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GM Reorganization: Mapping the Future

Rob

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GM Reorganization: Mapping the Future

by Rob Loszewski
©2008 Rob Loszewski, Corvette Action Center, XLR Net
No use without permission

Now that the Bush Administration has approved a lifeline to General Motors and Chrysler, I think it's important to take our own look at how General Motors should reorganize in order to provide a more stable and profitable future.

I've mentioned in previous Wheelspin editorials that the majority of GM's product styling is deplorable, their marketing in most cases, is God-awful and they need to ditch the pathetic practice of re-badging.

Styling

In my opinion and the opinion of the majority of people I've talked to, the only products that GM is building that has excellent styling and excitement is the Corvette, the Cadillac the Saturn Sky, the Hummer and the 2010 Camaro. Other than that, everything else has the same bland, boring styling.

The majority of the cars they build not only have poor styling, but they are usually larger than I care to drive. For example: the Cadillac CTS.

I went and bought a used 2004 BMW 330xi last year. I looked long and hard at other makes and models, especially the Cadillac CTS. Given that I own and operate two Corvette sites and one Cadillac site, I wanted to continue to support General Motors by also owning their products. While the CTS is a great car and I love the styling, the car is just too big for me. It's dimensions are larger than the E46 BMW and the ergonomics inside just didn't meet my expectations. After seeing the BMW, and taking it for a ride, I was instantly sold. The car is not perfect, but I'll say this, the Germans have engineering, styling and quality down to a science. Controls and buttons inside are logically placed and well positioned and their functionability is intuitive. After owning the car for a year now, I still once and while find myself saying "very cool, this is an awesome feature."

When the 2009 CTS came out, I went to look at them. Again the styling was improved over the previous generation and the quality of the interior was excellent, but it looked even bigger to me.

In my opinion, bigger = worse fuel mileage. In a time where fuel prices spiked to nearly $5.00 per gallon in some locations, and the threat still looms on the horizon that they will start creeping back up from their current $1.65 avg., GM needs to start building cars that are slightly smaller which in turn will help increase fuel consumption. This is why cars like the Honda Civic have been so largely successful - especially in times like this.

As for the styling, I've said it before...GM needs to take a few lessons from Chrysler in this department. While I have never been a big Chrysler fan because I've always felt that the quality of their products is horrible, their styling has been phenomenal. In my opinion, the only thing that has allowed Chrysler to survive up to this point is the styling of their products. It certainly hasn't been from the quality. In the past, they've been successful because their styling was innovative and many folks while looking at Chrysler products would often say, "wow, this is kind of cool."

GM needs more products that do that. I think Corvette, Cadillac, Hummer and Saturn are more successful at this than any of their other platforms.

Marketing

Their Marketing arm needs to go back to school because in most cases, it sucks. How can you develop a product to take on European cars like BMW and Mercedes, run an ad or two on TV or a magazine, and then drop the marketing of that product like a hot potato? Need an example? C4 Corvette ZR-1 and the Cadillac XLR.

These two cars were designed and developed with specific goals and targets in mind, and yet, I can't remember when the last time I've seen an advertisement for the XLR and this is a car that has a base MSRP of $85,000+! If you're trying to go after European car owners, do you really think you're going to be successful by bringing a product to market and not marketing it - especially when, historically GM's cars have had a bad reputation due to the products they built in the seventies and eighties, and they are now asking folks to cough-up $85,000+ for one of their products?

The XLR is a halo car for Cadillac. It should be seen in the background of all Cadillac advertisements both in print, and on air media.

The C4 ZR-1 was built to take on European competition. In 1989, GM started running some pretty cool ads in magazines showing a red blur on a race track. After that, the car was seen in an occasional ad for about a year or two after that, but then that was it. Sales dropped like a hot potato, for several reasons, and in my opinion, one of those reasons was that the car was left to die by the Marketing department. It was supposed to be a Halo vehicle, but the Marketing department failed once again.

Attention General Motors: If you have any hopes of being successful and profitable in the future, STOP building products with the "build it and they will come" mentality and start investing in successful and OPPORTUNISTIC marketing campaigns that SUPPORT the products you are trying to build to convince the public that they are superior to the competition. Regardless of how many J.D. Power awards your products are currently winning, you developed a negative reputation due to the crap that you built in the seventies and eighties. It isn't easy to erase a bad reputation, and the "build it and they will come" mentality isn't the way to do it.

Re-Badging and Brand Recognition

The other thing that GM needs to start doing is building products that look more unique. When I see the same oval door handles that were used on the C5 and the Pontiac line, I think "cheap." Stop using the same damn parts that are visible to the customer on multiple assembly lines. Regardless of how small or how insignificant the part may seem, I noticed the C5 door handles used on cheaper vehicles. If I buy a Corvette, I want the car to look unique and totally different from any of GM's other products and I don't want to see door handles and / or other styling components on it that are used on cars that cost 1/2 the price. If I'm going to pay top dollar for a Corvette, I don't want to see Pontiac door handles on it.

Can anyone explain to me what the hell they were thinking with the previous generations of Camaro / Firebird (F-Body platform) and the Saturn Sky and the Pontiac Solstice? These cars look almost identical. One word: why?

Give each and every one of your products a unique identity and a soul. Don't water them down so that they all start to look the same. As soon as you start doing that, you're going to start driving customers away who are looking for something different and more unique.

Product Lines

Let's take a look at individual product lines:

Buick: This brand needs a unique identity and needs to figure out which market it's going to target. Right now it's wallowing in its search and the respirator is starting to fail. In summary, I'm not sure I see that Buick has a place in GM's portfolio.

Cadillac: I think that in recent years, Cadillac has been moving in a positive direction. The styling is unique and exciting and their quality has drastically improved. They need to continue focusing their products to be more competitive with Lexus, Mercedes and BMW.

Chevrolet: I view Chevrolet as the largest brand with the most platforms in GM's inventory. The Corvette is a success, and I think what they've done with the Y-body platform has been pheonmenal. There is still room for improvement though. The ZR1 is a phenomenal sportscar and I'd give my right arm to own one, however, in my opinion, just a little bit more should have been done to make the car a little more unique from the base model. The C6 seats need to be more supportive. I realize they are probably built to support a wide array of posteriors, but a light weight, performance seat (not leather) needs to be offered in an interior performance package option for those who want to use their Corvettes on the track.

GMC: GMC needs to stop making SUVs and concentrate on making heavy use, large utility trucks for the industrial market.

Hummer: In my opinion, GM should keep Hummer, but it should start moving the platform to become more competitive to the Jeep brand. It has the potential, the design and the engineering, but they continue to be huge gas guzzlers in a dwindling market. I came close to buying a Jeep once, but had there been a Hummer that was proportional in size to the Jeep, I probably would have bought it.

Pontiac: I think Pontiac still has a place in GM's portfolio, but it should remain a performance division and should focus more on targeting the 18+ crowd with small, high performance competitors to Honda and Toyota.

Saab: I don't know enough about this marque other than it's owners are quite loyal. If you're not going to sell it off, then make sure you work to meet owners' expectations and keep that loyalty.

Saturn: An interesting brand, that I think has seen some successes, however, they need to work hard to erase the horrible quality and the problems associated with that quality in the past.

Dealership Experience

This is one area where GM needs to spend more time and money. In the past, some of the experiences I've had at GM dealerships has been poor. When I get my Corvette back from the service department with grease on the steering wheel and on the center console - I have a problem.

That's not how I left the car in their posession, and that is not how I expect to get it back. When I bring my Corvette or my Cadillac in for service, I don't want to see it treated like a Chevy Cobalt. I want to see it treated the same as the next guy who brings their Lexus into the Lexus dealer for service.

In my opinion, GM needs to have more control over the dealerships that sell their products.

Dealership sales staff also needs to get a clue about what it is they're selling. I've been in showrooms before and listend to salesmen explain various features or options on a Corvette. The majority of those times, they were completely clueless about what it is they were trying to explain, and they failed miserably at answering the customer's questions. If you're trying to increase sales and profit, start requiring that the sales force that sells your products, KNOWS what it is they're trying to sell.

Union of Automotive Workers

I think that recently there has been a lot of negative statements and inaccurate facts in the media about union workers' salaries, however the benefits they receive needs to be examined.

GM needs to stop allowing the UAW to strangle it by demaning some of the benefits they receive. As far as I'm concerned, if you're out of work for a month because the plant you work at has been shut down, then you don't get paid. Simple as that. Don't like it? Then go find another trade or job to work at it, OR plan for those times when things get tough and demand for the products you help build begins to wane.

I don't get paid NOT to work and not many people in this country do. If you want to remain working in the automotive industry and you want to get a pay check, then stop stangling the industry that pays your bills by requiring them to give you money when you're not giving anything back in return.

In summary, General Motors has such great potential and yet such poor foresight and implementation. In order for GM to be successful and make it more capable of conforming to the times at a quicker pace, reorganization needs to take place starting right at the top and go all the way down to where and how their products are sold to customers.

If GM approaches this opportunity at reorganization half-witted, it will surely fail.
 

Jetboy

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Great article. I hope somebody with influance at GM reads it. If they don't kill off Saab they should turn it into their 'green' brand. The demographic fits.
 
M

mswaim

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Until the industry as a whole is prepared to withstand a 24 month downturn without begging handouts from their customers, they can plan, re-structure and map their future all they want. They will still find themselves back in front of us begging for more capital to keep themselves afloat.

Yes, they need to do some freshening up in designs, yes they need to approach marketing a bit differently, yes they need to work closer with the unions to bring about more realistic salaries and benefit packages including the total elimination of the "paid not to work" program.

But the thing they must do -- is save for the rainy days! They must be able to withstand downturns in the market driven by forces they cannot control; which is exactly what they are facing right now. Their current problems have little to do with design, marketing or wages. It has to do with not having the cash to stay afloat in some very lean times. Sales are down due to a lack of available credit and lack of cash in the hands of consumers. Sales for foreign cars are also impacted, so this is not just a Big Three problem.

Of the Big Three; only Ford has some cash on hand, enough to stay solvent until late next year according to them. What I don't understand is why they are lumping themselves in with the losers over at GM and Chrysler?

If they are sitting on at least a year's worth of reserves, why not seperate themselves from the weaker companies and build their reputation and future on the fact they do have what it takes to conduct business in a strategic market? The answer is pretty simple; why take the risk? If the government is willing to finance the "turnaround" of an entire industry, why not get in line with your hand out?

Oh, I know; they won't take cash now. They just want a guarantee that if things get worse, they will get their fair share. And that is what is wrong with this whole bail out issue!
 

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