NEW YORK (AdAge.com) -- Last week AdAge.com polled its readers about whether they felt General Motors Corp. was fixable. The automotive colossus is grappling with one of the worst dilemmas in its long and storied history as a lynchpin of the U.S. economy. Its sales are down, its overall financial condition continues to slide and its products have largely become noteworthy because they aren't. Along with seeking their poll vote, we also invited readers to share with us their own views about GM's situation and prospects. Below is a selection of their remarks.
-- Hoag Levins, editor, AdAge.com
46% of Poll Respondents Say General Motors Can't Be Fixed
Even Optimistic Voters Cite Mediocre Products and Marketing Strategy Deficiencies
Have your own thoughts about GM? Send an e-mail to AdAge.com at Letters to the Editor
GM's Single-Biggest Mistake
GM's single-biggest mistake is doing business the same way it has for years, while the market is evolving away from it. Its best-looking cars, for example, are the Saabs, and these would sell more if GM truly got behind this division. Instead, it rolls out the old-looking Buicks, trying to lure elderly people who are likely buying their last car. Even the "new" Chevy Malibu Maxx is a throwback to the styling of the 1977-78 vintage Oldsmobiles with the cut-off rooflines. If GM is to survive it has to get rid of its old image and cars and go after a younger market.
Director of Marketing
Viking Yacht Co.
New Gretna, N.J.
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GM Needs to Be Acquired by Honda or Toyota
GM needs to seriously look at a merger/sale to a foreign entity. If GM were part of Honda or Toyota, the issue of perception of quality may go by wayside. Brands need to be trimmed. More focus on its big brands is sorely needed. The biggest issue, which they are working on, is the issue of "legacy costs" being reduced.
Procter & Gamble
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Marketing Alone Won't Save This Bunch
GM can be fixed in the design studio. Yes, Cadillac has reinvented itself, but it has converted itself from a maker of "wealthy geezer mobiles" to a maker of "wealthy, get-the-hell-out-of-my-way young snob mobiles." Buick may have a chance if it can get out of its own way, but it still can't decide if it's a family car, a family/performance car or just a safe place for Tiger Woods' golf clubs. Pontiac? Well, they all look pretty much the same, don't they? And Chevrolet? Wake me when it's over. The Corvette continues its relentless price slide upward, further out of the reach of most consumers. The fewer you see on the road, the less you think of Chevrolet as a brand with, um, balls. Cobalt is an interesting experiment, but the ghost of Cavalier haunts it. The rest of the line looks as if it were designed at Hallmark. Marketing alone won't save this bunch. Assertive, confident styling and practical, affordable technology might.
Grand Rapids, Mich.
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GM Will Get Through This
The automotive marketplace is extremely competitive right now. Dealer profitability is low; demand for new product is mixed; yet GM's marketing strategies are better than they ever have been -- just not consistent. Perhaps GM and all automotives need to "talk and listen" to their dealer networks and their owners -- and determine what they want to hear, read and see. Often, we get too glitzy, and we need to revert back to the 4 P's of marketing and effective communication goals (i.e., reach). Too much emphasis is placed on programs that are "buzz worthy" -- but are narrow and do little for sales. Middle America, i.e., the family -- GM's core -- isn't getting the message right now. GM is formidable and they have a great marketing organization behind them. They will get through this.
Todd W. Rankin
Senior Vice President, Regional Group Media Director
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Towing Our New Chevy to the Dealer
My wife and I have owned five Toyota's in the last 16 years, all excellent. We bought a new Chevy Tahoe in '03. We have had it towed to the dealer four times because it would not start. We also had three other trips to the dealer for a radio that did not work and windshield wipers that would not turn off. I don't think GM's problems stem from marketing.
Sage Media & Communications
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GM Needs Radical Changes
Yes, GM can be fixed ... as Lee Iacocca brought Chrysler back to life. GM's issues are deeper than just marketing and branding, however. The company is strapped with pension obligations to an amazing number of retirees and unionized labor requirements. Simply slashing the white-collar/management workforce and the remaining executives' salaries will not be enough of a signal to Wall Street or the investor community. Radical changes in comprehensive corporate policy and business strategy must be implemented.
Wendi R. W. McGowan
Chief Marketing Officer, Business Strategy
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Why GM Will Cease to Exist
I predict that in the next five or six years GM will cease to exist as we know it. Cadillac will become an independent unit and will be very profitable. GMC trucks will combine with Chevrolet and Buick in a "new sized" GM without Pontiac, which will disappear. The new GM will still fail unless all the designers at Chevy (except Corvette) are fired. Their styling is horrible. This company needs to go back to Al Sloan's vision of separate identities for separate brands, instead of each brand trying to be all things to all people. As Al Ries and Jack Trout have often pointed out, no one knows what a Chevy is anymore ... it's a big, medium, small, sub-compact, economy, middle class, blue collar, luxury 4-cylinder, 6-cylinder, V-8 powered hunk of marketing. The brand needs to split itself up.
This really got started under CEO Roger Smith in the '70s, when GM started to "save money" by having all the brands share engines/drive trains and even many body panels.
GM seems doomed to carry on and sink into the same swamp that swallowed Penn-Central and the buggy whip industry.
Fielding Graduate Institute
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GM Marketing Is Clueless
For decades GM has held the belief that they will dictate what Americans drive, whether they like it or not. The fact is, America doesn't like it and is telling GM so but the company is too arrogant to hear it. The cars are bad, the marketing is clueless and the executives are liars.
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A Relic of the American Century
It a world where an AT&T can vanish overnight, it's not inconceivable that GM could cease to exist as we know it.
The problem is that GM has no relevance in the marketplace of the mind because the company has no point of view. Thirty years ago the company was addicted to chrome, today it's SUVs. What is GM? Is it Saturn or is it Hummer? Why does the Buick nameplate still exist?
A relic of the American Century, GM is too big, too rich, too important to die; but what's certain is that no one will ever again say this: What's good for GM is good for America.
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Why Doesn't GM Listen to the Market?
GM is not offering compelling product. If people fall in love with a car, they will buy it. What is preventing GM from listening to the market and giving people what they want?
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GM's Quality Perception Gap
GM must refocus its advertising away from price and incentives and concentrate on value and quality. At the end of the day, cars are technical commodities with customers giving heavy weight to quality and total cost of ownership. While style may appear most important to consumers, it really is not -- some would argue that the best-selling Honda Accord and Toyota Camry both lack any sense of style whatsoever. What the Camry and Accord both have, though, is high actual and perceived quality.
In the past, GM experienced a deficit in quality vis-a-vis the Japanese competition that led customers to believe that the total cost of ownership for Toyotas or Hondas was lower than for equivalent GM models. Even though Toyota models were initially more expensive than GM's, they were in fact cheaper to own as their higher quality resulted in fewer repairs and higher resale values. However, today the actual gap in quality is narrowing, but GM continues to suffer from a devastating perception gap.
To survive, GM must convince customers of the value of its cars. Value is not a discount nor a low payment, but something that is highly correlated with quality: total cost of ownership. GM must convince its customers that its vehicles are of equal or greater quality than equivalent Japanese (and Korean and eventually Chinese) models and that the total cost of ownership for GM products is actually lower. Marketing must focus on "A great car for a great value" rather than "Buy today and we will give you $5,000 off."
Booz Allen Hamilton
New York, N.Y.
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Changing Media-Buying Agencies Won't Help
Changing agencies or media-buying responsibilities is simply an attempt to show Wall Street that action is being taken to fix things. In reality, such a simple, painless change will do little to address the multiple, deep-rooted business challenges facing GM.
Most businesses like GM are salvageable if they refocus their business on understanding and innovating for their core and/or desired consumers. It sounds simple, but it is true.
In the early 1900s, GM was an innovator. It was the first to offer things like enclosed car bodies, electric starters and tilt beam headlights. Its innovations were consumer relevant and enabled the company to grow faster than competitors. One of their biggest problems today is they have lost their consumer focus and passion for innovation ... something that often happens to large companies. A lack of innovation results in less word of mouth, which results in less market interest, resulting in lost sales to competitors who do innovate. To illustrate the point about market interest or buzz: When was the last time someone came up to you and shared an enthusiastic story about a new GM auto that made you consider purchasing it? I can't recall this ever happening to me in my lifetime. In contrast, growing companies have an army of satisfied customers who actively promote their products with positive word of mouth to other potential consumers.
Vice President of Worldwide Marketing
Idaho Falls, Idaho
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Car-making, not Moneymaking
GM needs to remember they're in the car-making business -- not the moneymaking business. It seems to me that the erosion of GM's market share is a result of lack of vision by a management focused on short-term gain. They need to free the creativity of the design and engineering staff to focus on the design of the product to build better emotional connections to the brand.
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GM and Real-World Customers
Here's a real-world example that just happened to me. I recently visited my local Pontiac dealer to test drive the 2005 GTO. In response to my request the salesperson abruptly said "No." When I asked why, the salesperson responded with reasons such as the car having too much horsepower and the fact that I wasn't ready to purchase the car that day. After this unsatisfying experience I sent an e-mail to Bob Lutz, the vice chairman of GM. In only 15 minutes Mr. Lutz kindly responded with an apology and offered his help in rectifying the situation. I was scheduled for the test drive I originally requested. The point of this story is to emphasize the importance of service and power of personal attention.
There's no doubt that GM needs help in multiple areas (manufacturing efficiencies, employee management issues) but in addressing these issues GM also needs to remember the importance of premium service and personal attention. Other automakers have already discovered that a customer will respond positively to a premium level of service and personal attention. Addressing this area should be a top GM priority. Corrective action in this area will allow GM to successfully move forward in dealing with other issues within the organization.
Dwayne J. Roark
Marketing Communications Project Manager
Wood Dale, Ill.
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Produce the Best Product
Having worked with Mazda, Lincoln, Mercury, Jaguar and Land Rover, I know that nothing, absolutely nothing we do beats having the best product in the market segment.
Mazda defined itself in the '80s as a discount Japanese manufacturer and it is just now getting over that message. The launch of Zoom-Zoom, the Protégé, RX-8, etc., has built its reputation.
Nissan has made its move based on its product releases, not because of its wonderful campaigns. Word of mouth, enthusiast reviews, etc., sell cars.
So GM needs merely to produce the best product in its segments and people will buy. Americans would love to buy domestic, but we're trained to believe that foreign is better made and a better investment.
Director of Interactive Services
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Identify a Salvageable Point of Difference
GM must identify a salvageable point of difference and use this to identify an ownable position vs. its competitive set. From here the company must deploy the talent and resources required to consistently deliver the new positioning to a relevant consumer segment in all touch points. This includes messaging, product, promotions and the dealership experience. Only then can GM expect to address its poor businesses performance and consumer perception.
Director of Marketing
Del Monte Foods
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GM Is an Apatosaurus
GM is an Apatosaurus, and the Jurassic is over. Time to pick the bones. Seriously, mega corps. like GM are run by accountants, for accountants and should outsource engineering and design of product to enthusiasts like the late DeLorean (well, somewhat like them).
D.E. Buck, Graphics
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Relocate GM to Southern California
GM does things too slowly and in a Detroit state-of-mind. They should relocate the whole company to Southern California and experience what the imports have learned.
Examples of GM's problems are the Buick LaCrosse, which is replacing the Regal and Century, two high-selling vehicles, as an '05 model, when it should have replaced the LeSabre in '03. The styling and performance are so-so and sales are terrible. Another example is the Malibu and Malibu Maxx, two absolutely ugly cars with limited appeal.
Other cases are the GTO, Aztec, Aveo and their poor versions of minivans with Montana, Ventura and Silhouette. And then there is the SSR, a $50,000+ oddity.
So what can be done? In the first place, nothing can be done quickly. GM is so entrenched in their myopic, Midwest thinking that it will take a fundamental change at many levels of executives to reverse sales and market share declines.
GM had the opportunity to take the lead in electric or hybrid technology as they had a huge head start with the EV1. They are now an also-ran in this area, which is the future of the automobile. Again, myopic Midwest thinking.
I hold out hope that they can make the necessary changes. Whether they ever return to the company they once were is to be seen.
The Drew Morgan Co.
Dana Point, Calif.
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Labor Costs Are Sinking GM
The only way GM is going to be able to compete with any of the imports is to take a look at their labor costs and supplier costs. They are unwilling to address the costs of production that drive up the costs of the cars. The unions are a thing of the past and are contributing to GM's inability to reduce costs of production. Its time to move their factories to other places in the country and hire no union workers in order to reduce overall production costs. This has worked for the imports and I don't understand why the Big Three haven't joined them.