Sunday, April 26, 2009

Pontiac, the mark of Dead Car

GM is about to give Pontiac the axe. What comes to mind when you think of Pontiac? Youthful, Wide-Track, ... Sporty -- Dead?

The Pontiac brand has been targeted by GM management. It's likely going to be gone soon.

First a disclaimer: Paul Ferris isn't a fan of GM products -- I do think that new Camaro is smokin' hot though, and I'm a big fan of the Corvette -- though I'm not likely to own one simply because of the impracticality of a 2 seater in my life. Fact is that if there is anything I'm not it's a car snob. Cars are expensive. I have things I'd rather have my money doing than soaking up the remains of a BMW or some other brand of vehicle. If I want to have fun, a decent Toyota, Ford or Honda is probably going to fit the bill. I've blogged about my tastes in Mustangs and various other car-related opinions over the years. I've also made quite a few comments on GM and their deletion of brand-names.

So it is with no surprise that today I read that GM is finally doing the obviously stupid, and killing off Pontiac.

Now, don't get me wrong, I'm not totally in view of the GM brand management lineup here -- what I am aware of, however, is that the management of this company has to be one of two things:

  • Chock full of political stupidity.
  • Just plain stupid.
Dozens of reasons not to kill of brands come to mind. Think of a much reduced GM here -- one where the people that manage Pontiac and say Chevrolet are merged together into a cohesive unit of people that were the exact same size (or smaller) than the people that used to manage just the Chevy brand. In this new scenario, the Pontiac brand is sold at Chevy dealerships and vise versa.

In this new reality, GM simply manages the Pontiac brand the way that someone would manage option packages on cars. If a Pontiac branded car is coming down the line it simply gets the right badging and color options. If a car is one of the signature items for Pontiact it might get different grills and/or body panels. In some cases, the Pontiac version of a corvette, for example, or Camaro (for another obvious example -- something called a "fire bird") is manufactured. Otherwise, it's essentially a branch off of the Chevy item of the same name.

This isn't hugely different than what's been going on for the past 20 years or so. There was a time when Pontiac cars had completely different bodies, engines, transmissions. The buyers expected this kind of differentiation. The world has changed (more on all of that later). Buyers of today are not looking for the same thing they were looking for in 1969.

But GM -- wake up here. You may survive for another year doing stuff like lopping off your Pontiac leg. You're going to do it at massive cost, however, if you manage to piss off a whole bunch of Pontiac fans. I don't have to speculate much here -- likely there's a bunch of Pontiac executives that are slated to get the axe. Why GM can't pull it's head out of its collective ass and simply merge all of its executive leaders into a cohesive team that manages all brands is likely a big part of their problem.

The GM of today has to shrink in executive leadership -- let's hope that they can pick the best of the best inside of the company. Let's hope the people that stay behind are frugal, nimble and most importantly creative problem solvers -- and not simply blowing away brand names because of political infighting -- like I suspect is going on -- I don't know for sure that this is the case. If you're a GM executive insider, feel free to post some comments here or send me a private email.

The sad thing is, the GM of today has to be a completely different GM than the GM of 1959. The GM of 1959 functioned in many ways as a bunch of independent car companies. Buyers of a Pontiac or Chevy took note of the massive differences with pride. Those days are obviously gone. GM can't afford different executive leadership for all of the different brands -- but I'd argue that they still need those brands to be GM. Managing the brands shouldn't require different dealerships, assembly and so on. This is the point I'm trying to make. The fact that they're killing Pontiac says that they don't get part of their problem.

GM has to face some rather obvious glaring problems (that have nothing to do with brands) head on:

  • They're no longer the manufacturing technology leader that they once were. Hybrid cars, fuel cell vehicles, lagging engine technology -- I have no doubt that they have had the jump start here from an engineering perspective. They have smart engineers, in other words, that have been in front of the competition, and probably on all of the times I just listed. They have moronic executive leadership that hasn't let the cool stuff get made -- there's a rather obvious problem they need to fix. My father and I go to the Cleveland auto show -- we see their prototype stuff. It never makes it into product form. In the mean time, a few years go by -- someone else makes it happen. This has to stop.
  • Quality: GM quality is getting to be something of a joke. I have a next door neighbor that is a huge GM fan -- his wife just bought a brand new Saturn product -- and on the first day it blew an ABS sensor. I have a friend with a brand new truck -- the expensive alloy wheels look like crap. His dealership wants to replace them with "refurbished" items. His wife's brand new car has a set of headlights and grill that look like junk. And this is just me thinking of examples -- I haven't gone out to interview people or something -- these are examples that I've just accidentally came across in the past couple of weeks.
  • Brand cultivation: GM needs to have its Mustang or F150. No -- I don't mean that they need the trucks to be better, or to go head to head with the Mustang on effort (that would be cool, though) -- I mean that one of the things about Ford is that they're obviously starting to get the fact that brand management of automotive products involves making the same products (with minor improvements) year after year.

    People come back for quality. They come back because their kid someday needs a car for college -- and that [brand item] served them well. The lights must be on somewhere in the company or they wouldn't be doing the new Camaro. They wouldn't be making the Corvette, Impala and Malibu. Sure -- there are times to make new brand items for people to get attached to -- those times are not to be every year or two, in an effort (I'm supposing here) to get people to forget the crappy product that the Citation or Cavalier turned into. No obvious choices for this come to mind. This is probably a core weakness; GM has not made a long-running product that gained market share and made lasting brand awareness in quite some time.

It's truly as sad day when one of your brand detractors is sitting on the fence lamenting the situation (that would be me, for the record).

A closing note here: I have real reason to be sore at GM. There was a time, early in my engineering career. I was still a student, looking for work in Warren Ohio so that I could support my family. GM didn't hire people back then at the Packard engineering facility -- it used a contractor work situation. I had to take a job at close to minimum wage working as a long term contract employee. They had a system worked out where the contract middle-men took a big portion of your salary while you worked over many years getting next to no benefits and crappy pay. All of this was eventually cleared up with a settlement for a class action lawsuit (long after I had moved on in disgust). I got to drive my 1966 Ford falcon into work and hear crap about how I should be driving a brand new GM product to help support the company (I was biting the hand that feeds, according to a couple of people, driving a 20 year old rat-bag of a car). Oh yeah, I also drove a 1974 Nova -- it was my wife's car at the time, upon occasion. When it ran.

If you wanted to switch contractors to get a raise in pay there were all kinds of "unwritten rules" to prevent true marketplace competition in the compensation department. This kept the contract suppliers happy and was in effect a reverse union situation -- workers, unable to compete for a fair wage, were kept making really crappy pay while their contract bosses made out like bandits.

I still get angry when I look back. I had a 2 year old son and we had to make seriously hard choices between food and medical care at times. All the while, the cleaning people (GM employees) were making several orders of magnitude more than we were. I sat it out, learned some valuable skills -- and left for a company that would hire me as an employee. I left for a large raise and never looked back.

I vowed at that time, never to support the company that had been so callous as to treat me the way that Packard (A GM subsidiary at the time) had treated me. The situation was compounded by the way that the employees walked around in a manufactured feudal system -- looking down their noses at the contract help like a second tier of society. They had GM car discounts, real medical benefits and a host of other reasons to feel so much better than the "contract help".

Years later, as I write this, real memories of disgust come to mind. The inefficiencies back then were obvious. My guess is that what we're witnessing these days is simply the result of a disease running its course.


Russ said...

This is slightly tangential, but I wanted to mention that the new GM "rally cap" commercials are phenomenal. What a great symbol for America in these "trying times" -- we're all pulling together to come back and win.

But on further reflection, maybe it's still a symptom of the problem. America is really just the biggest, best market ever created. And the "rally cap" is something the crowd puts on, or the players on the bench, to psychically overcome. It's superstition, not effort. Is GM doing what's it's always done, just trumpeting "AMURICA" at highest volume, changing nothing, and waiting for the tide of money to flow back in, as they feel must inevitably happen in the greatest market, ever?

Anonymous said...

GM is a microcosm of a much bigger problem now facing our American society - and marketing is a big part of the problem.

They can advertise anything, but its all too obvious what their real priorities have become. Money. Not true wealth or value creation.

They'll bring the brand back after a short Hiatus. But it will fail again if they don't learn to look past the short term gain - and the rest of us will continue to hurt for it.