No. 744,
April 23, 2014

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After a more than two decade career in automotive advertising, Peter M. De Lorenzo founded Autoextremist.com on June 1, 1999 as a weekly Internet magazine devoted to news, commentary and analysis of the auto industry and the business of motorsports. Since then the site has become a weekly "must read" for leading professionals within and outside the auto and motorsports industries, and De Lorenzo is considered to be one of the most influential voices commenting on the business today.

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The Autoextremist - Rants


Saturday
Mar292014

Mr. Ferguson goes (back) to Washington.

By Peter M. De Lorenzo

(Posted 3/29, 9:00 a.m.) Detroit. Well, that was special. Bob Ferguson, GM’s former head lobbyist, is going back to Washington to help navigate the arrival of GM’s Implosion Train, which is making its next stop in our nation’s capitol to get its obligatory public flogging in front of our esteemed grandstanding blowhards in Congress.

You remember Bob Ferguson, don’t you? Yeah, I didn’t think so. Ferguson, GM’s chief lobbyist from 2010-2012, was the guy plucked from obscurity on a whim by former CEO Dan Akerson, because ol’ Captain Queeg thought Bob was just the guy to run Cadillac globally for the now-reeling automaker.

This move puzzled insiders and outside observers alike at the time, because Ferguson was amazingly devoid of any qualifications for the assignment whatsoever. After all, Cadillac (along with Chevrolet) was one of GM’s showpiece divisions, and the push to project GM’s luxury division globally was an urgently important task. And it was clear to everyone but the aforementioned Queeg that appointing Ferguson to the job was akin to hiring the kid who used to deliver the papers in your neighborhood for a major corporate role because he was a real go-getter and he smiled a lot.

But the elevation of Ferguson – or “Amway” Bob as I called him because the first time he presented himself in front of the media he came off like a cheerleader warming up the room for an Amway sales meeting - was consistent with Akerson’s malicious reign of terror within GM, whereupon anyone who didn’t smack of “old” GM immediately went to the head of the line for kudos, accolades and prized jobs, whether deserved or not. Eerily similar, in fact, to the rationale Queeg employed to thrust Ms. Barra into her role, but I digress. (Awww, offended? Get over it. That’s exactly what happened.)

Ferguson wasn’t just plucked from obscurity, however. He was intercepted from another planet altogether and given the reins of GM’s luxury division because that miserable excuse of a former CEO thought Bob was a “smart” guy who could do just as well in the job as anyone else within the halls of the Silver Silos. (Then again Queeg, in all seriousness, thought anyone could run product development including him, so what does that tell you?)

And it worked fabulously. Not.

Cadillac is blessed with some of the finest, most competitive cars in its history, yet the divisional overlords – “led” by Ferguson – are flailing about throwing anything they can get their hands on up against the wall to see what will stick in the market. And it shows.

The Cadillac pricing strategy, such as it is, moved past being a joke long ago, transcending into an entirely new dimension of marketing fantasy heretofore unseen in this business.

For instance, the new CTS is an outstanding car by any measure. The fan boy press has lavished praise on it on a regular basis and the accolades have piled up accordingly. But there’s a giant disconnect going on in the market, because the CTS is priced dead-on with comparable models from BMW, Audi and Mercedes-Benz.

And there’s just one giant, glaring problem with that. 

The consumer-buying public – aka the well-heeled hordes out in ConsumerVille - aren’t buying it. They still – after fifteen years of GM "reimagining" Cadillac – they still don’t equate Cadillac with its German rivals. No way. No how. Uh-uh.

Yes, I get the internal thought processes going on within GM, that they’re building top-level cars – they are – and they should be able to come out swinging and charge accordingly for them. But it’s not that simple and it just doesn’t work that way.

You only have to go back and take a long hard look at what Toyota and Nissan did when they came to the luxury market years ago with Lexus and Infiniti. Back then, those two manufacturers simply didn’t belong. Toyota made blandtastic appliances sold cheerfully and Nissan did only slightly better – their cars at least sported a pulse as opposed to Toyota’s rolling tedium – but they both had no business being in the luxury market. None.

So what did they do? They brought in cars approaching the German luxury stalwarts in some key areas and exceeding them for the most part in quality, and then sold them for $15,000 less. And they lost money on every single car.

Why? Because they knew that they didn’t belong – yet. And they knew that the American consumer-buying public would be a very hard sell. But unlike the standard operating procedure for the American manufacturers back then, which revolved around a particularly odious brand of “what have you done for me lately” short-term thinking – a quarterly death march that destroyed everything in its path, especially all rational thought - the Japanese manufacturers were willing to take the long view. They were willing to stay the course, lose money and slowly but surely build their brands.

Taking all that into account, what does GM do with Cadillac? Instead of pricing the new CTS rationally, acknowledging that they’re not there yet in the luxury market image-wise, they price it on the money with the Germans and then end up discounting the shit out of ‘em, because consumers simply won't pay what they're asking.

The result of that? Resale takes a huge hit. And then GM is left with chaos going on in its Cadillac showrooms, with the diminutive ATS potentially costing as much as a discounted CTS or XTS, depending on the day and the cash incentive offered. And that's not even getting into the outrageous pricing of the ELR, which has now achieved a legendary level of insanity.

And the lessons to be learned here? Forget it.

In the “new” GM there are no lessons to be learned. Historical context and past lessons are to be ignored. Instant gratification and image wrangling by finger-snap and gunpoint is the way of the world as handed down by that hack of a former CEO. After all, when you have a guy who was just hatched yesterday in terms of accrued knowledge of the business running one of your most important divisions, all bets are off.

The remarkable thing in all of this is that GM actually believes that they don’t need or want a chief marketing officer, that he or she would just get in the way of “the machine” with their silly notions of vision, clarity and focused image consistency.

And maybe they’re right. When you look at the world through the custom, GM-issue kaleidoscope glasses that parse all rational thought into smithereens – the ones given to you when you sign on to toil at the Silver Silos - you can, nay, you’re expected to rationalize anything and everything. Even when it's all unmitigated bullshit.

How else to explain that GM’s market share is barely treading water, while offering the most impressive array of products in their history?

So “Amway Bob” is going back to Washington to help orchestrate St. Mary’s public flogging Tuesday and Wednesday at the hands of the sniveling, grandstanding miscreants who have the unbridled temerity to call themselves our representatives. The ones who will kick off their reelection bids with one liners tailor-made for the evening news, written by staffers with all of the historical context and gravitas of a half-chewed piece of gum.

Wonderful stuff.

I have a little advice for GM: “Amway Bob” should stay in Washington where he belongs. And they should jettison Selim Bingol, their so-called PR chief, to Washington, too, while they’re at it. Because it’s crystal clear that neither one of them are adding anything of value at this point.

And then maybe one of these days GM will wise-up and get serious about marketing. How it’s done, who runs it, and its urgent purpose and value to the company’s mission.

Then again, maybe one of these days we’ll be proud of the leadership emanating from Washington.

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