Great Moments in GM Marketing: The XP-75 – National

Great Moments in GM Marketing: The XP-75 – National

Facing tough German competition, the people at General Motors come up with a large-displacement supercharged contender that outpowers but also out-weighs the BMW-and-Benz-powered entries. The look of their new model is controversial, but we’re told that it has to be that way due to existing platform constraints. And, of course, they’ll need a massive cash injection from the United States Government to make the whole thing happen, and they’ll get it, even though the aforementioned government wants them to build something completely different.

Wait a minute. Did you think I was talking about the CTS-V? Pas du tout! Set the wayback machine for the big band era, and let’s hear a story about how General Motors (allegedly) sabotaged the strategic plans of the United States in order to further their own economic interests.

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Great Moments in GM Marketing: The XP-75 – National

Now that GM’s acquisition of the subprime lender AmeriCredit has had 24 hours to sink in, howls of protest are starting to surface. The charge is being led by Senator Chuck Grassley, who has requested a review of the deal from the SIGTARP, saying

If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first.  After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.

And though Grassley’s criticism could be read as mere partisan gamesmanship from a leader of “the party of no,” there are a number of very good reasons for opposing the deal.

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Great Moments in GM Marketing: The XP-75 – National

After ending the first quarter of this year with $35.7b in cash and equivalents, GM was in the best position it’s enjoyed in decades. And yet, with an IPO prospectus looming, The General is seeking a $5b line of credit and trotting out EBITDAPRO as its in-house measure of financial success. Both of these tactics are hallmarks of companies that are doing poorly, and GM has already learned how problematic loading up on debt and sliced-and-diced financials can be. So why is The General inviting criticism from outlets like Edmunds Autoobserver, which characterizes GM’s push towards an IPO as the rebirth of old bad habits? The simple answer: “business execution.” In other words, GM may have a lot of cash, but it’s got nearly as many demands on its resources as well… and these cash drains hardly add up to a coherent strategy.

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Great Moments in GM Marketing: The XP-75 – National

Despite having more cash than debt for the first time in decades, GM is going back to Wall Street in search of fresh debt. Over the weekend, The General has been in talks with several banks to secure a $5b revolving line of credit to shore up its liquidity position ahead of an IPO that’s rumored to take place in August. At $5b, GM’s desired line of credit would essentially replace the $5.8b the automaker has repaid to the Treasury, and will help it deal with a number of pressing cash needs to maintain its shaky global empire. But with so many pressing uses for the cash, and political pressure mounting for a rapid IPO, can GM deal with its issues and take on more debt and be worth what the government wants it to be worth? Troublingly, the answers to these questions are not to be found on GM’s balance sheet.

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Great Moments in GM Marketing: The XP-75 – National

As yesterday’s sales graph proves, this is not the greatest time to be re-launching an entry-luxury brand. With Kias and Fords offering the kind of tech gadgets once found only in the upper echelons of true luxury brands, and with well-regarded import luxury marques moving into the front-drive, mass-market, the so-called “premium” brands are finding themselves caught in the middle and losing sales. But in spite of these damning dynamics, GM is moving to overhaul its entry-luxe Buick brand at top speed. Why? Because it can…

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Great Moments in GM Marketing: The XP-75 – National

GM’s government-installed Chairman/CEO Ed Whitacre hasn’t been wildly popular with Detroit insiders, earning dismissive raspberries from more than a few corners of the industry’s peanut gallery. But now that his reign of executive terror is over, Detroit seems to be learning how to stop worrying and love the former AT&T man. As Whitacre prepares for his first visit to Washington DC as head of GM, the local media and other members of “Team Detroit” are making their peace with Whitacre. So what lies beneath the new united front?

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Great Moments in GM Marketing: The XP-75 – National

News that GM is selling a control-shifting single share in GM Shanghai to its Chinese partner SAIC was the toads-from-heaven flourish at the end of an epic week for the RenCen. The day after the last of GM’s lifer CEOs left the building, Opel’s CFO followed suit. One management re-organization and a rough LA Auto Show later, came this symbolic surrender of GM’s largest market for a measly $85m. Accompanied by news that The General would buy out Suzuki’s stake in CAMI for an estimated $46.5m, no less. Oh yeah, and something about India. Freshly-minted CEO and notorious rattlesnake killer Ed Whitacre isn’t about be accused of not trying to shake things up. The only question is where will everything land?

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Recently, it’s become popular to believe that when a zombie loses its head, it dies. With today’s resignation of Fritz Henderson, the reanimated corpse of General Motors is testing that theory. Henderson was the latest in a line of GM lifers to hold the company’s reigns, hand-picked by ousted CEO Rick Wagoner and put in place by a presidential task force that couldn’t say no to another insider. In theory, Henderson’s resignation shouldn’t come as a surprise, let alone a disappointment. In practice though, the move leaves the zombie GM in a precarious position at a challenging moment. For the first time since (your guess here), GM is in the hands of an outsider.
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Great Moments in GM Marketing: The XP-75 – National

GM’s first post-bankruptcy financial data has arrived, underscoring in red ink the folly of the government “investment” in the shambling zombie once known as General Motors. Bankruptcy-driven improvements in cost structure have not prevented GM from turning a non-GAAP-certified loss since emerging from Chapter 11, and GM is already warning that 4th quarter results will be even less attractive. More importantly, beneath all of the interpretation of this latest batch of weak results, rests the biggest lie of all: GM will be paying back the taxpayers. GM has simply defined the terms of its debt as $6.7b, or about half the amount remaining in its $16b bankruptcy-present escrow account. The plan is to have the taxpayers pay off GM’s debt to the taxpayers, and collect the remaining $6b or so for operating cash.  When called on the ruse, GM CEO Fritz Henderson has only one defense: Taxpayers will receive their just reward only when GM’s IPO relieves them of their 60 percent equity stake. But even with the goalposts moving up in hopes of a PR win, there’s little evidence that GM will come close to paying off their full bailout bill.

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Great Moments in GM Marketing: The XP-75 – National

OK, so, GM is a nationalized automaker. I know, I know: nationalization is for third world dictators. But there it is. Thanks to outgoing president George Bush, the feds used $50 billion from the Troubled Asset Relief Fund to bail out General Motors, in exchange for majority ownership. So no matter what W’s political successor says about his administration’s “hands off” non-management of Government Motors, he who owns the gold makes the rules. And when it comes to running a federal-funded organization, Uncle Sam plays by different rules than, say, any private enterprise extent. The bottom line is that there is no bottom line. Amtrak, the U.S. Postal Service, Medicaid—they’re all run at a tremendous, ongoing loss. Which means there’s zero sense of accountability. Which means they will never, ever be able to fully and fairly compete with privately held corporations. Why should GM by any different? Answer: it isn’t.

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Great Moments in GM Marketing: The XP-75 – National

Back in the day, GM really pissed me off. As the American automaker continued its inexorable slide into bankruptcy, executives, analysts, journalists, loyalists and camp followers scoffed at the prospect of disaster. Their scorn fueled my anger or, as Angus Mackenzie would have it, pompous indignation. When the feds bailed-out and then nationalized GM, the company’s refusal to overhaul (keelhaul?) its executive “talent” kept my ire alive. A few months and $50b-plus dollars later and I’m rapidly approaching the point where I couldn’t give a NSFW. How many times can you sing the chorus of “Where have all the flowers gone?” without saying FTS and cranking-up the MC5? Before I abandon this pursuit entirely, here’s a quick rant about GM’s inability to realize American’s favorite mantra: hope and change.

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Great Moments in GM Marketing: The XP-75 – National

General Motors is a nationalized automaker. But it can’t stay that way forever. Its federal taskmasters have decreed that GM must return to public ownership before the Congressional mid-term elections in 2010. Makes sense. If GM is still on welfare at election time, GM will be an enormous political liability. A symbol of Big Government gone bad. But GM can’t possibly achieve profitability within that time frame. Even if it had the brains, it doesn’t have the time or money to build what needs building, to fix what needs fixing. The new car market sucks and GM’s product planning, reputation and branding are in tatters. So New GM’s doing the only thing they can do: putting lipstick on the product pig and sending it off to market. This “May The Best Car Win” advertising strategy will backfire. Badly.

You can certainly understand the thought process involved. The campaign is, after all, Bob Lutz’s brainchild. For more than half a decade, the former Car Czar has been claiming there’s nothing wrong with GM’s products (especially the vehicles developed during his watch). Lutz has consistently blamed the so-called “perception gap” for GM’s epic fall from grace. Our products used to suck at some indeterminate point in the past, but they don’t anymore, starting . . . now! Wait . . . NOW! In other words, it’s not the product, stupid. It’s the perception of the product.

I have no idea how Lutz seized on the idea that perception and reality aren’t part of a feedback loop. For someone who never saw combat, he has an extremely cynical view of human nature. Less perplexing: why New GM is allowing Lutz to bet the entire company on Maximum Bob’s belief that carpet-bombing consumers with “enlightenment” will somehow save the day. Again, GM has no choice. They don’t have the time to create the incremental improvements they need to build, market and sell the genuinely competitive products which would generate a profit in the North American market.

Speaking of loops, Lutz would say that my assessment of GM’s competitiveness is just my [biased, GM-hating] opinion. But it’s also the opinion of millions of American consumers over the last three or four decades, who’ve been abandoning GM for other car companies. I mean, ipso facto, right?

In truth, GM’s comparison tests will offer little more than invidious distinctions. To wit: GM’s new ads will pit the Chevy Equinox against the Honda CR-V, and the Buick LaCrosse against the Lexus ES350. And so on. According to Automotive News, “Lutz said in the rare cases when both cars match each other feature for feature and warranty for warranty, the difference will be illustrated in sticker price.” So we’re talking about feature comparisons and price comparisons. What was that about the definition of insanity?

Lest we forget, GM’s been driving down this road for some time. Howie Long’s Chevy ads, focusing on relative mileage and manliness, have done exactly nothing to stem the Bow Tie brand’s sales slide. The ads were arrogant, condescending and, at the end of the proverbial English day, ineffective. So ineffective they always ended in a plug for “the deal.” What’s different this time?

Nothing. GM’s “May the Best Car Win” head-to-head ad campaign completely glosses over the fundamental question that a real bankruptcy forces a company to face: “Well, how did I get here?” With a few not-so-notable exceptions, the products that GM is about to present as class-leading are the same products that ushered the company into [its first] bankruptcy. Discount the idea that customers are to blame or the competitors suddenly got worse, and you’re left with an inescapable conclusion: same as it ever was.

The “May the Best Car Win” campaign also reveals Lutz’s ongoing and misplaced belief in symmetrical warfare. Ironically enough, the larger-than-life fly-by-the-seat-of-his-pants suit has convinced his bosses that rational comparisons will finally convince consumers of his paycheck provider’s product superiority. But, Bob, that’s not what sells cars. Brands sell cars.

This is no small point. GM’s fall from grace is not about its products, per se. It’s about the company’s ongoing and abject failure to create compelling brands that sell products (and services) that embody the brands’ promise. Never mind the LaCrosse vs. the ES350. Who would buy a Buick instead of a Lexus? Or a Chevrolet instead of a Honda? The people who would are, and the ones that don’t, won’t. No head-to-head model throwdown is going to change the overall dynamic, and/or the minds of people who vote with their wallet.

There’s only one way Lutz and Co. can win this “debate”: frame it in the context of a battle of the brands. But first they have to create four tightly-gathered, clearly expressed branding concepts (e.g., Cadillac as the “standard of the world”), then build products and services that realize that promise. Until and unless New GM grasps that nettle, potential customers will see “May the Best Car Win” as bilious bailout braggadocio, while existing customers will see it as an invitation to jump ship.

Never mind. Time’s up. While we await the inevitable, GM has placed the cart before the horse, and invited potential customers to tell them they’ve gone about it the wrong way. Only this time, when they make their choice, when the best car company wins, everyone loses.

Great Moments in GM Marketing: The XP-75 – National

Ron Bloom is a Harvard MBA grad, investment banker and former advisor to the U.S. Steel workers. He’s also the head of the Presidential Task Force on Automobiles, now that Steve Rattner is busy defending his investment firm against bribery charges. Over the weekend, the Obama administration added Manufacturing Czar to Car Czar in Ron Bloom’s portfolio of power. “Bloom is to work with government departments including Commerce, Treasury, Energy and Labor to develop new initiatives affecting the manufacturing sector. The White House said Obama is committed to partnering with the private sector to spur innovation, invest in the skills of American workers, and help manufacturers prosper in global markets by promoting exports.” In other words, after nationalizing GM, Obama’s mob are now looking to screw up all the other parts of America’s manufacturing base. A quick joke . . .

As GM headed for oblivion, the executives shielded themselves from responsibility by blaming everyone else. The contention that the American automaker was on the cusp of recovery (again, still)—only to be waylaid by the entirely-out-of-its-control global economic meltdown—was only the final excuse for their epic mismanagement. Before that, GM had an entire litany of alibis for their slide into Chapter 11. Number one on the “it wazzunt me” hit list: Washington.

The carmaker bitched and moaned that it was being strangled by Washington’s safety regulations, fuel economy mandates, health care policy (take our legacy costs, please!) and foreign policy (plagued as it wasn’t by Japanese currency manipulation and import restrictions). But when it was time to face the music, GM’s suits leaped into Uncle Sam’s loving embrace, glad to become America’s first nationalized automaker.

See, now that’s funny.

Only not really. In truth, companies like GM—and there are more than a few of them—love federal regulations. They happily pass the cost of meeting governmental diktat directly to the consumer. Or, better yet, they get the government to pay for the cost of meeting government regulations. Case in point: Section 136 of the Energy Independence and Security Act of 2007. This greenwashed piece of pork directs the Department of Energy (DOE) to hand out $25 billion worth of no- to low-interest 25-year loans to automakers to retool factories to build cars that satisfy new federal corporate average fuel economy (CAFE) regulations.

Note the hidden dynamic: the federal regs provide an enormous barrier of entry to smaller car companies, who can’t afford to pay for meeting the regs, pass on the costs to their customers or lobby Congress for their share of the pie.

What smaller car companies, you ask? Well, exactly. Electric sports car maker Tesla Motors is the exception that proves the rule: a Silicon Valley start-up that managed to secure itself a $465 million mega-suckle on Uncle Sam’s teat. Otherwise, brash automotive independents are a thing of the past. They’re consigned to the industry’s early history, when federal regulations (and related subsidies and tax credits) were notable by their absence.

The counter to the “Uncle Sam killed the creative cluster” contention: if the feds hadn’t stepped in, automobiles would still be gas-guzzling, toxin-belching, rickety baby killers. The government HAD to sort out the chaos of competition for the public good.

But is that true? If so, why did it take Tesla to finally spur GM’s [previous] Car Czar Bob Lutz into action on the EV front? More to the point, do we really believe that car makers would have failed to provide seat belts, crumple zones, air bags, clean-running engines, etc. if Uncle Sam hadn’t spent huge amounts of time and money twisting their arms?

I know the idea that the carmakers would have done the right thing anyway—simply to remain competitive—runs against the commonly held belief that big companies are fundamentally amoral (i.e. “Capitalism: A Love Story”). As a former GM Death Watcher, I’ll admit that there’s more than a little truth to that assertion. But how did these big companies get to have such a stranglehold on the marketplace in the first place?

Again, you have to look at the role of government regulation and oversight in creating the monolithic manufacturers—before Uncle Sam decided they had to be dragooned into saving lives and protecting the planet and other social goals.

Whether you’re talking about making things or providing health care, President Obama’s “public private partnership” is not new, nor will it do anything to help the American economy get back on its feet. American history is littered with examples of the negative effects of excessive government control of/interference with the private sector. In this I refer you to Jonas Goldberg’s rambling rant, Liberal Fascism. And point my finger at GM.

By promoting Bloom to “fix” America’s manufacturing base, the Obama administration would have us believe that his main man has already “fixed” GM. At best, you could say the jury is still out. At worst, you could mention the fact that GM is a headless, nationalized chicken, running around in a vain, mindless attempt to avoid an inexorable fate brought on by its taxpayer-provided protection from accountability. Or, if you will, it’s a zombie.

To let Ron Bloom loose on other parts of our industrial sector, to encourage him to impose the government’s will upon large companies, is madness; regardless of how willing these large companies are to accept government assistance. The intervention ignores Ronald Reagan’s warning that the most dangerous words in the English language are “We’re from the government and we’re here to help.” Or the message behind that message: that America’s true economic strength lies in its free markets, engendered, fostered and protected by a lack of government interference.

Meanwhile, the Germans are pressuring the Americans to convince GM to let the Russians (fronted by the Canadians) buy GM’s German-financed Opel division. Maybe Big Ron should go sort that shit out. Or not.

Great Moments in GM Marketing: The XP-75 – National

It’s been a while since I’ve written a General Motors Zombie Watch. Time keeps on slipping, slipping . . . into the future. Only when you’re dead, there is no future. You’re dead. Oh, I know: New GM’s got new plans for new cars with new advertising that will win new (old?) customers. And the new Board of Directors’ Chairman Ed Whitacre is busy threatening to fire New GM’s old (new?) execs if they don’t get their shit together. But they haven’t, as their farrago of product plans and the botched launch of the new Buick LaCrosse prove. In fact, the current crop of GM suits will be fired. And?

And nothing. As I’ve said before, Uncle Sam kept CEO Fritz Henderson and the GM Lifers on center stage for one reason: to throw them off when taxpayer tomatoes start hitting RenCen’s windows. Which will be soon after GM’s third quarter financials hit the press. When it becomes abundantly clear that GM will burn through ALL of its taxpayer loot within two years. Or less.

Politicians from both sides of the aisle (though one more than the other) will proclaim that something must be done! And something will: the management that should have been shit-canned when GM was nationalized—actually long before, but that’s another story—will be shit-canned. The feds will press an entirely theoretical reset button.

New suits will take over. The fact that the auto industry is on a three to five-year cycle, the fact that New GM’s new brooms face dust devils the size of Montana, the fact that any genuine GM turnaround would take a decade and over $100 billion in addition funds, will be lost in the shuffle.

Never mind. The corporate cull will achieve its intended goal: it will unleash the puppies of prognostication. The media will be abuzz with speculation about the new new new new new new new New GM, for another financial quarter. Maybe two. Possibly three. Meanwhile, the feds will continue readying the GM pig for its IPO, lipstick and all.

You want to talk about a perception gap? The Obama administration’s Presidential Task Force on Automobiles is trying to widen the gap between the perceived value of General Motors and the actual retail price of the government’s automotive showcase. Mark my words: the feds ain’t done propping-up the unproppable. They’ll shovel more and more money at GM, dressing-up the nationalized automaker for the Great Pre-Mid-Term Election Sale.

Lest we forget, GM is counting on—as in factoring into their current balance sheet—a $10.3 billion loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing loan program. It’s the same money previously denied the American automaker. You may remember that GM was deemed non-viable by someone figured out that 1 minus 120 billion is something less than one. Guess what’s changed.

Nothing much. While GM has shed a mountain of debt, restructured its labor contracts, dumped dealers, paid lip service to cultural change, and found another sucker to foot the bills (thank you, America!), it’s still taking in less money than it spends. And we all know how that picture ends.

Before the closing credits, we’ve got to sit through a chase scene between Chevy’s plug-in electric/gas hybrid Volt and the Toyota Prius.

There’s no way GM can catch ToMoCo’s four-wheeled planet cooler. Even if GM can get the Volt to work, they can’t sell it for anything even close to the Prius’ $22,000 price tag. Unless . . . Unless . . . Government Motors does it anyway and takes the hit.

Of course, a “hit” is not a good thing for a company that wants to offer shares to the general public. So . . . how about we subsidize the shit out of the car so that it appears as if the car is somewhat profitable-ish? Or, at the very least, take the costs off GM’s books?

The federal government has already cash-injected the battery makers developing the Volt’s power supply, to the tune of $100 million plus. Your elected representatives are going to use your taxes to subsidize the plant making the car [see: DOE loans above]. And the car itself (via a $7,500 tax credit). Not to mention signing over $62 billion to a company that can’t even set a timeline for the Volt’s potential profitability.

Before a hundred or so hand-built Volts hit Chevy showrooms, the feds will re-up the battery research grants and find some other eco-friendly way of “helping” the halo car that the Presidential Task Force on Automobiles rejected as delusional, pre-nationalization.

Yes, there is that. It can’t be said enough: the feds own GM. The GM zombie has no will of its own; it’s controlled by its political taskmasters. When the truth about its [most recent] parlous finances are revealed, GM will become far more than a failed automaker turned undead manufacturer. It will become a political liability. If you think GM shareholders were slow to abandon ship, you’re right. If you think the Obama administration will be slow about jettisoning its GM-shaped political baggage, you’re wrong.

But first, GM CEO Fritz Henderson and his motley crew will be packed off in their golden lifeboat, so that the illusion of change can be re-energized. Like any good magic trick, the “GM will pay back it federal loans” routine depends on a suspension of disbelief. As Tufts University supporter P.T. Barnum said, you can’t fool all of the people all of the time.

When the IPO time rolls around, real investors (as opposed to taxpayers dragooned into paying for GM’s nationalization) will not want to own GM stock. Why would they? So the government will have to subsidize THAT boondoggle as well. In other words, papers will be shuffled once again, the taxpayer will still be on the hook, and GM will continue wandering through the wilderness.

One way or another, sooner or later, what’s left of GM will fall into the hands of its rivals. A few names will be all that’s left of what was once the world’s largest automaker, and the world’s most profitable company. But make no mistake: this is less of a transition than it seems. GM is already dead.

Great Moments in GM Marketing: The XP-75 – National

General Motors has always been long on talk about the future. The company that invented concept cars and pioneered planned obsolescence has always kept consumers focused on the next big thing(s), and that tradition is ever more important now that GM is a publicly-owned entity. Future products are the justification for current investments and subsidies, and GM knows it. Though details are sparse and largely sifted out of the murk of PR leaks, teases and hearsay, a picture of post-IPO GM’s 2012 lineup is beginning to form. The success of these vehicles depends on a number of difficult-to-predict factors, but assuming fairly conservative projections (steady increases in US economic growth, auto sales and gas prices), it’s not too hard to tease out a few early conclusions on GM’s strategy. So let’s hop in the time machine and set the dial for the Fall of 2011.

City/Mini Class

The Chevrolet Spark will be all-new for the 2012 model year, hitting dealerships just as our time machine arrives two years into the future. Based on the basic-by-third-world-standards Daewoo Matiz, the Spark is Geo Metro redux with a Chevy badge and styling. With a 1.2 liter engine and a goal of 50 mpg on the highway, Spark is clearly GM’s insurance policy against another sharp spike in fuel prices.  US production of about 25k-30k units annually (about current Aveo sales levels) is reportedly planned. Most of GM’s competitors plan on bringing more premium offerings to this segment (e.g. VW Up!, Toyota iQ), making Spark a potentially unique value (though probably less profitable).

Subcompact Class

GM will replace its unloved Aveo as a 2011 model, a year before our time machine lands. Chinese/Korean engineered on the new GM-Daewoo “Gamma II” platform and styled by GM’s Brazilian studio, the new Aveo is supposed to be built at Orion Township. Strangely though, Automotive News [sub] reports that Aveo will “likely” be produced at San Luis Potosi, Mexico. Styling and space should be improved compared to the outgoing model, but the model will probably struggle under the Aveo name thanks to its predecessor’s weak reputation. Name continuity is a good thing, but Bob Lutz’s apparent decision to keep the Aveo name may not have been the example for GM to start the habit with.

Both the Spark and Aveo will struggle to hide their developing-market roots and will likely do little to change the perception small cars are an afterthought for GM. The Spark in particular should face some trouble, given that most economists see economic recovery and rising gas prices arriving hand-in-hand. In that scenario (and considering GM’s desperate need to improve its small-car rep), Toyota and VW’s premium city car approach seems to be the better choice. And with the Aveo upsizing to near-Cobalt size, GM will also be selling it as a hatchback only for fear of cannibalizing the Cruze. This will further limit its appeal in the American market.

Compact Class

The Cruze will debut alongside the new Aveo in 2011, and will be built on the global Delta II platform in Lordstown, OH. Early reviews from Europe and Australia where local versions have already debuted are . . . mixed. Reviewers praise the space, styling and interior quality, while criticizing the car’s weight, engines and dull handling. All in all, though, it’s hard to conclude that the Cruze won’t be a huge improvement on the Cobalt. This should go a long way towards building some kind of reputation for GM in a segment where it has never really been competitive. Unfortunately, for every positive step there’s at least one regression.

A Delta II-based Buick is planned for model year 2012, which has been conceived as a way of returning lost Pontiac volume to the Buick-GMC dealer network. “Unique sheetmetal” is promised, but the model (like all Buicks going forward) will essentially be a tweaked Chinese-market offering built alongside the Cruze at Lordstown. GM’s level of cynicism in executing this model will be a defining choice. With the Cruze already offering a relatively high quality interior for the segment, differentiating the Buick compact will be tough. Especially if Buick-GMC dealers are counting on it for real volume.

In addition to badge-engineering, GM is also saddling its compact portfolio with its other age-old sin, the fleet special. Though the weary Cobalt will no longer be offered at retail when our time machine lands, GM is considering a fleet-only version of the Cobalt to soldier through 2010 and possibly into 2011. Though fleet specials are understood to have a negative effect on brand image, old habits die hard. And as we will see later, the Cobalt “Fleet” won’t be the only image-dragging holdover model in GM’s portfolio come 2011.


The Volt should be available at dealers when we arrive to witness GM’s 2012 lineup. 10,000 units of production are planned for 2012, with an MSRP of $43K and GM will lose money on every one. A Cadillac Converj version could be available by 2012, but the chances are not good. If it is available by 2012, expect either a rebadge of shocking cynicism or a super-limited halo car. Neither of which will help GM. As reality sinks in and hype fades, the Volt could well be the cause of a few GM PR headaches by 2012.

Compact MPV/CUV

Entering the magical world of crossover utility vehicles, GM’s 2012 product planning begins to show signs of yet another classic GM sin: overlap. Chevrolet’s Delta II-based Orlando looks to be a relatively solid contender as a cheap seven-seater in the Kia Rondo mold. But will those two extra seats be useful enough to tempt Americans away from GM’s slew of five-passenger vehicles? Given the limitations of the platform, the answer is probably no. Unless, of course, a gas price shock creates more interest in the micro-van segment.

A Gamma-II based five-seat CUV is planned for Buick, in yet another attempt to bring more volume into the Buick-GMC sales channel. As with the Buick Cruze rebadge, this weak motivation could easily tempt GM into the old cynical rebadge trap. Though GM-Shanghai’s Business concept shows the possibility of an attractive small Buick CUV, putting concept into practice could prove difficult. The challenge: attracting a premium over the upsized, five-door Aveo, without cutting into GM’s four Theta CUVs. Or a possible 2012 GMC “Sub-Terrain” CUV based on either the Gamma II or Delta II platform.

Given GM’s history and limited resources, expect the Buick CUV to be tough to distinguish from the Aveo and the GMC to be similar to the Orlando. Execution is everything with this much potential for overlap, and GM has only so much time to create meaningful differentiation in this cluster-NSFW.  And as we move into the meat of GM’s planned lineup, that problem appears everywhere. No way can GM make sense of all of it.

Midsize CUV

Here in 2009 this is one of the hottest segments in the market, as Americans downsize from Detroit SUVs into CRVs, Rav4s and Foresters. And GM is only a little bit late to the party, banking on the 2010 Equinox and Terrain to fight for the remainder of the cute-ute boom. But GM is already having difficulty explaining how consumers should choose between these offerings. For 2011, Buick will add to the confusion by offering what appears to be an only mildly rebadged version of the Saturn Vue, which will bridge the already-narrow gap to the “Theta Premium” Cadillac SRX. Further complicating the Theta competition will be the Saturn Vue and the Saab 9-4X, which will likely both be sold by the former GM divisions in 2011.

The problem with GM’s Compact CUV offerings isn’t that GM misunderstands the market; this segment should continue to sell well through 2012. The problem is that GM is set on flooding the segment with models that, while distinguishable to buffs and designers, will only serve to confuse consumers. The Buick Vue rebadge seems to be a particularly senseless and cynical decision, justified only by the 2012 option of a plug-in drivetrain that should really be an option on the SRX. Retaining the Equinox name could also keep one of GM’s most important products in the shadow of its (ironically) forgettable predecessor, while the Terrain will share lot space with the Buick Vue. For such a crucial segment, GM has some major (and sadly familiar) issues to sort out. Fast.

Fullsize CUV

Though one of its more-recent platforms, the Lambda is already one of GM’s most egregious examples of latter-day brand engineering. Pre-bankruptcy, GM had four poorly-differentiated versions of the platform. In 2011, GM will likely have four poorly-differentiated versions of the platform. Traverse will be soldier on unchanged, while the Buick Enclave and GMC Acadia are scheduled for a 2012 refresh. Though the Saturn Outlook will probably still be on sale at Penske’s Saturn dealers (just to keep things fun), the fourth GM model is likely a 2012 Cadillac Escalade replacement. Though there’s talk of stretching the platform for ‘sclade duty, don’t expect it. GM will either do a quick-and-dirty Lambdasclade or allow the old GMT 900 beast to live on (truck/SUV strategy, as we will see later, is in chaos).

Either way, the Lambda glut caps a potential eleven-model swath of CUVs in GM’s lineup, not counting the five-door Aveo or the CTS Wagon. Four-brand GM dealer lots will be a maze of the rounded-off wagon-utes, with salesfolks guiding bewildered shoppers through a seemingly infinite palette of family vehicles. The CUV segment is a melting-pot of automotive styles anyway, where lines are already blur into unfamiliar form (and bland looks). And despite the huge number of models, nowhere in this mix is a credible compact off-roader or a modern family/commercial van (ala Ford’s Transit Connect). In model year 2012, it seems, variety in the heart of GM’s lineup will still only be skin-deep.

Midsize Sedans

Chevy’s “perception-shifting” 2008 Malibu will not be updated until after the 2012 model year, and for 2013 it will actually be downsized (except for the trunk). Which is hard to understand, considering that the aging Impala has hung close to the ‘bu in sales, seemingly on the strength of its interior size alone. But that’s a concern for 2013; for the purposes of our time-traveling, the Malibu will remain unchanged. But will its sales still be consistent?

By Fall 2011, the Opel Insignia-based Buick Regal will have been on sale for about a year. By then it should be fairly clear if the new model drives the kind of volume that Buick dealers need to make up for the loss of Pontiac. GM expects the four-cylinder-only Regal to cost “a few thousand dollars” less than its platform-mate, the LaCrosse, and become Buick’s best-selling model. Though the Insignia has been well-received in Europe, it shows less promise for the US market. It will have to be positioned as “more sporty” than the LaCrosse while only offering a four-banger to avoid overlap. Stuffing the Regal between LaCrosse and Impala/Malibu means limiting options, a compromise that hurts its chances as a volume model. And it may be the motivating factor in the ill-advised 2013 Malibu downsize.

Fullsize/Premium Sedans

GM’s decision to allow the W-body 2006 Impala to soldier on until 2014 is perhaps one of GM’s greatest sins. Though the Impala currently sells at about the same levels as the Malibu, one can’t help but feel that by 2012 the Impala will be bought only by curious students of 20th century automotive technology. It seems that GM has almost completely given up on large FWD sedans as a competitive volume product, perhaps assuming that the segment will be abandoned for the CUVs that it has bet the farm on. This assumption is by no means a sure thing. Meanwhile, the Impala will be an inescapable reminder of the old, bad GM.

Worse still, anyone who wants a remotely competitive fullsize GM sedan will have to look at one of its luxury brands. Specifically, they will have to look at Buick or Cadillac’s flagships, the LaCrosse or the XTS. The 2010 LaCrosse is seven inches longer than its Regal stablemate will be, and offers V6 and AWD options. Does that make the LaCrosse a “flagship” as GM claims, or does it make the Regal a hamstrung, would-be cannibal?

Cadillac’s “flagship” similarly fails to generate any unique appeal. Though Cadillac is supposed to fight BMW as a high-tech, dynamically-driven line of vehicles, the XTS will be a bloated “Super Epsilon,” possibly with standard AWD. This compromise (born of the inability to develop a true Cadillac flagship) places pressure on the entire GM sedan range by dint of its placement so close to the LaCrosse (itself to close to the Regal, Impala and Malibu). Somewhat larger than the CTS, there’s little chance it will better embody the brand’s world-class dynamic ambitions. That would be the job of the Alpha-platformed ATS sedan, a long-rumored BMW 3 Series fighter. Which will be expensive to develop, and difficult to justify considering the CTS is due to be downsized for 2013 or 2014.

Trucks And SUVs

Once GM’s bread-and-butter, truck and SUV development is in chaos as GM grapples with upcoming CAFE standards, the fear of gas price shocks and a buying public that appears to be “over” the body-on-frame craze. Expect Tahoe, Yukon, Suburban and Yukon XL to soldier on until at least 2013, unless GM rushes out more Lambda clones in the meantime.

Long term, the only apparent plan is to remake the Avalanche in the mold of the Ridgeline, also on the Lambda platform (Acadia SUT anyone?). Silverado and Sierra are in a holding pattern until at least 2013. Colorado and Canyon will be discontinued in 2012, possibly to be replaced by a global small pickup developed by GM of Brazil. The fact that GM is seriously considering abandoning the compact pickup market speaks volumes about GM’s jaundiced view of the future of body-on-frame.


By 2012, GM’s offerings will have become more narrow in positioning, with the exception of the Spark at the low end and the Volt at the high end. Between the upsized five-door Aveo and the premium brand “flagships,” GM’s products will be more tightly positioned than they have been in years. Overlap and brand dilution are likely to be the result, as many of the planned models serve only to make up for lost Pontiac volume at Buick-GMC dealers. Ironically, this flood of Buick product is both starving and cannibalizing Cadillac, which no longer has the resources to properly differentiate itself from Buick (in terms of aspiration, if not dynamics and styling).

Reviving Buick also means that one of GM’s least competitive products, the Impala, will stick around long past its best-by date. This will be corrosive to the Chevrolet brand, which won’t be able to compete with Ford’s Taurus without threatening the Buick/Cadillac balancing act. How many Epsilons can you fit on the head of a pin anyway? And if the Impala is going to slouch towards ignominy, why not a post-Cruze fleet special Cobalt too? Or maybe squeezing a few more bucks out of the HHR wouldn’t hurt too much?

One bad habit leads inexorably to others, especially for institutions so steeped in bad habit-as-tradition. GM’s executive never miss an opportunity to insist that change is here, telling us that they’re not fans of rebadging, and that every product must be class-leading. But the tight positioning, slumming holdovers and acknowledged volume-chasing to support dealers for model year 2012 show that these executive statements are either misleading or just crazy. Unless we are about to see one of the greatest achievements in the history of product differentiation, GM’s bright dawn will remain just out of reach. Same as it ever was.