Car Guys vs. Bean Counters - Bob Lutz [90]
Of special note is the source of profitability: it’s the car business! This is in sharp contrast to the old days, when vehicle profitability was marginal or negative, and most of the money came from the finance company, GMAC, and the seemingly endless profitability of ResCap, the mortgage subsidiary, in particular.
Weaknesses remain at GM, and they must be addressed: GM has a troubled relationship with external communications, formerly called “PR.” Instead of a welcoming, open, “let me help you” attitude toward the press, there remains a level of shyness and caution, an unwillingness to grant the media access to senior leadership who, for the most part, consider it a waste of time and a distraction from their “real job.” Rick Wagoner was fond of saying, “All we need are good results, that’ll take care of everything.” But what if the positive engagement of the CEO and the top people drives results? What if the public tends, for equivalent value, to buy from a company they love and trust? I’m convinced that senior leadership has no more important role, beside ensuring product excellence, than constantly and consistently telling the company’s story, and explaining, on “background” if necessary, how and why certain actions are being taken. Proof that this works can be found at Chrysler. During the Iacocca era, Lee relentlessly sold the company and its (mediocre) K-car products to an increasingly adoring media and, thus, public. Chrysler, instead of being vilified for taking government support and producing essentially one car in a dozen versions, became the brave, tough little underdog that wouldn’t give up.
Or take Ford today: CEO Alan Mulally and Mark Fields, head of North American operations, through their accessibility, charm, seeming candor, and willingness to devote large quantities of time to explaining and teaching, have become the darlings of the U.S. media. Consumer willingness to buy, or at least consider, Ford products is considerably in excess of the actual quality of their (good) product lineup. Ford has become the brave underdog that refused government assistance, and they do everything else right, too. Product flops like the ill-conceived Ford Flex and the monstrously proportioned Lincoln MKT are quietly glossed over and forgotten. Had they been GM products, they would have been held up for repeated ridicule as examples of corporate ineptness. GM, when using the same platform for several brands, usually provides an expensive, entirely different body for each brand. Ford spends no such money on at least two major, high-volume platforms, where the differences between Ford, Lincoln, and Mercury must be discerned in grilles, tail lamps, and ornamentation. Test question: which company, Ford or GM, is consistently accused of “badge engineering,” i.e., selling essentially the same vehicle under different brands? You guessed it! In the words of one well-known scribe, “Ford always gets the benefit of the doubt, because we know and like them. GM doesn’t because we don’t.”
Ford earned this by regarding the media as an important factor in corporate success, worthy of the time and intellect of the leadership. GM’s attitude is best described by a comment made by Ed Whitacre in a meeting. He was angered by some article that was not entirely positive. “Why do we waste all this time talkin’ to the press? It doesn’t do us a bit of good, and it just distracts us from our job. We don’t have to constantly tell these people what we’re doing! I think it’s better if we’re sort of mysterious.” Sadly, being “mysterious” is a recipe for disaster. People fear what they don’t know, and they hate what they fear. Engaging the public, through the media, in an open, supportive, positive manner is something GM needs to learn if success is to be permanent.
Perhaps the elevation of Dan Akerson to CEO, replacing Ed Whitacre, will provide the opportunity to engage the media and the