Former GM CEO Fritz Henderson may well have been a convenient punching boy in the aftermath of the Obama Administration’s firing of his predecessor, but at least the guy had a sense of obligation. Henderson was a consummate GM insider, but unlike Rick Wagoner, he realized that this status was as much a liability as an asset in the politically-fraught aftermath of the bailout. Nowhere is this more clear than in Fritz’s major contribution to GM’s public relations: in hopes of proving GM’s appreciation of its extraordinary rescue, Henderson committed GM to “open communication” and “transparency,” telling the US Senatewith the very first words of his testimony that
It’s our obligation to be open and transparent in all we do to reinvent GM, particularly with the American taxpayer as our largest investor.
Of course, The General didn’t always make good on that pledge, but at least Fritz made the effort to say he cared. Now, GM is taking the opposite approach, threatening to liberate the benighted public from the burden of its transparency. After all, the US taxpayer is no longer the majority shareholder in GM… even if, at 33%, we are still GM’s single-largest “investor.”
Automotive News [sub] reports
General Motors has settled on a strategy to quell industry chatter about a jump in its incentive spending: Disclose less.
GM sales chief Don Johnson said today that the automaker will be less forthcoming about its spiffs on a month-to-month basis. From now on, GM will talk about incentives and average transaction prices “directionally” but won’t discuss specifics.
This comes as Edmunds.com reports that GM’s average incentive per vehicle grew 29 percent in January to $3,762, the highest among large automakers. Johnson acknowledged a “modest” increase but wouldn’t talk numbers.
“There’s been a lot of noise out there in the system about sources of data, competitors saying this or that,” Johnson told analysts and reporters on a conference call. “We’re just trying to take the noise out of the system.”
Or, it will increase the “noise” in the system, as industry-watchers speculate about GM’s actual incentive spend. Remember, nothing stops speculation like the truth… and only GM can provide the real truth about its incentives.
And this is not just a question of practical PR strategy or even an obligation to taxpayers… it’s about the competition. Just as GM announced that it would be less transparent going forward, Hyundai was stepping up and providing an unprecedented amount of information with its latest sales release, including a full sales-weighted CAFE number, and the brand’s fleet mix. If Hyundai continues to provide more information while GM restricts access to its data, who do you think is going to come out looking better? Remember, they do still call this the “information age.”
AN [sub] provides another way of looking at the situation:
Christopher Ceraso, a Credit Suisse analyst, might have summed it up best. He told GM officials that less transparency could be seen as a signal that GM is getting more aggressive on price and doesn’t want to set off alarm bells.
“Generally,” he said, “less disclosure is bad.”
UPDATE: The DetN’s David Shepardson points out that GM did give us some warning about this.