By on July 12, 2009

A brand is a promise to a consumer. When a brand’s products fail to live up to the consumer’s expectations (i.e. the promise in THEIR mind), they are right never to trust it again. Why should a screwed customer give GM another chance? We’re not talking about sewing machines here. An automobile is the average consumer’s second most expensive purchase (after their house). They have every right—indeed an obligation to the people who depend on them—to err on the side of caution. To AVOID risking the money upon which their family relies. I repeat: if they’re satisfied with their current car company, they would do their family a disservice to put their money at risk.

Customers aren’t that stupid; they know New GM is Old GM is GM. If you need proof that New GM’s corporate culture hasn’t changed, clock the fact that your take on Henderson’s take on New GM’s challenge is the official GM position (i.e. “the perception gap”). Even worse, the head of The Presidential Task Force on Automobiles (PTFOA) parroted the meme on the occasion of New GM’s birth.

Seriously, check out CEO Henderson’s comments on GM dealer service. If you don’t like it, try someone else? Whatever planet Henderson lives on, it’s not revolving around its customers.

If someone says “your product/service sucks,” it’s up to the company behind the brand to go ABOVE AND BEYOND their consumer’s expectations to win back/win their patronage. Sweeping buyers’ problems under the rug (”this is not representational of our fine dealers”), calling the victim names (close-minded) or trying to ignore your past (New GM!) gets you precisely nowhere.

Sigh. What do you expect from ex-CEO Rick Wagoner’s hand-picked successor? Henderson keeps talking about GM going faster because he can’t even fathom the REAL problem: accountability. Both inside and outside GM.

By the same token, a car company that’s fulfilled a brand’s promise to its consumers, has every reason to expect ongoing consumer loyalty. Success breeds success.

Honda, Toyota and Nissan ascended to their current market share by keeping their promises to disaffected Big Three customers. And putting it right when they failed. Institutionally, they know their strengths. They have not and most probably will not make the same mistakes as GM has made. The thing of it is, that’s the only way GM’s going to recapture the lion’s share of the customers lost to Hyundissanota.

Saying that, there is another way out of hell. If New GM offers buyers an iron-clad guarantee against ANY financial loss, the formerly bankrupt car company might have a chance. A five-year, no conditions, no questions asked, bumper-to-bumper warranty would be . . . a start.

Providing, of course, GM honors its obligations. Which is exactly what they haven’t done hundreds of thousands of times. Given GM’s despicable past, there’s only one way New GM can get burned customers to believe that New GM isn’t Old GM at the dealer level: prove it. Over years.

At the same time, New GM has to win new customers. We’re talking about young, relatively poor car buyers whose brand loyalties are not yet fixed. Forget “the next big/little thing” (Cruze, Spark, whatever). Which carmaker sells the best entry-level whips? Even The General’s staunchest supporters wouldn’t suggest it’s GM.

Digressing slightly, Bob Lutz’s career was resurrected because someone at GM/the PTFOA figures Lutz brings glamor to the brand(s). That Maximum Bob creates cars that stir the soul. Products that will attract customers who think with their hearts rather than their heads (Solstice, SSR, G8, etc.). Which is just about the last thing New GM needs right now.

Look at the vehicles featured on New GM’s home page: Chevrolet Camaro, Buick LaCrosse, Cadillac CTS and hybrid GMC Yukon. Which of these can generate enough sales to keep New GM from following Old GM to a watery grave?

GM needs to produce a small range of class-leading vehicle for its Chevrolet brand. Period. As I’ve stated previously, Cadillac is a non-starter. Buick? What Buick? GMC? Nice volume, but a dead end. New GM needs to produce volume sellers that . . . sell. And make a profit.

To do that, they’re going to have to figure out what the Chevy brand stands for (reliability? value? style? durability? comfort?), make its products fulfill the brand promise better than anyone else on the planet, sell the SHIT out of it, and back up those products with the best sales and service known to mankind. No apologies. No excuses. All day. Every day.

Forget it. New GM doesn’t have the time to git ‘er done. In fact, they haven’t even started. Henderson promises that New GM’s 43 nameplates will all be class-leading. WTF? Does he actuallybelieve that? Does he expect his customers to believe it? Why? What’s different?

Our money is doomed. And it’s not the customer’s fault.

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47 Comments on “Ronnie,...”


  • avatar
    Strippo

    re:animator?

    This is podcast-worthy.

  • avatar
    morbo

    Soooo….

    New GM should be old Saturn?

    Tried, failed (from poor product lifecycle planning), failure to admit failure (in killing Saturn’s promise with the L-Series et al) will ensure continued (taxpayer funded) failure.

  • avatar
    lw

    GM is lost.. and it’s not because they are too big…

    I called AT&T to switch to a bundle. Wanted to remove an international calling package and bundle existing services.

    15 minutes later AT&T had:
    – Cut $5 off my monthly AT&T bill because I was a DirecTV client
    – Used my DirecTV account # to cut $5 off my monthly DirecTV bill
    – Merged my DirecTV bill into my AT&T bill so I get one less bill every month
    – Doubled my DSL speed at no charge for the next 12 months
    – Waived all fees related to the changes
    – Walked me through the billing changes and how they would play out for the next 2 months until it all syncs
    – I talked to an AMERICAN on a Saturday afternoon
    – She cared about her personal customer satisfaction score and asked very nicely if I would take the cust sat. survey

    GM – Beat that.. I double dog dare you.

  • avatar
    King Bojack

    Have you even driven a Cruze Mr. Farago?

    For as much time as you spend bitching about our tax bucks going to GM you’d figure you’d spend as much energy as possible pumping up the company or you’ll never see a dime of your cash back.

    Mr. Henderson says all their cars will be class leading because you don’t run a business running around saying “Our shit won’t even compete!”. Whether or not he actually thinks it or whether it happens or not McDonalds doesn’t make sales saying their hamburgers are number 2.

    lw:

    Your comparison to ATT is poor because GM cannot really do anything to match that. Totally different.

  • avatar
    PeteMoran

    Henderson promises that New GM’s 43 nameplates will all be class-leading. WTF? Does he actually believe that? Does he expect his customers to believe it? Why?

    …. because GM still believe they can blaze through the “perception gap” with marketing money either via a barrage of advertising or “money on the hood“.

    Crazily enough, it might be Fiatsco that has the better chance. They have a (re)stated goal; “to be the BMW of American motor manufacturing”. At least they’re aiming somewhere.

    The moment someone decided against the break-up of GM in bankruptcy, they were doomed. A healthy manufacturer isn’t the goal for GM however; it’s JUST the soft landing.

  • avatar
    jackc10

    “much time as you spend bitching about our tax bucks going to GM” is a pretty infantile way to describe RF’s reporting and comments over the years and in the instant case. Does not merit posting on this web site.

    Besides that, virtually everybody not employed by GM or Chrysler or a supplier, or a UAW member is bitching about it and none of the majority have to drive a Cruze to validate their opinion.

  • avatar
    lw

    GM’s customers are the dealers…

    Maybe Fritz should call a few of them and ask them how things are working out.. The “good” news for Fritz is that he has less and less of them to call every day.

  • avatar
    TR3GUY

    It’s the same old stuff,from the same old people. TTAC had a good piece that first GM was going to be “new” and make a gay (spoof?) Camero spot. So what did they do? They killed it. I thought the spot was lame and wouldn’t make this gay buy the car — but ok they tried something new. But just like the old GM they got cold feet. Forget that the car is overdone.

    Perception? Reality!

  • avatar
    King Bojack

    jack10:

    The Cruze comment had to do with Mr. Farago dissing the Cruze most likely w/o even driving one. If he has then he has a case. It was totally separate from the rest of my post.

    Now about me being infantile regarding Mr. Farago’s editorials,

    Um, not really. When I first came here the death watch series had just broke the 10’s or something. He used to run around claiming that ch11 was the only way to save GM, then IIRC it became it won’t matter if they ch 11 they’ll have to ch7 then it became all about them theiving our tax dollars, now it’s all about how they’ll fail unless they get a total top exec purge which would throw any company into massive turmoil and most likely screw everything. They’ve done everything they possibly can that Mr. Farago and others have been suggesting they do for years and supposedly according to Mr. Farago (right out of the ch 11 gates none the less) none of it will matter in the end? If that’s the case then what’s the point of constantly making editorials about that at every turn? Just ignore GM and post other auto news.

    Now they have gone ch 11. They did get government assistance and he doesn’t waste any chances complaining about the bailout and how badly they will fail right out of the gate. This is counter productive as GMs failing doesn’t really do any one any good. Perhaps Mr. Farago thinks that GM failing will open the door for other companies that will supposedly treat us better than GM. Current quality problems and product half assing at Toyonda suggests differently.

  • avatar
    George B

    To do that, they’re going to have to figure out what the Chevy brand stands for (reliability? value? style? durability? comfort?), make its products fulfill the brand promise better than anyone else on the planet

    In my mind Chevrolet generated two generations worth of good will from the design decisions that went into the small block Chevy V8. The decision to make the small block much stronger than absolutely necessary allowed for an incredible performance modification and racing market. GM needs to find someone like Ed Cole to give Chevrolet a performance advantage for future products.

    http://www.circletrack.com/thehistoryof/58038/index.html
    http://en.wikipedia.org/wiki/Ed_Cole

    Individuals like Yutaka Katayama (Mr. K, Father of the Z car) at Nissan and Ikuo Kajitani (Father of VTEC) at Honda elevated the performance and image of their companies like Ed Cole did at Chevrolet. Who will step up and make future Chevrolets special?

  • avatar

    King Bojack

    Some points:

    1. If you get the time, re-read GM DW 1. I called for the breakup of GM. All. Brands. Sold.

    2. Timing is everything. Mr. Elias and I said GM should file for C11 in 2005 (or earlier). At the time, the automaker had enough money to do so without spending a dime of taxpayer money. I opposed the “bridge loans” and all that followed.

    3. This is not a true C11. In a “real” C11, GM would NEVER have the same management team in place that brought it to bankruptcy. Any new GM management team worth its salt would not have instituted this amorphous four brand strategy (a word that dignifies the reality).

    4. Chaos is what GM has now. How many on-again off-again product plans do you need to accept that fact?

    5. Hope without change is a form of delusion.

    6. “Perhaps Mr. Farago thinks that GM failing will open the door for other companies that will supposedly treat us better than GM.” You’re thirty years late on that one.

  • avatar
    ajla

    I gather that GM’s plan is this:

    1. Sell high profit trucks, SUVs and crossovers.

    2. Greenwash like crazy with the Volt.

    3. Don’t fall into so much debt that you go bankrupt again.

  • avatar
    Dynamic88

    Mr. Henderson says all their cars will be class leading because you don’t run a business running around saying “Our shit won’t even compete!”. Whether or not he actually thinks it or whether it happens or not McDonalds doesn’t make sales saying their hamburgers are number 2.

    True enough. But it does not change the fact that behind the corporate/sales speak, there has to be a sense that the problems have been identified, and that steps are being taken to remedy the problems. I don’t see much evidence of that.

    Yes, they have come out with some good vehicles. But not enough. Most of their line up is still 2nd rate stuff.

    To my mind their two biggest problems are brand management, and long term reliability. And they must have both.

    Reliability does not have to be (and probably should not be) a part of the brand identity (for any of the divisions) But Honda-like reliability is simply going to be a prerequisite for remaining in business – especially with the bread and butter Chevrolet line. RF is right, people aren’t going to risk their money on cars that might need expensive out of warranty repairs. And they aren’t going to come back to GM once they’ve been given the run around about warranty claims.

    Despite decades to work on the problem, and obvious bench marks to try to emulate, they have simply not closed the reality gap. One may argue the gap is small, and I would reply that when there is nothing else to differentiate competing brands (and there is) the small gap tips the scale in favor of the more reliable. Improve or die.

    The other big problem is branding. They missed an opportunity to get rid of GMC, Buick, and Caddy, concentrating their meager attention spans on Chevrolet.

    OK, done deal. 4 brands. At least start carving a distinct identity for them. As far as I can see they have two near luxury brands, a car/truck brand (Chevrolet is car, is truck), and a duplicate truck brand. The only one that has an identity at all is Buick, and it’s identity is post-retirement transportation. It’s essential to start crafting an identity for these brands – and stick to it.

    I’m one who fervently hopes new GM makes it. I was, and remain all in favor of the bailout. But I just don’t see any real recognition on the part of the executive class that they know there are any problems, much less do they have any idea how to fix the problems.

  • avatar
    Adamatari

    It’s not digressing at all to go from pointing out that GM does not make the best entry level cars to Lutz. He’s the reason.

    Lutz is great at making performance cars. The Corvette is ridiculous, the Solstice GXP is nice enough, the Cobalt SS Turbo is fast on the track, the G8 is great. However, Lutz is a HUGE liability because he does not understand that good small cars are the foundation of a mass market car maker, and -normal- cars have to be good too. It’s painfully obvious that he hates small cars, doesn’t give a shit about the environment and is basically bored by anything that’s doesn’t go like hell, which would be great if he was head of a performance car company like Saleen but is a massively bad when you’re the product guy at GM.

    The GM bailout was a huge mistake, and will be remembered as a huge mistake. If I were CEO of GM, I’d tell Lutz that he could head the performance and racing division for much less money or he could go somewhere else. The fact that he’s doing the same thing at “new” GM shows how much of a farce “new” GM is.

    All of these jokers need to GO.

  • avatar

    The point Robert makes about Toyonda & Co. making extraordinary effort to keep the consumer happy is, or at least was, ingrained in Japanese corporate culture.
    CEOs at a Japanese company that has fubared or failed symbolically fall on their sword, whereas his American counterpart wants/demands a golden parachute or another round of the gravy train .
    Accountability, responsibility….and yes, shame.
    God knows our management and business schools have only the vaguest ideas of what those words mean and might embody in their actions.

    Years ago I read an account of an American visiting Tokyo who, on the Saturday before they left Japan late Sunday, purchased the latest Sony *man electronic device at a major Japanese department store just before closing time as a gift to take home to the states.
    By mistake she was given a non-operative display unit, which she never discovered. But the sales person realized after she’d walked out the door and the store was closing….and told the chain of command. That Saturday late afternoon, the store personnel tracked her down….they called Amex, then they called her home stateside to find out where she was staying (a private residence in the country) and Sunday morning at 8AM, the president of the department store was on the doorstep with a functioning unit and profound apologies.

    Imagine that. Hard isn’t it? The Watsons ran the old IBM like that, long time past. I hear they’ve had to put air bearing on the old man’s coffin it spins so fast.

    Not to say a lot of that Japanese cust sat doesn’t seem extreme and a bit dysfunctional…but we’ve gone too far to the other extreme.

  • avatar

    Robert,

    I still maintain that a cold, rational evaluation of company and product will ignore data that’s 30 years old. Should people evaluate a Hyundai Sonata based on the quality of a 1988 Excel? Hyundai’s saving grace was that they sold less than a million crappy cars in America over less than a decade before they started getting their shit together qualitywise. GM, on the other hand, pissed off millions and millions of car buyers from the mid 1970s into the 90s and beyond. That may be impossible to overcome. Hyundai came up with a ridiculously long warranty to regain credibility.

    The idea of 100% value protection might be just the same kind of image changer. Of course it would be just another incentive program, and an expensive one at that, but definitely GM needs a game changing marketing strategy to get consumers to consider their cars. That and making amazingly great cars.

  • avatar
    cbroeker

    What I really love about all this is that Obama’s administrations has created a new business model. The “Too Big to Fail” plan is going to seem pretty attractive to the average bean-counter hack lifer that runs these kind of companies. Why compete when you can get the government (stealing from the taxpayers) to protect you from the consequences of your decisions.
    I know a guy whose father was a life long employee of GM. His sister still works for them. He has never owned anything but GM cars/trucks his entire life. He told me the other day he will never buy GM again.
    The sad part of this is that, although I’ve owned Toyota’s for 30 years, I recently ordered a Camaro SS.
    Damn mid-life crisis.

  • avatar

    Ronnie,

    Should people evaluate a Hyundai Sonata based on the quality of a 1988 Excel? Hyundai’s saving grace was that they sold less than a million crappy cars in America over less than a decade before they started getting their shit together qualitywise.

    Hyundai recognized the mountain they had to climb. They didn’t make excuses or tell their ex-customers they were crazy for NOT trusting them. They built better cars and created a legally binding promise to back them.

    Hyundai [correctly] saw that they had to put their money where their mouth was, and did it. Over a decade. And still, now. Every day.

  • avatar
    Dimwit

    There is a concrete example that GM can study, Hyundai. Do what they did and you will have no “perception gap”. It isn’t easy or quick, but they’ve frittered away more than enough time to have fixed the problem already.
    Of course, it certainly doesn’t look like there is anyone that could, or is willing to, take the wheel to steer it in that direction.

  • avatar
    Dimwit

    Damn. We all got to the same point pretty quick!

  • avatar
    Pch101

    Should people evaluate a Hyundai Sonata based on the quality of a 1988 Excel?

    Hyundai made management changes in tandem with a specific agenda to improve quality.

    In contrast, GM has always denied its quality problems in real time. At best, it has vaguely conceded that quality “used to be” bad…but at no point has it ever admitted that its quality was unacceptable at that moment in time.

    Meanwhile, Lutz’s latest baby, the G8, gets the lowest possible mechanical quality score in the JD Power Initial Quality Survey, while his older infant Solstice got the lowest dependability score in the Vehicle Dependability Survey. (Mind you that these were both supposed to be image leaders, and Lutz had his hands all over both of them.) If this year’s data isn’t recent enough, then I suppose that we’ll just have to learn to ignore all factual information so that we maintain our happy dispositions.

  • avatar
    King Bojack

    1. If you get the time, re-read GM DW 1. I called for the breakup of GM. All. Brands. Sold.

    I did re-read it. When I first read it I simply took away the idea that GM simply needed less brands. Selling off everything probably would have destroyed all of the brands. The lead time to stop selling the current products after the sale would have been too great. The only way it could have worked is if several stupidly loaded companies took them up and dumped ass loads of cash into them, waited and prayed… alot. If a simple change in management and brand sale was all that was needed Chryslerberus would have worked a lot better.

    2. Timing is everything. Mr. Elias and I said GM should file for C11 in 2005 (or earlier). At the time, the automaker had enough money to do so without spending a dime of taxpayer money. I opposed the “bridge loans” and all that followed.

    Indeed timing is everything. Time will be needed to know if this was the right time. In any case, it’s pure guesswork to assume what would have happened had ch 11 occurred years back.

    We know you opposed them. A non government assisted bankruptcy had a large likely hood of taking years and billions w/o any real guarantee of success (Delphi on bigger scale). Granted the current bailout has the same cash burn and success likely hood but didn’t take very long and had some significant results (could be good or bad)

    3. This is not a true C11. In a “real” C11, GM would NEVER have the same management team in place that brought it to bankruptcy. Any new GM management team worth its salt would not have instituted this amorphous four brand strategy (a word that dignifies the reality).

    Perhaps a standard ch 11 would have brought in new mgmt (wikipedia (I know not the best source of info) at least states ” It is unusual for the management of a company in Chapter 11 to be fired, as it is usually assumed that the present management team knows far more about the company and its customers than would a new set of management.”). Assuming what a new mgmt team would have done is the same as me assuming New GM will work or Fiatsler will rule the industry one day. It’s mere speculation. The 4 brand strat seems to make sense to me. You clearly differ which is ok. It doesn’t seem to create much brand overlap and affords NGM to become far more focused. Hopefully it will lead to new decrease in product ADD and various other dipshittery GM used to do.

    4. Chaos is what GM has now. How many on-again off-again product plans do you need to accept that fact?

    What current on-again off-again product plans have they had? Lutz coming back and deciding the G8 will stay as the Caprice? Everything else I’ve heard of has been fairly consistant. Perhaps you can enlighten me on this.

    5. Hope without change is a form of delusion.

    The people in charge haven’t changed but their situations and circumstances have changed tremendously. To ignore this is a form of delusion.

    6. “Perhaps Mr. Farago thinks that GM failing will open the door for other companies that will supposedly treat us better than GM.” You’re thirty years late on that one.

    I don’t get what you mean by that. I do know that as other companies grow to GM levels of success word of decreasing customer service and quality levels despite “better management and culture” keep cropping up suggesting that any company that gets as big as GM used to be will behave in similar fashions as GM meaning that’s it’s simply a form of “Devil defferment”.

    Essentially it’s all summed up in that it would be best to give NGM a few quarters of activity before sounding the death horns.

  • avatar
    findude

    I just got home after logging 580 miles today on Interstate 81 with my wife in our Honda Odyssey. Funny that our conversation was about the likelihood that we will have to replace our 13-year-old Volvo soon. We talked about Volkswagens, Subarus, Hondas, Toyotas, even Volvos (though we don’t like the new design language). We commented on the looks and reputations of cars on the highway–kudos to the Ford Fusion for getting the style right for the size, but there’s that Hecho en Mexico problem. Cadillac has some great colors–what is that deep burgundy so dark it’s almost black? Mercedes-Benz, not so much–the looks are OK, but we’ve heard about all the electrical gremlins over during most 200x models.

    We also reflected that just last night the trusty Odyssey had turned 100,000 miles. This car has reliably taken us through 24 states and Canada, slogged to soccer games and concerts, been a faithful commuter, etc. etc. It has never broken down. We’ve had to nudge the dealer a couple of times, but we’ve had no problems other than little things like the clock back light going out and a wheel bearing that failed suspiciously early.

    Oh, and we averaged 23.7 MPG at 70+ MPH with the AC on most of the time. Not bad for a car that holds seven comfortably all day. We’ll get something smaller next time because our needs have changed.

    Obvious conclusion: Let’s buy another Honda! I’m not 100% sure we will, but that’s where we’ll start our shopping.

  • avatar
    Lee

    GM Deathwatch Mk2.

  • avatar
    NulloModo

    The biggest tragedy of the GM bankruptcy is that it happened just as the company had some truly compelling products coming out. Had GM filed ten, or even five years ago, it would be easy to write them off and say to hell with it, but now, in light of recent vehicles, I want to have hope.

    The Malibu is finally competitive with the Camcords, the new Equinox is a compelling alternative to the RAV-Vs, the Traverse is just as nice as the Pilanders, and Silverado is still better than the Tundra. Add in vehicles like the G8, which GM realizes is too good to let go, the CTS which is making Cadillac a serious consideration in the luxury market, and the Solstice, which is sadly going away even though it could have been great after a refresh to address its issues, and you see a company that ‘gets it’ but got it too late. Yes, the Aveo is still horrible, the Cobalt isn’t much better, the Impala, STS, DTS, Trailblazer, and Lucerne are of interest only to rental fleets and bargain shoppers looking at deep discounts, but every newly redesigned product has been halfway or more decent.

    The bigger the ship the harder it is to turn around. you can’t expect GM to go from selling crap to selling class leading anything in any time period short of a decade.

  • avatar
    golden2husky

    Which carmaker sells the best entry-level whips? Even The General’s staunchest supporters wouldn’t suggest it’s GM.…

    One can only imagine how many people were soured by the Chevy Caviler. Often bought by/for young people as their first car, how many suffered failures either by the car or the dealership. How many of those people were driven to the dealership in their friends’ Civics, Corollas, etc. Seems to me that having such a poor entry level car made it quite obvious that there would be no stepping up to any other GM product.

  • avatar
    zaitcev

    I rented a Vibe once. It’s just like a Matrix, except that when I opened the hood once to look inside, I was unable to close it. The lock was mounted incorrectly. I didn’t want to force it, but eventually had to press harder. When it snapped in place, a piece of lock went through the hood. Proud UAW members at NUMMI cannot even clone a Matrix right. Also, to think that the first time I got a GM rental, such a thing would happen (I had a Cavalier later that moved me around ok, and I relocated in big GMC truck once).

  • avatar
    ja-gti

    Yea, I was soured by a 1987 cavalier. It was my college/post grad car, as I had to leave my ’78 MGB at home – for obvious reasons.
    I hated that Cavalier from the moment I got in it – so many compromises compared to the Civics of the day. The car was dependable, but only because there was nothing on it to break – manual windows, locks, and am/fm only. AC was only option. But I hated the fact that the seats were from the S-10 pickup, and that the steering wheel was the same as in my buddy’s ’77 Camaro. The car only had two gauges, and that d*** wheel blocked my view of one of them – the fuel gauge. Here I am, average sized guy in a normal driving position, and I can’t see 50% of the gauges. Getting into a Civic felt like getting into a Porsche. And my MGB felt like a Ferrari!
    Twenty years later, and I still haven’t spent more than five minutes at the Chevy display at the auto show, much less set foot on a GM lot for anything.

  • avatar
    ravenchris

    I’ll bet on GM, with 2,000 to 1 odds…

  • avatar
    Ken Elias

    GM’s slide into bankruptcy begins and ends with management ineptitude or incompetence beginning in the 1970s or so to make the hard decisions necessary to position the company for the future in North America. That would include a rededication to building great vehicles in all class sizes, rejection of poor quality build and engineering, and greater attention to the customer experience. GM execs ignored the car biz and focused efforts everywhere else but in the core NA biz.

    Unfortunately, none of the changes needed happened and change agents like Ross Perot or Jerry York were quickly shown the door. It’s a problem of culture at GM, and keeping existing management in leadership positions after a bankruptcy makes no sense. GM got to this point because of its management, not because of unforeseen or unexpected changes in its business. The real shame is that the BoD never forced greater accountability on GM’s execs, but then again, they owed their seats to the all powerful Chairman and CEO of GM…whoever sat in that seat.

    GM absolutely needs a strong executive from outside of GM to be CEO. Ford brought in Mulally, who then brought Farley and Czubay…executives from outside the Ford system. GM needs to do the same if it wants a chance to survive.

  • avatar
    yankinwaoz

    Regarding the issue of landing new younger customers. What thrilled young people in the past no longer works today. Today, most young people, the customers that GM will need, view a car as a transportation appliance, and many view it as a nusince.

    We can’t repair their own cars now like we could when we were teenagers. The cars have changed. Now you have to have specialized tools, and the parts are expensive.

    There are other things to spend money on that bring more satisfaction to a teenager. An iPhone and the mobile service. Gaming consoles. Internet services. Laptops. Etc.

    The cost of ownership of a car has gone way up since we were teens. Fuel, insurance, registration, and maintenance are up. These items have to compete with other things teens want to spend money on.

    And lastly, having a driver’s license just isn’t as important as it used to be. Many schools dropped driver’s ed to cut costs. Now the students have to pay for it themselves, which again, has to compete against other temptations.

    All of these factors: reliability, reputation, low operating cost, all steer these new customers towards the Asian cars.

  • avatar
    kurtamaxxguy

    Henderson’s recycling of GM’s tired, stale dealer comment (that customers only option with a bad dealer is to find another one) is one of many reasons both my brother and I have given up on GM for our future cars.

    GM’s not the only auto manufacturer at fault with this, BTW, which TTAC will surely see when it explores other Mfr relations with their dealers.

  • avatar
    WetWilly

    Meanwhile, Lutz’s latest baby, the G8, gets the lowest possible mechanical quality score in the JD Power Initial Quality Survey, while his older infant Solstice got the lowest dependability score in the Vehicle Dependability Survey.

    If I were buying a G8 or Solstice, quality and dependability wouldn’t be on the top of the criteria list. Just look at the Solstice’s inexcusably crappy top; with such a glaring display of crap quality before it leaves the showroom floor, one shouldn’t expect dependability after it leaves the dealer’s lot.

  • avatar
    cmcmail

    Robert,
    Is it even possible that the “new GM” stock isn’t going to be toxic from Day 1. What investor, small or large are ever going to buy the stock? The previous stockholders were given a 1% position in the new company, the UAW were given 30% and got weekly paycheques, and got their benefits and their pension etc. It is almost impossible to make a profit with the UAW on the assembly line never mind on the BoD.

  • avatar
    GS650G

    Maybe Hyundai should consider buying GM. They could probably fix some of the problems. Because Hyundai went from being a serious joke to a serious choice for millions of people. It was always in their capacity to make good cars, they just needed to get it done.

    About 8 years ago it became OK to buy a Hyundai without having your friends laugh at you because the cars were nice, reliable, economical and affordable. Today they are a formidable foe and coupled with Kia have wisked away a large number of customers from GM, Ford and Chrysler. These buyers might come back some day the way they returned to Hyundai, but it’s not likely.

    For GM to reclaim market share good enough is not good enough. They have to beat the competition and instill confidence for the long haul. Resale values for Hyundai are not that great but are getting better. GM is sliding down the hole on resale. Resale is a darn good barometer of confidence in the product.

    This would all be academic in nature if we didn’t have billions of dollars taken from us and forked over to these guys. I, like most taxpaying consumers, are really pissed we were forced to invest in GM when customers and investors decided not to.

  • avatar
    Monty

    The biggest step that GM could take, right now, would be to offer a longer and more comprehensive warranty than any competitor. The problem would be with the dealer network however, to ensure compliance with the program.

    More than any other company I have dealt with, GM’s dealer network is the absolute worst. Almost twenty years ago I received notification from GM to bring my GM product in for recall service, and the dealer tried to charge me for it. Seriously. I dropped off the car, with recall notice in hand, and when I came back the following day (because of course the dealer couldn’t get the job done in one day) I was presented with a bill for services rendered.

    GM has not improved the dealership network, and until they do, people will not be interested in GM vehicles.

    I would be willing to consider a GM product, even a substandard one, if I knew that I could get trustworthy warranty service, and get it done properly, at a GM dealer without any hassle. That is probably the biggest reality gap that they face. The service gap.

  • avatar

    King Bojack : They’ve done everything they possibly can that Mr. Farago and others have been suggesting they do for years and supposedly according to Mr. Farago (right out of the ch 11 gates none the less) none of it will matter in the end?

    Sorry, I just find this statement really hard to believe.

    And I’d counter they’ve done almost nothing the critics have been suggesting. Forget about TTAC, Maryann Keller’s been hammering these points since the mid-1980s…

  • avatar
    GS650G

    GM already increased the warranty, cry-sler tried lifetime power train (does that transfer to the Fiat partnership?)and still the perception is the cars are not good enough.

    what to do. considering everything else has failed I think we are all out of ideas. But the underlying theme is millions of pissed off people who were burned by one of the three, sometimes all three, who drive foreign now.

    A good observation is how Hyundai, despite making some of the worst cars for years, did not generate so much ill will that they were not able to recover. Gold star to their management, clearly not the same thinking in RenCen. Hyundai also made ships, electronics, and buildings along with trucks and buses in Korea. GM invested in home mortgages and bought car companies all over the world for way too much money. One company had a backup, the other didn’t.

    Maybe the best answer is to drop the company, take the lumps from the fallout, and watch the existing companies flourish with sales they earn from the 22% market share the dead cat bounce produces.

    Worldwide demand for cars is a lot less, there is not enough pizza to support this mess any longer. Sorry.

  • avatar
    geeber

    Earlier this year, my friend traded his Toyota 4Runner for a Chevrolet Traverse.

    Since that time, the company has reneged on the promise of two free years of OnStar, claiming it can only afford one year. (Perhaps because of the “bankruptcy” proceedings? He isn’t the type to make stuff up out of thin air.) Numerous, niggling problems take the dealer two or three attempts to correct.

    The sad part is that he likes the vehicle’s performance, ergonomics and comfort. He bought this vehicle to help out an American manufacturer, but he already regrets not buying another Toyota.

  • avatar
    GS650G

    Don’t spend tens of thousands of dollars out of sympathy for a company that sealed it’ own fate.

    A friend bought a Buick trying to help them out, he has had naggling problems with it and now the dealer is starting to blame him for it, hoping to cut him off from support.

    He’s going back to Toyota as soon as he pays the car down enough to trade it without a bridge loan.

    So maybe the problems really are the dealers and service department, coupled with initial engineering errors and cost cutting on parts.

    Funny thing is, if the car doesn’t break in the first place you don’t have to deal with the service department at all.

  • avatar
    Lokkii

    I think we’re all saying variations of the same thing:

    There’s no visible evidence that GM is changing anything that consumers care about. I don’t care about how they’re managed or how much money the unions are getting or what they’re going to do in five years. If the cars will be better in five years, I’ll start looking at them then.

    What visible evidence is there that GM is doing anything to make their cars better and more desirable NOW? People who have not been buying GM products are not going to take a risk unless given some reason to do so.

    So far, it’s “Our products are great!” which is what they’ve been saying since the Vega. Henderson’s only contribution has been to add, “Our dealers are great!”.

    That’s not going to change any minds. Unless people are given some pretense to believe that the new GM isn’t really just the surviving remnant of the old GM no new buyers are coming GM’s way.

    It looks like GM has no intention of improving product – they’re just going to reduce costs by building less cars with less brand names.

    Well, I don’t think they can save themselves out of danger.

  • avatar

    yankinwaoz: I’m going to have to disagree with you here. The cost of owning a car may have gone up, and maybe at 28 I’m not considered a young buyer anymore, but youth (especially males) still lust after cars and much as iPhones and whatnot. My brother, at 21, and his friends are all about tuning up their Mustangs and Camaros, and are will willing to pay the high insurance rates with their part time jobs.

    Many of the young women I know would love to own a BWM or Infiniti. As a matter of fact, I just test drove a 3-coupe and G37 with a young lady this weekend who is car shopping. They don’t care so much about the HP and handling as the features and luxury.

    You see, the problem is, cars are just another status symbol. And for the young and irrational it is not cool to drive a Chevy even if they perform just as well.

  • avatar
    capdeblu

    I really think Mr. Faragos idea of a Hyundi/Lexus like warranty for GM would make buyers feel at ease over such an expensive purchase.

    And with all the money GM has “borrowed” from the government that could easily pay for it.

  • avatar
    jkross22

    GM’s CPO warranty is really nothing to get excited about… it’s a 12 month, 12k bumper to bumper warranty. Big deal. Ever look at the CPO program for Audi, Volvo or BMW?

    Sure, they brag about powertrain warranty, but it’s the small stuff (broken visors, electrical, and small motors inside the car) that are expensive to fix and that’s why GM is going cheap on the warranty. If they don’t have faith in their cars, why should consumers?

    For crissake, even VW doubles the GM warranty duration on their CPO cars. That says it all… VW is more confident in their cars than GM is in theirs.

  • avatar
    GS650G

    A long warranty that allows you to find your own shop to do the work. Sort of like the extended warranties sold privately only these come from the company. It might cost GM more in some cases but the customer goodwill would be worth it long term.

    As soon as companies stop viewing customers adversarial and start respecting them as the golden egg providers the better.

    Forget gimmicks and rebates. Give us a reason to own the cars like value and durability.

  • avatar
    fallout11

    Allow me to present an example of the recent GM, as quoted from Forbes Magazine’s “Most Overpriced Vehicles in North America” article-
    “The Canyon and its Chevrolet sibling, the Colorado, rated at the very bottom of the Owner Satisfaction scale for Consumer Reports, with only 40% of purchasers saying that they’d make the same purchase choice again.” Residual market worth of a new Colorado after 1 year was a meager 63%. Ouch! Now that’s world leading!

  • avatar
    Tricky Dicky

    What I don’t get in all of this is the liberty that writers and posters alike take, in trying to diss the various non-American owned/managed OEMs by collapsing their names.

    Fiatsco, Toyonda, Hyundissanota…. what a load of cr4p! If you need a collective name, why not try something like “Asian OEMs”, or “non-American brands”.

    “Foreign” is of course a relative term. “Foreign” and “non-American” are not interchangeable terms.

    BTW, having never experienced the legendary GM service or American products, I still find it hard to believe that such a big organisation can change it’s culture just by shedding debt and a few hundred middle managers. Humility is a pre-requisite for such a change and I don’t see any of it.

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