By on July 8, 2009

GM is so screwed. We are so screwed. On the occasion of Old GM’s judicial death sentence, Steve Rattner offered an instant analysis of what New GM needs to do to survive: eliminate the perception gap. “There’s often a lag between perception and reality,” the head of the Presidential Task Force on Automobiles (PTFOA) told jobbing journos. Automotive News [sub] puts it this way: “General Motors must convince consumers that the quality of its vehicles has improved to stop a decline in U.S. market share and survive after bankruptcy, a senior Obama administration official said. Steve Rattner, the head of the Treasury Department’s auto task force, said the quality of GM vehicles has improved, citing the Chevrolet Malibu as an example. But he added that consumers have to be made aware.”

1. Malibu schmalibu. In general, General Motors’ vehicles are still not as well-built as its class-leading competition. Check any long-term survey of quality, reliability, warranty claims, etc. Consumer Reports reports: “The reliability of many models still falls short.”

2. the “perception gap” is simply GM customers way of saying “we won’t get fooled again.” Do NOT accuse them of being stupid, however obliquely.

3. A comprehensive warranty is the single best way to eliminate this issue. So . . . where is it?

4. It’s not all about quality. Quality—a slippery term even amongst the carnoscenti—is a given in the auto industry these days. What’s needed here is branding. A relentless focus on a given brand’s unique selling point. For example, Audi’s haven’t been reliable since, uh . . . And yet they’re the up and coming luxury brand.

5. Rattner’s repetition of Detroit’s favorite meme is a bad, bad thing. He’s gone native.

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28 Comments on “Presidential Task Force on Automobiles Falls Into the Perception Gap...”


  • avatar
    tced2

    Detroit also has to make some models that people WANT.
    Quality is not determined by one model over a short period of time. It’s providing quality automobiles over a period of time. I think they call it reputation.

  • avatar
    Airhen

    Six: The UAW is a serious drag on Detroit and will always be.

  • avatar
    superbadd75

    There are a few shiny spots in the dark cloud that is GM, but overall there isn’t merely a perception gap. GM’s got some real shitballs out there on dealer lots right now.

    The Malibu, CTS, G8, and full-size trucks are extremely competitive in their segments. The Lambdas are pretty damn good, and the upcoming Theta(?) models look promising as well. That’s pretty much it. You can still buy noncompetitive garbage like the Aveo, G6, DTS, Colorado, and the list goes on. GM has some good products on the ground, but nobody in their right mind could possibly believe that the only reason their cars don’t sell is a “perception gap”. Once all of their cars are as good as the CTS or Malibu, then they can talk that noise.

  • avatar
    mo V

    Working at a Cadillac franchise, I for one can attest to the improved quality of the Cadillac brand. However, there is a long way to go yet to match the “perceived” quality of some of the other
    car brands out there. Unfortunately, this is a problem the “New/Old GM” will have to find a solution for.

  • avatar
    moedaman

    The perception meme pretty much is calling out american consumers as being stupid. Maybe if they showed consumers more respect they could get more sales. Detroit automakers didn’t lose all of that marketshare overnight. They earned those losses.

    Offer a warranty as good as Hyundai’s. That did them a world of good. That is if their vehicles are good enough for a warranty like that.

  • avatar
    crackers

    Fixing this so called “Perception Gap” will be like trying to make Bernie Madoff seem a likeable, humanitarian philanthropist. It’s going to be a serious, if not impossible, challenge.

  • avatar
    thalter

    Sorry, but it took decades for GM to burn through their customer goodwill with crappy cars (by my reckoning, starting in the late 70’s), losing many customers forever in the process (myself included).

    It will similarly take decades for GM to regain it.

  • avatar
    Ralph SS

    And, besides, what does Wally Cox’s love child know about what makes a quality automobile?

  • avatar
    Lokkii

    I’ve been musing about how GM should approach its post-apocalypse world.

    You want to fix the perception gap?

    My pitch is to take one model and deliberately and very publicly take steps to improve the quality of that vehicle. Gather all the parts suppliers and ask them what they can do to improve the quality of the parts they supply (and then privately what it will cost to do so). Make a big deal out of it. Hold a big press conference.

    Then warrant the hell out of that one model. 5 years bumper to bumper. Every one of these cars gets a gold bumper icon shaped like a star with a big “5” in the middle of the star.

    Then drive one to the artic circle. Drive one to Patagonia. Drive one around Indy for a week without stopping. If something breaks have a bunch of engineers in white coats fly the broken piece back to Detroit for improvement.

    Put a Malibu on a stage in Times square running day and night with robots opening and closing the doors,hood, and trunk thousands of times. Turning the radio on and off.

    “We build better cars than anybody and we’re going to prove it to you“.

    Oh, and no discounts on these cars….. they’re the gold standard, and you get treated like gold (priority service at dealers for repairs and service), but you pay (by GM standards) gold prices i.e. msrp.

    It can be done.

  • avatar
    highrpm

    See, this is the exact mentality that’s responsible for GM’s bankruptcy in the first place. The idea that the cars are world-class but for some strange reason the customers don’t “get it.”

    This taxpayer-sponsored bankruptcy didn’t change one thing about GM’s 70s-era mentality that they own the car market and you have no other choice but to buy GM.

    GM, when you insult me, you make me even less likely to ever consider one of your cars. Never mind the fact that my taxes are paying your salary right now.

    In my estimation, there is a perception gap. But it exists in your company and not with the customers. You think you build world-class cars, when clearly the buying public thinks otherwise.

  • avatar

    RF is correct. They need better warranty coverage, and they need better branding.

    GM will argue that its warranty coverage is already the best. Well, as long as people perceive the purchase of a GM car as too risky, it’s not good enough.

    I’ve called repeatedly for customer care deserving of the term. Most recently this week:

    http://www.truedelta.com/blog/?p=377

  • avatar
    Potemkin

    If you always do what you always did, you’ll always get what you always got. GM has not changed the rules or people who decide component service life so how can we expect more reliable cars. Purchasing is still making deals with suppliers for lower prices by lowering quality. Engineers are still refusing to admit their mistakes for fear of screwing their career path, and the old GM marches on. If you don’t change the decision makers you won’t change the product. As to Audi selling cars despite reliability and quality problems, perception isn’t just a case of quality numbers. To car nuts our relationship with our cars is close to sex. We love how it makes us feel so we are willing to accept some problems. GM needs to excite customers with great designs that inspire.

  • avatar
    Conslaw

    The Malibu may have improved quality and performance, but IMHO it’s the ugliest GM midsizer. That grill just doesn’t work for me. It’s a little too narrow as well. Luckily for GM, neither the current generation Camry nor the Accord are much in the looks department either.

    The Ford Fusion and the Milan are much better lookers than the Malibu. All of the Fusions have 6-speed transmissions. Surprisingly, GM is still gouging people to upgrade to the 6-speed auto in the Malibu. It’s hard to even find a 6-speed in the G6.

    The G6 may have the lowest quality ratings of the GM midsizers, and it’s an orphan, but the dealers are blowing them out right now. A friend just bought a new G6 listed at almost 22k for about $15,300 after discounts (4-speed tranny, unfortunately). At this price the G6 is a good buy if interior room is important to you at all. If this deal is typical, GM’s sales numbers are still skewed on the high side by unsustainable discounts.

  • avatar
    William C Montgomery

    Just like a government bureaucrat to discover the obvious… about 15 to 20 years after the private leadership of GM started making noise about this. And just because he’s late to the party doesn’t mean that he can make the Perception Gap go away.

    On the other hand, maybe GM’s quality gap isn’t all perception. A friend of mine purchased a G8 a month ago. He’s actually had it home and been able to drive it less than a week. It’s already been in the shop twice and will go back as soon as some parts come in. The problems: scratched paint on the roof, front right quarter panel and left rear quarter panes (buffed and refinished by the dealership body shop); damaged left rear rim and tire (both replaced); misaligned and bent door panel (body shop); right rear window gasket damaged (replace part); and a hitch in the steering (replaced coil springs and strut bearing assembly per PIC4873).

    Clearly some of these problems are mechanical and manufacturing problems while others are damage from transport. However, the transport body damage should have been addressed before the dealer tried to pawn the car off on a buyer.

  • avatar
    br549

    If a comprehensive warranty is the answer, why is it not working for Chrysler?

  • avatar
    MikeyDee

    Those UAW guys in Michigan need to save every penny they get from now on, or pay down their debts as fast as they can, because clearly, the end is near.

  • avatar
    threeer

    @ William,

    hate that your buddy’s G8 was victim to shipping/transport damage…but did he bother to look at the car prior to purchasing it? Claiming that to be a GM problem doesn’t hold water. I do agree that GM should step up to the plate on warranty and design cars that people actually desire to own (and not simply because they are the best “low cost” option).

  • avatar
    moedaman

    Lokkii :
    July 8th, 2009 at 10:09 am

    I’ve been musing about how GM should approach its post-apocalypse world.

    You want to fix the perception gap?

    My pitch is to take one model and deliberately and very publicly take steps to improve the quality of that vehicle. Gather all the parts suppliers and ask them what they can do to improve the quality of the parts they supply (and then privately what it will cost to do so). Make a big deal out of it. Hold a big press conference.

    Then warrant the hell out of that one model. 5 years bumper to bumper. Every one of these cars gets a gold bumper icon shaped like a star with a big “5″ in the middle of the star.

    Then drive one to the artic circle. Drive one to Patagonia. Drive one around Indy for a week without stopping. If something breaks have a bunch of engineers in white coats fly the broken piece back to Detroit for improvement.

    Put a Malibu on a stage in Times square running day and night with robots opening and closing the doors,hood, and trunk thousands of times. Turning the radio on and off.

    “We build better cars than anybody and we’re going to prove it to you“.

    Oh, and no discounts on these cars….. they’re the gold standard, and you get treated like gold (priority service at dealers for repairs and service), but you pay (by GM standards) gold prices i.e. msrp.

    It can be done.

    Ya, but then you’d be admitting that you had a problem in the first place. That’s something that GM management could never do.

  • avatar
    Gardiner Westbound

    GM’s problems run far deeper than substandard product.

    I recently accompanied a neighbor to a GM dealer on her quest for a used car. She selected a nice 2006 CPO priced about 15-percent higher than fair retail value before mystery fees. It drove well, but the glove box door kept falling open, the upholstery was soiled and some paint scratches required touching up. We returned several days later after the car had been run through GM’s comprehensive 150 point inspection a second time. Nothing much had changed. We would have walked out right then, but there is a severe shortage of used cars locally.

    CarProof reported $1,500 and $3,100 collision repairs to a bumper and the left rear quarter panel. The dealer said the report is wrong. The front and rear bumper covers sustained minor damage. Their body shop repainted one and replaced the other. Most of the amounts shown were for rental cars.

    My mechanic found physical evidence the left rear quarter panel was struck hard. It should have been replaced. Instead, a cheap repair job saw body filler applied thickly, contoured and painted. A few winter freeze-thaw cycles will pop off the filler. She didn’t buy the car.

    This dealer survived the Great Canadian Dealer Purge. If this is a primo GM dealer, I can’t imagine a lousy one.

  • avatar
    indi500fan

    @MikeyDee:

    The UAW guys (and GM for that matter) are solid until Nov 2012. After that, not so much.

  • avatar
    derm81

    So what can they do from a PR and advertising standpoint? GM advertising on a whole isn’t all that bad, but it’s not that great either. Maybe some sort if viral campaign or something edgy such as giving 100 Volts to people for a year to mess with loike the Fiesta project?

  • avatar
    alexcassidy

    GM has done a reasonably good job of starting to catch up to competitors in recent years, but that’s the problem- in order to survive, they need to be BETTER than their competitors, and it needs to happen like fucking yesterday.

    As a car buyer, I’m not going to give that much consideration to [the company that I hear is doing okay lately, even though I’ve owned their shitty cars in the past] when I can go down the street and buy from the company that I know is a sure thing. So they need to become better than their competitors, and they need to sustain that for several years before people will consider them. (Oh yeah, that’s entirely ignoring the fact that I don’t want to buy from a nationalized automaker anyway)

  • avatar
    reclusive_in_nature

    Just pay some auto critics from all the different medias (tv, magazines, and maybe even some of the Best and Brightest) to assist in the design and manufacturing of a new vehicle. Advertise the living hell out of the fact that said vehicle was designed by the people that’s been bashing GM for years. If the vehicle bombs the critics who helped form the negative perception of GM would be discredited. (If you don’t believe media plays a part in brand perception you’re a fool, and if you don’t believe there’s a little bias against GM in the media you’re a bigger fool.)

  • avatar
    Dynamic88

    5. Rattner’s repetition of Detroit’s favorite meme is a bad, bad thing. He’s gone native.

    That is bad. Until they improve product across the board, they will continue loosing market share.

  • avatar
    npbheights

    Superbadd75 said:
    You can still buy noncompetitive garbage like the Aveo, G6, DTS, Colorado, and the list goes on.

    How can you say the DTS is noncompetitive. It has to be the best front wheel V8 luxury car on the planet. Well, next to the Lucerne Super

  • avatar
    King Bojack

    Branding won’t matter for shit if the vehicles blow. The general idea is that after the bankruptcy they will be able to create new vehicles. New GM MUST be given time to create something before we condemn them for shit that was old GM.

    Branding also doesn’t mean half the dick many of the best and brightest think it means. Yes in meaningless shit like ipods and iphones (the best selling 75% products ever created) or clothing sure, your marketing is everything. People do plenty of research in the volume markets of cars. Branding only means shit to luxury makes to make your penis look huge. Think about it, Hyundai hardly did shit in the market until they got decent, and Volkswagen hasn’t posted half the numbers Toyonda because they aren’t that great over all. Shifting marketing and branding strategies only works in small stakes games.

    The perception gap is true, good luck convincing people that the Flex or Traverse is as good or better as a Pilot (despite the Flex/Traverse being generally better at everything than the Pilot) etc.

  • avatar
    Bunter1

    “He’s gone native.”

    Bullseye, RF.

    You can’t change a culture by adopting it.

    Once President Goodwrench finds continued support of GM is a political liability C7 will be just around the corner.

    Sad.

    Bunter

  • avatar
    RetardedSparks

    If you’ve been batting .250 and want to get your average to .300, you can bat .299 forever and you won’t get there.

    Can GM bat .400 for a few years straight? Doubt it.

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