Opinion

Felix Salmon

Managing expectations at GM

By Felix Salmon
June 4, 2009

Mark Wolfinger asks a great question:

How can GM expect to sell ANY cars now when they are promising better cars soon?

It’s a bit like living in a country with deflation: no one buys anything because it’s going to be cheaper tomorrow. And yes this is going to be a hard circle for GM’s communications people to square: how to get across a message of a company building fabulous cars for tomorrow, without implicitly denigrating the product line they’ve been bequeathed today.

Comments
11 comments so far | RSS Comments RSS

Lots of industries come out with better products frequently and people buy anyway. Tech is a great example. People buy computers even though something better & cheaper is just around the corner. Cell phones seem to change by the moment. Etc. Etc.

Posted by fusion | Report as abusive
 

And, you know, the Malibu really is a great car. The Aveo, while less than exciting, has a great price and excellent fuel economy. The problem of image is at least as great as that of substance–who wants to buy a mid-size or subcompact “Chevrolet?”

Saturn cars in the 1980s weren’t dramatically more reliable or efficient than other GM lines–but everyone knew that it was “a different kind of car company.”

How they’re going to bring the Chevy brand back to life, I don’t know–but if they can’t capture the public’s imagination, they could have a lineup of class leaders like the Malibu that still don’t sell. That’s the power of reputation for you.

In the PR department, that Chevy Volt can’t come fast enough. They could sell six units and still reap a huge windfall in term of brand image.

Posted by Craig | Report as abusive
 

Easy – Price them right. Its all about value, so if I can buy a very good car at a very good price, I’ll do it. The tricky part is the subjective “very good.” I think GM makes a few very good cars that are worth buying if we could get them at a “value” price point. But that is just one opinion and not a widely held one I fear.

Posted by CaddyFan | Report as abusive
 

I saw what I’m sure was the opening shot of a new ad campaign last night. I must say that the spot I saw was pretty effective. “We’re not going out of business. We’re getting down to business.” A good commercial.

 

As long as GM’s saying just saying better cars tomorrow, rather than better cars than the terrible ones that drove us into bankruptcy, this shouldn’t be a problem. There’s some evidence that batter models have already come but simply came too late to solve GM’s structural issues.

 

In terms of pricing for value (CaddyFan comment), it turns out value is based on perception, not price, and perception is hard to change. One of the most successful campaigns was by Ford, which went from F-O-R-D (Fix Or Repair Daily) to “Quality is Job 1″. Not sure quality changed a whole lot, but Ford did a pretty good job on changing the perception of rust, transmissions popping into reverse, Edsels and exploding Pinto fuel tanks. It will be interesting to see what GM comes up with in respect to perception, when the public knows UAW seniority takes precedent over worker’s quality.

Posted by Ima Bier | Report as abusive
 

forgot one after exploding Pinto fuel tanks…. and not to be forgotten, rollover Explorer SUVs.

Posted by Ima Bier | Report as abusive
 

too bad about those Pinto fuel tanks…an otherwise excellent vehicle (not so much). After renting a Malibu during an Atlanta visit last week, the word “impressed” is too high but this is a solid car. Couldn’t tell you the engine, probably a 4-cylinder; but comfortable, good sight lines (except for a door pillar blind spot), easy to drive and controls were plenty easy.

I really, really don’t think the VOLT is any answer to their problems. GM also delivered the Aztek in the late 1990′s…egregious is a mild description.

Posted by Griff | Report as abusive
 
 

Great Comments so far, and good question. I work for GM. Previous to my assignment on Social Media team – I worked in GM Design. Yes, the cars in the hopper are amazing and build off the great cars we have now. The award winning Cadillac CTS, Chevy Malibu, Chevy Malibu, Buick LaCrosse and Buick Enclave are just a handful of the great cars and crossovers currently available. Soon to follow are the Chevy Volt, Cruze, Orlando and Spark as well as the Cadillac CTS SportWagon, SRX and CTS Coupe. I implore you all to check out these cars for yourselves. You can find me on twitter: @gmblogs

 

In every organization where I’ve ever worked, huge organizational shakeups (massive layoffs, reorganizations of divisions, shuffling of administrators and responsibilities) have led to less productivity and lower-quality work. Why would anyone expect that to be different for GM? Car lines that had mediocre quality five years ago are very unlikely to have better quality today, and vanishingly unlikely to have better quality in a year, after some large fraction of the factories and workers involved have gone through a bunch of administrative chaos and reorganization.

Posted by albatross | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •