No. 976
December 12, 2018
 

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Autoextremist.com, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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Monday
Nov262018

#IUsedToWorkForGM.

By Peter M. DeLorenzo

Detroit. With GM’s announcement today that it is suspending operations at several of its underperforming manufacturing facilities including three plants in particular - Lordstown, Ohio; Hamtramck, Michigan; and Oshawa, Ontario - and cutting fifteen percent of its workforce, including streamlining its executive ranks by a whopping 25 percent, this is the most definitive sign yet that after running flat-out for years, the U.S. auto industry is bracing for a serious downturn. The shakeout cometh, the most serious, in fact, since the Great Recession that began in 2008. 

Although not exclusive to GM - Ford and FCA are planning or considering similar maneuvers - it’s no secret that GM is most exposed by the stunning abandonment of traditional sedans by its U.S. consumers. The hue and cry was immediate by the people most affected – as if no one could possibly imagine that any of this would be necessary or even a remote possibility – but it’s just the first step in a transition that will be painful for everyone, including autoworkers, executives and even consumers, who are going to see their vehicle choices not only slashed, but reoriented dramatically.

A few of the vehicle nameplates that will be affected include the Buick LaCrosse, the Cadillac CT6, the Chevrolet Impala and Cruze, and most surprisingly, the Chevrolet Volt. All of these models will be supplanted by next-generation SUVs and crossovers, but the dismissal of the Volt is shocking, especially when you consider that GM is going all-in on electrification for its future product lineup. The Volt is a technological tour de force for this or any other century and a glittering reaffirmation that there is such a thing as American ingenuity, that we haven’t completely devolved into a parasitic consumer society that can’t build anything of consequence anymore, and that we can and will fight our way out of this morass of mediocrity that has plagued this industry – and this country I might add – for far too long. Granted, the Volt’s second-generation electric-with-hybrid-assist technology has already been succeeded by advanced, new, fully electric technologies that GM has in the works, but still, the second-generation Volt is an outstanding machine that was crippled from the get-go by GM’s egregiously inept marketing, or lack thereof.

Which begs the question – and this is for all automakers as well – if the Volt was such a clearly excellent machine, hamstrung though it was by the criminally nonexistent GM marketing efforts, how do GM and the rest of these automakers plan on convincing the American consumer to go all-in on battery electric vehicles (BEVs) in the future, when they clearly weren’t all that interested up until this point, except, of course, for Elon’s Musketeers? 

An even bigger question is, what is going to convince the American consumer to pay a lot more to plug-in? The onslaught of global warming? Really? When the main crisis for the planet is the continued use of burning coal to supply electricity? It appears to me that the electric-cars-save-the-planet argument will have a short shelf life, especially when the realities of how the world generates power become a burgeoning concern.

I mean let’s be real here - between the massive electrification plans of the VW Group and GM alone, BEVs are going to be launched into the U.S. market at a furious rate over the next five years. And where will the buyers come from, exactly? What will convince the average America car-buying consumer that a BEV is The Answer? 

And while you’re contemplating that thought, here’s GM basically talking out of both sides of its mouth, laying off and firing “old tech” workers while hiring “new tech” workers for its vision of The Future filled with shiny happy BEVs, and even shinier and happier Autonomous vehicles. A future that is purely speculative at this point, by the way, but you can bet GM will be doing everything in its power to convince people to buy and drive their BEVs simply by not building vehicles with ICEs anymore

Sounds like a plan, right? Not really. Because in GM’s case it’s very shaky one, at best. After all, this is a company that builds the Chevrolet Bolt, an excellent BEV, by the way - except for being yet another example of GM’s notoriously lackluster interior design capability – and they can’t sell it enough to make any noise in the market at all. Yes, GM marketing, those consummate experts at doing less with more than any other automotive marketer on the planet are the culprits here, yet again, but GM is going to flip a switch and have consumers beating their dealers’ doors down to get their hands on a brace of new BEVs? I don’t think so.

GM’s PR minions are already spinning this as the company taking the necessary but challenging steps on the way to a productive future with wildly impressive profit potential, promising to improve annual cash flow to the tune of $6 billion by the end of 2020, but who’s kidding whom here?

Now, it should be said that the “new” GM, burned by years of serial mediocrity because of reacting to market conditions and changes instead of getting out front of them should be commended for these actions, and CEO Mary Barra is reaping the benefit from analyst accolades, who are already calling the restructuring hugely beneficial and smart. And true to form, the denizens of Wall Street have already weighed in, too, spiking GM’s stock price.

But CEO Mary Barra is walking on sunshine here – and blowing a lot of smoke too – promising the moon and the stars as long as we don’t look too closely or pay attention to those things that she doesn’t want us to pay attention to. GM’s track record in marketing is so reprehensibly bad that if those so-called analysts bothered to dig deeper, they’d realize that Barra’s plan is beyond frightening, and the company’s stock price would be plummeting instead of enjoying a spike. 

The bottom line is that GM can’t get where it says it wants to go. It is planning for an electrified future that only exists in projections, and on top of that, the company has demonstrated conclusively that it can’t market its way out of a paper bag. Oh well, at least it has the capability to keep cranking out ICE-powered crossovers and SUVs, at least until they start jamming BEVs down consumers’ throats.

GM has a social-media hashtag rolling around – #IWorkForGM – that supposedly stands for the pride and passion that come with being associated with – and employed by – the company.

Unfortunately for the people on their way out at GM, my hashtag headline is more accurate.

And that’s the High-Octane Truth for this week.

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