Charles D Agostino :
IF I WAS PUT IN CHARGE OF GM
Charles D Agostino :
Just suppose you were handed the top job at General Motors; to come in and fix things up in the American market. How would you do it? Where would you start?
First off what do I have? A huge empire with some of the best engineers at my disposal making cars for five divisions and light trucks for three all competing against foreign rivals that do it cheaper and with higher quality. On top of this I have an aging labor force dogged with union concessions and a staggering health care bill. So where do I start?
Product is what it ultimately boils down to and where my heart is, so this is where I would start. It doesn’t make sense to be spending money on the engineering and marketing of five car divisions while Honda and Toyota get by with just 2 (2.5 for Toyota if you count Scion). Once, in the glory days of Alfred Sloan and 50+% market share it made sense; no more. Getting rid of Oldsmobile was a tough decision but the right one; time for more of that. So who gets the axe?
Phase I, Part 1 “Say goodbye to the Past”
So what to do? Should we even keep any of the divisions or just call the car simply a GM. A GM Impala, a GM Grand Prix etc.; you get the point. This seems just to downright radical. Plus, we still need a luxury division (think Toytoa and Lexus). That said Cadillac should stay, get better, but stay. So now it’s down to Buick, Chevy, Pontiac and Saturn (later).
Buick, kindly referred to as the Geritol division its well known just which demographic shops here. Toyota picks up their fair share of the older folk without giving them their own division so why can’t I? There is no reason would be Buick buyers couldn’t buy a different GM product. Add to this the fact that the older folk are obviously getting older and aging out of the market the decision is clear: I would nix Buick.
Now it’s down to Pontiac and Chevrolet. Chevrolet once touted as the heartbeat of America should be just that. It should be the Toyota or Honda of G! M. It sh ould make high quality affordable cars people want to buy. This is job one. This is where I need to put all of my resources and best people. Chevrolet needs to become competitive ASAP or there will cease to be a GM as we know it. Chevrolet has got to come around; it must stay. And yes, I would bring back the Camaro.
Pontiac’s role, on the other hand, is less clear. The marketing guys have tried to brand it the performance division with quasi GT models and the “wide track.” Aside from the GTO nothing else in the division even remotely gets my pulse up (even it has a Chevrolet engine). Like Buick, I can find nothing distinctive enough to keep a would be Pontiac buyer out of a Chevrolet or other GM product. Pontiac must go.
Phase I, Part 2 “Image Rebuilding”
As I said Chevy will need to make some kick ass cars but for GM as a whole it needs a new image. We need to find a way to accentuate GM’s strong points, make it an exciting player on the big stage again. It’s amazing to me that the same company that gave us the Chevette (who ever let any part of the Corvette name get stamped on that car?) could turn out the Corvette. Furthermore, if I were to buy a Corvette I would not look forward to having to go to a Chevy dealer to buy it and worse, to have it serviced. There has been talk recently of making Corvette itself a division; I’ll classify that as a maybe only because I would hate like hell to hurt the Corvette in any way.
So I propose this: select dealers in each market become GM Performance Dealers (we can name them later). Imagine GM’s own M-division or AMG. I envision small specialty dealers that offer an experience much like that of Lexus or BMW. Customers are given VIP treatment; just what someone who buys a specialty car expects. They most certainly do not want to sit on grease stained vinyl couches alongside common folk arguing about the cost to! repair their rusted out Citation. The showrooms can be places to display specialized GM performance upgrades and! product s along with the cars. Obviously I would move Corvette sales here along with the Cadillac type V products, the GTO and maybe the Chevrolet SS models if they can be brought up to snuff. I would look carefully at other products in the U.S. and international markets that would make sense also. More Holden products? In short, one stop shopping for any performance vehicle GM makes. The emphasis would be on world class performance at each level; just what the Corvette is in its circle. GM can do this, they have the resources already in place. Now, picture a college student stopping by to purchase an entry-level performance vehicle and returning when he is an established professional for a Corvette or a performance sedan like the CTS V. Dealers would also install, sell and stand behind a wide array of performance upgrades, parts and custom add-ons. How about displaying and selling GM crate motors and NASCAR stuff too? We must play and win at the image and excitement game.
As for Saturn, maybe, just maybe we can change what exactly a Saturn is. That said, I would evolve Saturn into the “Green Division,” the “Apple Computer” of GM. We can build/modify the funky Avante Guarde image it already has. Under the Saturn moniker I would market hybrids, fuel cell vehicles, and TDI diesels like in VW’s line up. Each Saturn would be distinctive. The Saturn division would be the place to field environmentally conscious technology and to share resources with appropriate suppliers. I would market Saturn heavily in the areas that are traditionally more environmentally sensitive like New England and California. Hell I might even dust off the electric car we made in the early nineties and put a few of them out there to see what happens. The R & D is already paid for. Perhaps we could use this plastic body thing to our advantage too. How about making them out of recycled plastics or some other some other cutting edge environmentally friendly material.
Phase II “Light Trucks”
Next, what to do ab! out the whole GMC vs. Chevrolet truck thing? And do we let Cadillac keep selling trucks? Geez, how did we get into this mess? I must admit this is really a tough decision seeing as trucks are still profitable. I do see that changing though with rising gas prices and the onslaught of better foreign products. Again, we need to consolidate. Since I firmly believe Chevrolet needs to concentrate on the fat part of the car market I would evolve their offerings. Under phase II I’d probably let them keep SUV’s and ½ ton pick-ups but that’s all and I’m not sure for how long. GMC would become the truck division building on its perceived higher quality and more upscale offerings. Hummer can stay but must offer only the highest of quality and best in class performance; no more underpowered rebadged Chevy’s. How about adding something as exciting as a Jeep Wrangler but better? The Escalade? I guess I would keep it for now.
Phase III under development
As for the health care, union wages and Saab; I’ll address that when I compose phase III if I’m still around.
In the end, I firmly believe that if GM doesn’t make changes like those I’ve spelled out it will ultimately be broken up with the good being sold off to the likes of Toyota and Honda; the bad closed down. While that would erase the health care and wage issues I would hate like hell to see that happen. We all benefit from a market place filled with a variety of high quality offerings.
So that’s what I would do if I was put in charge of General Motors.