Nearly everyone with a keyboard and opinion has weighed in on the chances for the newly bankrupted General Motors to emerge from its reorganization and prosper. And it’s all but impossible to read one of these opinion pieces without hearing the familiar saw of “building products that shoppers want to buy,” as if the old GM never launched a successful product.
Part of a successful strategy in running any company is financial control. If you don’t have the money to pay people and suppliers and your financial planning is inept, you’ll never succeed, let alone prosper. From that standpoint, GM seems to be more than staffed. Jelly Belly is the only company I can think of with more bean counters than the current General Motors. If CEO Fritz Henderson and CFO Ray Young ever get stuck with a financial issue, they have a deep bench of bankers, hedge fund managers, and assorted Ivy League MBAs that can churn out Excel spreadsheets till the cow’s eyes glaze over.
Then there’s that not unimportant product thing. You know, those I’ve-got-to-have-it vehicles that will bring customers stampeding back into new GM showrooms. Actually, GM is in decent shape on this front. Next week, I’ll drive a production version of Chevy’s new 2010 Equinox, a compact SUV that has been completely remade to go head to head with Toyota’s RAV4, Honda’s CR-V, Ford’s Escape, and Nissan’s new Rogue. When I gave this car a quick examination at GM’s design center last December, it looked like a real winner. It starts with class-leading fuel economy of 22 city / 32 highway and if it drives as good as it looks, Chevy should have a hit on its hands in a tough segment.
Chevy’s Malibu is competitive in the tough mid-size category, the Traverse continues to impress critics like Consumer Reports in the mid-size crossover crowd, and the new Camaro joins Corvette to add some spark to the bow-tie brand. Cadillac’s CTS may be one of the best kept secrets in the universe of luxury sedan buyers who are certain that only Europeans can produce a great driving machine while only Japanese automakers can offer consistent quality. And Buick has focused its lineup down to three models: the full-size Lucerne sedan, an all-new Lacrosse mid-size offering, and the Enclave crossover SUV.
So let’s assume that GM will have a gaggle of cars and trucks that includes very competitive offerings when it emerges from bankruptcy. And it’s assumed that the “new GM” will be armed with the finances and cost structures that level the playing field. What’s less clear is how the taxpayer’s $65 billion investment in this new enterprise will get repaid in a timely fashion, but that’s a subject for another commentary.
To become successful in a crowded, competitive market like North America when the global auto industry is rife with overproduction, GM will have to insure that every vehicle is supported with brilliant marketing. It doesn’t matter if the Equinox or CTS or Lacrosse is better than the competition if the intended buyer doesn’t put the vehicle on his or her shopping list.
When people ask me directly what kind of car, truck, or SUV they should consider, all too often they dismiss any recommendation that includes a domestic brand. Whether that bias is based on past experience, hearsay, or the perceived snob appeal of driving an “import,” it doesn’t matter. If you build a better mousetrap, you’ve got to get the mice engaged.
GM and its Detroit rivals are hardly ignorant about marketing that works overtime. Throughout its formative history, General Motors was so successful at wooing the American public to adore its cars that by the early 1960s Congress threatened to curb what was becoming an automotive monopoly.
That wasn’t GM’s only marketing success. In the 1990s, Saturn was launched and managed to build a franchise from scratch that was the envy of the industry. The new company developed a cult following in the style of Harley-Davidson with products that were hardly superior to its Japanese rivals. But the marketing was brilliant, led by Hal Riney and Partners, a San Francisco ad agency that helped develop a new sales environment and sold the concept with effective advertising. But when the “old” GM took its eye off Saturn, then folded it into the mothership and finally ended that creative advertising nonsense, the brand died of unnatural causes.
Now that doesn’t mean that Detroit ad agencies can’t get the job done. Campbell-Ewald, the Motown-based organization that bills itself as producing “industrial-strength creativity,” has been Chevrolet’s agency of record for as long as most of us can remember. But in 1991 the venerable firm nearly lost that business. Just as the grim reaper was at CE’s doorstep, creative chief Donald Gould heard Bob Seger’s “Like a Rock” ballad and talked the country star into letting Gould’s agency use it for a Chevy truck commercial. They still have the Chevy business.
There are lots of examples of brilliant new products that help turn around companies. But in today’s hyper-competitive automotive landscape, the next amazing new thing is right around the corner. Not many years ago, people laughed when Hyundai sat down to play. This year, Hyundai’s Genesis sedan won the North American Car of the Year award.
But there are far fewer brilliant, risk-taking marketing executions that win new customers. MINI Cooper is clearly one example where every part of the communication strategy, from TV ads to the owner’s manual, exudes the fun of the brand. Meanwhile, people visit Apple’s website just to see their newest commercials. How often do you suppose surfers direct their browsers to locate the average car company ad?
So here’s what GM needs to do right now. Get in a crisis mode. Clearly your employees must be worried about their future. Put the best marketing minds you can find to the task of reinventing that crucial part of your business and don’t second-guess the result, even if you make a misstep or two. And make every incumbent ad agency compete with new creative hot shots for the business.