Extensive Gary Cowger Interview

[Ming]

GM still studying $100,000 Cadillac, hoping to boost market share, Cowger says
08:59 May 17, 2004
AUTOMOTIVE NEWS

Gary Cowger is still wearing his "29" pin.

The president of GM North America says he will keep wearing the pin until GM hits 29 percent market share in the United States. Then, he says, he'll get a "30" pin.

But GM's light-vehicle share dipped last year, from 28.6 percent to 28.3 percent. And although GM has become a leaner, more productive organization, it is still battling in a crowded, hyper-competitive market. Cowger discussed GM's challenges with Automotive News Editorial Director Peter Brown and Reporter Dave Guilford.

It looks like your truck sales are on fire, and the bigger the better. Your big trucks in particular are really doing well. What are we going to expect to see from the car side of the business? How do you get out of being in the low-margin commodity business on the car side?

You've gotta go in there segment by segment. Luxury is doing well. Cadillac is just on fire. Had a great year last year, up 16 percent, up over 16 percent retail in the first quarter, and it's having a great April. You've got the CTS, and we're coming out with the STS. You've got the Impala, and the Malibu is really starting to get ramped up. The areas that we really need the help is in Buick, of course, and we've got the LaCrosse that's going to hit this year, so that'll be a big boost for Buick. Buick we've got in good shape with the Rainier and the Rendezvous, and now we've just come out with the Rendezvous Ultra, so that's kind of a repeat of the Cadillac story where we had the Escalades coming in and then we followed with the cars. So Buick gets the LaCrosse this year and next year they get the LeSabre (replacement). Help's on the way there.

With Pontiac, the Grand Prix just keeps gaining momentum. Arguably, we think, the GTP Comp 4 is one of the best, if not the best, front-wheel drive performance cars out there right now. The GTO is doing extremely well. I was just with a group of dealers that are really pleased with the way that that's taking off. Then we've got the G6 coming, the Grand Am replacement - huge, huge positive clinic data on the G6. So Pontiac's getting filled out, Buick's getting filled out. And (for) Saturn we're going to have three new entries in three new segments. Help's on the way everywhere. But today, as you say, the car segment itself is under a lot of pressure - not just for ourselves, but for all of the segment.

As you clarify the positioning of divisions like Pontiac and Buick, I can come up with a one-sentence definition of what they mean. For Saturn, I can't quite do that. What is Saturn's personality?

We're going to give Saturn much more of an import-intender look, a European flair if you will. That's Saturn's niche. The Saturn brand still brings in a lot of non-GM intenders, conquest people. They will continue to do that. What we have to have is compelling vehicles.

Is there a Sloan-type price hierarchy? How does Saturn fit into that? Because I see Saturn as being right in the middle of the Chevy territory.

The differentiator is the customer base you're going after. Chevrolet brings in a lot more loyal GM intenders. I think that's going to change with Chevrolet as the Malibu, the Maxx, the new Cobalt come out this fall. I think you're going to see a lot of people re-thinking in those segments what their choices are.

If Saturn is for import-intenders, where do they go when they leave Saturn?

That's why you broaden the appeal of Saturn and you broaden the range. That's what our channel strategy is all about, so we keep people in the family and move them to other brands if they have a need for something that's currently not in that channel. I mean, look, this channel's going to be pretty broad. When you get to the six entries, you're going to be able to go all the way from a roadster to a full-sized big brother to the Vue. So you're going to have a broad range to move around in the Saturn brand.

For most of the 1990s, the mantra at GM was "run common." Is that still the main focus?

"Run common, run lean," as Jack (Smith) would say. Yeah, that's still the focus. What running common does is it drives a lot of things. It drives the ability to be flexible, it drives the ability to leverage General Motors' size and purchasing power, particularly on the equipment and process side, the manufacturing side. With global architectures, it allows you to get the parts that the consumer doesn't see much more common, and then differentiate everything the consumer sees and interfaces.

I think we're really starting to deliver on that promise. Just look at the Epsilon, from the (Opel) Vectra to the (Saab) 9-3 to the (Chevrolet) Malibu to the (Pontiac) G-6. Completely different. Products completely different feel, ride and handling, the whole thing. You'll see more and more of that. That's because of Jack's getting down to one manufacturing organization, one engineering organization, where you'll really be able to leverage the size. And, by the way, we're not the only one doing it. There's a lot of people out there using common architectures today.

I was out at a Saturn product event at Milford, and Lori Queen talked about there being 800 new part numbers in the 2005 Saturn Ion, and boy is it going to be better. My thought was that Toyota and Honda would not do that - they redesign a car and use a lot of common parts even in the redesign, and more or less fix it for four years. GM has always had a tendency to make a lot of changes as they go, which strikes me as not lean.

Hopefully what you saw on the Ion was big changes on the interior, big changes helping those areas that consumers have told us quite frankly, need improvement. It's not a big change in the architecture. The architecture is doing well. But when you make color changes, when you make changes to the interior style and graphics, that drives a lot of parts numbers. We watch that very closely.

Is there any trend at GM to make fewer mid-cycle changes?

We've always looked at what is the value of a mid-cycle change. If you have an obvious failing, whether it's a content issue or a feature issue or even a performance issue, you want to remedy that. But this idea of just having a mid-cycle enhancement for its own sake, the data I look at say those don't pay off very well.

Are you doing anything differently?

Yes, we are.

You're being ...

What I just said. We're looking at if a product's out there that has obvious feedback that "this is a shortcoming," and we agree, then we'll remedy those kinds of things. But to just say, every third year you're going to have a mid-cycle enhancement, we're thinking much differently on that today.

Obviously, what it means is less changing. We want to do less changing. We want to have engineered solutions that basically stay the same. You may have to tweak them one way or another, but the engineered solution itself remains the same.

You mentioned when you introduced this that there's a block out there where you're not on their consideration list, and you're trying to get at that.

Right, non-GM intenders. I have not seen the data on that. But this is much more of a long-term kind of dialog. Month after month, year after year, people read this. It's like the "Magic Bus," where 232 buses basically save us the same amount of fuel as about 8,500 small car hybrids. It gets you to start thinking about that's why our philosophy on hybrids has always been start at the big end, where the percent fuel economy affects big amounts of fuel, and then work your way down. Whereas others, because they developed the hybrids for their own markets and then brought them here, wound up having the hybrids at the small end. We're just trying to get people to think about that.

There is no magic silver bullet out there. There is a matrix of technical solutions for problems that are caused by externalities - price of fuel, regulations. If you're a full-line producer that has a Cadillac and a Chevrolet, that's why you need to have all the technologies out there. That's why we're never selling one silver bullet. We make 2 million diesels a year. We understand that diesels work in markets where they can work. We're going to make a million hybrids available by the '05-'06 time frame.

Are we going to see diesels in mid-market GM cars and trucks?

You'll have to find the technological solution, which we have people working on, or you're going to have to change the regulations. Our next set of regulations are four times as stringent as the new regulations Europe just put into effect this year. There are some that say maybe they will change the regulations. If they change the regulations, that's one of these externalities.

Isuzu is about to be a GM division that has a product range consisting of two GM trucks. Do people cross-shop you and Isuzu?

I think there's probably very little interplay between us and Isuzu. Their volume is small. What we try to do is support them here with what they say they need.

You don't care that they have a sport-utility that's much the same as yours?

That's the whole thing of flexible architectures. Can you dial in much different character? I think when you see and drive the Saab 9-7x, you will say, that is a Saab. You know, the Camry drives the Lexus 330. Are those much different vehicles? I think so. So we can do the same thing. It's the execution.

Is Cadillac any closer to the $100,000-plus super-luxury vehicle?

That is a product that we definitely want to do. It is not an approved program yet, but we are definitely working on such a vehicle. But it is not an approved program.

If you were a betting man ...

It is not an approved program (laughs). It is something that we all want to do.

The Buick Velite concept car stirred up a lot of excitement. What are the Velite's chances?

Clearly what we're trying to show there, like we did with the (Cadillac) Sixteen, is the direction that Buick's going in. I feel good about that. I feel good about the reception that it got. I think we're getting our platform strategy lined up where it's starting to make a lot of sense where we can drive those kinds of derivatives. So I'm feeling good about Velite, or a Velite-like vehicle.

See Full Uncut Article Here

[Mikkoo]

I didn't feel that the questions asked by the interviewer
were all that penetrative.

I do think that the 05 interior upgrades
on the Saturn Ion are necessary for that car to be
competitive in it's class. When I first sat in the latest
version I was extremely displeased with the uncomfortable
seats, and very cheap looking interior. Along with doors that
closed with a clunk, making it feel several generations
behind the competition.

In closing build the Cadillac Sixteen, the marque needs
a halo vehicle that will bring back the slogan " Standard of the
World."

[Ming]

I'm extremely pleased that the 2005 Saturn ION is getting some much needed improvements.

Hopefully these will be tangible improvements. The 2003 Chevrolet Cavalier reskin claimed 1000 new part numbers or something, but aside from the exterior it was hard to tell. Unless they made it cheaper, that is. I drove a rental and it had a horrible rubber headrest that felt like one of those foam Nerf footballs.

Notice Gary glossed over Buick adding the Terraza (didn't mention it), and is there such a thing as the Pontiac Grand Prix "Comp 4"?

Maybe he let slip "Pontiac G4"?

[desmo9]

Cowger's branding solution for Saturn is pathetically weak. More European? What's Pontiac, then? There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms.

He needs to realize that to wear the "30" pin, there must be fewer, more focused offerings. Optimize distribution channels so you can sell just a couple models under some brands at a profit. Let Saturn evolve its small-car formula and forget the minivans and large cars. Give Saab a couple quirky cars and leave it alone. Forget the 9-7. Take the cash used for that and do the 9-2 correctly ... It's the only near-luxury car GM offers under $30K. So don't rebadge a 10-year-old Subaru design and expect the younger aspirational crowd to buy it. And if Saab folks really want to move into a Chevy-based Ute, then give them compelling options elsewhere in the company's portfolio. Buick minivan? Forget about it.

A full-range of models for every brand, covering every segment, is crazy when you've got so many brands to leverage. GM's market share won't be bolstered by so many options, but their costs are much higher for it. Their business acumen is not much better than their ability to produce gotta-have products under $30K.

[MelvinJ]

Originally posted by desmo9@May 17 2004, 04:40 PM
Cowger's branding solution for Saturn is pathetically weak. More European? What's Pontiac, then? There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms.

Pontiac is supposed to be "American Performance", not European. Oldmobile was supposed to be the more European brand, so that slot is open for Saturn to take.

[tgagneguam]

Originally posted by MelvinJ+May 17 2004, 04:54 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (MelvinJ @ May 17 2004, 04:54 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-desmo9@May 17 2004, 04:40 PM
Cowger's branding solution for Saturn is pathetically weak. More European? What's Pontiac, then? There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms.

Pontiac is supposed to be "American Performance", not European. Oldmobile was supposed to be the more European brand, so that slot is open for Saturn to take. [/b][/quote]
In general, I agree with desmo9 on this one: "...There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms." Perhaps I would go a little further, though, and close the division, which should have been closed before Oldsmobile was shuttered. I wonder if in the final analysis the costs of maintaining Saturn as a separate entity (re-tooling, engineering, marketing, et cetera) are worth the time and finite cash resources. Once again, I'm skeptical.

With respect to Pontiac's performance aspirations, I believe desmo9 is correct: "...Pontiac, we have said, will be your affordable BMW, great performance at reasonable prices." Clearly the target is BMW. That also has been stated before by GM's "elite."

[gmmerc5]

Originally posted by tgagneguam@May 17 2004, 06:03 PM

Pontiac is supposed to be "American Performance", not European. Oldmobile was supposed to be the more European brand, so that slot is open for Saturn to take. [/quote]
In general, I agree with desmo9 on this one: "...There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms." Perhaps I would go a little further, though, and close the division, which should have been closed before Oldsmobile was shuttered. I wonder if in the final analysis the costs of maintaining Saturn as a separate entity (re-tooling, engineering, marketing, et cetera) are worth the time and finite cash resources. Once again, I'm skeptical.

With respect to Pontiac's performance aspirations, I believe desmo9 is correct: "...Pontiac, we have said, will be your affordable BMW, great performance at reasonable prices." Clearly the target is BMW. That also has been stated before by GM's "elite." [/quote]
I think what Mr. Cowger meant was the Saturn's styling will have a more European looks as well as performence....... I read this in the Pontiac Solstice's forum that one of the small concept coupe based on the new Kappa platform was intend for Vauxhall, according to the writer, GM is giving that concept car to Saturn.

[tgagneguam]

Originally posted by gmmerc5@May 17 2004, 06:48 PM

Pontiac is supposed to be "American Performance", not European. Oldmobile was supposed to be the more European brand, so that slot is open for Saturn to take.

In general, I agree with desmo9 on this one: "...There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms." Perhaps I would go a little further, though, and close the division, which should have been closed before Oldsmobile was shuttered. I wonder if in the final analysis the costs of maintaining Saturn as a separate entity (re-tooling, engineering, marketing, et cetera) are worth the time and finite cash resources. Once again, I'm skeptical.

With respect to Pontiac's performance aspirations, I believe desmo9 is correct: "...Pontiac, we have said, will be your affordable BMW, great performance at reasonable prices." Clearly the target is BMW. That also has been stated before by GM's "elite." [/quote]
I think what Mr. Cowger meant was the Saturn's styling will have a more European looks as well as performence....... I read this in the Pontiac Solstice's forum that one of the small concept coupe based on the new Kappa platform was intend for Vauxhall, according to the writer, GM is giving that concept car to Saturn. [/quote]
I captured the quote directly from Cowger, so I'm fairly certain he was speaking to the issue of Pontiac; he doesn't appear to have been misquoted, and he did not seem to misspeak. Besides, I recall that he, along with others in the past year or so, have stated the same thing.

I agree with you, though, that Saturn is also apparently trying to develop a European flair. After all, Cowger stated that in the article: "We're going to give Saturn much more of an import-intender look, a European flair if you will. That's Saturn's niche."

I'm aware that the Lightning(?) was developed as one of the four kappa concepts and that due to pedestrian impact laws, kappa might not become a reality across the pond. As a result, Saturn may get a reworked version of the Vauxhall (or kappa).

[SmallBlock]

Possibly he meant that Saturn would be more European in a VW sense. Utilitarian, but with a more conservative European style.

Who knows? Saturn = VW?

[Highlander]

Originally posted by Ming@May 17 2004, 09:37 AM
and is there such a thing as the Pontiac Grand Prix "Comp 4"?

Maybe he let slip "Pontiac G4"?

Perhaps, but my guess is that it was just a typo....but who knows... You may be on to something.

[mgescuro]

Originally posted by SmallBlock@May 17 2004, 03:15 PM
Possibly he meant that Saturn would be more European in a VW sense. Utilitarian, but with a more conservative European style.

Who knows? Saturn = VW?

OH great... $24,000 of an ION... just like a Golf.... maybe the old VW... NOT the new one.
Fuggedabouddit!!

If Saturn becomes "more European," I woudl surmise that its car would have a more Euro feel to il, yet retain the no nonsense pricing and great customer service. It would be a great, inexpensive, high quality car.

[Canuck]

Originally posted by SmallBlock@May 17 2004, 08:15 PM


Who knows? Saturn = VW?

HAH then Saturn can have a V12 and a large SUV and ideas of $100k models.
Seriously having Saturn be GMs VW is a great idea.

[ab348]

Originally posted by MelvinJ+May 17 2004, 04:54 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (MelvinJ @ May 17 2004, 04:54 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-desmo9@May 17 2004, 04:40 PM
Cowger's branding solution for Saturn is pathetically weak. More European? What's Pontiac, then? There is absolutely nothing Saturn can offer that shouldn't already be available in Chevy, Pontiac, and Buick showrooms.

Pontiac is supposed to be "American Performance", not European. Oldmobile was supposed to be the more European brand, so that slot is open for Saturn to take. [/b][/quote]
Good. Maybe that means they'll finally kill off Saturn the way they killed Olds when they were given that hopeless task. Theonly difference is, Saturn DESERVES to die.

[nsap]

I don't look for them to kill Saturn. If anything they will rename the brand Opel USA", but I think Saturn's future is brighter than you think...

[desmo9]

Originally posted by mgescuro@May 17 2004, 08:50 PM


If Saturn becomes "more European," I woudl surmise that its car would have a more Euro feel to il, yet retain the no nonsense pricing and great customer service. It would be a great, inexpensive, high quality car.

That's fine, but take the Cobalt... it clearly has VW Jetta written all over it, in terms of execution and market placement. And the bowtie brand needs the same great customer service as Saturn. GM should not intentionally differentiate brands based on levels of customer service...not at the mainstream level. Cadillac may offer something more, but Saturn and Chevy oughta have the same levels of satisfaction. All that's left is pricing policy, and the no-haggle option by itself isn't enough to give Saturn an identity. The cars used to help...they were different than the old-school Cavaliers and Sunfires. But now that Cavalier has grown up to Cobalt, the little Saturn is all about plastic panels and funky gage placement...no more, no less. I recognize that Saturn has now developed some brand equity that'd be tough to shed, but at the same time the new minivans and others continue to shorten the distance between Spring Hill and Detroit.

It just seems to me that between Chevy and Pontiac, you have every possible incarnation of Ameri-Euro end covered at the center of the market.

Well, almost. If Saturn stays, my vote would be to retain what Saturn originally did well, and where GM still has a huge void. Get rid of all Saturn models but the small car, and make it great. Because Pontiac has no small coupe/sedan and Cobalt has become a pricier, more premium entry, fill the slot below it, where the SC/SL always resided. The Aveo is too small and shouts cheap. It's more like a Geo Metro, and won't fill the sub-Cobalt void very well. So sell a nice small Saturn again that's hip yet conventional enough to retain young and old alike. Redo and rename the Ion. Maybe...maybe do the small SUV like Vue to fit below the Equinox, as well. Figure out a way to structure the division and distribute a couple models profitably so that a full-range of models is not required for profitability. Assemble in Spring Hill, and nowhere else. Saturn was unique in terms of product and buying experience. People even drove to Spring Hill to have reunions! Capitalize on that unique flair !!!! Ditto Saab. Don't turn every division into a cookie cutter full-range spread of models differentiated only by pricing and a few styling touches...accepting the compromises because you believe "the brand cannot survive wothout a truck and SUV." ..Nonsense.