Posted by: David Kiley on March 24, 2005
Paraphrasing a line written by David E. Davis, the dean of automotive journalism, about the city of Detroit, “General Motors (Davis wrote of the City of Detroit) doesn’t have a bad image. It has a bad reality.”
GM’s market share is sliding despite heavy incentives. It has a union, the United Auto Workers Union, that blackmails GM, as well as other automakers, into keeping plants open it doesn’t need. The threat is this: close the plant you don’t need and take our jobs away and we’ll close the plants you do need by picketing. That’s a reality. Rank and file members use that same leverage pay far less than salaried workers as a percentage of pay in healthcare premiums, while GM’s costs go up 18% a year. More reality: GM used to have have twice the market share it has today with Chevy, GMC, Oldsmobile, Buick, Pontiac and Cadillac. Since then GM has subtracted Olds, but added Hummer, Saturn and Saab. More brands and half the share? That’s a problem. GM’s Bob Lutz suggested yesterday that Buick or Pontiac could go the way of Olds if things don’t improve. Buick is the obvious choice.
But let’s look at the stuff GM can control and has botched. New products and advertising. Pontiac and Buick have had recent marketing makeovers, yet GM marketing chief Mark LaNeve says they aren’t right yet. Huh? How’d you get through a process, practically a new brand strategy every year for the last four years for those brands and still not get it right. Press GM executives on Saturn and Saab, and they’ll tell you that the marketing strategies hatched for those brands aren’t right either.
GM produces some solid, competent products, but far too few that stir any emotion. Worse yet, dreary images of Buick, Saab, Chevy and Saturn passenger car brands do not wrap competently produced cars in a blanket of appeal the way, say, Toyota’s image of quality and reliability wraps a bland Camry or Corolla in an attractive coverlet.
As one rival car executive commented about Buick and Pontiac, “These aren’t brands for the 21st Century.”
The trouble at GM is that it has a bad image to go with a bad reality.