GM Marketing Chief Discusses Challenges, Plan Going Forward

[1931Chevy]

GM problem is that why the heck dont get the 4 cylinders engines now instead of waiting for customer demand, dont they get it. Another thing why the heck do they design this



instead of bringing this to the US as the Aveo replacement

http://upload.wikimedia.org/wikipedi...Corsa_D_01.jpg

give the Astra to Chevrolet as the Cobalt replacement and so on, they need to go with a global design and save money at the time

[mgescuro]

Originally Posted by Ming

It's not the math that bothers me. It's the way that LaNeve almost seems to be saying that people shouldn't be buying their own 4-cylinder Malibu (!), but should be smart enough to see that what they really need is a Silverado (to commute to a desk job in).

He does have that air about himself in that interview, huh?

Originally Posted by Ming

I know that's not how he meant it, but it does gel with the general idea you get from listening to management that GM is patiently waiting for us all to "wise up" and start buying their most profitable (and most thirsty) vehicles again. Meanwhile they grimace and drag their feet, "surprised" at the sales of vehicles like the Cobalt XFE, as they grudgingly comply with what we really want, which isn't $40,000 8-passenger crossovers and SUV's and trucks with thousands of dollars of 'built-in profit', but more sensible and stylish cars like the 4-cyl. Malibu he says isn't all that different, fuel economy-wise from their trucks.

Yes, it does gel with GM management's stances on things.
It just seems like this management team and the board have an attitude problem when it comes to the "new world order" of cars. They haven't begun to deal with teh fact that GM no longer dictates terms in the automotive industry. Their sphere of influence is diminished.

Why would GM be surprised that the XFE sells well? Because it's what people want.
Why won't GM market the Astra? because they think it's not what people want.
Gosh... if only GM would market teh Astra!!!!

Originally Posted by Ming

What GM wants to sell us and what the public wants to buy from them are not always the same. GM needs to make a visibly enthusiastic effort to bridge that gap, and quick.

It's never been the same. That's been the single biggest complaint by customers and media for the past 3 decades. GM doesn't build cars people want.
GM's counter argument is, "according to our research, Americans want trucks, so we build trucks because it's what people want." It's a flawed, circuitous argument.

Originally Posted by Ming

I want to see and feel a GM that is confident that the profits from cars can sustain them --- that they aren't hopelessly addicted to SUV and truck profits - or their replacement, the super-sized, super-priced crossover. The "GM is only trying to clear out old SUV/Truck inventory, so that's why you haven't seen those kind of ads yet" excuse will only last a few months longer.

We know GM's cash cow was the suv's and trucks. Anything else just doesn't mass muster. And compact cars are a loss for GM.
I'd like to see a concerted effort to streamline operations to make these cars more porfitable for GM, without it looking like they're trying to nickel and dime customers. You want a fuel tank? $1,000.

[Buickman]

I've met him more than once. he has no clue what he's doing and his word is absolutely no good. an incompetent and a liar.

[tgagneguam]

Originally Posted by skylark68

It's nice hearing something from an actual industry person rather than a bunch of armchair CEO's like we usually do on this site (I'm guilty of this too).

And yet the answers are no more inspired or thoughtful. Fancy that. GM could save themselves $1 million/year and get similar quality management. Now, that's cost savings!

Originally Posted by Rocket 88

This guy pointed out only Honda is up year over year and doesn't seem to want to think about WHY that is the case. Shouldn't that be the $10,000 question instead of trying to talk people into spending just $17/week extra in fuel cost to drive a Silverado?

I'd love to hear GM executives directly confront an issue like this. No spin, no double-talk, just a candid answer. Part of beating Toyota and Honda, the best-managed mass market automakers presently, is admitting that their business model is working so much better than GM's presently. Their work is not divinely-inspired, it's not without problems, but Toyota and Honda are doing a better job presently and have for a while. There's a lesson in there for GM.

[tgagneguam]

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.

I actually agree with some of this, I'm frightened to say. It is a reasonable compromise to sell Hummer and to merge Buick, Pontiac, and GMC and treat it as one entity: BPG. I look at it as having the potential of another mass-market division in the vein of Chevrolet. If GM had talented managers, that set-up absolutely could work. Actually, a lot of permutations of GM's brand structure could work if GM had the good fortune of a deep pool of talented managers. Unfortunately, as people like Ed Peper, Jill Lajdziak, and Mark LaNeve demonstrate, the talent pool is mighty shallow at the General. And since there's zero accountability at GM, a pervasive problem in all of corporate America, these three [and others] will remain firmly entrenched, free to wreak havoc at General Motors with impunity.

[jry]

Originally Posted by mgescuro

WTF?? THe difference between a V8 Silverado and a 4-cyl Camry/Malibu is approximately 4 gallons every week??
You math has got to be off Mr. Marketing Dude.

In addition, this is a beancounter answer. There is nothing in there that shows the issue that customers have in their head that V8 = gas guzzling. There's no perception quotient in there.

And if that continues to be GM's answer, pointing at numbers and saying, "Nuuuh-uuhh," then there is no hope.

If you look at his answer, he touches on the "200 dollars a barrel" thing which was "top of mind".

Its not the extra 17 bucks per week that is driving folks away from trucks, its the prospect of oil reaching 200 dollars a barrel, gas being north of 5 dollars and no end in sight. The populous then saying "i've got to get out of this truck, now!"
I think he hit the point, spot on.
Try hauling what i do in a Pee-us or a Civic. If gas does hit 5 dollars a gallon, look for the citizens to march on DC with pitchforks and burning stakes (think frankenstein, here).

[Ambalanche]

What GM obviously doesn't understand is the public's physche about gas prices. Is is rational to trade in a Silverado for a Prius? No, of course not. Will you save money by doing it? No. But the public hears the media daily talking about how high prices are and how bad the economy is and it scares them and makes them do irrational things. Hell, I've been guilty of it too, but GM still can't respond like the lean Automaker with a healthy portfolio needs to be able to respond. And what's worse is the talk out of GM lately, like "we'll build more 4cyls when the public is ready", is not showing me they understand what they are being asked to do. Just because the market is asking for more fuel efficient cars and trucks doesn't mean you abandon the current products you have, IE now the Silverado will be on a 20 year cycle!

[fp115]

Originally Posted by Buickman

I've met him more than once. he has no clue what he's doing and his word is absolutely no good. an incompetent and a liar.

For once I actually agree with you.

But to all others, Mark is NOT leadership and nor does he stand for GM's word on product development. All he does is marketing and only marketing for North America.

[rlchv70]

Originally Posted by mgescuro

GM's math is bass ackwards!!!

No, it's not. It just depends on the assumptions you make.

Highway vs. City v.s Combined mileage
Which vehicle configuration
# of miles per year (actual is closer to 12k, not 15)
Price of fuel

[robsBU08]

this guys numbers are way off. it takes $50 bucks to fill up my tank on my malibu, and it will last me a full week easy, a good friend of mine has a 2007 silverado and it costs him almost $100 to fill up every week and he sometimes cant make it a full week on a tank, so say for arguments sake he goes through one tank a week he spends almost twice as much on gas as I do, so if I spend roughly $2600 a year on gas he spends $5200, and plus he paid $10,000 more for his truck then my car. The thinking of this guy is why GM is struggling, but I think there is light at the end of tunnel

[windvale]

Originally Posted by Ming

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.

Trucks are the fair-haired child. Why aren't you all buying trucks. Cars are for jerks...

Same old GM.

[HoosierRon]

Originally Posted by mgescuro

Let's do the math!!

A Silverado 4.8L is 14/19. Let's call it 16 mpg. 26 gallon fuel tank. $4/gal. $104 fillup. Range = 416 miles.
A Malibu 4-cyl is 22/32. Let's call it 27 mpg. 16.4 gallon fuel tank. $4/gal. $65.60 fillup. Range = 442.8 miles.

In 10,000 miles, the Silverado, assuming these numbers, will cost $2,500.
In 10,000 miles, the Malibu, assuming there numbers, will cost $1,481.48.
The difference is $1,018.52.

In 35,000 miles, the Silverado, will cost $8,750 in gas.
In 35,000 miles, the Malibu, will cost $5,185.19.
The difference is $3,564.81.

The average miles driven by an American is 15,000 miles per year.
In 15,000 miles, the Silverado will cost $3,750 in gas.
In 15,000 miles, the Malibu will cost $2,222.22.
The difference is $1,527.78.
Spread out weekly.... That's $29.38 per week!!

That's $12.38 MORE than estimated by GM!!!!!

GM's math is bass ackwards!!!

OK, let's do the math.

Today, the national average price of 87 octane gasoline is $3.892. The Silverado 2WD with a 5.3L V-8 gets 15/20 (combined 17.5). A Camry 4 cylinder gets 21/31 (combined 26).

If you drive 12,000 miles per year, a Silverado would use 685.7 gallons, which would cost $2,668.80. The Camry would use 461.5 gallons, which would cost $1,796.31. The difference is $872.49, which is $16.78 per week.

If you increase your driving to 15,000 miles per year, it would cost $20.97 per week.

GM's math is not ass backward.

[Buickman]

Originally Posted by fp115

For once I actually agree with you.

But to all others, Mark is NOT leadership and nor does he stand for GM's word on product development. All he does is marketing and only marketing for North America.

and it's the marketing where GM is really hurting, in fact it's killing the comany. (although lack of accountability is a close second).

[andy82471]

Originally Posted by mikesright

Did you even pay attention to that paragraph, let alone the article? He pointed out later that with all of the economic uncertainty and with the price of oil going higher and higher, that fuel economy is top-of-mind. He also went on in the article to say that they have extensive plans to meet the consumer's needs with lots of hybrids and putting 4 cylinder engines in vehicles they wouldn't have dreamed about doing until now.

Also, he was absolutely correct to say that the consumer reaction isn't rational. You can get $10,000+ discount off a truck right now, but you'll have to pay sticker for that compact car, for one, and secondly, the savings in gasoline for the average person for a pickup vs a car is about $60/month. When people are doing this, or trading in their upside-down truck for a Cobalt, losing ten grand plus for a $60/week gain, it is irrational.

Gosh and people wonder why GM is doing poorly. You are the perfect person to run GM to the ground. First, even with a 10 grand discount, a SUV will still cost more than twice that of a compact. Second, like someone pointed out 17 dollars a week roughly translates to 900 dollars a year. That 900 dollars could pay for a lot of grocery and utility bills.

[SAngelo]

I do agree that GM's newest products over the past 2 year or so are excellent. I think it all started with the Aura which is a fine car but still can use some tweaks to make it better. Cars like the CTS, Malibu and the G8 continued and even added to the greatness of the Aura. GM might have tougher times ahead but they still need to work on replacing their old vehicles and tweaking the good ones that need modifications

The Epsilons can be improved by adding a DI option to the 3.6 and invest in putting a Nav screen in these cars as an option. I read some reports on the new Malibu, most of them were fine, but many times they mentioned the lack of a Nav screen. How can GM possibly say to the public tat the Epsilon I platform was not configured for Navigation ? This tells the public that GM has no foresight and once again are asleep behind the wheel. You can't use the excuse that they dont want to put more money into an old design because these are current platforms and are arguably GM's bread and butter cars. Spend the money and make those changes !!! Free up some money by cutting vehicles people dont want anymore like the Trailblazer/Envoy, the old Lacrosse etc.

I also think GM needs to get more of the new products here quicker than scheduled like the new Buick FWD sedan (Invicta, Lacrosse etc). Bring this new sedan here by the beginning of the year. Show the public the sedan and maybe GM's stock will rise. Right now Buick does not have a competitive sedan. Both the Lacrosse and Lucerne both have dated platforms saddled with 4 speed automatics that no one wants except for people over 60. All of the other divisions have atleast 1 modern competitive sedan except Buick. I find that extremely unacceptable. Brinbg

One of the problems is GM still makes sedans that are dated and no one wants except for the Seniors. GM needs to continue working on trimming their lineups and just have a few vehicles per lineup. Get rid of the Lucerne, Lacrosse, Impala, DTS because those vehicles have dated 4 speed automatics and pushrod V6's and other inherent weaknesses like long turning circles, smaller than expected cabins and unexciting driving experiences. Yes the Impala sells but I think mostly to fleets.

Here are the next line of GM vehicles due here by the first quarter of next year !!!!!

Chevrolet Traverse - This fall
Chevrolet Equinox - 1st quarter of 2008 ?
Cadillac SRX replacement- 1st quarter of 2008 ?
Buick Invicta(Lacrosse) - March 2009

Only one sedan, well that I guess its better than nothing but I would also like a rwd Buick from Holden on the same platform as the G8 but stresses luxury. I would also like the new Chevrolet Cruze here next year as well and just call it the new Cobalt. Why change names so much ? Why does Europe get this car next year while the US has to wait for it ?? Maybe because it has an integrated radio which would make it look more upscale than the larger more expensive GM cars. Who knows but we need a more competitive small car !!!!!

By the first quarter of next year if GM made the following changes they would be in good shape.

Buick
New Buick FWD sedan
Import Holden Rwd sedan (Electra, Park Avenue)
Enclave - keep

Chevrolet -
Traverse - Fall
Equinox - next year
Cobalt/Cruze- march of next year would be awesome
Malibu -Give it DI 3.6 option, nav screen (spend the money), plus rear center armrest.
Camaro - No rush, this car not being here is not hurting GM

Pontiac -
G8 - Give it navigation and give 3.6 DI and 6 speed
GTO - Sometime next year import Holden Monaro and call it GTO
G6 - dont replace this car, just kill it, epsilon overkill plus Buick FWD will sit in same showroom. if you do bring it back make it rwd.
Solstice - Keep

Saturn- Aura - Same as Malibu
Vue - reduce weight a few hundred pounds, it can be done, come on !!!!!!
Astra - Get new one here ASAP but if u cant bring over 2 and 4 door trunk version in addition to a Turbo model
Outlook - Discontinue !!!! overkill of Lamdas !!!!!
Sky - Keep
Maybe create a lamda minivan and make it Saturn exclusive !!!!!!!!!

Cadillac -
CTS - awesome, coupe, convertible, wagon bring them on
STS - I know the replacement is in the works but in the meantime give it a new dash alla SLS in China and a DI Northstar !!!!!!
Escalade - Hybrid is a good idea
SRX - Will be here in first qtr of 2009


Move the Saturn division into Cadillac when they sell Hummer, so it will be called Cadillac, Saab, Saturn. This also makes it easier if GM wants to eventually cut a division and it gives Saturn more exposure. Saturn is the only GM division that has a full line up of competitive vehicles that alot of people don't know about !!!!!!! Come on GM !!!!!