Car Guys vs. Bean Counters - Bob Lutz [104]
Hummer turned out to be a colossal mistake, although coming on board in 2001 I was a major proponent of feeding its growth. Those were the heady times of economic expansion, and with a complete line planned down to small but capable off-roaders with four-cylinder engines, the brand had the potential to challenge Jeep as the dominant American “rugged, capable, off-road” brand. Unfortunately, the increasingly strident anti-CO2 forces created an environment (eagerly seized upon and magnified by the media) where the large Hummer H2 became the poster child for upperclass greed, insouciance, and environmental irresponsibility, poisoning the whole brand. The fact that many European luxury sedans and sports cars routinely suck more fuel than a Hummer H2 was lost in the hysteria.
In retrospect, GM should never have launched Hummer as a brand. In the early 2000s, we should have launched the H2 as “the Hummer by GMC” and sold it through GMC dealers.That would have vastly reduced our financial commitment, permitted us to drop it quietly when the heat came on, and avoided the massive legal exposure to an entire, newly created retail structure. But, as with Saturn, the cost of exit was too great and only Chapter 11 was able to create the conditions that permitted shedding the brand. I was no smarter than anyone else, though, when the Hummer brand was hot.
Buick and Pontiac were frequent nominees on Rick Wagoner’s “reduce brands” list, but I felt very strongly that each had its legitimate place in the lineup and that they were not “superfluous” as much as they were victims of parental neglect. Buick was ultimately saved because of the importance of the brand to China, as well as by the current resurgence thanks to hugely successful products like the Buick Enclave luxury crossover and the spectacular new LaCrosse.
I personally would have fought to keep Pontiac. Research showed it to be one of the brands most coveted by Generation Y, the youngest identifiable demographic group, and despite endless interference and attempted direction changes from a rapidly rotating set of Pontiac marketing heads, we had finally managed to develop a unique, plausible, complementary product philosophy for Pontiac: sporty, entertaining, high-performance cars with rear-wheel drive, like BMW at much lower prices.Two of the foundation stones were in place: the Pontiac Solstice roadster and coupe and the highly acclaimed G8 rear-wheel-drive sedan, which, despite practically no launch advertising, soon began to sell well to exactly the type of customer we had always envisaged.
Next up was to be a smaller rear-drive sports sedan, a valueoriented car sharing its basic layout with a future smaller Cadillac. Alas, there was no “China factor” to argue in the case of Pontiac; it was, as a brand, not (yet) profitable. Because the “new” Pontiac was not as far along as the “new” Buick, it was cut. If it had been my choice, I would have kept it. My decision may well have been proven wrong. The numbers said drop it; my gut said keep it. We’ll never know.
What would I have done about the UAW and our legacy costs? I wish I could claim that I would have tackled the problem head on, with boldness. The truth is, I would not have done anything differently. In the 2007 negotiations, under the leadership of Rick Wagoner (and thanks to a growing sense of reality on the part of the UAW under Ron Gettelfinger), GM successfully negotiated a solution to the crushing, multibillion-per-annum funding of UAW health care costs. The irony is, the savings were not to become effective until 2010 . . . exactly two years too late to save us from the “perfect storm” of the 2008 mortgage and car market meltdown.
A tough approach, often advocated by outsiders unfamiliar with the