News flash! Automotive News [AN sub] finally talks to someone on the record! And it’s no less a personage than GM Marketing Maven Mark LaNeve, the man in charge of managing The General’s declining ad budget. To celebrate the occasion, AN’s crack reporters resort to the lazy journalist’s best friend: Q & A. The resulting edit begins with the usual “these grapes are not sour, there must be something wrong with your taste buds” waffle. LaNeve would have us believe that the new media is so wicked cool GM doesn’t really need to spend as much money as it did before the last of the corporate cash pile went up the chimney. “When a lot of the digital technology was new, all marketers were learning. As you learn, you get more efficient and you spend less money to get the same results, the same impact, the same reach in the marketplace. That is why I am comfortable with some of the cuts we are making. We are a whole lot better at search, at digital, at working with our third-party partners like Edmunds.com and The Truth About Cars.” Just kidding. About TTAC. Anyway, AN raises the spectre of GM’s octo-brand stretch. Pah! “We prioritize the launches. The key launches are the Chevrolet Traverse, Camaro and Equinox. Cadillac has the CTS wagon, CTS-V series and CTS coupe on the horizon. And the Buick LaCrosse and GMC Terrain are two big launches.” THOSE are GM’s priorities? My children’s children’s children’s tax money is so dead. More revelations after the jump.
Needless to say (but what the Hell) LaNeve trots-out the Curley defense to explain his whithering company/budget/salary. “The decline is now over a three-year period. It really started with Hurricane Katrina. The industry stopped growing and started declining. That has put a lot of pressure on dealer profitability in the whole industry.” So.. what to do? What to do? “We are going to be moving into the Red Tag year-end event, probably starting in early November. Normally we would start mid-November. Next year, depending on how the market shapes up, you will see a pretty strong tactical focus. We will be leveraging incentive offers, combined with a fuel message or a quality message.” Yeah, two messages for eight brands. That sounds like a pretty strong tactical focus to me. But then I think attacking Russia was one of Hitler’s better military ideas. Oh hang on; what if GM merges with Chrysler? Do all eleven brands get the same two messages? Doesn’t seem fair, somehow.
Dear Mark,
Perhaps GM’s greatest failings, if you believe Bob Lutz, is that it is actually are making desirable cars, but that no one seems to know, want or care. If you believe GM’s detractors, it’s that the company completely fails at product planning, choosing exactly the wrong vehicle for the wrong market, no matter how good the engineering might be.
And guess what Mark, both convincing people to buy the vehicles you do make, as well as deciding which vehicles to make in the first place, are functions of Marketing and Product Planning. Or, to put it another way, the division you–and I say this lightly–lead.
Yup, blame Lutz, blame Wagoner for sure, because ultimately the buck stops there, but the operational failings of GM are squarely on your shoulders. I don’t know if you’re unwilling or unable to do better yourself, or clue Rick Wagoner into the fact that better is what needs to be done, but this is your job and you’re failing miserably at it.
And now you don’t have the truck cash storm to bail out your track record any more.
Signed,
-Someone who likes GM, but is sick of the perfect shitstorm that is it’s North American marketing.
It’s a strange analogy, Germany’s attack on the Soviet Union (not Russia) in WWII and GM’s latest sale.
But there are actually some strong similarities. In both cases, these actions are the logical result of moving down a path that looked good at first, but came to ultimately led to defeat.
Obviously, WWII went very well for Nazi Germany the first couple of years, having resulted in victories across Europe extending to North Africa. But so long as the UK retained its naval superiority and remained in the fight, Europe was effectively blockaded. And without natural resourses – oil being critical — Germany’s economy and war effort were choking. And so, the logical next step was an attack on the Soviets and their control of oil in the Southern Caucasus.
Similarly, just after 9/11, GM had a choice — reduce production and accept that the market was smaller, or “get America moving” with big sales. The problem for GM was two-fold: (1) Ford and Chrysler had to match, blunting the competitive edge of the sale and (2) GM didn’t steal revenues from Toyota and Honda. Instead they stole their own future revenues, by pulling sales forward.
Worse, GM stole future sales they would have made at normal prices (i.e. $3K on the hood, rather than the $5K on the hood which has become their norm). And so, here we are today, GM is much weaker than it was 7 years ago, and now despite having trimmed production repeatedly, must continue to put cash on the hood to sell vehicles.
They are burning furniture for firewood.
A page from “Return to Greatness” (2005)
These twenty illustrations from The Plan are an indication of the kinds of marketing that will lead to a rebound in GM’s sales. As you can see, there would be hardly any expense involved, and in fact, many of the ideas would actually serve to reduce costs. GM needs to get off of the fire sale, deal of the day, mentality. The full page, distress ads currently being run only harm image, and create a sense of desperation. GM needs to let it go, and save the dough. We spend tens of millions of dollars unnecessarily, including huge amounts for useless spokesmen, who bring nothing to the table. Additional steps in The Plan include things like further doing away with rebates. If there is a problem with day’s supply, don’t increase the rebate. Instead, add a point, or two, to the residual value and have the image of a good car with a great lease, as opposed to a slow mover with a big rebate. GM needs to wake up and realize, as the book says, “Your Marketing Sucks”. GM worries about health care costs and pension benefits, yet wastes untold millions in the name of marketing. To quote my friend Jerry Flint, senior automotive writer at Forbes magazine, “It’s not that the leaders of GM are bad people, they’re not. They just don’t understand the American car business”. He further states, “This business really isn’t all that difficult, all it takes is a good car, and someone to sell it”. This excerpt from The Plan A Return to Greatness shows that this someone does exist. Articles about my achievements and ideas have been showcased in major publications such as The Detroit News and Automotive News. However, there is nothing better than a first hand look at specific examples and detailed explanations.
GeneralWatch News
Market Capitalization
May 2000 $66 Billion
May 2001 $48 Billion
May 2004 $25 Billion
May 2005 $15 Billion
Under the leadership of G. Richard Wagoner (Executive Vice President and President North American Operations 1994, President and Chief Operating Officer 1998, Chief Executive Officer 2000, and Chairman 2003) General Motors has closed, sold, or spun off:
Oldsmobile Hughes
Delphi Detroit Diesel
Defense Electronics Light Armored Vehicles
American Axle Electromotive
EDS and more!
In replacement we have:
Saab Disastrous Marketing
Daewoo Record Recalls
Shanghai (may work) Huge Long Term Debt
No Innovative Buicks Diminished Profits
FIAT FIASCO JUNK BONDS
In Japan, they fall on their sword for any of these failures individually. When added together, the real question appears. Who is RESPONSIBLE? Hardly anyone questions the BOARD, even with over 75% of the company’s value GONE in five years. The answer is The Plan, which calls for virtually no investment, and will, in fact, serve to significantly reduce expenses.
LaNeve wants the kind of gold plated government bailout plan that will pay for his hair transplants.
We prioritize the launches.
Oh yes, you do. You’re a master of “How to f_ck a good car up by releasing a competitor just in time to hamstring both products.”
To whit: the Saturn Aura. Not a bad car, but just as it’s getting traction, you shift gears and manage to not just short-change Saturn, but fudge the Malibu as well by not having enough product and/or marketing support. And then there’s the Acadia/Outlook/Traverse.
My favourites, though, are the twin sparks of genius that are the Escalade Hybrid and Saab 9-5. On one hand, you have the answer to the vehicular quesiotn that no one asked; were you to draw a venn diagram of it’s markets (hybrid buyers, bling fiends), you’d see no intersection. With the Saab, you have a car that’s dying for hybrid platform–or heck, any platform, as it’s been twelve years–but soldiers on with the bones of the Saturn L-Series powered by a Saab engine that predates Clinton’s presidency.
Way to go planning product there, Mark. Any other brainstorms in the pipe? How about a hybrid Hummer H2? Or a Buick-badged Aveo? Or a Corvette powered by an unblown Ecotec 2.2L?
GM harps about their quality being so good, but no one knows it. Well put your money where your mouth is. Offer the best, no BS, warranty in the business. If they are as great as you say, then this should not be an issue.
I went to test drive a G8 GT this weekend, and the salesman who was ‘helping’ me was getting yelled at and berated by the sales manager. The salesman was trying to park one of the cars that we got done driving, and the manager is berating him right in front of me. The manager seemed to believe the salesman wasn’t watching where he was going, but he seemed fine to me.
This is the 2nd experience I’ve had at a GM dealer (ever), and I understand why so many potential customers will never darken a GM door again. Who the hell would want to buy a car from a place like that?
RF:
Needless to say (but what the Hell) LaNeve trots-out the Curley defense to explain his whithering company/budget/salary. “The decline is now over a three-year period. It really started with Hurricane Katrina. The industry stopped growing and started declining.
Hurricane Katrina!
What’s he been smoking? And when did they stop drug testing upper management there?
Marketing people are the worst sort of human being you can encounter. All the prestige of a ‘business degree’ *snort* with nothing resembling work or intellectual rigor! Get your marketing degree today! ($19.95 + S&H)*
Prejudice aside, GM is doomed to the 6th circle of corporate hell – never allowed to declare the C11 they need to become ‘their own company’ again – they’ll just end up receiving taxpayer funds until the sun goes dark like AmTrak.
* Other fees may apply. No we won’t tell you what they are now.
Wow. So LaNeve actually said “The decline is now over a three-year period. It really started with Hurricane Katrina. The industry stopped growing and started declining. That has put a lot of pressure on dealer profitability in the whole industry.”?
He’s blaming it on Katrina? I wonder when they stopped doing drug testing on their managers?
yankinwaoz :
GM harps about their quality being so good, but no one knows it. Well put your money where your mouth is. Offer the best, no BS, warranty in the business. If they are as great as you say, then this should not be an issue.
They could offer a little bag of gold to the customer for each time he/she has to bring the car in for warranty work, but it won’t matter.
That’s because in my experience, they find every way possible to avoid actually DOING warranty work. After all, it’s the customer’s fault. Or that part is not covered. Or the ever-famous “it’s working as designed.”
The Camaro is a key launch because…?
Presumably a) because the damn car has been around so long that not to launch is too much of an embarassment (GM, sunk costs, look that up) or b) there’s not harm in investing time and money in a little bit of rah-rah nonsense when you are on the verge of going belly up.
BTW if they merge with Chrysler, will they discontinue the already in production Challenger to ‘make room’ for the Camaro, or will they actually sell them concurrently?
GM could cut their marketing by 90%, and it would only help. Better yet, cut it 99%. All they need is the bare minimum to make people aware of their existance. All the hype doesn’t do them any good. No one believes the marketing BS anyway.