.

But DeLorenzo didn’t have anything to say about Whitacre’s biggest moves, like his cancellation of the Opel sale or the recent China-India strategy shuffles. Instead, Whitacre’s executive shuffling took the top billing, and the biggest gripe of all is over Bob Lutz’s downgrade to “senior adviser” status. In fact, the demotion was so bewildering in light of DeLorenzo’s (and frankly, every “car guy” analyst’s) hero worship of Mr. Maximum, that things descend quickly into revisionist history.

As for Bob Lutz’s new “advisory” role? This announcement was made in preparation for Bob leaving the company at the end of this month. Lutz was originally going to leave at the end of this year but then last spring he and Fritz got to talking about what he’d like to do when he did leave, and that’s when Bob mentioned that he’d like to keep his hand in product development and design, but that he’d really like to take a shot at revamping GM’s marketing, which he viewed as one of the company’s weakest links (he was right, of course). One thing led to another, and all of a sudden Bob was Vice Chairman in charge of marketing for GM.

Bob was slated to stay in that capacity at least through the end of 2010, but it was no secret that he has become less than enchanted with developments down at the RenCen of late, so he has decided that now would be a good time to end his day-to-day involvement in this business. But Bob isn’t going away by any means, so no premature career send-offs need to be written. He will continue to advise GM on product development and design, and – seeing as I consider him to be the top product guy of the last 40 years in this business – that will be a very good thing for GM, or at least it should be if they continue to listen to him. But remember what I said about “Big Ed’s” listening skills?

So MaxBob stepped down because he “has become less than enchanted with developments down at the RenCen,” but he’s sticking around as an advisor anyway? In the absence of a better explanation (let alone an official one), it’s tempting to believe DeLorenzo’s take… even if it’s hard to see the real impact considering Lutz isn’t going anywhere. Either way, we’d certainly have to agree with his assessment that Lutz’s replacement as top marketer, Susan Docherty, proves that

longevity in the GM system does not necessarily mean that there’s a dimension of success involved, it just means that an executive has survived long enough to make it to the next level on the “Big Magic Wheel” of executive job assignments.

And, as DeLorenzo concludes, marketing is too crucial to put in the hands of the person who green-lighted the “take a look at me now” Buick spots. After all:

the most crucial issue facing GM is the fact that a highly skeptical American consumer public is finding it hard to be impressed with GM’s excellent new vehicle lineup. And until that consideration needle is moved in a dramatically positive direction, the company will literally and figuratively be nowhere.

And it’s the one crucial issue that has not been addressed by Whitacre’s changes.

Why is that do you suppose? I’ll answer that one for you: 1. He doesn’t have the first clue at to how to go about it, and 2. Even if he did there’s no one currently in the building in the post-Lutzian era who is capable of taking them where they need to go.

There continues to be a massive disconnect between GM’s excellent new products and the ability or, more accurately, the inability of the company’s marketing minions to communicate their strengths in compelling fashion to an entire nation of consumers who are all of a sudden from the “show me” state of Missouri.

And until this company figures it out – or somebody is brought in to figure it out for the Board and “Big Ed” – then this company will continue chugging along in time-honored fashion, lost in its classic “M.O.” – the “two-steps forward, three back” dance of mediocrity – indefinitely.

Sometimes all a hammer can see is nails, and you can’t help but imagine that Marketing Consultant DeLorenzo is applying for the job of “somebody to figure it out for the Board,” but it’s still a valid point. Unlike Chrysler, GM already has a number of relatively competitive products on the market, but it’s still struggling just as hard to get out from under its loser reputation. Thanks to the bailout DeLorenzo and everyone else in the Detroit tent cheered for, escaping that reputation is about more than just marketing cars. And if, as DeLorenzo confirms, the bailout didn’t fundamentally change GM’s arrogance and ineptitude-fostering “magic wheel” executive culture, then it was as bad a deal for GM as it was for taxpayers.

The real critique, lurking unsaid beneath DeLorenzo’s savaging of Whitacre, is that Big Ed didn’t fire Lutz, Docherty and the other GM lifers when he booted Fritz. But, since that wouldn’t play well inside the tent, the argument gets watered down to “Whitacre doesn’t understand the business.” Which is like shooting the messenger for delivering only half of the right message.