Jim Dollinger's Plan for a Return to Greatness

[Buickman]

Originally Posted by Ming

I had the same reaction to this as I do to most of your posts, Jim.

You are clearly well informed on the art of selling cars. And I think most, probably all of your points are worth implementing. The GM card I can vouch for being broken, and for me it's because of the puny redemption limits on smaller, less profit-packed, fuel efficient cars.

But I think what you illustrate here is the difference between a saavy GM Salesman and Company Loyalist, and a GM Product Fan like me.

In other words, I don't see much of a focus on product in your list, aside from the annual updates. And I guess I'd expect a list like this from you to be much different from the list of "how to fix GM" that, say, an Engineer who is passionate about cars and winning the technology battle (but who knows nothing of how to sell new cars to people who don't particularly need them) might write.

From what I'm reading, you'd be fine with GM selling old 200 horsepower 3800 Buicks ad infinitum if they'd just add some Planned Obsolescence in to each model year. Forget what the competition is doing. Beat the customer into submission with an array of sales tactics. Play on brand loyalty. Dazzle them with the Wookie in the corner. Get them in that car today, whatever it takes.

But there's a reason that the Prius is a household name, and it wasn't just an array of sales tactics from Toyota that made it happen.

Product matters too. I think you know this, but it is hard to find mention of product, or what kind of product can save GM, in your list here, or your posts in the past. It's a subject you seem to stealthily avoid -- possibly because you don't have an opinion one way or the other - or you prefer to leave the product engineering and design up to other people?

I often wonder, are you really a fan of GM product, or would you be happy selling anything GM, as long as it will turn a buck? I'm not being critical of you personally here, I'm just curious. I'm sure someone like me would get a lot of raised eyebrows and disapproving stares if I went into a dealership lined with SUVs and told the salesmen that I thought the way for GM to save itself was to master the art of selling smaller, more fuel efficient sedans, hatches and wagons that would put Toyota and Honda to shame. After all, the dealerships and salesmen love selling those profit-packed SUVs and large cars with the bloated MSRP's just as much as GM does.

All that said, it is refreshing in a way to see how someone with a focus on sales would attack GM's decline, here on a GM fansite that is product-centric. I just cannot agree fully with the approach, because I see nothing in this article that makes the points about fuel-inefficient products that I did not too long after you proposed your list in the Winter of 2005/6. See here: "GM in America is a Truck and SUV Company" - Shaking the Gas Guzzler Image Note the date I wrote it, and the price of gasoline back then. Was I psychic? No, but I saw GM sinking deeper and deeper into an addiction to the "Devil's Candy" (as one poster put it here) of Truck and SUV profits.

I also have worked with Japanese automotive workers in the past, and I know their PASSION for engineering cars - yes, even 4-cylinder cars - and a sense of competition that the Ron Zarella 3-brands of toothpaste style of marketing could never have hoped to match. As my co-worker once put it, "GM is a Marketing Company, Honda is an Engineering Company".

You can only polish a turd (or a lineup of turds) so much, and putting the 3400 in the Torrent, calling it "Pontiac's Commitment to Total Performance" --- now that was an example of some spin that only a salesman could love. And the buying public, lead by critical reviews, saw through it.

But in truth, a fresh approach like yours from the sales side, combined with my product wake-up calls to GM...well, we could have made a fine team. (ha ha ) Of course, I'm just an armchair product quarterback, and don't even work for GM or the automotive industry for that matter...

Now I'm thinking that it's possibly too little, too late, and am guessing that is one reason you are showing us the plan you once kept secret. You either want to show us ho you tried to change the tide, or you are hoping in a last act of desperation to save GM from itself.

Good luck.

I agree that superior product makes for a self seller, like the original Buick Valve in Head engine. Billy always liked a product that sold itself, whether a fine cigar, ellliptical spring carriage, Buick engine, or Frigidaire. we must remember this whole thing starts when somebody sells something. now I don't claim to possess any engineering skills but I am sure our people do, as do our stylists. what I do know is how to treat people, all the people, and create a team atmosphere in which we all pull together to make this happen, built upon trust.

as to style, let's keep in mind that the American public buys cars kind of like they vote for elected officials. they weigh the issues very carefully, then go in and vote for the best looking candidate. I mentioned this years ago on Autoline Detroit with John McElroy and in fact showed Roger Adams in the styling studio how to make an upcoming model more toothy in front and of substance in the fascia. he didn't listen and ironically Chrysler shortly thereafter came out with the 300. it wowed the country until the mechanics/quality came to light. we need to start with great appearance in and out and back it up with consistent reliability.

an interesting email came in to GeneralWatch the other day which I'd like to share regarding the "stuff" we have on the street today...

"Everybody seems determined to get a 6+speed automatic, but they all run the same rpm down the highway as the existing 4-speed automatics in OD. How's that possible? All of the top OD ratios are in the .65-.70 range, as they've always been. Hence, no fuel economy advantage. Only advantage is in performance with the deeper low gear.

"I rented a Malibu LTZ a few months ago, with the 3.6L High-Feature V-6 and the 6-speed automatic. Unfortunately, unless you get the direct injection 3.6L V-6, it gets worse fuel economy than the Buick 3800 it replaces (generally). Nor does it match the Chrysler 3.5L V-6 in economy, either, with similar power ratings (and a whole lot LESS high-tech stuff in the motor!).

"Incognito fuel economy champions are the Impala SS V-8s. I've rented a few of them that, if you run them at posted speed limits with the cruise (approx 65mph), they'll get 30-31mpg on the trip computer's Average Fuel Economy readings. Similar Pontiac Grand Prix GXPs don't quite do the same, though. With the V-8, it'll stay in 4cyl mode longer than the 3.9L V-6 will stay in 3cyl mode when you head up hills or over Interstate overpasses. Plus the 3.5L VVT V-6 in the normal Impalas and the Buick 3800 V-6.

"In reality, GM has had more high fuel economy vehicles over the past 10 years than any other car maker--period. Cars that'll get at least 28mpg on the highway without giving up size or comfort, either. Unfortunately, they haven't done a good enough job of communicating that fact."

point in fact...we've got great product which is competitive, trouble is that our message and potential brand reputation gets left behind by the worst marketing in the industry.

we can easily fix this, reduce marketing costs substantially by letting Associated Press/Reuters do our merchandising for us through news releases, increase sales, market share, restore health to the dealer body, strengthen the supplier base, encourage employees/retirees to once again actually believe in GM, and earn a substantial return for our shareholders (after of course we repair the financial mess we are in and drastically reduce the debt burden).

sounds good?

oh btw, I certainly don't have all the answers. in fact much of RTG has come from listening to "car guys" around the US for the last couple decades (that includes this forum particularly, I'm not here only to rant against Rick, but to learn). there's lots more to be discovered, many more ideas out there. if anything, I'll take credit for summarizing/organizing and for contributing my passion for this company.

[TriShield]

Jim, you've done a good job of addressing one large aspect of what has brought GM to the brink.

The other of course, is GM's entire flawed and failed business model.

Since joining this site I have argued that the number of brands and models they make does not constitute a structure that can profit on diminishing marketshare nor is it sustainable in the face of that reality.

Also, GM has weakened all of it's brands considerably in the past twenty years.

They are shells of what they once stood for and GM is apparently ignorant of it's own history. Most of them do not have recognizable styling from past, from great models that made them dominating brands, nor are they selling the names that they are known for. The Impala today bears little resemblance in any respect to the best Impala of the 1960s. It is hard to be a successful brand when you are not selling what made your brand great in the first place nor are you producing vehicles that do your heritage and nameplates justice.

Product is fundamental, but what you can't go out and copy or "me-too" the king of a class then convince everyone that you are suddenly equal to the leader of the class. You also face a problem that if you've never been known for FWD appliance cars why should anyone take a chance on yours as opposed to the established leader with a track record for quality, high resale and excellent customer service?

It was too late to save all of GM's brands ten years ago, it's way past late to save them now.

I've always advocated on this site the majority of GM's investment should be in the brand that makes up it's core business and needed the attention first to pay the bills for everything else. That brand is Chevrolet and when the inevitable happens the brand left standing will be Chevrolet and we'll all be left wondering why it didn't recieve the attention it needed more than a decade ago.

[2648562]

^^There's probably a reason why he doesn't diss GM's products. Think about it.

All fantastic ideas Buickman.

[Buickman]

Originally Posted by TriShield

Jim, you've done a good job of addressing one large aspect of what has brought GM to the brink.

The other of course, is GM's entire flawed and failed business model.

Since joining this site I have argued that the number of brands and models they make does not constitute a structure that can profit on diminishing marketshare nor is it sustainable in the face of that reality.

Also, GM has weakened all of it's brands considerably in the past twenty years.

They are shells of what they once stood for and GM is apparently ignorant of it's own history. Most of them do not have recognizable styling from past, from great models that made them dominating brands, nor are they selling the names that they are known for. The Impala today bears little resemblance in any respect to the best Impala of the 1960s. It is hard to be a successful brand when you are not selling what made your brand great in the first place nor are you producing vehicles that do your heritage and nameplates justice.

Product is fundamental, but what you can't go out and copy or "me-too" the king of a class then convince everyone that you are suddenly equal to the leader of the class. You also face a problem that if you've never been known for FWD appliance cars why should anyone take a chance on yours as opposed to the established leader with a track record for quality, high resale and excellent customer service?

It was too late to save all of GM's brands ten years ago, it's way past late to save them now.

I've always advocated on this site the majority of GM's investment should be in the brand that makes up it's core business and needed the attention first to pay the bills for everything else. That brand is Chevrolet and when the inevitable happens the brand left standing will be Chevrolet and we'll all be left wondering why it didn't recieve the attention it needed more than a decade ago.

I honestly feel that you and I have a common purpose and focus. I see you on TTAC and always read your thoughts and opinions. we are in agreement on most issues, but one difference I see is that IMO GM can maintain and grow all our divisions with the proper focus. call me nuts, but I really believe RTG will generate an increase of 5 points within 6 months. as bad as GM management is, the good news is that the competition isn't all that great. they only benefit from our absolute stupidity. given a clear sense of leadership and direction, this company will soar straight up. for all the alienated customers who are disillusioned, there are buyers just hoping that we get it right. Americans aren't really different than the Japanese who remain steadfastly loyal to their domestic producers. we simply need to give people something they can count on and believe in, and that just ain't RIR & CO. sorry for the slam, just can't help myself (plus he deserves it).

[vam29]

GM would lose credibility by eliminating the Destinaation Fee as it would be necessary to include the cost in the base price of the vehicle and customers would resent it. As a salesman, I also find it surprising that you feel it would be productive to effectively take control away from the salesperson and give it to the manufacturer while the car is on order. Executive stock incentives hasn't seemed to help other industries, and an AARP incentive , might work in some cases, but at the same time it might perpetuate an image that Buick is trying to shed. I'm sorry, but I laso do not like Home Delivery either. I do agree, though, that GM could do a better job in pricing their "Executive Cars." I have been saying for approx 20 years that if GM wants to stay on top they would have to simply run with Chev-Pont-Buick- Cad all under one roof, and phase at non-hub dealers. This would solve over 90% of GM's problems. Everything else would quickly fall into place. Yes, I was against dropping Olds. I felt that if they went ahead with Saturn it would'nt be successful and would cost them another Division. I also felt at the time that they should have sold all of the GMAC mortgage business and kept just the automotive-related operations. I wouldn't have bought Saab or Fiat. I also said at the time that they would eventually get caught with Delphi legacy costs. Don't ask me how I feel about putting so many assets in China. You can believe this or not but some people know it's true.

[Buickman]

Originally Posted by 2648562

^^There's probably a reason why he doesn't diss GM's products. Think about it.

All fantastic ideas Buickman.

perceptive, kind, and appreciated.

thx

jd

[Buickman]

Originally Posted by vam29

GM would lose credibility by eliminating the Destinaation Fee as it would be necessary to include the cost in the base price of the vehicle and customers would resent it. As a salesman, I also find it surprising that you feel it would be productive to effectively take control away from the salesperson and give it to the manufacturer while the car is on order. Executive stock incentives hasn't seemed to help other industries, and an AARP incentive , might work in some cases, but at the same time it might perpetuate an image that Buick is trying to shed. I'm sorry, but I laso do not like Home Delivery either. I do agree, though, that GM could do a better job in pricing their "Executive Cars." I have been saying for approx 20 years that if GM wants to stay on top they would have to simply run with Chev-Pont-Buick- Cad all under one roof, and phase at non-hub dealers. This would solve over 90% of GM's problems. Everything else would quickly fall into place. Yes, I was against dropping Olds. I felt that if they went ahead with Saturn it would'nt be successful and would cost them another Division. I also felt at the time that they should have sold all of the GMAC mortgage business and kept just the automotive-related operations. I wouldn't have bought Saab or Fiat. I also said at the time that they would eventually get caught with Delphi legacy costs. Don't ask me how I feel about putting so many assets in China. You can believe this or not but some people know it's true.

thx for the input. to clarify...the destination charge wouldn't be added, just replace some other ingredient of the goofy/confusing rebates that you must experience, and hate, for how ridiculous and nonsensical they are. I strongly feel as outlined that the goodwill would be tremendous and that is why I made it STEP ONE.

home deilveries are something I started doing 25 years ago when I worked in the worst area of Flint after moving here from NY (Blain Buick, Clio Rd, they made a movie about it, R & Me). no one would come there so I did it from necessity. I can say from first hand experience that this is something people appreciate, even more so today with the advent of the internet. poeple know what they want and love not having to come to the dealer. of course the F&I folks aren't overly pleased as upsells become more different, but hey, this should really be about the customer if we are to win the long run, plus it's the right thing to do...being straight, honest, and helpful.

it's okay if we disagree. I like the passion, energy, and willingness to speak up. hope I haven't rubbed the wrong way, just standing ground based on experience and input. please continue with thoughts and ideas...do agree that the message would have to come across re: freight that it was a concession not a gimmick.

[ChevroletRevived]

Definitely think the change in approach is good! Finds much more of an audience that way. What this doesn't touch on, is product. It's needed fixing and that has been done (as in the process of being done) as we've seen with the latest from the corporation. Both effective sales and great product are needed for success. Proof is in the pudding I think with how well you've done in sales. This is your area of expertise, you sell cars. I don't see a reason why GM couldn't give it a try, put some of into action and see what happens. Couldn't hurt! Might know something about this we don't!

[Buickman]

Originally Posted by ChevroletRevived

Definitely think the change in approach is good! Finds much more of an audience that way. What this doesn't touch on, is product. It's needed fixing and that has been done (as in the process of being done) as we've seen with the latest from the corporation. Both effective sales and great product are needed for success. Proof is in the pudding I think with how well you've done in sales. This is your area of expertise, you sell cars. I don't see a reason why GM couldn't give it a try, put some of into action and see what happens. Couldn't hurt! Might know something about this we don't.

guess I've learned something here tonight. suppose my antagontistic attitude toward Mr Wagoner has caused some to develop a tempered appreciation for my expression of the facts as to his running (ruining) of our company (I say "our" even tho we are, many of us, not actual GM employees, but have the sense of belonging moreso than many who derive a paycheck).

don't get me wrong however, I still can't stand him for what he has done.

http://www.daylife.com/search/photos/all/1?q=dollinger#

[macphisto]

Love the change in tone from the Buickman! Very good ideas and clear understanding of how the experience of the customer and their perceptions matter. There's a reason why you're a great salesman - you understand how to satisfy the needs of customers.

You answered my major questions when you responded to Ming. I assumed that you didn't delve deeply into product because the design aspect is not your forte and it is pretty apparent that even the best salesmen need a good product. It's clear from your plan that you have no intention of providing inferior product to a customer because doing so could cause the customer to not want to come back. Same thing for the experience.

GM's marketing has been atrocious for a long time. As you've pointed out, they don't know how to use the press to their advantage. They did get a boost this year just by improving the perception of quality in the Malibu, though you're right on the fuel economy numbers. Funny thing is that some of those older pushrod engines can be far more efficient that the OHC ones. Cylinder deactivation is easier with them, they can implement VVT and direct injection on them if they want - and even add a third valve per cylinder. I think they can also reduce displacement and increase compression to get a similar amount of power out of a lower displacement engine, but all the tech geeks force them out of the pushrods even though, frankly, most customers don't care if an engine is OHV or OHC. They care about fuel economy or how it feels as it motivates the car - all things that can be tweaked. They might care abotu noise or vibration - also tweakable.

GM does need top grade product, but they need to change people's perception of them through more than just new product.

Your new stuff is something that every GM stockholder needs to get in their hands.

[Gagarin]

Buickman,

The RTG is great and I'd really love to see a company do the things outlined there - and I'd love for General Motors to be that company.

I agree with some of the product comments -

Addressing something about product would be good - maybe about keep striving for class leading and competitive vehicles, instead of place fillers which suck development, marketing, and distort brand image. Not having embarassments on the lot will help dealers (less risk), help brand managers (distinctive product), and help salesmen who will have a easier time selling a product that has many advantages.

Also, I have a sense that GM was a engineering blackhole where engineers would be working on science projects that would never see the light of day. This seems to be getting better (Volt?) but we see some big fumbles (Quadrasteer, the invisible 2-Mode Hybrids). This company at one time had huge amounts of cash and R&D but did not turn these into viable products soon enough. There needs to be technological leadership and wise investment into technology.

The BIG problem I see with the auto business is the way the dealership system seems to be this iron-tight thing. Podunk towns or big cities have all kinds of GM dealerships and you never really know what you're going to get. If the hotel industry and the fastfood industry can DEMAND certain quality, image, customer service and experience, I think GM should be able to demand that from it's dealers. Clothing retailers and restraunt chains owned by the same parent company control consumer experience and perception with decor and product selection - GM should be able to market it's brands with the dealerships being assests instead of liabilities. 'Shape up or ship out'. I have a feeling many dealerships just need some leadership - they're doing the best they could, but GM needs to LEAD.

[MonaroSS]

I have read Buickmans Return to Greatness previously and thought it had quite a bit of merit to it that GM would have been, and still would be, wise to examine carefully.

Yes I appreciate what Ming says about product, but I think that to understand how Return to Greatness and improved product could best co-exist you need to have a deeper understanding of the Japanese philosophy of 'Kaizen' which most westerners interpret as 'continuous improvement'. But westerners misunderstand it.

Buickman unwittingly uses a more Japanese Kaizen in his methodology than any GM exec would have understood, and it is where Ming doesn't quite get the value of Return to Greatness either.

Kaizen does not just mean 'continuous improvement' and especially not the way westerners interpret improvement. We in the west like obviously new things, so new that they indeed embody an element of transitory newness that is called 'fashion'. There is no room for 'fashion' in Japanese Kaizen because Kaizen in addition to continuous improvement involves another opposing element often overlooked and referred to as 'standardisation and elimination of waste'.

Most westerners overlook this as they simply think that it means that it is cheaper to horizontally standardise components in an automaker so that many different models use the same subsystems or component sets and that those components are less economically wasted when delivered just-in-time, which is a side product of Kaizen philosophy. But this misses the point altogether and misses why Toyota is so profitable.

The Kaizen element of 'standardization and elimination of waste' is not just horizontal integrated into the company across products but is vertically applied over time as well and is an opposing force to the other Kaizen element of 'continuous improvement'.

Like Yin and Yang, Kaizen is all about forces to continuously improve a product struggling with forces to resist changing the product over time. To improve the product makes it more appealing and suitable to the market place, but to keep the product unchanged makes it cheaper and cheaper to produce as fixed costs are amortised over time.

So Buickman needs to struggle with Ming and the net result should be a Toyota style profitability.

As an aside it has been interesting to note Toyota being criticized for reducing their production capability for batteries for the Prius and also for letting the Corolla languish without recent updates. But if Toyota foresaw the current market situation happening then their principles of Kaizen would require them to artificially provide an excuse for not making more Prius' which they do not make good profit on which under Kaizen is somewhat wasteful.

It would also mean they should hold off on spending money on Corolla. Why? Because a car you make unchanged for six years nearly doubles the profit on fixed costs of a car that you amortise over three years. Even if demand is lower for Corolla than it could be because it is a little outdated, better to sell a well amortised version in a market clamouring for smaller cars than to sell more of a car that is needing to first pay off it’s fixed development costs.

And you will sell more high profit margin older design Corollas if you make a much more appealing small profit vehicle like Prius conveniently not as available so as to compete with a surge in small car sales that you can direct to the highly profitable Corolla. Toyota is well served by their Kaizen philosophy, even if it does not produce the best cars in the world, but it makes for the most profitable cars in the world.

PS. By 'old' Corolla I mean not really modernised like their competitors. Just the old model regurgitated under a re-skin.

[Buickman]

Originally Posted by macphisto

Love the change in tone from the Buickman! Very good ideas and clear understanding of how the experience of the customer and their perceptions matter. There's a reason why you're a great salesman - you understand how to satisfy the needs of customers.

You answered my major questions when you responded to Ming. I assumed that you didn't delve deeply into product because the design aspect is not your forte and it is pretty apparent that even the best salesmen need a good product. It's clear from your plan that you have no intention of providing inferior product to a customer because doing so could cause the customer to not want to come back. Same thing for the experience.

GM's marketing has been atrocious for a long time. As you've pointed out, they don't know how to use the press to their advantage. They did get a boost this year just by improving the perception of quality in the Malibu, though you're right on the fuel economy numbers. Funny thing is that some of those older pushrod engines can be far more efficient that the OHC ones. Cylinder deactivation is easier with them, they can implement VVT and direct injection on them if they want - and even add a third valve per cylinder. I think they can also reduce displacement and increase compression to get a similar amount of power out of a lower displacement engine, but all the tech geeks force them out of the pushrods even though, frankly, most customers don't care if an engine is OHV or OHC. They care about fuel economy or how it feels as it motivates the car - all things that can be tweaked. They might care abotu noise or vibration - also tweakable.

GM does need top grade product, but they need to change people's perception of them through more than just new product.

Your new stuff is something that every GM stockholder needs to get in their hands.

thank you sir. never been so upbeat about this site and it's members.

point in fact. two years ago, I began passing out Return to Greatness in the Annual Meeting at the Hotel duPont. Wagoner had security threaten to remove me from the property if I didn't stop. maybe I was wrong but imagined the reason for the meeting was for shareholders to exchange thoughts and ideas on how to improve our company. and some wonder why I speak out against this guy? what's his deal anyway and why is he still in charge? there must be a reason!

[Buickman]

Originally Posted by Gagarin

Buickman,

The RTG is great and I'd really love to see a company do the things outlined there - and I'd love for General Motors to be that company.

I agree with some of the product comments -

Addressing something about product would be good - maybe about keep striving for class leading and competitive vehicles, instead of place fillers which suck development, marketing, and distort brand image. Not having embarassments on the lot will help dealers (less risk), help brand managers (distinctive product), and help salesmen who will have a easier time selling a product that has many advantages.

Also, I have a sense that GM was a engineering blackhole where engineers would be working on science projects that would never see the light of day. This seems to be getting better (Volt?) but we see some big fumbles (Quadrasteer, the invisible 2-Mode Hybrids). This company at one time had huge amounts of cash and R&D but did not turn these into viable products soon enough. There needs to be technological leadership and wise investment into technology.

The BIG problem I see with the auto business is the way the dealership system seems to be this iron-tight thing. Podunk towns or big cities have all kinds of GM dealerships and you never really know what you're going to get. If the hotel industry and the fastfood industry can DEMAND certain quality, image, customer service and experience, I think GM should be able to demand that from it's dealers. Clothing retailers and restraunt chains owned by the same parent company control consumer experience and perception with decor and product selection - GM should be able to market it's brands with the dealerships being assests instead of liabilities. 'Shape up or ship out'. I have a feeling many dealerships just need some leadership - they're doing the best they could, but GM needs to LEAD.

excellent point. anywhere in America a Big Mac is a Big Mac, same, same. GM would benefit to a large, very large, degree having consistent, reliable, trustworthy service from sea to shining sea. good concept and great goal to be shared and strived for amongst the dealer body. would also give the writers/techs/cashiers a sense of common purpose and a feeling of particiapting in a plan to win. man, am I getting some solid input and ideas to fold into RTG. they need to be thought thru as to presentation/implementation, but this is good stuff. worth staying up way too late.

[TimR]

Buickman, that is a very impressive list of great ideas! As I was reading it I realized many of the things on there have happened to me as a customer over the years with exactly the results you mentioned.

It will be interesting to see what the future holds. Hopefully some of these ideas are used!