December 9, 2008

The big moment! The turnaround! What we've all been waiting for...

Rob Walker, at Slate, writes about the current ad campaign by GM to persuade us that they have really "turned the corner" this time. And notices that it all sounds familiar...

GM begs forgiveness, again:

....GM says that campaign is aimed at the apparently large segment of the car-buying public that simply won't consider its models. The company's North American president calls it 'a unique effort to reach those consumers whose perceptions of GM are out of step with today's reality.' I suppose that's reasonable, but let's say you're one of the thousands who did buy a GM car in the 1980s and 1990s. You, apparently, were a sucker. Your vehicle was not put together by a company with 'a true culture of quality in every division.' That's not what I'm saying--it's what GM is saying.

Or at least, it's what GM is saying now. Twenty years ago, as it happens, GM's then-chief executive was calling 1983 'the turnaround year we have been working for.' That was Roger Smith. Six years later he and GM President Robert Stempel reiterated that a 'turnaround' in 'product quality' and 'customer service' had been underway for 'some time.' When Stempel assumed the top slot alone a year later he assured us that GM's 'entire focus' was on customer satisfaction. Meanwhile GM's share of new-car sales fell from 44 percent of the U.S. market to about 35 percent.

Stempel was run out of Dodge (as it were) by the company's board about two years later, and GM announced that 'fundamental changes' in its business were underway. Market share dipped below 30 percent, but not to worry. In late 1994 the New York Times reported that the new president and CEO was saying that GM's North American operations 'had 'absolutely' turned the corner.' Another GM executive noted the carmaker's focus on the consumer ... and so on. Last year, for what it's worth, GM had about 28 percent of the domestic vehicle market...

Either they are making exciting, appealing cars, or they are not. That's the only question.

All the rest is meaningless if they can't do that. Improving "product quality" or "customer service" is management, and any company can make such improvements if it tries hard. But for a giant company to come up with that mysterious something that generates excitement...that requires something like generalship. Like Marlborough* calmly watching hours of inconclusive carnage on the battlefield, waiting for the wavering he expects in the French line as the redcoats grind them down, and then committing his reserves at the exact moment.

GM had a moment of opportunity when Saturn was launched. I remember how there was real buzz about a GM line of cars, and people were eager to show off their new Saturns to the neighbors. That was probably a moment for GM to ruthlessly sacrifice a couple of moribund older car lines, and fling its resources into the new models. But to do that the leader has to be a killer. Thousands of decent people--his own friends maybe--have to be thrown out of work. And the opprobrium that would fall on the guy who scrapped, say, Pontiac! Wow! Painful. (By the way it is the moral thing to be a "killer" at such a time. Inaction would be morally wrong. Like a doctor too soft-hearted to amputate a limb to save a life.)

[*I know, I know, nobody thinks about the Duke of Marlborough anymore. Or even smokes his cigarettes. "Will the last person who cares about history please lock the door? Mr Weidner?" I recall it was Voltaire who wrote something like: "Who has not heard of the Siege of Malta?" Pretty soon it will be: "Has anybody here heard of Voltaire?"]


Posted by John Weidner at December 9, 2008 10:06 AM
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