General Motors entered 1997 with the worst kind of delusional attitude. The company had rebounded from its brush with bankruptcy in the early 1990s, but the core of the company’s disfunction was far from resolved. Rather than building better cars and trucks, GM’s focus was on financial engineering, browbeating suppliers and deploying the worst sort of marketing gimmickry. Automobile Magazine took a look at what was in store for 1997 from GM’s eight divisions in the October 1996 issue: were there any breakout hits in the making?
One tidbit noted by Automobile Magazine in the front of the October issue was the fact that General Motors was leaving its landmark headquarters building, designed by noted architect Alfred Kahn, and moving operations to the Renaissance Center, a failed downtown revitalization project that had originally been built by Henry Ford II. The General Motors Building was one of the finest examples of neoclassical renaissance architecture in the U.S., and for years showcased the power and success of GM. The Renaissance Center, by contrast, is a dismal post-modern pile on the Detroit River, derisively referred to as “The Tubes.” It was eerily prescient in 1997 that GM was “heading down the tubes.”
GM’s brand management debacle of the 1990s was one of the worst plagues ever unleashed on the company. Given that cars are an infrequent, expensive and emotional purchase (yes, even the most rational buyer makes a statement with their choice of car, even if just to signal “I care nothing for cars…”), a good source for “outside” marketing talent would be from industries that create desire and build strong images, like fashion, technology, luxury goods and entertainment. Instead, GM appointed Ron Zarrella, an operations executive from Bausch and Lomb, as the top marketing executive at the company. Sad but true: a guy whose expertise consisted of crunching the numbers to move contact lenses and saline solution was leading marketing for the world’s largest car company. When you think of the world’s most desirable brands and products, the first thing that comes to mind is vision care, right?
But all the ridiculous packaged goods mumbo-jumbo in the world could not overcome weak products and too many divisions and models. Terrible badge engineering was alive and well, with the Malibu/Cutlass and the new minivans. Chevrolet continued to flounder. Opels were turned into Cadillacs! And it was even worse than all that: read on to learn more about the misguided marketing “wonders” who were going to “save” GM.
If there ever was a corporate “Deadly Sin,” this was it. There is nothing more lethal than ignorance combined with arrogance, and I genuinely pity the many talented people at GM who had to deal with this plague of clueless Consumer Packaged Goods (CPG) marketers. Reading these quotes is so horrifically unbelievable I don’t even know where to begin. Marketing a Cadillac was like marketing baby wipes?!?!? The guy literally talked about discovering how people wipe themselves as if this was some sort of grand consumer insight. Then there were the pompous statements from the Pontiac Grand Am manager, who felt that Secret Deodorant marketing was superior to anything from the car industry. Never mind “The Ultimate Driving Machine” or countless others, including many from GM’s heyday… Or how about the Oldsmobile Bravada “superstar” marketer who felt that selling SUVs was like selling pet food. Of course, members of the “CPG brain trust” preached that you could position a Chevrolet SUV clone from GMC as being for a different customer than the Chevy itself. Or using “brand positioning and consumer interviews” to make a Buick Regal so exciting that people would “walk over broken glass to get it.” Or learning brand building lessons from the scintillating world of pencils. Seriously, what were these guys smoking?
The blame for this disgraceful mess should be placed at the feet of John Smale, from the GM Board of Directors. Smale was the CEO of Proctor & Gamble, the Cincinnati, Ohio-based Consumer Packaged Goods giant. He joined the GM Board in 1982, and along with other Board members, presided over the systematic destruction of one of the world’s greatest companies. This Board rubber stamped all of GM CEO Roger Smith’s inept moves, allowed the disastrous 1984 corporate reorganization, the idiotic purchases of entire companies in unrelated industries, the creation of a unneeded new divisions (Saturn and GEO), the outrageously expensive and problematic GM10 program, etc. etc., etc. All the while, General Motors was hemorrhaging market share, investing in malfunctioning assembly line robots instead of much-needed new engines, and falling incredibly far behind all of its rivals while fielding uncompetitive, out-of-date products. Where was the management accountability for this unmitigated disaster? GM’s Board did nothing to address the appalling business degradation for years.
Finally, facing the specter of bankruptcy in 1992, Smale acted and ousted Bob Stempel, who was Roger Smith’s hand-picked (and Board approved) successor. Of course, Smale himself and the rest of the Board were far more culpable for GM’s woes than any of the individual leaders: the Board’s job was to hold management responsible for protecting and growing the company, and they failed miserably. After the Board coup, the cure to “fix” the company turned out to be worse than the disease: Smale unleashed the CPG reign of terror on GM, where the wildly unqualified CPG marketers damaged GM’s brands even further and put the company right back on the road toward its next bankruptcy.
The complete incompetence of the General Motor’s Board led to devastated communities, damaged dealers and disappointed customers. Just like Liquid Plumr (a brand these clods no doubt revered), the Board took GM down the drain, and no amount of Tide was ever going to wash away that ugly truth. OK, I’ll get off my soap box now (pun intended) so we can see the rest of the news from GM for 1997.
In spite of thrilling developments like PASS-Key II, daytime running lights and easier turn gas caps, Buick sales dropped 16% for 1997. Some of that was likely due to the loss of the Roadmaster (taken out of production so The General could build more SUVs at the Arlington, Texas plant), as well as a slow ramp-up for the redesigned Century and Regal. Too bad the CPG brain trust didn’t implement some smart tie-ins, like a 3-year supply of Geritol standard with each LeSabre, or maybe a gift-with-purchase like “The Clapper” so turning your lights on and off was stupid easy, just like driving a Buick…
The Butt-wipe Maestro at Cadillac must have been very pleased with himself, as Cadillac sales rose 17% for the model year, with most of that growth coming from the new Opel-cloned Catera, the pathetic “Caddy That Zigs.” That horrific “non-Cadillac,” marketed with a cartoon duck named Ziggy, essentially became the Cimarron II. Somehow, for the first model year, Cadillac dealers found enough suckers to take delivery of one that GM surely viewed the Catera as a “huge” success. Here are all the results from the “wreath and crest” and “zigging duck” division:
GM’s “Bowtie” division was a hot mess in 1997. Old products like the Lumina and Cavalier were subpar rental car fodder. Of course, so were “new” products like the Malibu and Venture. The best car available in Chevrolet showrooms was from Toyota, in the form of the GEO Prizm. Overall sales were down 6% year-over-year, and profits on most (if not all) carlines were virtually nonexistent. Frankly, if it weren’t for trucks and SUVS (49% of sales), Chevrolet would have been down for the count–“Like a Rock” indeed. Here are the results by model:
For almost its entire history, the consumer products from GMC were nothing more than Chevrolets with different badges and different grilles. The strategic intent was to allow non-Chevrolet dealers to sell trucks too. The “market saturation” approach was a market share grab and nothing more–GMC couldn’t really meet the criteria of being a brand in the sense of offering anything unique. However, the CPG wizards were convinced they could craft a meaningful “brand” for “unique” consumers, just like they thought P&G’s Tide detergent was “vitally” different than Gain detergent. Never mind that most shoppers just picked whatever laundry detergent was cheapest or had the smell that they liked the most. If only GMC had touted a “new Spring Fresh scent” or placed coupons in Sunday circulars, maybe sales would have been up instead of flat for 1997.
Poor Oldsmobile. The rocket division was a dismal shadow of its former rock star days in the 1970s. Sales for 1997 were down 28% and were barely ahead of Cadillac within the GM portfolio. The best product in the line, the Aurora, only started carrying the Oldsmobile name in 1997–the brand’s image had become that toxic. Of course, if only the CPG marketers had been able to implement more campaigns, things might have turned out differently. Perhaps loading the back of Bravadas with Dog Chow and Meow Mix. Or maybe brand advertising announcing that Oldsmobile was “recommended by 4 out of 5 dentists…”
Believe it or not, among all the GM divisions, Pontiac actually placed second in sales behind Chevrolet for 1997, and sales were up 27% for the division. What drove the success? Easy–the new Grand Prix, which saw sales rise 90%. Was it the marketing angle: “Crunchier and Munchier” or “Now Even Cheesier” or “Wider Is Better” or something like that? Or maybe it was that the Grand Prix was the best of the revamped W-Bodies and buyers liked the product. Nah, must have been the marketing. Whatever the cause, the divisional results were pretty good, especially given that Pontiac offered no SUV models during “truck crazy” 1997.
Over at Saturn, the division continued to compete with in-house sister Chevrolet for small car buyers (c’mon, do you really think Civic and Corolla intenders were cross-shopping Saturn in 1997?). The allure of dent resistance did lift Saturn sales by 7% compared to 1996: after all, the “handy plastic container” had been a staple of Tupperware for years, so why not cars?
|Saturn Division Cars||314,992|
The Trans Sport may have been “in the game” with the arrival of the updated U-Body minivan, but it sure couldn’t play. The newest GM offerings didn’t even come close to the class-leading Chrysler minivans. Plus, why was Pontiac, the “excitement” division, even selling a minivan in the first place?
OK, finally, one car from GM for 1997 that was decent. Not spectacular, but not dreadful either. At least the Grand Prix did have a unique roofline and more aggressive styling than its W-Body siblings. The corporate Supercharged 3.8 Liter V6 was unrefined but quick (and shared with other divisions). But given that the Grand Prix was a large sedan with aggressive styling, why on earth was the Bonneville still around? Ah yes, brand management–each GM car model had its own brand manager, searching for their “own” customers, and not bothering to look for overlap or how the models added up to building a brand image for Pontiac. Of course, Pontiac was the brand, but that fact was conveniently forgotten by the CPG brain trust: they just focused on individual models. A pure, unmitigated mess.
So, let’s respond to the statement posed by Paul Lienert in his introduction to GM for 1997:
“If GM can achieve meaningful differentiation among its eight domestic nameplates and dozens of models, then brand management will be a success. If it develops into a cynical attempt to use advertising and marketing to give a different aura to vehicles that are essentially the same, it will likely be a humiliating failure.”
Well, we all know how that turned out.
John Smale and Ron Zarrella (who went back to Baush and Lomb as CEO and then was busted for lying about his resume) deserve the infamy. They can join Roger Smith in the Automotive Hall of Shame as leaders who did the most to destroy GM.