GM the underdog...
GM primed to fight back as underdog
Marketing chief says automaker has accepted its place in the industry and is ready to recover.
By Daniel Howes / The Detroit News
The son of a steelworker, he comes from Beaver Falls, Pa., the same gritty hometown as legendary quarterback Joe Namath.
He's a former linebacker at the University of Virginia. He's also the unofficial leader of General Motors Corp.'s "Cadillac cowboys," the swaggering marketing and sales types who now, in GM's latest moment of peril, find themselves charged with steering GM's disparate brands back to prosperity.
Talk about a tough assignment. Yes, it's a good thing that Mark LaNeve, vice president of sales, service and marketing for GM North America, has the DNA of a Rust Belt industrial town and years of football deep in his 46-year-old bones.
He'll need all the mettle he can muster just to survive.
"The chapter is over," he told me, acknowledging the obvious: Toyota, Honda and Nissan combined sell more vehicles to American consumers than GM does. "Japan Inc. passed us up. It's old news. Our mindset is -- we've got to fight back.
"For us, what's the next chapter we write? My team's (attitude isn't) 'GM's the leader, GM's the leader.' That's (crap). We're the underdog."
If the past week doesn't prove him right -- billionaire Kirk Kerkorian's bottom-feeding play for 8.8 percent of GM shares, then Standard & Poor's downgrade of GM debt to "junk" status -- what else would this side of bankruptcy?
GM Chairman Rick Wagoner is in the hot seat, now that every other metric for measuring success in the auto industry -- profits, market share, share price, debt rating, cash hoard -- is headed in the wrong direction.
LaNeve's in the hot seat, too. He's got to move the metal GM's designers, engineers and plants are scheduled to produce, whether they're the right products for their time or not.
First off: Will any of GM's eight North American brands bite the dust? No. "Eight brands are fine if everyone plays their game."
Isn't "the game" too muddled -- four minivans in four different divisions, look-alike midsize SUVs, a Buick division still groping for an identity and a Pontiac division that's supposed to be about performance but mostly isn't, at least not yet?
"We have to be able to manage all the businesses like they're walled off," LaNeve said, drawing a brand chart. "We're going to win or lose by managing each of the eight brands like they're different companies."
Which, of course, they aren't. They're one company, something GM has been trying to beat into us and itself for the better part of a decade as it systematically pushed to eliminate fiefdoms within its vast bureaucracy -- "run common, run lean," develop "common architectures," manage each model as a "brand."
The "common" parts remain and account for some of GM's biggest organizational successes in the past decade. There are the common manufacturing processes that made GM plants among the world's most efficient. And there's a common set of parts for the new Cadillac vehicles that anchor the brand's legit revival.
LaNeve may be on to something with this "walled-off business" stuff. GM's biggest product successes since its last implosion in the early '90s have been products or brands effectively walled off from the car-and-truck vegematic that has been a hallmark of way too many GM products.
Think the new Cadillacs, the sum of a $4 billion bet that LaNeve knows well as the division's former boss. Or Corvette. Or the early success of Saturn before Detroit starved it for new product investment, a mistake it's now in the midst of correcting with a series of new cars designed mostly by Germans from its Adam Opel unit.
Or GM's full-size pickups and SUVs, developed together and evolved over time much as Ford does with its F-Series line, or BMW with its 3 and 5 Series cars or Porsche with its 911. Vastly different products but with similar results: All are perennial stalwarts in their respective segments.
LaNeve is walking a tight rope. Killing brands now, much as some voices on Wall Street and in the media are demanding it, would exacerbate GM's market share slide, saddle the automaker with more unused plant capacity, and run up a massive tab with angry dealers.
What don't critics get about what's going on inside GM and how it intends to manage its brands?
"They're interpreting past behavior," he said. "If their statement is that GM can't afford to provide full product lines to four or five brands, then they're right."
Given GM's "listen-to-what-we-say-not-what-we-do" track record, it's fair to interpret past behavior unfavorably for GM. But we're getting somewhere. An admission that Pontiac and Buick don't each need a minivan? Yes, basically.
"The answer," he said, "is not to have 15 products in each."
Yes, we're getting somewhere. Pontiac and Buick will get fewer models and will be more tightly focused on individual brand identities or they'll get the scrap heap. For Pontiac, its sharpened identity is best exemplified in the Solstice roadster; for Buick, it's the Lucerne that debuts later this year.
"I get the feeling people are waiting for some brilliant strategy," he said. "The strategy is build strong brands. What gives me optimism is you can turn brands around with some momentum. Cadillac picked up 70,000 units in three years."
So how does LaNeve propose to build the badly needed momentum? Back to the doodling.
Chevrolet and Cadillac are full vehicle lines, one mass market, the other premium. Hummer and Saab will be focused niche brands, and all four will be GM's global brands (though I have a hard time seeing Europeans plunking down hard-won euros for the gas-guzzler's gas guzzler, synonymous as it is with the U.S. Army).
Saturn will remain Saturn, albeit Europeanized in the look and feel of the upcoming Sky roadster and Aura sedan. The interesting part is LaNeve's vision for Pontiac, Buick and GMC -- a combined "channel" for dealers that would deliver between 1.2 million and 1.7 million vehicles to customers every year.
At least that's the plan. Athletic design and performance from Pontiac. Premium quality and refinement from Buick. Professional truck capability from GMC. All would offer fewer models than they do now.
OK. I get the theory. GM has seldom disappointed on theory. Where it falls short too often -- "public faux pas," LaNeve calls them -- is on the execution part. Can you do it, Mark?
"We have to do it," he said. "Too much is at stake."
That's absolutely true. At stake is far more than his job, or even Wagoner's. We're talking about the survival of GM as we know it.