Other Editorials

There May Be Hope

Peter DeLorenzo
Wednesday, October 11, 2006

From www.autoextremist.com

GM Marketing goes back to the future.

Detroit. Big changes for GM marketing are imminent, as the path they have followed for years and the path that contributed mightily to the company's freefall in the market is going to be abandoned. GM is about to give its moribund divisional structure a serious boost by reconfiguring the individual divisions, giving them more autonomy and giving the divisional leaders serious clout for the first time in years. To understand where GM wants to go with this move, you first have to go back - way back - to GM's "glory days" to understand where it once was and why they need to take a page from the past to help them gain market consideration for their products now.

Back when GM consistently dominated more than 40 percent of the U.S. market, the company was made up of divisions - Cadillac, Chevrolet, Pontiac, Buick, Oldsmobile (and GMC Trucks) - that bristled with independence. These divisions were headed up by strong-willed General Managers who had complete control over everything that went on at that division, from manufacturing to sales. To be in charge of one of GM's divisions was akin to being potentate of a small country, and some of GM's most famous names were rotated through the divisional gigs - guys like Bunkie Knudsen, Ed Cole, John DeLorean, etc. - with the final and premier stop being the divisional General Manager job at Chevrolet, GM's largest division.

I have written many, many columns about how GM operated in its heyday, and it's hard to believe now that it was once a vibrant, exuberant, creative and flat-out exciting company that was in full command of the market - but that's exactly what it was.

Let's take a look at just one division - Pontiac. I have recounted several times in this column how Pontiac was once GM's "maverick" division. But it wasn't always that way. Pontiac was actually a sleepy little division for many, many years - that is until Bunkie Knudsen was given the wheel in 1956 and told to juice up sales - or else. Knudsen grabbed Pontiac by the lapels and decided to build hot cars - and he drafted Pete Estes from Oldsmobile to be his chief engineer and hired an engineer by the name of John Z. DeLorean away from Packard to be his assistant. And those guys went crazy, throwing three two-barrel carburetors on Pontiac V-8s (Tri-Power), racing in NASCAR with Glenn "Fireball" Roberts and unleashing a series of high-performance "wide-track" street cars that put Pontiac on the map and buried its old "reliable but boring" image once and for all. And from that moment on Pontiac officially became GM's "maverick" division - much to the chagrin of other GM General Managers who chafed at the idea that Pontiac was getting all the attention.

Of course, the Pontiac guys relished their newly created "maverick" reputations, all but flying a "skull and crossbones" flag over their headquarters in downtown Pontiac, Michigan. And their comrades at Chevrolet were their favorite target (back then GM basically competed against itself, so these intramural rivalries were intense and sometimes bitter). Even when Knudsen "got the call" for his next big divisional assignment at GM, new General Manager DeLorean (at the time the youngest to hold that post in GM history) continued to pour it on. His engineering team came up with the idea of stuffing a 389 V-8 in the "Plain Jane" Tempest and calling it the "GTO" - but it was an option, not a model. This, of course, conveniently skirted GM's corporate ban on producing overt performance car models, in deference to a silly mandate by the AAA, which was the reigning "No Fun League" at the time and which equated anything to do with performance cars, or performance advertising and imagery - as being akin to the Devil's Work. And they urged the domestic auto manufacturers to voluntarily comply with their suggestion, which they stupidly did, for all of about five minutes.

Sadly, GM complied with the mandate just long enough to screw-up the sensational Corvette Grand Sport program, however, forcing all other development programs (i.e., racing) underground, including the unofficial though deeply official arrangement with Jim Hall and his magnificent Chaparrals. But by then Ford was deep into its "Total Performance" marketing assault that stormed racetracks around the country and around the world, and DeLorean figured that his little GTO "option" was a great way to get around GM's silly anti-racing, anti-performance stance. The Chevy guys immediately ran downtown to headquarters, squealing like little school girls that "those guys" at Pontiac were at it again. But a funny thing happened on the way to crucifying Pontiac for a long list of real and perceived transgressions, because a brilliant marketing campaign orchestrated by Jim Wangers, an exec at Pontiac's ad agency at the time (MacManus John & Adams), made the GTO take off in the market - and all of a sudden the fourteenth floor, after scanning the upward trajectory of the sales numbers, decided to look the other way - and the AAA "ban" became lost in the tire smoke from Pontiac GTOs, Chevy "SS" models, Olds "442s" and big-block Corvettes, etc.

Alas, that entrepreneurial spirit at GM, when General Managers fought for their turf and lived and died for their divisions - with great products resulting more often than not - was snuffed out for a number of reasons. The dawn of the "GM Assembly Division" killed the divisions' individual sense of daring and and stifled manufacturing creativity by removing them from the decision-making process. Bill Mitchell retired, and the corporate weenies confined GM Design (then called "Styling") into a cage and threw away the key, until just recently. Consequently, the confluence of all of these events contributed to GM's long, slow slide into oblivion, and the corporate bureaucrats - most of whom wouldn't know what to do with a GM division if their lives depended on it - ran GM right into the ground, at the exact moment in time that the Asian and German car companies began their inexorable climb up the sales charts. And this all happened before the Brand Management crusade decimated GM's fortuned even further.

The point of this little look back at GM history is that after decades of homogenizing and neutering the divisions to the point that they were about as autonomous as Putin's cabinet, GM is finally rethinking what they've been doing after all these years.

Since they don't honestly believe that they do have "too many models, too many divisions" as I've often said, they are now hell-bent on giving the divisions more autonomy and more hands-on responsibility for marketing and product decisions.

In other words, giving the divisions a real raison d'etre.

Rumors suggest that Brent Dewar will go back to the future himself and take over a revamped and reinvigorated Chevrolet Division. And that Mike Jackson, fresh in from California and currently GM North America's vice president of marketing and advertising, will take over the Buick-Pontiac-GMC division - with the official announcements (and other changes) coming soon.

Will this resurrect GM's hoary divisional structure to fighting trim?

We'll see.

But as long as GM is going to make a go of it, they might as well give the divisions some serious horsepower - literally and figuratively.