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How General Motors Plans to Muddle Through
Rick Newman
US News and World Report
August 1, 2008



I sat down recently with GM marketing chief Mark LaNeve and asked about the company's prospects.

Q:There's been a lot of bad news lately: plunging car sales, more restructurings, the huge dropoff in trucks and SUVs. Do you feel like GM has a handle on where it's going?

A: What we don't have a handle on is the industry, especially at the retail level. We're doing better than Ford or Chrysler in some segments, but the only manufacturer doing well year-over-year is Honda. So the whole question is where is the industry going? I'd like to think it's somewhere near the bottom.



What's your answer to all the armchair analysts who say GM has too many brands, that it needs to get rid of some of the weaker brands like Pontiac, Buick, and Saturn?

If we were to cut three or four brands, what would the benefit be? What would we really save? We actually run our business now like it's four brands, with Pontiac, GMC, and Buick as one brand. And we've filled the portfolio for all of our brands. So if we killed one of the brands, we'd lose a business. We'd save a little short-term marketing money, but not much. Plus, we know from Oldsmobile how much it costs to kill a brand.

We look at the brands as assets, with four channels globally. Saturn is our way of distributing Opels from Europe in the United States. And in the last year, Saturn has had one of the best increases in sales in the industry, if you compare year-over-year sales for the same products. In China, Buick is our major brand.

All the talk lately of bankruptcy, and GM possibly running out of cash in 2009: Do you think the talk itself is harming GM?

It's never helpful. The dealers tend to get very anxious when they hear it, and I've heard very little from dealers. It tends to be a very incendiary issue, but I don't think it's a big issue out there right now.

By the way, it's not just us. Look at the airlines, look at Starbucks closing hundreds of stores. Our industry has certainly been in a recession, but we're not the only ones.

With $4 gas, people are fleeing big vehicles for smaller ones. Do you think consumers are being rational?

The reaction to $4 gas has been more severe than I would have thought. We ran some numbers the other day, and the difference between driving a Silverado pickup with a V-8 engine and a Malibu or Camry with a 4-cylinder comes out to about $17 per week in extra fuel. That's not that much. What has scared people, I think, is that prices have gone higher as we're also having layoffs and the economy is getting worse. And you've got oil analysts saying oil is going to get to $200 per barrel. So suddenly fuel economy is top of mind.

How much strength is left in the SUV and truck segment?

We've got four really good truck brands: Chevrolet, GMC, Escalade, and Hummer. Hummer has the lowest share and the greatest chance to maximize its value outside of GM, which is why we've put it on the block. Other brands lack the brand image and the market position that we've got. Toyota introduced a much-improved Tundra last year, and we didn't lose one point of share on the Silverado. Now we have to do that with cars. Malibu sales are up 100 percent, but we still don't have the market position of Honda or Toyota. A customer can see every ad they want, but that's not as powerful as selling a car to their neighbors.

FULL INTERVIEW / SOURCE