Category: GM Death Watch

By on April 15, 2005

OnStar: fear sells. OnStar's radio ads are powerful stuff. The 30-second documentaries– featuring real life rescue coordination by OnStar staff– jerk more tears than Terms of Endearment and The Divine Secrets of the Ya-Ya Sisterhood combined. The fact that you can summon the same emergency crew by punching 911 into you cell is neither here nor there. After hearing an OnStar rep soothing a toddler crying "Momma's passed out", you'd gladly get a second mortgage to pay for their emergency coverage.

Considering the ads' impact on OnStar's takeup rate, the General's plan to translate the radio spots into a series of 30-minute TV infomercials makes perfect sense. Provided the producers keep it real (in the best 'based on a true story' TV tradition), the marketing campaign will be a sure-fire hit. You can almost hear new customers choking back the tears as they relay their credit card number to their toll-free friends.

The Saturn VUE: Mom puts People First-- well, her children. But the OnStar effect doesn't end there. The service's commercial success has infected the rest of The General's marketing staff. The safety bug has gone viral.

A recent TV ad for the Saturn Vue highlights the pathology. In this flawlessly executed vignette, a young woman admits that she bought a Saturn SUV because impending motherhood shifted her priorities towards safety (and away from imports). While exploiting maternal paranoia is a no-brainer for admen aiming at the family car market, the commercial is a major change in Saturn's branding. If the TV ad is anything to go by, 'The People's Car Company' is now, simply, 'Deathbusters'.

GM's got your back, and wants your cashBut wait! There's more! (NOW how much would you pay?) In a recently unleashed national TV campaign called 'Only GM', fresh-faced children tell viewers how their lives were saved by GM safety features (including OnStar). The odd thing about the ad– other than a strong sense that the pint-sized "survivors" were carefully rehearsed– is that it touts GM's entire model line-up. It's not just Saturn that keeps you from experiencing the last word in personal depreciation. It's GMC, Pontiac, Hummer, Saturn, Buick, Chevrolet, Cadillac and Saab.

Well how about that: GM as Volvo, times eight. Cynics might point out that the majority of GM's safety features are either federally mandated or late to market (e.g. their SUV anti-rollover technology). But there's no doubt that GM's multi-divisional we-got-your-back shtick represents a significant shift in The General's marketing focus. (Just having a focus is pretty big news for GM.) What's more, there's no reason to believe a division-wide safety campaign wouldn't work. It's OnStar's "Field of Nightmares" writ large: if you protect them, they will buy.

Badges!  We don't need no stinkin' badges!   The ads– the first multi-marque General Motors campaign since tail fins went out of fashion– may also reflect a sea change in GM's overall corporate strategy. (Just having a corporate strategy…) Maybe the big guns have finally listened to all those critics who've condemned the automaker for badge-engineering its divisions' identities into oblivion. Rather than mounting a hugely expensive effort to re-delineate its brands through new product and marketing, perhaps The General has simply thrown in the towel. Are we about to see GM fold all its divisions into one?

Yes, it sounds dopey. But why would GM suddenly announce that it's going to affix the corporate logo on ALL of its brands' products? Will a Corvette owner gain street cred when onlookers clock that his favorite phallic symbol was built by the world's largest car company? Will a Hummer piss off more tree-huggers by virtue of its dual branding? Nope. So what's the point? If you discount the move as a morale booster for financially challeged stockholders, GM's big badge boom is a tacit acknowledgement that the whole multi-brand thing is a dead flow chart walking.

Or do we?Think about it: Ford is the other big multi-divisional carmaker, and look how THEY'RE doing: Lincoln's a joke, Mercury's the punch line, Jaguar's a drain, the rest of the boutiques are irrelevant and the mainline brand is slouching towards Bethlehem. BMW and Mercedes have only one subdivision apiece (MINI and Chrysler) and they sell millions of cars in every imaginable market segment. In short, all those analysts calling for GM's dissection could be punditing in the wrong direction. The answer to GM's perilous financials could be consolidation.

Let's face it: these days, only die-hard pistonheads care about brand history. We live in a world where a Chevy can be a re-badged Korean or Australian import, where a Sky or Solstice will fly out the door regardless of the badge on its butt, where a Chevy Silverado and a GMC Sierra are all pretty much of a muchness. So why not drop all pretence of brand differentiation, reduce costs across the board and sell all 40-plus products under the GM banner? As OnStar proves, sensible and safe aren't always the same thing.

By on April 10, 2005

'You want excitement from the 'Excitement' division? Try to get this thing to turn in a sharp corner.'Unbelievable. GM’s lost the plot, they’re losing the game and now they want to take their ball and go home. After automotive critic Dan Neil ripped apart the new Pontiac G6 GT and called for an executive putsch, The General pulled its $10M adspend out of the Los Angeles Times. While you can’t begrudge GM’s right to place—or not place—its money where it chooses, the decision to pull the plug on the Times displays an unappealing combination of arrogance and petulance. To wit: GM spokesfolk defended their action by saying that the review (and other GM-related coverage) contained “factual errors and misrepresentations”—without providing any specifics. So there. Nuh.

GM’s version of The Wizard of Oz‘ “pay no attention to that man behind the curtain” routine is good for a few laughs. It’s always fun to watch the rich and powerful act like victims. Nevertheless, it’s a worrying situation. The General’s muscle-flexing will certainly have a dampening effect on the already obsequious US automotive press. The ripples will be felt from the biggest buff books to the smallest local supplements. Even the blogosphere and ad-free sites like this one will sense the heat (if nothing else, we depend on manufacturers for access to test models). With the threat of retribution lingering in the air like sulfurous gas, the truth is bound to suffer even greater indignities.

'...someone's head ought to roll, and the most likely candidate would be the numinous white noggin of Lutz.'  The press’ silence on this story is deafening. Ironically, this lack of coordinated response actually works against the automotive media; leading the public to the not-so-wrong conclusion that lapdoggery towards the big advertisers is the norm. I’ve said it before: the press’ greatest asset, perhaps its only asset, is its credibility. If the car media doesn’t stand up for Neil, if they don’t defend the principles which they claim govern their profession, they risk losing their readers’ respect, and thus, affections.

At the same time, GM’s vindictiveness will hurt GM’s bottom line. The move against the LA Times catapulted Neil’s column out of pistonhead backwaters into the national consciousness. By doing so, it focused yet more attention on the generally piss-poor performance of GM products vis-à-vis their competitors, as well as the likelihood that the General may axe two entire divisions. Buyers who’ve long suspected that domestic automakers try to hide their products’ mediocrity behind a wall of hype and ad spend—consumers who don’t want to buy a car from a brand that might disappear—now have even more reason to shop Toyota.

'Interior styling: The GT comes with comfortable leather-lined bucket seats, nicely bolstered with heaters. I like the soft grip on the hand brake. That exhausts my praise for the interior.'GM’s assumption that the general public would side with big business in a fight against a lone (not to say rogue) journalist also raises serious doubts about the company’s understanding of PR. The proper response to Neil’s criticisms was obvious: demand that the Times publish a detailed refutation of the charges leveled against the company and the G6 GT. At the very least, when GM pulled their ads, their objections should have been made clear. But no. As far as the public is concerned, GM’s action was designed to punish the Times for doing what newspapers are supposed to do: report the truth. News flash to GM brass: people LIKE newspapers. And they don’t like bullies.

Of course, GM couldn’t really offer a point-by-point reply to Neil’s review because the G6 sucks. Oh wait, Neil didn’t say that. With uncharacteristic reserve, the Pulitzer Prize-winning critic called the G6 “uncompetitive.” If GM doesn’t agree with this assessment, if they can’t read their own sales figures and come to the same conclusion, they are in deep, deep denial. At the risk of sounding as obvious as an alcoholic’s friend during an intervention, lashing out at the LA Times doesn’t change anything. The G6 is still mediocre. GM is still in deep shit. The General’s assertion that it’s being unjustly persecuted doesn’t make it so.

'This is an uncompetitive product, an assertion borne out not by my say-so but by sales numbers. When ballclubs have losing records, players and coaches and managers get their walking papers.'Both domestic carmakers and car hacks need to wise-up. Until and unless the automotive press puts their readers’ interests first, advertisers will have them over a barrel. Until and unless GM faces the truth about its products, they will keep making boneheaded, self-defeating and futile attempts to protect their increasingly illusory reputation. Meanwhile, send [email protected] an email. Let him know that his short-term prospects are a lot better than GM’s.

By on April 3, 2005

Pontiac: going down in flames?

When The Donald calls aspiring apprentices into the boardroom to determine which one to fire, I’m always hoping for a miracle. I want him to can ALL of them. My feelings about GM are identical. When GM Vice Chairman Bob Lutz hinted that he’d axe Buick or Pontiac if the divisions didn’t “gain traction,” he ignited a debate over which of the General’s lackluster brands deserved death. The answer is, of course, all of them.

General Motors was born as a conglomeration of independent car companies. In the beginning, all of GM’s acquisitions maintained their own distinct mechanical, design and marketing identity. Despite the imposition of centralized control in many strategic areas (e.g. choice of suppliers), each sub-brand remained true to its niche. Exactly when, how and why the structure fell apart, or became one big amorphous mass of poorly made product, is not as important as the fact that it has.

Vauxhall Lightning spawns Saturn Sky.  Corporate synergy or corporate sloth? GM’s eleven brands—Buick, Cadillac, Chevrolet, Holden, Hummer, GMC, Opel, Pontiac, SAAB, Saturn and Vauxhall—are virtually interchangeable. You could rebadge a Vauxhall Lightning and call it a Saturn Sky; or a Holden Monaro and call it a Pontiac GTO; or a GMC truck and call it a SAAB 9-7X. Those are just the real-world examples. How about the new Cadillac STS as a Buick, or the Hummer H3 as a GMC? And that’s without mentioning the elephant on the assembly line: platform sharing.

GM’s brands bring new meaning to the words “product overlap.” Pontiac GTO or Chevrolet Corvette? Chevrolet Cobalt or Saturn Ion? Saab 9-5 or Cadillac CTS? The divisions might have better luck competing with non-GM brands if they weren’t so busy competing against each other. As a result, whenever one of the eleven non-identical twins tries to make a case for itself, it unintentionally demeans a fraternal partner. GMC’s claim to be “professional grade” makes Chevrolet seem amateur. Hummer’s “like nothing else” makes Buick seem common. And so on.

Is there room for Saturn in Saab's state?The marketing departments may beg to differ, but their campaigns don’t. Pontiac still touts itself as GM’s performance division—at the same time that Cadillac emphasizes its products’ supersonic speed. SAAB’s ‘State of Independence’ exhorts buyers to go their own way—while Saturn continues to chase iconoclastic buyers. And here’s a compare-and-contrast from Hell: Chevrolet’s marketing strategy for its full-size pickups vs. GMC’s.

The situation reminds me of Coca-Cola’s plight in the 70s. When the competition started offering strange and marvelous soft drink variations, Coke responded by introducing a wave of new flavors: Coke, Diet Coke, Cherry Coke, Diet Cherry Coke, Caffeine Free Diet Coke, etc. The bottom line? Add all the sales of all the new Coca-Cola sub-brands together and … the company LOST total market share. Am I the only one who sees a parallel with GM, which is responding to their diminishing slice of the US car market by introducing a flood of new products?

More products = less sales?  Whatcha gonna do Bobby?Vice Chairman Lutz could axe a couple of brands, figure out what the remaining ones are supposed to be, erect some Chinese walls and—like Hell he could. Thanks to decades of bureaucratic bungling, craven UAW appeasement and intra-departmental intrigue, GM has neither the will nor the skill to kill the omnivorous cancer devouring it. There’s only one thing for it: sell off all of the brands.

GMAC Finance is the only solidly profitable part of the entire multi-billion dollar corporation; everything else is either limping along, a dead loss or a loss leader. Dump the car and truck making side of the equation and GM becomes instantly profitable. What’s more, under independent ownership, each division would be leaner, meaner and quicker on its feet. Think about the breakup of AT&T, and the highly competitive, hugely profitable baby Bells it spawned…

If the Hummer brands gets bogged down, why can't it be someone else's problem?Even if a liberated division’s new ownership WASN’T entirely independent, even if some other multi-national car-making goliath bought up, say, Hummer, and ran it into the ground, well, so what? As a GM stockholder, I’d say “better them than us”.

The idea of being wrenched from the corporate tit is not bound to please GM’s employees and suppliers. Most sensible financial analysts would view GM’s dissolution as an improbable corporate Krakatoa: a violent, tectonic shift signaling the end of big business as we know it.

Of course, these are the same sensible people who don’t buy GM products anymore. They buy Mercs, Toyotas, BMWs and other vehicles made by companies who don’t try to juggle eleven balls at the same time. If these experts want to feel GM’s seismic rumblings, all they have to do is look at their own driveway. Even the Donald would savor the irony.

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