By on January 6, 2010

No, you're a towel... (courtesy:autoweek.com)

GM’s VP got a guest spot on Edmund’s Inside Line to promote his “to-do list for 2010.” The top two spots on the list are dedicated to Lutz’s resolution to “remain focused on the product above all else,” presumably because “stop repeating self” was cut by GM PR. But number three on Lutz’s list is of considerably more interest. Labeled “change minds,” Lutz uses the entry to defend the General’s “perception gap” hobbyhorse. You see, when GM accuses consumers of being too stupid to understand how great GM’s products are, they aren’t actually calling consumers stupid. In hopes of clearing up the confusion, Lutz does what any other savvy marketer would do: call the media stupid.

Let me digress for a moment and say that I’ve seen it written that GM’s marketing strategy is based on the fact that the consumer is too dumb to know what great vehicles it makes. I take huge issue with that. That’s an example of the media trying to ascribe some of the old GM arrogance where none exists.


But wait, there’s more. Having blamed the world’s most convenient scapegoat for a reputation he later admits GM deserves, he explains that the perception gap may not even exist:

It’s not arrogant to think you have great vehicles, so long as you do, and to try to spread the word about them. No one at GM has said that every vehicle we have is world-class — we still have room to improve. And no one at GM, including me, has said that the consumer is too dumb to realize how good our new products are. All we’ve said is that the consumer perhaps is unaware of said fact. That’s a far cry from being dumb.

And the typical consumer’s unawareness is a result of one of two things. First, the consumer literally may not know about our products and what they offer; or second, the consumer knows of them but chooses not to consider them, for a variety of reasons ranging from a bad previous experience to a relative’s bad previous experience to a neighbor down the street who has a relative who knows someone else who had a bad previous experience. In short, it’s reputation.

No, nobody at GM has ever accused anyone of stupidity. Except for maybe the one time GM spokesman Gregg Martin said it was “strange” that Rep Pete Hoekstra “would want to perpetuate some of the misguided thinking that resides outside of Michigan.” Or when Lutz himself said “Detroit and the U.S. domestic auto industry need to change a lot of perceptions — often misguided and wrong perceptions — the rest of the country has about us if we’re to turn things around.” Or when he compared import buyers to suicidal rodents. Or when he said:

We’re not going to erase that perception gap in this generation. People are still going to go to the Toyota store and are still going to get a Camry. They’re not going to care that most of the models are no longer recommended, and they’re not going to care about all the quality problems. It’s a learned response. That’s going to be hard to erase.

And on and on. No, GM has never called a consumer “dumb,” just “misguided,” “strange,” “wrong,” and “lemming-like.” Which is actually just how Lutz likes his consumers, as a quote at the end of his new year list reveals:

We realize, and this may be a little inside baseball for you, that “General Motors” itself may be what someone could label a “damaged brand.” (Someone might say that, but not me!) Even if that were true, and it may be, that alone would not be the reason we would choose to emphasize our brands more than the parent company. The reason for emphasizing the brands is that we’re proud of them, and their heritage, and their vehicle lineups, and what they represent: a glorious past and a potentially bright future.

Besides, there may still be that one person out there who says, “GM? They went bankrupt! Took money from the government! I’m not buying any GM car! Chevrolet? Yeah, Chevrolet’s OK. American car, right? I’d look at a Chevrolet…”

I’d put that guy in an Equinox in a heartbeat.

Sigh. Maybe MaxBob will figure the perception gap thing out next year.

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35 Comments on “Bob Lutz’s New Years To-Do List: Fight, Take Advantage Of Consumer Ignorance...”


  • avatar

    “Besides, there may still be that one person out there who says, “GM? They went bankrupt! Took money from the government! I’m not buying any GM car! Chevrolet? Yeah, Chevrolet’s OK. American car, right? I’d look at a Chevrolet…” ”

    So, after all that….the customer is still stupid.  It was General Motors that took the guvmint money, NOT Chevy.  Yeah right.

    John

  • avatar
    gslippy

    Perception is reality; just ask Bill Clinton.  His impeachment trial was not actually about his personal relationships, but that’s the public’s perception of the event.
     
    And quality doesn’t just mean durability, but the perception of integration and elegance.  This is why so many people hate GM interiors.  They don’t care that the interior might last 20 years; they just don’t like them.

  • avatar
    CarPerson

    Swing and a miss, Bob.

    Sorry but your top man already admitted it’s hard presenting GM’s message that GM’s cars are near-world-class when the public sees EVERY non-suspect rating placing the GM vehicles well down the list on all the newsstands.
     
    General Motors gushes over the Malibu but Consumer Reports rates it ninth in class. Bob, that’s the reality that seemingly escapes every occupant of Ren Cen.
     
    Sorry Bob, but you are still full of the over-the-top GM hubris, the same hubris that drove GM into bankruptcy and will eventually drive them to a tiny niche player.

    I predict your self-described “perception gap” will begin to disappear only when GM starts looking at the ratings and honestly addresses those things that make the cars suck in the people’s eyes.

  • avatar
    psarhjinian

    They’re not going to care that most of the models are no longer recommended, and they’re not going to care about all the quality problems. It’s a learned response. That’s going to be hard to erase.
     
    Except that most of the models actually are recommended.  This is what happens when you get your factoids from what fourteen year-olds posting to Autoblog think Consumer Reports says, versus what Consumer Reports actually says.
     
    Never mind that more of GM’s are not recommended, or that Ford, Honda and Hyundai are also recommended at a greater ration.  Nice ignoring of facts, there.

    • 0 avatar
      texlovera

      psarhjinian – I’m going to assume that when Lutz said “They’re not going to care that most of the models are no longer recommended, and they’re not going to care about all the quality problems.”, that he was referring to some hypothetical situation in the future.  We could refer to it as “bizarro-world”.

      So no, he’s not really “ignoring facts”; he’s just engaging in some flight of fantasy that’s batshit insane, that’s all…

  • avatar

    For me there is no perception gap. There is a huge experience gap resulting from my previous ownership of two Chevrolets. The cars were junk and the dealer treated me very badly. I am very happy with my new Honda and I see no reason to risk my money on a GM product ever again.

  • avatar
    Cammy Corrigan

    Can someone explain how this clown is still in a job? He keeps moaning about a “perception gap”, yet has done approximately nothing to eradicate it (to see how to get rid of a Perception gap talk to Hyundai and Ford).
     
    I also like how he moans about how they’ve lost a generation of buyers. If that’s the case, then who will support GM whilst they woo the next generation of customers?
     
    Utter, utter pillock!

  • avatar
    trucosm

    How many times must us internet car trolls keep hitting our heads against the wall and mutter to GM: “match Hyundai’s warranty?”

    Yes, there may be a gap between 5-yr/60k-mile theoretical warranty coverage and actual dealer coverage. Yes, a warranty won’t solve everything.

    However, Hyundai is the one car company that went from Yugo-esqe ridicule to general respectablility today. Hyundai’s bumper-to-bumper warranty coverage made a big contribution in convincing consumers to reassess their bias against Hyundai.

    If quality truly is up to par, then the cost of expanding GM’s bumper to bumper warranty will be more than offset by the units they should be able to sell.

    • 0 avatar
      dastanley

      I’m with you on this.  But I doubt GM will ever match Hyundai’s or any one else’s warranty because someone else came up with the suggestion before GM’s management did (“Hey, that’s no fair, you thought of it first and we can’t be seen as copy cats”).  They can’t let internet trolls (possible future customers?) dictate policy at the RenCen.  So the perception gap to address first is GM’s actual arrogance vs. their lack of admitting any arrogance.

    • 0 avatar
      psarhjinian

      But I doubt GM will ever match Hyundai’s or any one else’s warranty because someone else came up with the suggestion before GM’s management did
       
      What, like the Camaro (vis a vis the Mustang)?

    • 0 avatar
      Runfromcheney

      But. doesn’t GM have the best coverage in the industry with their 100,000 mile warranty? Oh wait! Gm’s warranty lasts only 5 years. How many miles does one rack up in five years? Usually 50,000.
      Its stuff like this that gave GM such an “image” problem.

    • 0 avatar
      LectroByte

       
      Didn’t GM just drop some items out from their powertrain warranty such as ECMs and TCMs?

  • avatar
    NickR

    Unfortunately for Bob, a ‘tie’ isn’t good enough. To change perception they have to have a distinct advantage and maintain it long enough for it to become widely accepted. Cars are generally pretty good now as compared to the 70s and 80s so distinguishing oneself is getting more and more difficult. And, let’s face it, time is not on GMs side.

  • avatar
    p00ch

    Question is, does he honestly believe what he’s saying, or is he merely earning his paycheck?

  • avatar
    mikey610 (of GM)

    “May the best car win”……increased GM consideration numbers from here at Edmunds and other sources show that the campaign was a very good first step.

    Great, except that every GM has claimed every marketing campaign since 1995 or so has been “a good first step”.  The problem is that the next several steps are backwards…every time.

    Each month’s sales results are “an important indicator of a turnaround”, and each promotion of a failed executive is “an important step in a new direction”. 

  • avatar
    segfault

    “The reason for euthanizing the brands is that we’re proud of them, and their heritage, and it was the most humane thing we could do.”

    FTFH. (Why doesn’t the strikethrough effect work correctly?)

  • avatar
    newfdawg

    I don’t have a perception problem with General Motors vehicles, I have a experience problem.  I owned several GM vehicles in the 70′s and 80′s, to say they spent more time in the shop than on the road is hardly an exaggeration.  After some terrible experiences with an ’80 X-car I vowed never to drive another GM automobile.  I  will not be purchasing another GM product until I can be absolutely certain it will  give reliable service longer than twelve months or so.  All this blathering by Lutz will not sway anybody-aim to build cars that are  the equal of manufacturers like Honda, Toyota, etc. and perhaps the gap can be narrowed or erased.

  • avatar
    mtymsi

    When both Lutz and Docherty are history and are replaced by outsiders GM will be much more on the road to recovery. Those two are the last of the former top management left and hopefully not for very long.

  • avatar
    skcusmg

    Chapter 7 in late 2010 or early 2011!

  • avatar
    Gardiner Westbound

    Lousy cars killed Detroit. Its non-stop efforts to please Wall Street, maximize executive bonuses, and buy off the union bosses looked after everybody that mattered, except the customers.

    The domestic automakers pioneered and perfected the twin evils of value engineering, producing a car that prematurely becomes non-functional, and planned obsolescence generating billions in early parts and vehicle replacements. It worked until consumers finally realized buying Asian largely avoids slipshod quality and warranty repair confrontations.

    Why would they go back for more of the same when GM does not have sufficient confidence in it’s wares to ameliorate the risk with an honest, comprehensive 10-year warranty.

  • avatar
    bmoredlj

    “I’d put that guy in an Equinox in a heartbeat.”

    Really? My Mom wants a 2010 CR-V (her current driver being an ’04 Accord, and before that, a ’95 Caprice wagon) so I went with her to test-drive one and make sure the dealer wouldn’t try to scam her on anything. He didn’t, and she really liked it, but I told her the Equinox was supposed to be very good too, and that we should check it out (I knew there weren’t enough Equinoxes out there to satisfy the demand all the Chevy marketing is building up, but I crossed my fingers anyway.)

    The Honda dealership was like a madhouse of activity compared to the Chevy dealer’s depressing, masoleumesque hush and slightly mildewy smell. We saw a lot of Silverados and Tahoes and Camaros and Corvettes…but there were no Equinoxes to test-drive. There was only one at the whole dealership – one of greater Baltimore’s biggest – and it was already sold. When asked when more would come in? “Two months.”

    That’s a lot of heartbeats.

    Sorry Chevy, can’t buy your products if they aren’t for sale!

    • 0 avatar
      psarhjinian

      Sorry Chevy, can’t buy your products if they aren’t for sale!
       
      GM is not really very good at emerging trends.  They were very, very late to the small ‘ute party—it’s first, the Vue was a good few years later than just about everyone else—and they usually put their own “spin” on it when they do that, invariably, spins it out of contention (the aforementioned Vue, and now the Equinox, were big and clumsy).
       
      The poster above who notes GM’s not-invented-here syndrome has got it right.  Despite the fact that they do, sometimes obviously, copy the competition, they have a long and storied history of putting their own special little blessing on it.  In this case, I don’t think they really want the Equinox to do well because it doesn’t really jive with their view of the market: it’s “enough” where GM’s business model is selling “too much”.  Every Equinox is a lost Traverse sale to them.

  • avatar
    Autopassion

    Meanwhile people here still gush about Jaguar and even Land Rover. Try Googling “Porsche rear main seal failure” sometime. Also be sure to read owner experience with reliability on any of the Bimmer blogs. Pretty yes, fast too, but reliable??
    I get it that many had terrible experiences with GM, but I’m willing to look at their new products, such as the Camaro,  (e.g. http://wheels.blogs.nytimes.com/2009/12/30/in-defense-of-camaro/ ); the CTS-V has a lot going for it too.

    • 0 avatar
      toxicroach

      The key difference between Jaguar, Landrover, BMW, and Porsche is that they aren’t really mainstream cars, and they really have nothing to do with discussions about Hyundais, Hondas, Chevies, and Toyotas.

      A Porsche (and Jag, Landrover and BMW) has its own rewards, like being super fast or luxurious, and if you’re worried about how expensive they are to repair, you really couldn’t afford it in the first place. You buy a Camry or a Malibu to get to work and stuff. It’s not about the sensory pleasure of driving. It’s about getting stuff done as cheaply as possible.

  • avatar
    Bunter1

    As I have noted before:
    CR reliability vs. the industry numerical average.

    GM- 21% vehicles above average
    Ford-67%
    Hyundia-80%
    Toyota-93%
    Honda-100%

    I feel my perception that GM’s products are sub-standard is accurate and better informed that Maxbob’s.

    BTW- Most of their divisions, including volume leader Chevy, scored below average in JDP VDS last year and GM’s True Delta scores are not very exciting either.

    Bunter

    • 0 avatar
      CarPerson

      When it is the owner opening up their checkbook to pay for repairs, it’s bonuses for all the automaker executives.
      When it is the automaker paying for repairs, the cars suddenly get very reliable.
       
      80% of all General Motors models are below average in reliability.
      80% of all Hyundai models are above average in reliability.
       

  • avatar
    michal1980

    amazing that edmunds doesn’t allow voting or commenting on their site for what ammounts to nothing more then free ad space they are giving gm.

    • 0 avatar
      Autopassion

      The key difference between Jaguar, Landrover, BMW, and Porsche is that they aren’t really mainstream cars, and they really have nothing to do with discussions about Hyundais, Hondas, Chevies, and Toyotas.

      Give me a break. I can afford a new Jag or Porsche or BMW, etc, cash. I still refuse to let badge snobbery excuse a less than reliable vehicle, regardless of the perceived quality or “luxuriousness”
      .

  • avatar
    CarPerson

    Thankfully GM is actually moving beyond the “perception gap” excuse. The new reason is that the floor tile in a Chevy dealer in Spokane may be different than the floor tile in a Chevy dealer in Seattle.
     
    Throw a few hundred thousand dollars at that and it’ll really goose the sales numbers.
     

  • avatar
    Happy_Endings

    That’s an example of the media trying to ascribe some of the old GM arrogance where none exists.

    Uh, aren’t you from old GM, Bob?  And I think there are those would label your arrogant as well.

    Of course, there isn’t a perception gap.  GM makes cars that are competitive, not great.  You see, if you keep saying they are great when in actuality they aren’t, then the perception gap is on your side.  Perhaps that’s is what he is talking about when he says “perception gap”.  He thinks if he keeps saying it, people may start to believe it.

    But making competitive cars isn’t good enough to get widespread defections from the competition.  It is, however, good enough to keep your customers from leaving.   To attract new customers, your cars must be better than the competitions offerings.  Why would someone buy your car when it is merely just as good as everyone else’s?  This, of course, doesn’t take into account prior negative experiences with your company, questions about the future of your company, and general ill-will to your company.  All those things will factor into people’s car buying decision.

  • avatar
    Steven02

    It is interesting how much pulling of the article there is.  First, he is saying he doesn’t like how people write that GM marketing is based on the fact the customer is too dumb to know what great cars GM makes.
    He is talking about exactly what is being done in your article Ed.  Funny, in one of the articles you were quoting, talking about taking exception to a media hatchet job, looks like that is what I am going to be doing.
    GM hasn’t always made the right choices.  GM hasn’t always had the right people working for them.  GM had years of problems with vehicles that were terrible.  Subpar, well that actually might be a complement to some of them.
     
    This article was about what GM needs to do to get better.  He stresses focus on the product and lists it twice, which I believe is exactly what GM needs to do.  The third item is to change minds.  This can only be done if they focus on the product.  In this section, he addresses what he calls a reputation deficit.  One that he said was earned by GM.  Let me translate for you, Bob said they earned the perception gap they have today.  He also mentions a few things that GM will do to help address it.  Fourth is technology and quality, which IMHO, are part of number one and two.  Last is design, which again is part of number one and two.  The part at the end about baseball and the customer not want GM, I don’t know exactly where he was going there.  But if that customer exists, which I am sure there are a few people out there who don’t know that Chevy is part of GM, I am betting if a GM dealer sees them, they will try to sell to them.
     
    But, the article you wrote focuses on not what GM wants to do and criticizing that, you seem to talk about how GM has and hasn’t called customers stupid.  It is only at TTAC can you see a quote twisted so much to suit your own beliefs.  GM isn’t where it needs to be today if it is going to compete.  It has some pieces in place with some great models that are selling well.  GM needs to keep them selling well, by keeping them fresh and making them reliable.  If GM can do what is listed in the article, then GM will be successful.
     
    Instead of taking the one liner and making the article all about that, which seems to be in my opinion a media hatchet job, why not talk about what Bob was trying to convey in his article?

    • 0 avatar
      imag

      Maybe it’s because GM has made the same improvement claims for years, without a whole lot of improvement.
      Maybe it’s because they repeatedly blame customers, the media, and non-American car companies for their inability to build world leading cars.
      Maybe because a savvy journalist will try to look past what marketing people say to what the companies actually do…
      Finally, the fact that TTAC is not in love with GM’s hype should not be news to anyone.


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