No. 743,
April 16, 2014

About The Autoextremist

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.

De Lorenzo'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. De Lorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Tuesday
Mar182014

GM’s egregious indiscretion.

By Peter M. De Lorenzo

Detroit. With the latest GM travails about to turn into a U.S. government-certified witch hunt, I just have to ask the obvious question: Just how many times can GM be at the crossroads? How many times can this company seemingly rise from the ashes, repair its image (sort of), build some ultra-competitive and in some cases superb automobiles, and then shoot itself in the head again? Only to dust itself off with impunity and start the cycle all over again?

This roller-coaster ride for GM has gotten more severe with each gut-wrenching swoop. We’ve all been witnesses to the GM story. As one of America’s industrial icons – for decades a beacon for American corporate might – there was no American company more assured of itself and more dominant over its competition. GM dictated everything in the market – the segments, the style, the engineering, the pricing, even down to the colors offered. From the high-flying late 50s, through the rollicking 60s and up through the money-printing mid-70s, GM was a juggernaut in every sense of the word.

Then, things got weird.

The passionate, swashbuckling risk-takers who fueled GM’s scintillating success during its heyday were slowly but surely replaced by a corps of gray-flannel drones, conservative zombies who systematically purged all creativity from the company, banishing the people with gasoline in their veins – the creative shit-disturbers and True Believers in particular - to the sidelines, while the financial types counted the profits thinking it was all good and that it would all go on forever.

But it couldn’t. And it didn’t.

Complacency set in, and economies of scale and profit targets replaced the truly bright, innovative thinking. And any concept that even remotely resembled hanging your ass out in the breeze a little bit – like the company did so adeptly in its heyday - became anathema.

And after decades of flat dominating the market, the inevitable happened. Hungrier import competitors dined on GM’s conservatism and literally walked away with entire segments that the company used to lord over, unchallenged. Battered and stupid, the company fell into complete disarray, like a punch-drunk boxing legend relegated to greeter duty at a casino. From there the company stumbled and reeled through a period of serial mediocrity that was stunning to watch, finally doing a graceless pirouette into bankruptcy.

And even through all of that there were True Believers in the company who actually still loved cars and the car business and whose relentless efforts at least kept the company in the game, despite management’s remarkable inability to remove their collective heads out of their asses.

And now, here we are. Five years after the excruciating humiliation of bankruptcy and being saddled with the odorous “Government Motors” moniker, the “new” GM was on a little bit of a roll, product wise. They still bumble their way when it comes to marketing, and they still can’t seem to prop up their market share if their lives depended on it, but there was a little bit of a glimmer of hope. And that was despite having been ravaged by a carpetbagger of a CEO who left a trail of boorish and clueless behavior in his wake the likes of which this industry will be lucky to never see again.

But that’s all lost now. Because the “new” GM, still struggling to get out from under the “Government Motors” tag, is all of a sudden front and center in the media again, and in a big, ugly way. A defect with an ignition interlock switch was buried in the bureaucracy, or deemed not a big deal, or just plain ignored.

And people died.

For that GM will face the congressional circus of “what did you know and when did you know it” line of questioning, giving those esteemed hacks in Congress who are trying to get elected a reason for being. And you thought the unmitigated asshole-ism and interminable grandstanding on display during the congressional hearings debating the fate of the auto industry was bad? Just wait.

GM is desperately trying to get out in front of it, with a series of moves and pronouncements calculated to portray the company as being caring and concerned. The PR minions, led by Selim “I’ve forgotten more than most people will ever know about PR” Bingol, are feverishly managing the damage, making sure that all statements are forthright and contrite, and even trotting out its newly minted CEO, Mary Barra, to say, “We’re sorry” by video while taking full responsibility, even having her play the “I’m a mom” card. It’s all right out of the modern day PR handbook (see “Damage Control,” last chapter, page 386).

The so-called “expert” PR pundits are making the rounds on the morning television shows praising GM for doing all the right moves up to this point, which is to be expected. After all, Mary Barra is getting a pass – for now – because, well, just because. (But can you imagine if the dreaded Captain Queeg was still the face of GM right now? I can just see the Alexander Haig-tinged, “I’m in charge here” combative press conference now. Yikes.) 

Except this just in: It isn’t nearly enough. I liken it to image wrangling at gunpoint, and it usually doesn’t end well. And I’m not even sure the company can survive another image hit of this scope, to be blunt. 

And the idea that GM can get out in front of this PR shit storm is so completely naïve that it’s almost impossible to think that anyone down at the Silver Silos actually believes that’s how it will play out.

But don’t worry, that notion will blow up real good when the circus comes to town in Washington in April. That’s when GM executives will be sitting front and center for the relentless grilling by the lesser lights in Congress whose only goal is to get TV network time so that they can give their reelection campaigns a jump-start. Fueled by vicious young staffers trying to make names for themselves, “the GM thing” will give these bumblers in Congress just the bully pulpit they need to portray GM as evil incarnate and a bad, bad company. One undeserving of America’s trust, etc., etc.

You can imagine where all of this is going. Sounds like a giant heaping, steaming bowl of Not Good to me.

The sad thing in all of this is that GM could have done something about this situation more than a decade ago.

But they didn’t.

And for that egregious indiscretion they’re going to pay dearly.

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