Well put, Mike :yes:

 

The fact that my local dealer has 8+ Solstices on order but GM is only giving them 6 is part of the problem.

Forget your ego for a minute GM, and give up the limited production run on cars people actually want to pay money for.

 

exactly. every time i sit in an american car, i get the feeling that nowhere in the process of designing and building that car did they think about the driver's experience. instead, the feeling is more like, "where can we save money?"

i want to see these guys succeed, i truly do. but boy is it frustrating to watch them make the same mistakes over and over again.

 

The thing that really annoys me is that GM already has a bunch of small cars that could easily compete against the Japanese onslaught of small cars, namely the Opel Meriva, Opel Corsa and Opel Astra.

How come GM isn't seriously considering selling at least the Meriva in the USA? Remember, they're already assembling the Meriva in Mexico, so it wouldn't take much to expand that plant and sell US-certified versions under the Chevrolet label (in fact, in Latin America the Meriva is sold as a Chevrolet model).

 

This is an e-mail Bob Lutz sent to all GM employees upon joining the company, about 4 years ago. I've highlighted items 5 and 10, which I thought are really really good. While he's very much made progress on executing on this, 2 and 6 still needs some work.

1. The best corporate culture is the one that produces, over time, the best results for shareholders. Happy, contented employees, and an environment where nobody argues or disagrees, and everyone compromises because the other person has goals, too, is usually not the culture that produces great shareholder value. performance-driven culture is often a difficult place to work, and it certainly isn't "democratic." Democracy and excessive consensus building slow the process and result in lowest-common-denominator decisions. As Larry Bossidy, former CEO of Allied Signal [now chief executive at Honeywell--JF], so aptly said: "Tension and conflict are necessary ingredients of a successful organization."

2. Product portfolio creation is partly disciplined planning, but partly spontaneous, inspired all-new thinking. A good planning process can be an excellent baseline tool, a means of generating solid data. But it cannot robotically create a good future portfolio. It will generate bunts, singles, walks, and the occasional double. But triples and homeruns come from people who say, "Hey, I've got an idea!! Listen to this!" Steven Spielberg does not research in moviegoer needs segments. Needs-segment analysis can find a "small monovan" niche. It can't find a PT Cruiser, or a new BMW Mini, or an H2!

3. There are no significant unfilled "Consumer Needs" in the U.S. car and truck market (except in the commercial arena). What there are are "consumer turn-ons" that research alone won't find.

4. The VLEs [Vehicle Line Engineers who are given responsibility for a car or several cars--JF] must be the tough gatekeepers on program cost, content, and investment levels. After (and maybe before) contract, requests for "priceable" content (it never works out that way, anyway) or "volume-improving" content can no longer be honored without offset. The VLE needs a program contingency, to be reserved for last-minute fixes or enhancements, (and maybe I need one, too). But the VLEs must evolve into often-unpopular "benevolent dictators" when it comes to protecting their cost position. It must be inviolable. Programs that miss their cost targets cannot be tolerated.

5. Much of today's content is useless in terms of triggering purchase decisions. Most customers want a vehicle of new, fresh exciting appearance, with a rich, value-transmitting interior. They want a great powertrain, superb dynamics, and, obviously, safety and quality. But the thought that huge advances in voice-recognition, or screen-technology, or multi-function displays or ever-trickier consoles, or embroidered floormats, etc., etc. will somehow override other deficiencies (or, worse yet, "averageness") is wrong. What focus groups say they would "really like in their next car" is not reliable, because they are, in the research, not really paying for it. ("Talking car" and all-digital instrument panels received high "want" ratings in their day.) The vehicles that are succeeding today (Honda, Toyota, Audi, VW) are not highly-contented, or if they are, they charge for the option packs. A "base" Camry is really base!

6. Design's Role Needs to be Greater. As one of you said to me the other day, Design is being "corporate-criteria-ed" to death. By the time the myriad research-driven "best-in-class" package, the carryover architecture, the manufacturing wants, the non-stone chip rocker placement, the carryover sunroof module, and on and on, are loaded in, and the whole thing is given to Design with the words, "Here, wrap this for us," the ship sailing toward that dreaded destination, "Lackluster," has already left the dock.

7. Complexity-reduction is a noble goal, but it is not an overriding corporate goal. Standardizing options for the sake of simplifying the BOM, engineering and releasing effort, pricing, dealer stocks, etc. is very worthwhile. But it can be counterproductive if it reduces vehicle margins, i.e., the net revenue loss is greater than the demonstrated savings in the enabling disciplines. A good rule of thumb is that, in the case of an option with a significant cost, where the freestanding "take" is less than 70-75%, the incorporation as standard will cost money. If "priced for," then a large proportion of customers are being asked to pay for something they don't really want. If it's "eaten" and not priced, we are reducing margins without enhancing value to those who don't care for the option. My experience is that options running at 25-40% should remain options (perhaps grouped into packages), options running at over 75% should be incorporated as standard. The area between 40-75% requires judgment in each individual case, and a good dialog between affected parties.

8. We all need to question things that inhibit our drive for exceptional, "turn-on" products. Edicts and criteria do some good; they create consistency and order, and they help someone achieve a goal that he or she feels is important. But many of our criteria are internally-focused and prevent us from doing high-appeal, exciting, dramatically-new products. A salesman cannot say to the customer, "It takes a bit of getting used to, I admit, but did you know that it satisfies 100% of GM's internal criteria?" We don't want anarchy, but we do need more of a "Who says?" attitude. The focus has to be on the customer.

9. It's better to have Manufacturing lose ground in the Harbour Report [an annual study of factory productivity--JF], building high net-margin vehicles with many more hours, than being best in the world building low-hour vehicles that we make a loss on.

10. We need to recognize that everything is a trade-off, that we can't maximize the performance of any one function to the detriment of overall profit maximization. The same goes for every discipline: A gorgeous vehicle that disappoints in quality will fail. A car incorporating every conceivable new safety technology makes no contribution to safety if it becomes unaffordable to the customer or we can't afford to build it. A vehicle with a single-minded focus on "absence of things-gone-wrong" will fail miserably if it is dull, unexciting, a dog to drive, and ugly. Even if it's the best ever found by J. D. Power!

11. Remember the Bob Lutz motto: "Often wrong, but seldom in doubt." None of us is infallible, and we all make errors. Remember baseball, where a batting average of 400 is unheard of! But pushing and arguing for what you believe to be the right course (while recognizing you just might be wrong, therefore, still willing to listen) is the key to moving forward. Errors of commission are less damaging to us than errors of omission. In our business, taking no risk is to accept the certainty of long-term failure. (Even Aztek, in this sense, is noble!)

 

Eh, the Meriva is kinda weird and the Corsa is too dinky for the US market. The Astra is a lot nicer than the piece o crap Cobalt though, and they're on the same platform.

Thing is, GM can make pretty decent cars out of their newer platforms, but they're hoarding the good stuff for upper-end models that aren't competitive in their price segments.

Perfect example is the Saab 9-3. It's on the same platform as the Chevy Malibu and Pontiac G6. It gets nice interior materials, a nice powertrain, nice chassis calibrations, and is generally a rather nice car. If the Saab 9-3 was sold in decontented form (and by this I mean less gadgets and maybe less power but the same basic "nice" stuff) it would be plenty competitive against the Accords and Camrys of the world.

But GM has to take the basic platform and crappify it for the Malibu and G6, throw some old pushrod engines in them--and while they may be good pushrods they're still old school low tech--and make way too many stupid variations. Then the 9-3 gets priced as a supposedly premium Saab but it's nowhere as nice as the competition it has to go up against.

If GM wants to use a platform in "premium" and also regular cars, they have to make the platform good enough for the premium car and then just offer a basic, cheap-to-produce version as the regular car without making it a piece of crap. They can't use a platform that would make a nice regular car when set up in its premium form, then take all the niceness out to make the regular version.

 

"What if GM was put for sale on eBay, and nobody came?"
I got a slap in the head for that one at lunch.

The Pontiac G6 is a step in the right direction.
I still don't care for GM OHV engines, but that's obvious
because I prefer DOHC units that I typically drive.

With this holiday season's "Red Tag Sales Event,"
a Buick LaCrosse will be priced like a 4-cylinder Camry.
Which would you rather have, the 6-cylinder Buick,
or the 4-cylinder Camry? Think twice about this one,
especially with the redesigned Buick interiors.
I'd at least consider the Buick...
... but not if resale value was important.

Any criteria that allow the Aztek to be called "a noble effort" need to be reevaluated.

 

GM's woes are simply a combination of bad business choices/bureaucracy coupled with average products. GM currently has, what, 8 divisions? And in those division are about 80 models of cars, with many that crossover between divisions and many more that share platforms across divisions. That alone dilutes each brand image and raises operating costs and company complexity. Add to that an unwillingness to stand up to the UAW and liquidations of GMAC and their supply of cars through the employee sale this summer, and you've got GM as it stands now.

GM cars aren't really that bad, but that's just it: they aren't good or bad. In order to win back consumers, GM needs to do more than just match the other car makers, it needs to create cars that are desirable and better than anything Honda or Toyota or Nissan can make. Otherwise, why would anyone choose a GM car? It may be too late for that though, with GM taking such massive losses in capital. There just plain isn't time left to design a nice car.

 

Well, when you say they are neither good or bad, I think that there are no bad cars being manufactured today. For instance, just five years ago you could say that GM cars are not as good as Japanese but not as bad as Korean. Today, however, the Korean cars have far surpased GM in quality. Yes, GM cars are not bad, but they are the worst on the market.

 

Each of the brands aren't their own division anymore. It hasn't been that way since the 1980s. They might have separate people doing the marketing (i.e. one guy is Pontiac, another is Cadillac).