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Kinda like Cerberus, n'est-ce pas?
Cerberus thought they were a bunch of hotshot investors who were going to come to Detroit and teach those "hicks" how business is done. Yep, they were going to show Detroit how to run a business. And damned if they didn't get their balls in a sling. As you point out, the automotive business is THE most difficult business there is, being heavily capital intensive, competitive, and stretched and strained by the antipodes of science and engineering on the one end and fashion, glitz, and glam on the other. While other industries may have to deal with one or two difficult aspects of business, the automotive industry deals with them all: Unions-strike! Environmental-clean it up! Marketing-create buzz! Safety-voici Toyota! Capacity planning-better watch where you spend that $700 million! Design-build something where thousands of parts must work in symphony (and not kill anybody)!
Those outside Detroit (like, say, New Yorkers, or Texans) just don't consider the incredible complexity of this business before they decide to go for a swim. Only when they're drowning do they peak, plaint, and pine, "Oh shit! What have I gotten myself into?"
It's not as easy as it looks . . . .
Tom S.
Detroit
Yeah, it's hard to get some of us to consider GM products, but...
I did it! I drove a GM product. I took a look at two CTS-V's, a 2006 and a 2007. They were trash, from ugly, worn knobs and buttons to varied rattles. Sure, the V8 pulled, but it also pulled the cars apart. Call me in ten years and I'll look at another GM.
Later that day, I drove home a 2007 BMW 550i.
And does anyone else find the new Taurus comically large? The SHO engine is awesome, thankfully. Too bad about the steering. It's like a blind man describing a silent movie by telegraph, all while suffering from IBS over the incomprehensible sticker price.
Jon Simon
Fremont, California
Uh, it's about that switch, Ed...
It sure is a shame that GM leadership doesn't get it, but then again they are being run by folks appointed by "light switch" leadership. The only problem is that the light switch they are looking for doesn't exist. They keep fumbling around, flipping this switch and that, hoping to magically find the the one that starts the machine. As with all machines, there needs to be some priming, some warm-up. If it did get it to work by merely flipping a switch, it would be disaster. Taking any machine from a dead stop to wide open would scatter the parts everywhere.
No, "Big Ed" needs to get into the reality that even if sales doubles tomorrow, the corporate manufacturing shell that is left couldn't employ people fast enough to turn up the market share. What is he expecting, a 10% gain this year? He'll be lucky to eek out a point given all the shuttered GM factories. The rise to the top in the car business is slow, even if you do have the best products out there. There may be fast tracks in careers, but in the auto game it's quite different. Just think; if they can get a point a year over the next 10 years, shucks and by golly, that's TEN points, or back up to nearly 30% of the market.
GM is finally building some great cars and trucks, however, their success is not guaranteed, nor will it happen overnight. Big Ed needs to be given a rheostat rather than a switch. Show him how if you turn it up a little at a time, the speed of the machine increases. But be sure to show him that it can go backwards too, a little bit at a time.
Beats the heck out of an on/off switch.
Gary Lisk
Lancaster, OH
On GM.
This week's rant is a magnum opus, distilling your point of view about Detroit, the auto business, where they are at and what needs to be done.
I just read on Bloomberg that Susan Docherty is going to lead a market study to more effectively understand Cadillac's customer. Are you kidding me? Seems to me that they should have a solid understanding of their customer/target market...Let me take a stab at it...how about this: Rich Old White People.
While GM's cars may be improving (we don't see many in Boulder, mostly Priuses and Subaru's) it seems to me that the are boxed in with their overall brand strategy, Here's how I see the brands' core customer/target market:
Chevy: Working Man
GMC: Working Man's Boss
Buick: Old People (and,strangely, Chinese living in China)
Cadillac: Rich Old People
Getting out of these boxes is possible, but will likely take decades of the grinding hard work you have described in this week's rant.
My suggestion: embrace these realities and sell hard into these profiles. It's 2010, not 1970, and GM can no longer be everything to everybody.
Love your blog and your point of view on Autoline After Hours. Thanks for the great entertainment, I listen to the podcast in my 2000 5 series every week.
Chris Stone
Boulder, Colorado
And more on GM... and Corvette.
The gang at GM that gets it (Mark Reuss, Ed Wellburn etc) had better learn how to manage Big Ed and do it fast.
Pushing products to market too early and letting the consumer perform the beta testing used to be a GM specialty…no matter what Big Ed says or how hard he pounds his fists on the desk requesting that the Volt and any other GM product come to market before an established target date should be met with a resounding NO WAY answer from the above mentioned management.
GM products have to come to market fully proven and bullet proof…or they will be still born. Does he not realize this is a major part of the reason they are in this mess….quality needs to be ingrained from launch…not engineered in afterwards.
Concerning Corvette Racing; I could not agree more…being a life long Corvette fan and owner and having followed the Corvette Racing program from the start; the technology developed on both sides has been a tremendous boon to both the race car and the street car…and should be a tremendous source of pride for GM that they exploit from a marketing perspective and push out to the rest of the organization as well.
KB
Sparta, New Jersey
Carl Edwards.
I know you haven't covered this yet in "Fumes" or "The Line" but I just saw where Carl Edwards is on probation for 3 weeks for intentionally crashing Brad Keselowski at the end of the Atlanta race. WTF!!!
I understand letting drivers race. They will get together and crashes happen. Tempers will flare. That's racing. Hauling someone to "the trailer" for a preceived infraction (Mr. Stewart, you there) is uncalled for. But sitting in the pits for 150 laps, go out and attempt to kill someone (I don't know what else to call intentionally wrecking someone at 190+ MPH) and end up with a hand slap? Maybe NASCAR is trying to drum up some business for Mr. Edwards' sponsor?
J.W. Page
Chillicothe
Big Ed.
While reading the letter I kept thinking to myself why doesn't Big Ed do a mental exercise to help him find his way? He needs to think back over the last 20-25 years and figure out what cars he and his family purchased and why. One of two things will happen. He'll recall that he's only owned Mercedes, BMW or Lexus cars because of quality and perception or that he's been driven around in a limo for far too long to be a credible source of information as an automobile customer. Then maybe he'll realize that maybe he needs to ask CBS to put him on Undercover CEO to find out how things really work at GM and see what customers actually think.
My sense is that Alan Mulally doesn't need the CBS gig because he comes off as the kind of guy who actually went out and bought his own cars and drove himself to work. So he understands the relationship that a person has with a car even though one would think that he earned enough to buy his car whole and was never likely stuck in a lease or loan only to deal with being underwater when the product goes bad. When Big Ed understands these issues as a customer then maybe he can appreciate how to fix the situation for GM customers.
Joe Macri
Holly Springs, North Carolina
GM.
Big Ed should NOT be the face of GM. He should shut up, put his head down and learn about the auto industry, and apply what he already knows about business--which I know is a lot, and combine it with his new car biz enlightenment to straighten out the future of GM based on their disasterous past, their current public perception, and their future great products. And then in a couple of years pick his head up and look around and see what needs to be adjusted, because over the next two years there isn't much market share-wise that's going to change for GM.
Thom Taylor
Laguna Niguel, California
GM, Corvette, etc.
Ed is running into the brick wall -- learning just how powerful the end customers are by buying or not buying GM products. As you succinctly put it, he should focus on upcoming vehicles and not "demanding more sales" -- his battle is upcoming, not today.
I was never a Corvette fan until this vehicle went into true factory racing with its GT1 and now "GT" series racing. Once they did that, I felt the street cred of 'Vette became real because now they are racing. I love rooting for the team and hope they can start off the year with a Sebring win. It would be nice to see Ford join the GT ALMS fray as well. Heck, I'd like to see 'Vette issue a world-wide challenge to bring it in this GT ALMS class -- let's see some competitive trash-talking and build some fun and excitement.
Jason
Auburn Hills, Michigan
More on GM.
The subject is broader and far more complicated than most people allow themselves to believe, but you covered it efficiently, accurately, and entertainingly. Unfortunately I don't think enough people realize that GM is technically a Dead Man Walking now. They currently exist as an entity only so long as Washington DC keeps writing the same kinds of checks that Greece is asking for. If GM isn't meeting the criteria that you close your article with - 100%, and RIGHT NOW - they are doomed. Public sentiment is already only luke-warm to them, and turning downright hostile to the Obama team that writes the checks. November could change Congress and the Senate enough to jeopardize the "perpetual bail-out." Not much sand left in the hour-glass. If there's going to be a turn-around, it had better have started yesterday.
Rob Marciello, Stewartsville, New Jersey
The right man for the job?
I don't mean to excuse "Big Ed" for his behavior, but I speculate on an explanation.
GM owes a lot of money to the US government, and my theory is that Ed is under an enormous amount of pressure from the Obama Administration to pay it back ASAP.
There may be a deadline behind this. In about a year from now, the Administration might have to rescue Fannie Mae and Freddie Mac....again. Obama, to show fiscal restraint, would like to pay for that bailout with funds recovered from the auto bailout.
Effectively, GM's worst fears have been realized. They are owned by a VERY impatient investor with a short time horizon. Sad to say this, but maybe Big Ed *is* the best man to lead GM. He does have experience in generating returns for impatient AT&T investors. For this year, maybe that's all this company is gonna be about.
Let's hope GM can make a couple of products that can survive the bean-counting.
Dave G.
Portland, Oregon
Shelby.
The PR folks at Ol' Shel's place evidently have olive oil confused with snake oil...
J. Larson
Santa Maria, California
Advice to GM.
Big Ed and GM need to sieze the opportunity of their lifetime. Toyota on the ropes. I'm not talking dirty pool or conquest rebates, I'm talkin' about good marketing of excellent product on the showroom floor right now. If ever there was an opportunity to get GM defectors or just reaquire import buyers, now is the time. Get your best dealers your best product NOW! Give them marketing dollars to work with and don't look back. Import buyers are confused and feel betrayed. Put your best foot forward and lead the race. Tomorrow will be too late. You have been handed a silver spoon. Eat!
RM
Lockport, Illinois
On GM.
Undoubtedly Big Ed is under pressure from the Obama administration to increase sales and begin to pay back the government for the bailout money. However, if he thinks he can snap his fingers and instantly get traffic into GM showrooms he is sadly mistaken. In the 70's and 80's I owned several GM vehicles; to say they spent more time in the shop than on the street is hardly an exaggeration. I haven't driven a GM car since 1984-my current vehicle is an '04 Honda which has been virtually trouble free; it's everything the GM vehicles never were...I won't consider another GM can until I can be absolutely sure it will be as reliable as my Honda.
I'm certain I'm not the only individual with that mindset, as you correctly point out after building terrible vehicles for the 25-30 years it will take GM years to rebuild the trust of American consumers the company once had. I'm not sure GM has the time to accomplish that task, a CH7 in GM's future wouldn't exactly suprise me.
ELW
Leavenworth, Kansas
Ed and the Dunning-Kruger Effect.
What we have here is an individual who hails from a service industry that provides an undifferentiated product. In the old days we called this type of industry a public utility, granted it the status of a natural monopoly and regulated it. This individual projects a vibrant, progressive image and following a decrepit predecessor accedes to power promising to restore a wholly disparate entity to its former glory by “reforming” it and all the while possessing only the dimmest operational grasp of the actual system he seeks to preserve and reform.
To quote Bertrand Russell: “The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.”
Tom Bartkiewicz
Baton Rouge, LA
RUFKM?
Cadillac looking for a "New Strategy"?
Now? Now?? When the Lexus/Toyota image is imploding???
This would be like Edward Smith, the captain of the Titanic asking for an alternate route after hitting the iceberg. Yes, another Ed! As PMD likes to say: "you just can’t make this shit up, folks!"
I am starting to wonder if we are dealing with a tragedy or a comedy here.
Maybe Cadillac should outsource their "Marketing and Advertising" to Carroll Shelby!
Another thought: Toyota pulled out of Formula One too soon; they might have had a chance in 2010 with their "runaway" cars.
Phil Walters
Los Angeles
This just in: The telecommunications industry will save us all.
On thing your correspondents have demonstrated here is they sure don't understand the telecommunications industry.
It could be charged that some of you folks are just a little myopic.
AT&T has been an icon of quality service for it's entire existence, the true "Standard of the World."
Think about how you respond when your telephone doesn't work, or the internet goes down.
It's a super complex, sophisticated, technical business and not only is each provider a complex organization to themselves, but those providers have to interface with each other seamlessly. If not, your telephone doesn't work - the world's data doesn't flow.
And our nation's security and that of the world rests upon the shoulders of the telecommunications industry.
So, "Big Ed" comes from a background of very high pressure, top quality and quick response background. He may not be the man for the job at GM, or he may be, but to characterize telecommunications as some lame "out of it" industry is pretty "out of it."
Richard Martin
Jerome, Arizona
Alrighty then!
There are currently ZERO designs out there by ANY automaker, that belong in the universe at which Detroit should be aiming. This must go beyond the realm of mere surface language and graphics. Push the architecture, push the roadblocks to pushing the architecture (cojones remember!), and get THAT message to the public in the form of drop-dead, knee-bucklingly sensational show vehicles ASAP.
Mark Walters
Paris, France
Quick Takes.
Really enjoyed Peter's "quick takes" -- much better reading than the bloated ego-boosted reviews in many of the buff books. Can we have some more, please?
Doug Fernlock
Grand Rapids, Michigan
About GM.
I live in a county of 170,705 population, with the two largest cities at 82,280 and 25,800. The demographic is a combination of rural and yuppie urban with a high outdoor recreation quotient. We had three GM dealers. Now we have none. One was a major player with 70 years as a family business. People here buy big pickups to haul hay and pull horse trailers, and pickups and big SUVs to pull boats and RV trailers, for a variety of job-related reasons, or to look butch at the latte shop. The largest and oldest dealer has filed for arbitration but is NOT among those recently contacted about reconsideration. BTW, the two Ford dealerships in the county are still in business and look to be doing well. Would I buy a Silverado or an F-series Ford? Your guess, Mr. Whitacre.
PS - GM did retain a dealership 40 miles away in an adjoining county of 22.715, where the demographic is almost entirely rural/agricultural.
Go figure.
Dave Pease
Bend, Oregon