Monday, December 11, 2006

The Challenge of Changing GM

David Welch

Even the most gung-ho General Motors executive will admit that one of the company’s most vexing problems is changing the image of its brands with many consumers, especially those on the coasts who swore off American cars of every stripe years ago. The tough part, says GM car czar Robert A. “Bob” Lutz, is that it can’t be done with simple marketing. In a recent interview, Lutz said that “there isn’t enough marketing money in the world to change the perception of some of our brands overnight.”

No doubt about that. So what will it take? At a media backgrounder last week, Lutz, his boss, Chairman and CEO Rick Wagoner and a handful of other GM brass, showed off a raft of future cars that they hope will get them some much-needed attention. The designs are good, very good in fact. GM swore all media and analysts to secrecy on the cars until they show them at auto shows coming up in the next few months. But it’s clear that design has taken a big step at GM. The cabins also are more posh, with richer materials and a more artistic layout gracing the cabins of the future cars. So long as GM's purchasing department doesn't replace the fine leather we saw with office-furnitire vinyl and deck out the dashboards in plastic from Mattel, the confines of tomorrow's Chevrolets will be pretty nice.

Lutz readily accepts that only good design—married with good quality and performance--will do the trick, and GM will need to do that with a few generations worth of cars. When asked how GM can erase its decades-old image for being stodgy, behind the times and second rate, he first jumped on his old hobby horse that the media doesn’t give GM a fair shake. When he was at Chrysler, Lutz said, it was easier because the company is smaller and one model could have a bigger impact on perception. Plus, the media always saw the smallest of the Big Three as the perennial underdog. Journalists had a soft spot for Chrysler and would cut the company some slack. Not so GM.

But he stopped short of blaming the press for GM's woes. What GM needs, he said, is “a seemingly endless barrage of highly successful and highly acclaimed products that will lead even the least-knowledgeable journalist to conclude that something is changing.” But he did admit that, “It’s a long process. It took us 30 years to get where we are. We lived off momentum and didn’t reinvest in the brands.”

Lutz's models offer some hope. Jim Hall, vice president of automotive research firm AutoPacific, called the cars, “another reason to feel good about GM.” There’s one problem, though. While many journalists left impressed with GM’s future models, they might have been equally impressed had they just taken a top-secret sojourn through the showrooms of tomorrow at Toyota, Honda or Nissan. But I’ll go out on a limb here. GM can get back in the game with these new cars. If they can get back into financial shape and come up with the cash to make a lot more of them, the company may even be able to steal a march on a few competitors.

Original Article..


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