Car Guy
Don’t Know Much About Car Story
GM’s new honchos pride themselves on being clueless about their own products.
Why does the “I don’t know anything about cars” guy who is now running GM (along with a 31-year-old “car czar” who also knows nothing about cars) think GM can accelerate out of bankruptcy while still trying to market itself through four different brands?
Pontiac, Saturn and Hummer may be gone — but Buick, Cadillac, GMC and Chevrolet linger, like leaves in late fall that don’t want to acknowledge the imminent winter.
For the next few months, anyhow.
Four brands. But together, they have less total market share than Chevrolet alone had in 1970.
Really.
Honda has two brands — the mainline Honda stuff and the Acura luxury stuff. Toyota has three — the bread and butter Toyotas, the luxury Lexus stuff and the “youth brand” Scion stuff (just three cars in the latter). There is just one Subaru, just one VW, just one Audi, just one Mercedes-Benz, BMW and Volvo and Jaguar and Land Rover.
No one has four brands.
But GM still thinks it needs to sell the same car three or even four different ways. For example, several trucks and SUVs and “crossovers” sold by Chevy are also sold by GMC (with different trim and higher price tags) and then again (for certain models) through Cadillac. A Chevy Tahoe, GMC Yukon and Cadillac Escalade are all the same truck, just rouged up a bit the higher you move down the price aisle. The Buick Enclave is the GMC Acadia — and both of those are basically the Chevy Traverse.
Mind you, this is after the “reorganization.”
GM will still maintain — or try to maintain — the existence of all these makes and models even though none of the surviving divisions or even all of them combined can approach what one healthy GM division was selling back in 1970. Instead, GMC will cannibalize sales (and resources) from Chevy while Buick sucks the marrow out of Cadillac — before any of them, amid their internecine squabbling, take note of Toyota or Honda laughing all the way to the bank.
This is what comes of having an “I don’t know much about cars” guy like Fritz Henderson and his post-adolescent “car czar” buddy handling things. If President Obama believes these clowns have a clue, he is in for a rude awakening about a year from now when the whole rickety, half-assed structure falls in on itself and the public demands answers and accountability.
GM does not need four brands because it hasn’t got the market share to justify three brands. Getting rid of Pontiac and Saturn and Hummer was a start, but a partial amputation of the necrotic flesh is only a halfway measure. It’s time to cut down to the stump and cauterize the wound. GM needs one line of “bread and butter cars” — and a line of luxury cars. That’s it. No more slotted under or just above nonsense. Your market share does not justify it. Face that. Move on. Do it now.
Someone said that a change of names might be the ticket — a way to divorce GM from its attachment to a brand/maketing structure that is as dead and irrelevant in 2009 as the corpse of Alfred P. Sloan himself. Yes. That might be it. How about simply, “GM” — and keep Cadillac for the high-end stuff? It’s simple, it makes sense - it could work.
But it would take a car guy to see it.
About the Author
Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.
Letter to the Editor View all comments (39) | Leave a comment
Related Articles
More Articles by Eric Peters
More Articles From Car Guy
http://spectator.org/archives/2009/06/17/dont-know-much-about-car-story
Follow us:
ADVERTISEMENT
The Spectacle Blog
Democrat Dan Maffei Blames Budget Cuts for Girl’s Rape, Mother’s Murder
Robert Stacy McCain | 6.18.13
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
El Rey| 6.17.09 @ 7:36AM
Mr. Peters,
One does not to need to know much about cars (or business in general) to do a better job than the past generation of management at GM.
It was those fools who brought a giant of an industrial company low. And not least among their many managerial sins was constantly caving in on outrageous demands by the UAW.
And where were you, Mr. Peters, all those years when GM was signing labor contracts that were in reality the seeds of its own destruction?
John| 6.17.09 @ 8:06AM
The "Brand" isn't as much an issue if the Brand is essentially a model.
For consumer usage:
So: You have a GM dealer that sells.. Chevrolet Corvettes, whatever crossover family wagon, whatever mid size sedan, and whatever skate. That is it.... the entire thing... for Chevy.
Buick produces only two models Full size sedan, style Euro semi-luxury coupe... that is it that is all Buick makes and is sold as...
Cadillac needs to produce one luxury limo type car, and one luxury full size car with all the usual Caddy style. But that is it... TWO models...
GMC sells four models: BIG PICKUP (they are still necessary) BIG VAN (there are still big families out there who need the seat space), SMALL VAN, SMALL PICKUP.... That is it.
But the brands are all sold under one roof. Marketed under one organization, and do not duplicate lines of sale.
Oh.. and Americans don't like, want, or need skates... we need a lean and intelligent GM (privately owned and operated) to be fueled by American fuel resources... which are also provided by privately owned and operated companies... And the darned government to get out of the nationalization of industry business - which should be unconstitutional, and already struck down by the Supreme Court on a Writ of Mandamus.
But I can dream... can't I...
r/John -TMF
Robert Rosencrans| 6.17.09 @ 8:09AM
General Motors has mad some stellar cars and stellar mistakes.
While negotiating away future viability in labor contracts they also sat on the sidelines while left wing environmentalists helped Congress decide how cars would be built.
At this time they will survive but much smaller and they will never regain the ground they lost.
One reason they need to change their name is that it equates to Government Motors so easily and many in the public want to boycott GM for that reason alone, i.e., the bailouts.
Howard| 6.17.09 @ 8:09AM
Additional foolishness was dumping Opel. All of the hot stuff (little though it is) was designed by Opel. Now we are left with the same yokels who designed the Cavalier and the Pontiac Aztek. Even Obama wouldn't be caught in one of those things.
jerryofva| 6.17.09 @ 8:26AM
Mr. Peters:
VW has three brands not one. VAG produces the Volkswagen brand, the Audi brand and the Porsche brand. VW/Audi is pretty much a mixture of bin and badge engineered vehicles.
GM does not have a brand issue; it has a brand identification issue caused by badge engineering. If GM bothered to differentiate its brands then four brands would work out just fine.
If I were the CEO of GM I would have reorganized the company this way:
• Chevrolet Division: Small cars, Malibu and the Traverse.
• Pontiac: Performance cars
Cadillac: Luxury Sedans and the Suburban based Escalade
• GMC: All trucks and SUVs
• Corvette
This is a structure with four distinct brands that would work.
John W.| 6.17.09 @ 8:34AM
Mr. Peters,
Please clarify just exactly which of these morons has achieved the status of "post-adolescent." In fact, could you point to one who has managed to demonstrated the maturity associated with "adolescent?"
Thanks.
blackelkspeaks| 6.17.09 @ 8:41AM
As a former UAW member who, in my youth, helped build Chrysler and Ford cars, and even owned a few, I will state unequivocally and without any misplaced guilt that I will NEVER AGAIN buy any car or truck, under any nameplate, that has had any hand of a UAW member touch it anywhere in the production process. And I mean that emphatically.
Bram| 6.17.09 @ 8:58AM
I know I’m being nit-picky but - you forgot about GM’s Saab brand (which they are trying to sell to Koenigsegg Automotive). BMW has Cooper, Rolls-Royce, and BMW. Volkswagen Group owns Audi, Volkswagen, Lamborghini, Bentley, and Bugatti.
The difference is that BMW and Volkswagen have kept their brands so distinct most people think they are coming from different companies – unlike GM where the differences are usually little more than badges and trim.
The whole think will implode before long since many people like me will refuse to even consider purchasing a car from a sham nationalized aberration of a firm.
CraigZ| 6.17.09 @ 9:15AM
There is such a thing as Brand Equity. Keep Chevrolet. Keep Cadillac. China is a potentially huge market so let them keep “Buick”. Whether it uses re-badged Chevys or Caddys is irrelevant. General Motors can consist of two domestic brands, Opel in Europe, Holden in Australia and Buick in China. The real problem is that the domestics blew off selling to the world as somehow beneath them. I live in Nairobi and see Toyota Land Cruisers, Mitsubishi Pajeros (aka Monteros) and Nissan Patrols. GM just got here with the Hummer H3 (too little, too late). I see European Ford trucks and Jeeps. Fifteen years ago the domestics didn’t even have those. Their arrogance ceded half the planet to the Japanese without a fight.
2Anglico| 6.17.09 @ 9:33AM
El Rey, you just wait and see. I agree GM management made major blunders but the notion that a couple of government punks can't make things worse is naive. Government could screw up a wet dream. These clowns at Obama motors will re-define incompetence.
Again, the 1 factor that could have SAVED GM was a dedication to QUALITY. You know if you buy a Toyota product, even if they came out with a Donkey division, it would be a QUALITY automobile. Don't take my word for it, Ross Perot said essentially the same.
JP| 6.17.09 @ 10:16AM
GM has only one brand (Cadillac) that is profitable. Its heavy duty trucks and SUVs can turn a profit, but right few are being sold. The small to mid size sedans lose money as well. Each division that GM owns replicates its own processes (HR, engineering, production, and R@D). I think most of you are missing that point. T0 c0mpound matters Chevy does compete with Buick and Pontiac for the midsize sedans and mini-vans. Niether Toyota, Honda, Nissan, VW, BMW, nor Mercedes have this organizational problem. I remember reading about this problem 10 years ago, but management and the UAW did nothing.
L. Ross| 6.17.09 @ 10:47AM
I don't know about all this. But I do remember a while back, when it was very important to bail out Chrysler and GM to the tune of tens of billions of dollars, or they would go bankrupt. Well, they have gone bankrupt. Why do we keep trusting these clowns in D.C. to be able to manage us out of this situation. It just isn't going to happen. They don't know what they are doing.
MM| 6.17.09 @ 11:53AM
BMw has three brands - BMW, MINI and RR
Jaguar and Land Rover are the same company
Nissan, Infiniti...
PolishKnight| 6.17.09 @ 11:56AM
The GM reorg has already alienated half of the potential buyers (Republican conservatives) with the questionable dealer shutdown. For that reason alone, 1/2 of the domestic buyers may stay away.
Anyways, it's sad that there's nothing new about clueless CEO's with MBAs who think there's no difference between managing a bakery and a technology company. The get in their office and the first thing they do is demand refurbishment (for a few million dollars). Then they grab the orginizational chart and move people around and give them new titles. That's about 90% of what they do. The commie liberals would have a point that these are just overpriced figureheads if they didn't have so many of them in their back pocket or appointing their buddies to such lottery winning positions now that Obama is in charge.
Pat| 6.17.09 @ 12:48PM
If GM is truly fortunate, the company will be steered by someone who understands business and doesn't keep a 427 Chevy Malibu SS in his garage for week-end cruising. Contrary to what Peters believes, putting new headers and a big, bad carb on the Plymouth Fury I doesn't qualify these perpetual adolescents in Detroit to manage an automotive business.
You'd think that concept would be obvious by now what with the horrendous meltdown - the idea that first and foremost GM must be managed like a business would sink in, even to the lunkheads in Detroit - a passion for engines and a love of bending sheet metal into eye pleasing curves is nice but experience, mature judgment, integrity, objectivity and dispassion are far better qualities and desperately needed within GM and Chrysler at the moment.
And the little boys fondling their muscle cars just won't take the hint and give up, they're still shouting advice from the sidelines. Guys, no one is listening, why don't you take the GTO out for a nice cruise and buy some White Castles?
GM is in for a long slog back to health, 15 to 20 years at a minimum. While GM is rebuilding, the taxpayers will continue to help their wayward child out with a yearly allowance. So many Americans are angry with GM or completely indifferent to GM, it really doesn't matter what brands they have or relinquish. Regaining the customer's interest in their offerings, regaining the customer's trust in their quality and their committment to fix problems after the sale are the more important issues now - and probably for the next 20 years.
Peters you need to grow up, it's over, embrace the new reality - it's time to leave your parent's basement and sell the vintage Mustang GT. GM's recovery will take years and years - in the interim we're all sure you'll have plenty of useless advice for the auto executives - hopefully, instead of listening, they'll just get on with repairing the taxpayers' lastest business investment.
Il Gecko| 6.17.09 @ 12:57PM
Hopefully, the rest of the world will think like Pat and we can make an offer to GM just for the Corvette line, before they rape the guts out of the last true American performance car.
Son Of Sam | 6.17.09 @ 1:35PM
TOO BIG TO FAIL = TOO STUPID TO SURVIVE
GM --Chrysler--Wall Street--Congress-- The White House
stand strong until freedom dawns
Son Of Sam
http://www.samadamssos.bravehost.com
blackelkspeaks| 6.17.09 @ 2:16PM
We don't need the likes of Pat and Il Gecko guiding our thinking. Somehow, these types just don't get concepts like freedom or liberty or free-market capitalism. They're "progressives"who, like all "enlightened sophisticates", identify with statism and governmental tyranny and command-and-control economics. Pat blithely talks about a taxpayer funded "20 year slog" back to viability for GM, with no irony in his remarks. Rather, we should expect GM and Chrysler both to fail miserably, just like British Leyland failed, with the taxpayer "investment" gone with the wind, just like the billions we've already seen evaporate before the bankruptcies even got off the ground.
John| 6.17.09 @ 2:30PM
Lack of knowledge of product is not just a GM problem. It's an American problem. The U.S. churns out MBAs who know nothing about manufacturing. They may be able to talk about trout fishing and expensive wrist watches but that is not enough to run a company. Did Henry Ford or Thomas Edison have an MBA?
Marc Jeric| 6.17.09 @ 3:41PM
In the Soviet Union the industry bosses did not have to know anything about their industries - they just have to be good communists. After these let their industries lag by 50 years behind free enterprise, Gorbachev introduced Perestroika and Glasnost - that in English means Reform and Transparency. Are you getting a glimpse of what is going on - by our Abu Hussein from Kenya, our Community Organizer-in-Chief? Also, in the USSR community organizations were called soviets.
Johnny Knuckles| 6.17.09 @ 4:09PM
Buick: Family cars including current Chev sedans.
Chev: Performance/sports cars. Camaro, Corvette, Solstice.
Cadillac: Luxury coupes and sedans.
GMC: Trucks, SUVs, vans, and dopey electo/hybrids. Change badge to GM.
George True| 6.17.09 @ 6:13PM
If only the gummint had had the good sense to let GM and Chrysler fail last fall, those companies might have had an orderly reorganization, and emerged as much leaner and vastly more competitive entities. Now, tens of billions have been wasted, and tens of billions more will be squandered in the ears to come. And as the article correctly points out, they have now incurred the enmity of at least half of the car-buying public, including me.
Ford, while far from problem free, is doing quite well in this downturn. Two weeks ago Hugh Hewitt had a car dealer from Lancaster, CA on his radio show. Where they normally have 400 vehicles in stock, they were down to 110 cars because their sales are so strong. They are selling every F-series truck they can get their hands on, they were down to two Explorers, sales of the Focus and Fusion were brisk, and they are expecting to sell a lot of the completely re-designed Taurus when it comes out later this summer. Interestingly, he said they can't hardly give away the Ford Escape hybrid.
Last week I talked to my brother-in-law in Mason City, IA where he has been a car salesman at the lcoal Ford dealership for many years. He said they are doing just fine, and he personally is selling 25-30 cars a month.
I guess the lesson is that free enterprise works, and government meddling doesn't.
Pete| 6.17.09 @ 6:56PM
No surprise Ford is surging - once GM became Gubmint Motors they lost at least 47% of potential customers. I will only consider Ford and American built foreign brands for the rest of my life.
Richard Baker| 6.18.09 @ 12:17AM
If you believe that government car, or any other, companies are the way to go, read about the disaster which was British Leyland. Many of England's most famous names were utterly destroyed by "car czars" and bureaucrats who didn't know a penny farthing about cars. It'll all sound VERY familiar.
Miken| 6.18.09 @ 12:07PM
First, it was the new Chairman, Edward Whitacre, that said "I don't know much about cars", not Fritz Henderson who has been in the car business for 30 years. Maybe we should write an article where someone doesn't know much about the news business regarding Mr. Eric Peters.
Secondly, when you don't have a viable truck or SUV market presence like Toyota, Honda, etc. it might be OK to only have 2-3 brands.
I don't think Mr. Whitacre is the only one who doesn't know much about cars.
Benjovi| 6.18.09 @ 12:25PM
The journalist must mean Whitacre, not Henderson. I think the idea with getting someone in from the outside, like Mulally or Whitacre, is that they will have no qualms about cutting whatever they see as wasteful or inefficient. They have no prior connections, personal or otherwise, to anything or anyone in the company.
William Chinanski| 6.18.09 @ 11:24PM
Audi is the luxury division of volkswagen, who also owns two other brands Seat and Skoda. Volkswagen in turn is owned by Porshe. There is much parts sharing between the divisions In fact the porsche Cayenne suv shares the same chassis and several other parts with the Volkswagen Toureg Suv. The parts sharing between Audi and VW is even more extensive. Thats is five , count them five brands all with overlapping product lines with the same corperate parent. The problem with GM was not an abundance of brands, the multi brand strategy was pioneered by gm founder alfred p sloan and it is what propelled them to the top of the automotive landscape in the first place. It was not a multi brand strategy wich doomed gm rather overly generous comensation policies and complacency in design and engineering sunk the once unsinkable ship.