Branding Guru Al Reis: A Time to Kill. But Whom?
As GM gets out its begging bowl and approaches the federal bailout buffet for seconds, it’s got to tell Congress something positive about its bloated brand portfolio. The scuttlebutt: GM will declare its intention to kill Saturn—despite the enormous expense and legal hassles (i.e., more expense). Oh, and let the taxpayer pick up the tab (gee, thanks). BUT, one day in the not too distant future, the artist once known as the world’s largest automaker will file for Chapter 11. And on that fateful day, it will be free to kill brands. So I asked branding guru Al Reis about the maybe decision to deep six Saturn, what GM brands should survive the automaker’s impending C11 and what dangers lie ahead in that regard. The answers may surprise you. Or they may not. But you’re going to have to make the jump to find out.
“GM shouldn’t kill Saturn,” Reis asserts. “Saturn was the perfect entry level brand. The cars were inexpensive, new and different. Plastic panels for low maintenance? Genius. The no-haggle price policy was ideal for unsophisticated first-time buyers . . . Then they made a classic GM mistake. ‘Sales are down so let’s put more cars in the showroom.'”
Of course, GM already has an entry level brand: Chevrolet (in case you got confused with all this branding going on). Reis (of all people) acknowledges the cannibalism and confusion, but still reckons Saturn could make a go of it in a post-C11 world.
“It’s not all about product. Sometimes it’s about brands. Take a badge off a Mercedes and hardly anyone would buy it. Put a Saturn badge on something dirt cheap and reliable and you’d have a decent shot of doing the deal.”
So who else lives? Not Saab. “They haven’t ever made money on that brand. Not once.” Not HUMMER, Pontiac or Buick. (“A guy at Buick once told me ‘We’re going to make the perfect entry-level Buick.’ I said, ‘XXXX, that’s a Chevy.'”)
GMC makes the cut. “Put all Chevy’s trucks into GMC; make it a truck brand. That would clarify the brands and help both GMC and Chevy . . . GMC is a great brand with a lousy name. You could take one of the product names and call it that. Silverado, maybe.”
Cadillac’s good. “A great brand takes a long time to create and even longer to kill. Cadillac’s not dead yet. Not by a long shot.”
And there you have it. In Al Reis’ world, GM = Chevrolet, Cadillac, GMC and Saturn. But here’s the thing: Reis says GM should NOT pare down to two brands. “As sure as I’m sitting here, the branding problem would get worse, not better. GM would dump all their products into two dealerships. Nothing would mean anything.”
At the end of our conversation, I asked Reis his opinion of former GM Car Czar Bob Lutz.
“I met Lutz several times. He’s a charming man. He was excellent from the product point-of-view. But GM doesn’t know how to build great brands. Lutz . . . didn’t add anything to that picture. It’s a shame.”
More by Robert Farago
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@Geotpf- it is not like they don't have overlapping territories. And the dealers that don't can convert over to whatever brands are left standing. Then again, I wish Congress would repeal the ridiculous dealer protection laws all over the country and let the manufacturers sell direct. If GM could own its dealerships and showrooms I suspect they would have a lot more invested in the experience.
GM ought to sell every GM product on every GM dealer lot. Let the good dealers flourish and the bad ones rot. Of course there will be lawyers involved but then this is the reason I think they are intentionally going broke - very slowly, very carefully. It'll give them a chance to turn the wheel back to profitability later - if they are careful after they have shed alot of business costs. Anyhow going broke lets them starve the dealer network so it shrinks or if they go CH11 then GM can prob shed them at will. Let every dealer sell every GM product - Saturns beside Chevies next to Pontiacs and let the good products survive. The bad products will wilt and fade away. I suspect that it is not this easy though. Despite slow sells it prob lowers their cost to build both Pontiac and Chevy versions of the same product even if there is only marginally more sales because of this. More units, lower cost per unit. I think it is time for GM to face up to the new reality that they have a much small sliver of the market and they will not be able to do as they have done for so long. GM ought to learn to either build multiple products on the same line or do several months of a certain product. Batches... Yes I recognize that it often takes GM weeks to change over a line but maybe it is time to learn to do this faster. Maybe it is time for the line workers to learn to get out of the way. In case you are wondering I worked for a company that built assembly equipment and there were plenty of stories from everyone at our company of the union guys literally finding a "hidy-hole" where they could take a nap or watch a movie on a gadget rather than getting their work done while our guys were trying to get a project installed. We were very limited to what we were allowed to do and wasted huge amounts of time waiting on someone to come connect and air line or plug something into the factory power or what-have-you. In manufacturing there is something called stacked-tolerances. Each little part that is outside of specs adds to the out of tolerance finished assembly. This applies to manpower too. Efficiency might be the right word. GM needs to get it together. Heck America needs to get it together again - starting at the top.