Old GM Threatening New GM?

On Friday, GM, something of a branding basket case in recent times, surprised every­one by coming out of bank­ruptcy protection after only 40 days.

Even President Obama, who invested $50bn and much of his own political capital in the ailing automotive giant, expected GM to take up to 90 days to get its house in order.

GM's new chief executive, Fritz Henderson, was keen to recognise the ‘intensity, decisiveness and speed' that enabled the new firm, now known as the General Motors Company, to exit bankruptcy in record time. He then laid out his plan to revitalise it.

Henderson's presentation was professional, and the journalists in the room lapped it up. However, to me it seemed that the stark reality of Friday's session was that the new GM could expire, too, as a result of the same brand ineptitude that destroyed it the first time around.

Let's start with the 40-day bankruptcy. GM might be proud of coming out early, but, in my opinion, it's a stupid move. If I know anything about brand revitalisation, it is that it takes time to work out what's wrong and develop a plan to fix things. Once you press the green button marked ‘The turnaround begins', as GM did on Friday, things move frighteningly fast.

Great executives always engineer as much time as possible to assess and strategise before they get on the stage and announce their strategy. Clearly, bankruptcy is a black mark against GM, but once the stain is on a brand, it should make the most of the time to develop a strategy that can work. Forty days is not enough.

This is why I think Henderson's decisions on branding are so wrong.

On Friday, he confirmed that the new GM would consist of four key brands: Chevrolet, GMC, Cadillac and Buick. There was no mention of the brand equity, tracking or market segments that should have guided his branding decisions. That's because 40 days is not enough time to do the research and analysis to get all this done. As a result, Henderson has picked too many brands, and GM is unlikely to be able to market them effectively.

Look at his competition. Ford is focused on a single brand these days. Toyota and Honda are similar. The four brands Henderson has picked are not distinct from each other. Watch carefully as he splits his marketing budget into quarters and then competes with himself.

While we are on the topic, I wonder why he is keeping the GM brand. In the past year, the corporate brand has added further associations of inefficiency and US malaise. Did Henderson even consider a strategy in which his surviving vehicle brands could stand alone and be unencumbered by the negative equity of the parent brand?

I don't think the idea occurred to him. Henderson is a GM lifer, and while he might talk about a fresh approach, his strategy could be seen as evidence that GM is not ready for a fresh start.

He has also hand-picked a brand expert to sort out the marketing and branding malaise that destroyed the old GM. The new blood in question is 77-year-old Bob Lutz, the former GM marketer who was about to retire after a career at Ford, Chrysler and GM. Henderson obviously felt Lutz was a better choice than a P&G or Apple marketer. Was this the right choice?

I hope I am wrong about the road ahead for GM, but it might be time to accept that some companies deserve to die. Watch this space. We'll know one way or another very soon.

Courtesy of Marketing Magazine

Sponsored By: The Brand Positioning Workshop

Comments

[Alan Brew]

Are you serious about picking a P&G marketer after Ron Zarella's unfortunate tenure at GM? Zarella’s love of brand management, urged on by ex-P&G directors on GM's board at the time, left many customers wondering “just what is the brand?”. His "consumer product" marketing strategy was the last nail in the coffin for Oldsmobile. It was Bob Lutz's job to clean up the mess after Zarella left. As for an Apple marketer, there's only one that matters and Steve Jobs has his hands full.
Don't be such a brand groupie. Think for a change. In 40 days Fritz Henderson has got it just about right. Give him a break, and give GM a break.

[mark ritson]

Alan, fair comments, but you cannot seriously believe that Bob Lutz is the future for GM? I hate to be a "brand groupie" but it was a complete lack of knowledge of branding that got GM into this fix in the first place.

Zarella may not have worked out, but that's the only proper marketer they have tried. Surely the answer - at least for marketing, and perhaps for leadership - lay outside the old GM box.

Look at Ford, they get it. External guy. Radical approach. I am really really hoping I am wrong - but this is a rushed, botched job and GM needed better people, more time and a much more radical approach to get out of jail. China is their only hope now.

[Scott White]

I think you're all missing something big here. It doesn't matter who the "CEO" is because Mr. Obama is the CMO. GM will do whatever the government tells it to do, they have no choice. They're going to make small, crappy "green" cars that no one wants to buy. They'll probably ruin the few remaining products customers want to buy like the Corvette. Watch how they "green" up the Vette, argh.

GM is dead, like death. I for one won't even consider a government run company because the government can't even run themselves never mind a major auto maker.

Rant over.

[Ernst]

GM already got their break -- they don't deserve another one.

I agree with Mark; their branding solutions appear completely un-inspired and appear more of the same. More of the same is not what GM needs.

But this certainly isn't a surprise; as soon as Fritz Henderson was appointed CEO one could already predict that these types of "solutions" would be forthcoming.

There's a saying along the lines; trying the same thing (with the same people) and expecting a different result is a sign of madness. In GM's case, it's a sign of madenning ineptitude.

Ernst

[Manfred]

Although I too question some of GMs decisions, I need to correct you on competitive branding, specifically your comments about Ford, Toyota, and Honda:

- Ford has Ford, Lincoln, and Mercury
- Toyota has Toyota, Scion, and Lexus
- Honda has Honda and Acura

They also are not "single brand" focused.

[AVarella]

China?
And what do you think about Brazilian operation?
(Considering the flex fuel technology, market size, etc.)

[Ernst]

Yep, looks like GM have their ducks in a row.

On Monday, Bob Lutz says the the Pontiac G8 would be re-badged a Caprice. On Tuesday the CEO, Fritz Henderson, says that's unlikely to happen. On Wednesday, Bob Lutz says although the G8 is a wonderful call it probably won't be re-badged and will instead be discontinued.

Maybe they should have waited a few more weeks before exiting bankruptcy.

[Derrick Daye]

We have a brand consulting offer for GM:

http://www.brandingstrategyinsider.com/2009/07/a-brand-consulting-offer-for-gm.html

Derrick