Is TTAC’s influence spreading like butter on toast? David Welch of Business Week seems terribly underwhelmed by GM’s “Facts and Fiction” website. He believes that, in theory, it’s a good idea. In practice, he gives GM a right, royal kicking. “But the site itself is mostly unconvincing.” he writes, “In one entry, GM scoffs at the notion that the company ‘still doesn’t make cars that people want to buy’. As proof, GM cites that sales for cars like the Chevy Cobalt are up 10% this year. Malibu sales are up 32%. Yawn. Most of the company’s new vehicles have won praise from the motoring press. Why not refer to a good review in, say, Car and Driver?” Ouch! But wait, there’s more! He then questions GM’s version of events, ass-kicking style. In the “GM didn’t anticipate the shift towards fuel efficient vehicles” section, he points out that while the Saturn Aura and Chevrolet Malibu are good cars, they came to market AFTER the fuel jumps. “When GM got in trouble in 2005, it spent extra money to rush its large SUV’s to market, not its cars.” Even Toyota get an honourable mention, “And the company didn’t make a push to get advanced hybrids to showrooms until it had lost the technology image game to Toyota. That’s reaction, not anticipating.” His pièce de résistance: GM’s so-called evidence to support their claims. “There are five of them (websites and blogs) and all come from the company’s PR staff.” It’ll be interesting to see Bob Lutz’s reaction to all of this. “Business Week? It’s a crock of shit!”
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As many of us had previously posted, if that website represents the best GM’s marketing department can produce, they are dead meat, even if the products all become desirable. One caveat, though. Since the new truck/suv line was so far into development in 05, it really did make sense to rush it to market when they did. They managed to pick up a lot of sales that they would not have had if they waited a year later, as gas by then was firmly in the minds of most consumers. If they would only have such foresight when it comes to competitive small cars…
On the surface the Business Week writer may be correct, but the auto industry is different than other businesses.
I think a lot of people forget about the length of development time on new cars (there is a reason why there will be so many new cars in 2010).
It is the main reason that most of the car makers were opposed to CAFE (yes even Toyota), not because of the final number they had to achieve, but the rate at which they had to achieve it (basically it meant that all the money that had already been spent on current development was lost because they had to shift priorities).
David Welch is too kind.
I just can’t see how insulting the intelligence of the customer is going to win sales. Isn’t making sales what the marketing department is supposed to do? Maybe they’ve switched totally over to securing government backed funding now…
Note to GM: You will not change your customer’s reality by telling them their perception is wrong. You have to be slightly more clever than that.
GM public relations plays fast and loose with the truth?!?! I’m shocked! SHOCKED I say!
TTAC influence is indeed spreading light years faster than the outbreak of democracy in the middle east and so is the sentiment of ‘nay’ on domestic 2.8 bailout crock-o-shiat. Heard this on NPR yesterday morning by Cato Institute commentator Will Wilkinson:
http://marketplace.publicradio.org/display/web/2008/09/10/wilkinson/
Cato will always oppose bailouts. They support free-market capitalism, not socialism. That NPR ran it is just another way for them to stick it to domestic American industry, which they have opposed for years.
SkiD666 : On the surface the Business Week writer may be correct, but the auto industry is different than other businesses.I think a lot of people forget about the length of development time on new cars (there is a reason why there will be so many new cars in 2010).
Product lead times are irrelevant. The writing on the wall has been painfully visible for decades. Take this excerpt from today’s editorial:
———————-
“In 1993, the government created The Project For A New Generation Of Vehicles (PNGV) to help Detroit build 80 mpg sedans for everyone. Eight years and over a billion bucks later, Ford, GM and Chrysler had each built one “working prototype,” capable of 72 mpg or better.”
Even the Lutz-lovahs (and GM strokers) at CNBC think Facts and Fiction “only goes so far.”
You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. – Abraham Lincoln
The web site is a solid indication of the #1 problem with the U.S. Auto industry which is their attitude towards their customers. Based on what the website infers customers are the problem not GM. Customers cant recognize a quality product, and are misled by devious furriners and journalists. So if customers don’t buy GM products the answer lays with providing them with a re-education. We all know GM makes top notch cars that get high gas mileage that are well built and reliable.
I cant believe I just said that!
Adub:
“That NPR ran it is just another way for them to stick it to domestic American industry, which they have opposed for years.”
Being that I and most other NPR listeners I know just happen to do most of our NPR-listening from the driver’s seat, I find that sorta hard to believe.
On top of that, our local stations (and a whole host of others) have been carrying that “Car Talk” show for years. Click and Clack got some love for ‘Murican autos, I’d think.
Heard this on NPR yesterday morning by Cato Institute commentator Will Wilkinson:…
Cato thinks that everything and anything can be solved through the free market, as long as the market wants it. While I steadfastly oppose a D3 bailout (and Bear), do you really think today’s cars would be as safe and clean as they are if it was up to the market to decide? Picture deciding on the interior upgrade or a “clean air” package at the local dealer. Pretty easy to see what would happen there. The historical record is remarkably clear: things that are in the best interest for society as a whole are often not well served by pure market forces. Hence the system we have in place today. The political arena, as flawed as it may be, serves to fill the void that would be left by self serving interests. It is also interesting to note that such “meddling” in the market can change perception to the point where the regulation itself becomes moot. Think safety equipment here. Even if you relaxed regulations, do you think airbags would disappear? We’ve come a long way since passive restraints became Lee Iacocca’s marketing tool…
golden2husky: While I steadfastly oppose a D3 bailout (and Bear), do you really think today’s cars would be as safe and clean as they are if it was up to the market to decide?
Clean? Maybe. Safe? Absolutely. The death rate per 100 million miles driven had been declining since the 1920s, so cars were obviously becomnig safer even in the 1950s and 1960s, despite Mr. Nader’s contentions (although better roads helped, too).
Competitive pressures from the Japanese, Germans and Swedes forced Detroit to use safety as a marketing tool. Iacocca initially put airbags in Chrysler products because he needed a way to distinguish Chrysler products from the GM, Ford and Japanese competition.
And let’s not forget two of the dumbest and most deservedly ignored laws of all time – the 55 mph and 65 mph national speed limits. I hope that no one is going to defend them as “good” and “effective” examples of government regulation…
geeber, safety via marketing is not the same thing as safety via standards. There’s still people who think Volvos are safer than anything else out there, thanks to that marketing.
M1EK, there is no proof that cars were not becoming safer even before Nader’s book, just as there is no proof that the adoption of safety advancements through market forces will not result in safer cars.
You seem to think that safety marketing merely refers to advertising claims, and this is not necessarily the case, even in the 1950s and early 1960s, as Ford, Mercedes and Volvo all included real safety features in their cars, however primitive they may seem to us today in 2008.
geeber, we have plenty of contrary proof to fundamentalist libertarianism – granted, not as much with automobiles since their mass production postdated larger government, but certainly the prevalence of medicines that would do nothing good and in many cases kill you in that pre-regulation “golden age” isn’t such a great sign.
M1EK you are changing the argument. You initially tried to say that allowing the market to drive the adoption of safety standards would result in little more than advertising hype, completely ignoring that car makers – Ford, Mercedes, Volvo – DID adopt REAL safety features prior to the advent of Nader’s books and the resulting federal regulation. And it was a desire to have a marketing difference from the Japanese and domestic competitors that led Chrysler to install airbags on its cars in the late 1980s.
Then you condemn “fundamentalist libertarianism” without addressing the original example, and proceed to compare apples to oranges by bringing up a completely different product sold during a different era.
Sorry, but no dice.
Banger- I don’t know about that. Every time I hear Tom and Ray recommend a car it’s a Honda or a Subaru.
GM Facts and Fiction is a horrible website, and add in my personal distain for what I like to call “Myth:Truth” advertising in general, and we’re in territory I’m sure to hate!
I’m just expecting something something like this to pop up one day:
“MYTH: GM’s stock price has hit a low not seen 1954.
FACT: Though GM’s stock prices no longer command the premiums they once did, GM stock is still desirable and is in no way an indication of GM’s overall health. Though long-term numbers suggest an overall decline, please note the other day our stock jumped a whopping .4 percent! Also, the Cadillac CTS won Motor Trend’s presigious Car of the Year award.”
GM replaced the GEO METRO with the AVEO. Now the parameters are simple, customer that needs a cheap car. GEO METRO cheap to buy cheap to drive between 48 and 55 miles to gallon my experience, lasts about 150,000 miles.
Now here comes GM. GM knows it did something wrong with the METRO it got 48 to 55 miles to the gallon, was cheap to buy and lasted trouble free about 150,000 miles. Now this defines a cheap car.
AVEO not cheap to buy, gets 24 mpg (CHEVY IMPALA gets about the same) and is unreliable.
The sales folks are taught to tell you. Buy the bigger car the gas mileage is about the same. This was a willful act by GM.
golden2husky: While I steadfastly oppose a D3 bailout (and Bear), do you really think today’s cars would be as safe and clean as they are if it was up to the market to decide?
Clean? Maybe. Safe? Absolutely. The death rate per 100 million miles driven had been declining since the 1920s, so cars were obviously becomnig safer even in the 1950s and 1960s, despite Mr. Nader’s contentions (although better roads helped, too).
Competitive pressures from the Japanese, Germans and Swedes forced Detroit to use safety as a marketing tool. Iacocca initially put airbags in Chrysler products because he needed a way to distinguish Chrysler products from the GM, Ford and Japanese competition.…
Safety as a marketing tool because of competitive pressure from Japan? I recall Detroit using poor crash data on some Japanese cars as a reason to buy their products. Iacocca put airbags in cars in response to safety regulations mandating passive restraints. All average priced cars at the time had motorized belts or door belts – two methods despised by the car buying public. By going to bags across the board, he was offering a better way to meet the regs. All other makers were forced to follow suit. This put safety into the minds of consumers. The market took care of the rest, once the initial regulations “primed the pump”. I do not advocate pushing regulations just for the sake of it; I just think sometimes there really is no other way. The speed limit law you mentioned is a classic case of improper application of government mandate. But there was lots money to made in those fines…
GM reacting and not anticipating has a long history at the company. It worked well in the old days when things moved at a much slower pace.
Frequently in the past when GM had much larger market share an innovative change or model would come out and flop. GM avoided a lot of mistakes then by being slow and the competition would suffer as its innovations failed.
Recent examples of reacting to the market are the HHR and the Hummer. These were reactions to Chrysler’s success with the PT Cruiser and Jeep. And the new Camaro is a reaction to Ford’s success with its Mustang.
But as GM’s market share has dwindled and its finances have deteriorated, the strategy has become a millstone that may drown GM as the delay causes ever larger loss of market share. The 10 year late Volt, if it shows up, will have to compete with a well established Prius and Honda’s new Prius fighting Insight.
Car technology, car power sources and market innovation are changing so fast that GM’s old strategy that served it so well in the past is killing the company. It’s inability to anticipate energy, technology and market changes are condemning the company to a weak future and maybe even death.
davey49
“I don’t know about that. Every time I hear Tom and Ray recommend a car it’s a Honda or a Subaru.”
I’m not a regular listener (they run at mid-day Saturdays around here), but come to think of it, I do remember them recommending a Subaru to someone not too long ago.
But on the whole, I do not subscribe to the “us vs. them” paranoia that so many people have with the media nowadays. Especially not the taxpayer-funded media, a’la NPR and PBS. I can’t imagine what NPR would gain from a failure of the domestic auto industry. Or a failure of Subaru, for that matter. It’s not like they’re getting advertising dollars from the local Honda dealer (unlike most of our for-profit FM stations around here).
Come to think of it, aren’t the domestics some of the biggest contributors to all those “foundations” that you hear in the “This NPR programming made possible by a grant from…” segments?
GM has every right to aggressively defend itself on that site, regardless of who authors its content.
After all, what is GM “guilty” of? Of not having an absurd 2000 lb. Smart-car deathtrap to sell? Of not having an expensive hybrid to sell? Of not filling its lots with silly Fit-sized econo-junkboxes? Who cares?
GM couldn’t have predicted high gas prices. But now that gas is pricier than Evian, GM has taken many proactive steps to be state of the art…and they’ve done it in only a few years.
Its body-on-frame SUVs have been vanquished. Its crossover is king. The Malibu is beating Accord in customer reviews. The Cobalt isn’t quite the equal of Civic, but at least you can find one to buy! And if you think GM is biased towards trucks, remember that GM does offer a more compact truck alternative: the Colorado. But no one’s buying it. Is that GM’s fault??
But that’s what it’s all about. Giving the customer a quality car at a good price. No dealer markups. No “limited supply.” No arrogance. GM is good.
golden2husky,
Ford, Mercedes and Volvo were all pushing safety before government regulations were in effect. And the death rate per 100 million vehicle miles driven had been falling since the 1920s. As I said, part of that was better roads (elimination of dangerous curves, wider lanes, etc.) and traffic control (traffic signals at intersections), but one can only conclude that during this time, cars were becoming safer, too.
I don’t disagree that safety progress was being made prior to being mandated, but I believe that a good chunk of that came from the natural progression toward better materials and improved design. A good example would be tires and suspension design. Ford tried to sell safety (remember the egg drop on the dash?) Ford’s conclusion was that safety does not sell. Volvo did make it sell, but the total numbers Volvo moved would have been a bad week in Detroit’s heyday. Bottom line in my opinion is that by pushing safety regulations, car safety improved much faster than it would have otherwise. When the higher standards were not required on trucks, they did not get them. When standards were relaxed on the 5 mph bumpers to a lower 2.5 mph, Chrysler, Honda, GM and others jumped right in.