General Motors Death Watch 30: More Mush From the Wimps
Imagine Maximum Bob Lutz and Marketing Mark LeNeve heading for the unveiling of GM's new 'full-size' SUV's. At the precise moment when another hurricane is eyeing-up Gulf oil refineries, the dynamic duo is charged with selling the idea that The General's latest fuel-sucking land yachts will stop the automaker's financial fibrillation. Never mind all the other diseases eating away at GM: viral benefit payments, broken brands, model metastasis, bubonic incentive programs, hybrid anemia, etc. This SUV thing is where GM gets its first glimpse of the corporate crash cart. So, how did the boys take it?
Denial is a useful psychological condition. It allows humans to maintain hope in the face of ridiculous odds. By that token, Lutz and LaNeve's inability to confront the full horror of GM's situation is both understandable and indefensible. After all, they're the guys behind the wheel of a multi-billion dollar company launching a fleet of the wrong vehicles at the wrong time. And yet they're pathologically incapable of accepting this fact or, more importantly, its implications. I'm serious. This is not the usual corporate spin. These guys are delusional.
As TTAC's invitation to the SUV launch was lost in the mail, we make our diagnosis based on past history and reports in the automotive press– whose own inability to grasp the nettle is equally worrying (The Detroit News headline "Can new lineup of big SUV's revive GM?" should have preceded the world's shortest article.) According to AutoWeek, Mr. Lutz admitted that "It is realistic to assume that this segment won't grow". How about roll over and die? Not in Bob's world. "I think we may maintain our volume at other people's expense, even if the segment shrinks a little bit.'
May? If? A bit? These are not exactly bold words for a guy who flies military jets for fun. As we learned in a Fortune magazine profile of Rabid Rick Wagoner, Maximum Bob's optimistic sales predictions are the source of a great deal of humor within the GM Empire. When Maxi Bob is downbeat, it's time for the cemetery workers to get out the shovels. More to the point, Bob's use of the word "realistic" and "to assume" in the same sentence reveals that he's seen the enemy, recognized his own face and retreated to the executive washroom for a little pep talk with the mirror.
You'd think that Marketing Mark LeNeve would have a firmer grasp of reality, and you'd be right– in a roundabout sort of way. The Detroit News has LaNeve looking at GM's new full-size SUV's and conceding "This launch is critical to us." Note: LeNeve is not known for his arched eyebrow. Anyway, to quote the Sinatras, then he goes and blows it all by saying that I love you. After conceding that the jumbo-sized SUV market "may" contract, LeNeve asserts "This is a very large, very important and very profitable market.' If only he'd used the word "was"…
It gets worse. When confronted with their new SUV's gas-hoggedness, the GM poo-bahs pointed to their invisible friends: crossovers and alternative fuels. The Detroit News said Lutz was quick to point out that yesterday's big-SUV roll-out was only part of GM's "full-frontal product assault on the marketplace". The Car Czar revealed that GM will unleash eight new crossovers in the next four years. (Eight? How about one good one?) For his part, LeNeve reminded journos that GM's 5.3-liter V8 can run on ethanol, and announced plans to promote ethanol use in those states "with a lot of ethanol fueling stations". Both of them.
OK, look; I'm not a big fan of shooting fish in a barrel. But again, the automotive press just isn't holding GM's feet to the fire re: their monumentally stupid decision to spend billions rushing their '07 SUV's to market. To their credit, the Detroit News has sprinkled their stories with pithy quotes from industry Naysayers (Burnham Securities' analyst David Healy: 'To me, GM is kind of whistling past the graveyard.') But the press seems generally comfortable repeating the same old GM BS we've been hearing for decades: success is just a new model (or thirty) away.
Well it isn't. Everyone involved– executives, union members, shareholders, journalists and consumers– should admit and acknowledge that big ass SUV's are a dead genre guzzling. Unless GM can come up with a credible plan B in a hurry, they are completely screwed. Meanwhile, I'd like to know why we're only seeing pictures and descriptions of the new Tahoe. The preview included the new GMC Yukon, GMC Yukon Denali and Cadillac Escalade. I find it astounding that the automotive press would acquiesce to yet another product-related embargo at this critical moment of corporate crisis. It's a totally unacceptable abrogation of their editorial responsibility.
And where was Rick Wagoner?
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- DenverMike When was it ever a mystery? The Fairmont maybe, but only the 4-door "Futura" trim, that was distinctively upscale. The Citation and Volare didn't have competing trims, nor was there a base stripper Maxima at the time, if ever, crank windows, vinyl seats, 2-doors, etc. So it wasn't a "massacre", not even in spirit, just different market segments. It could be that the Maxima was intended to compete with those, but everything coming from Japan at the time had to take it up a notch, if not two.Thanks to the Japanese "voluntary" trade restriction, everything had extra options, if not hard loaded. The restriction limited how many vehicles were shipped, not what they retailed at. So Japanese automakers naturally raised the "price" (or stakes) without raising MSRP. What the dealers charged (gouged) was a different story.Realistically, the Maxima was going up against entry luxury sedans (except Cimarron lol), especially Euro/German, same as the Cressida. It definitely worked in Japanese automaker's favor, not to mention inspiring Lexus, Acura and Infiniti.
- Ronnie Schreiber Hydrocarbon based fuels have become unreliable? More expensive at the moment but I haven't seen any lines gathering around gas stations lately, have you? I'm old enough to remember actual gasoline shortages in 1973 and 1979 (of course, since then there have been many recoverable oil deposits discovered around the world plus the introduction of fracking). Consumers Power is still supplying me with natural gas. I recently went camping and had no problem buying propane.Texas had grid problems last winter because they replaced fossil fueled power plants with wind and solar, which didn't work in the cold weather. That's the definition of unreliable.I'm an "all of the above" guy when it comes to energy: fossil fuels, hydro, wind (where it makes sense), nuclear (including funding for fusion research), and possibly solar.Environmental activists, it seems to me, have no interest in energy diversity. Based on what's happened in Sri Lanka and the push against agriculture in Europe and Canada, I think it's safe to say that some folks want most of us to live like medieval peasants to save the planet for their own private jets.
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- MaintenanceCosts There's no mystery anymore about how the Japanese took over the prestige spot in the US mass market (especially on the west coast) when you realize that this thing was up against the likes of the Fairmont, Citation, and Volaré. A massacre.