General Motors Death Watch 12: The Summer Solstice
GM and its supporters have a mantra: product. By continually chanting "product, product, product", they hope the company's critics will believe that a string of hot cars, trucks, SUV's and minivans will pull the world's largest automaker back from the brink. While the argument ignores GM's sky high costs and decades of soured consumer relations, it sounds plausible enough. Chrysler's doing it. Why not GM?
For one thing, GM doesn't know how to sell a hot product when they have one. Take the Pontiac Solstice. No wait, you can't. Despite promising the car for summer '05, production problems have delayed dealer delivery until October. Ish. While GM wants props for selling no Pontiac before its time, you've got to laugh (or cry) at their incompetence. The company finally comes up with a blockbuster, generates massive awareness through a hit TV show, opens a special website for an "early order program" (EOP) and then… nothing.
Make that worse than nothing. GM won't commit to a new delivery date and leaves the "lucky" 1000 EOP winners twisting in the wind. GM also fails to contact customers who registered on the Pontiac website for Solstice updates. [Many of these customers already feel hard done by; the web winners cut the line.] And then there's talk of Pontiac dealers adding a "market adjustment" to the Solstice's retail price. Potential buyers wanting to know what's what can't get a straight answer from their dealer. GM remains mute.
When aspiring Solstice owners finally hear word of 'their' car, the message doesn't come via email, or registered letter or a courtesy phone call. GM addresses the 'issue' through our old friend fastlane.gmblogs.com. Suffice it to say, GM Line Executive – Small Cars Lori Queen says nothing whatsoever about potential dealer surcharges and makes no firm committment to a delivery date. And then she tells surfers that she's toodling around town in a pre-production Solstice and it's great! As the British like to snarl, it's alright for SOME.
But not most; including GM. You don't have to be a New England Pontiac dealer to know that launching a convertible roadster in October is not a great idea. What's more, Mazda is about to unleash– on time– their latest generation MX-5. Unless the Solstice is damn near perfect, the highly evolved Japanese roadster is bound to kick the American newcomer's ass. But even if the Solstice is rated the better of the two cars, the ideal sales window will be closed for winter, and the chance of a pre-emptive strike against the class leader will be gone.
C'mon, supporters say, cut GM some slack; everyone makes mistakes. Yes, but this is the exact same mistake Pontiac made with the G6. That Great Wheeled Hope also experienced a horrendous gap between marketing hype, consumer backlash (a $7k tax bill for Oprah's G6 winners) and eventual delivery. A company living in junk bond Hell, an automaker that's losing $2,331 on every vehicles it sells, simply can't afford to build-up consumer expectations and then drive them into a tree.
The second reason GM's product mantra won't forestall foreclosure is that The General is simply too slow off the mark. As good as it may be, the Solstice is taking aim at a segment that Mazda has been exploiting for 15 years. When the Solstice finally arrives, it will hit the marketplace almost four years after the concept car was first introduced.
Again, we're talking about a pattern of behavior. Maximum Bob's latest blog entry assures readers that he understands enthusiasts' current fondness for rear-wheel-drive passenger cars (i.e. the Chrysler 300C). In fact, Bob says, his minions MAY start another rear-wheel-drive program to replace the one they just spiked. The company is also "studying" the trend towards "nostalgia vehicles". In other words, by the time GM translates its current rear-wheel-drive "studies" into action, and delivers its new nostalgic designs (?), the market will have solidified, or moved on.
Bottom line: 'me too' products won't cut it. Toyota spends some $15b a year on research and development for three brands, and leads the way in hybrid technology. GM spends $7b a year for eight brands, and still sells pushrod engines. Obviously, creativity and innovation isn't simply a matter of money. But if GM believes that product is all, they should be putting their all into product. The car business isn't brain surgery. As Thomas Ho's post on the fastlane blog puts it, GM should…
"Make a solid product, market it, sell it and back it up with great customer service. Instead, they market [a product] before it is ready for prime time, receive orders and then delay it. Is it just me, or are people in GM smoking something?"
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