Red Tag with a Twist

I used to think that this was a terrific blog for giving some real perspective into the business of making and selling vehicles, and for soliciting important feedback from customers, shareholders, and the usual camaro freaks. Mark, why bother spinning this latest pricing strategy? If your team is convinced that you've got great product (and I think you do btw), introduce 10-year warranties as it has been suggested many times before in this blog. Offer it on the newest models like the Impala, DTS, the 2007 SUV's, G6, LaCross, Lucerne, Corvette, Equinox and Torrent. It would go a long way towards convincing folks to choose GM over domestics or imports. If this isn't possible perhaps you can provide some explaination.

Good. Now why don't you make this permanent? 1 price, no negotiating. The whole car buying experience would be so much better if you didn't have to deal with all the annoying price negotiating. I never understood it in the first place. You don't go to Wal-Mart and negotiate the price of your 42" plasma, so why do it for a car? GM should make a "one price" policy that all dealers must follow. This way the dealerships can compete on customer service instead of just pricing. My biggest gripe with GM is still the dealerships. Often the ones with the best prices are the sleasiest, and just downright stupid. Follow a Saturn like pricing scheme and everyone would want to shop GM just so they don't have to haggle.

"...First of all, it builds on the growing consumer awareness that GM stands for tremendous value...."

No, what it stands for is that GM has list prices on thier cars that the public refuses to pay.

GM was able to go with standard pricing for all of a month and a half before you had to revert to cutting prices yet again.

Look, save yourself the trouble and the marketing dollars. Just cut the prices and LEAVE THEM THERE.

This does nothing to "strengthen the GM brand". All it does is reinforce the public's preception that if they wait a while, GM will once again be back with incentives/sales/employee pricing/whatever.

It's really very simple, just ask Hyundai:

1) Build good cars
2) Price them aggressively.
3) Back them with a stronmg warranty commitment.

Seems pretty weak to me. Why not just make the TVP mean something and bring down prices significantly? Your "value prices" haven't been brought down enough to raise any eyebrows, and you're still dependant on incentives. What was the point?

I couldn't agree more w/patrickmichael and Joe in the previous posts. I thought this blog was supposed to be about discussing cars and how GM was going to get back in the game and produce GREAT cars.

Apparently not.

There's a disclaimer at the bottom of this blog warning of spam, off-topic and abusive comments. It looks like the Red Tag event slipped through. This is clearly a promotion of a carmaker in desperate straits--so much so, that it feels it must spin its messaging so that it doesn't LOOK so desperate.

Now I'm going to wait for the apologetic post from someone at GM who starts crying that it can't make a profit because we're so loaded w/incentives....

Come on GM. This is why you're in the shape you're in. You have NO RESPECT for the consumer and you think that he/she will just be naive enough not to see through your constant spinning.

Yup-
No Haggle pricing
Ten year Warranty

Just do it already! If you do, sales will be the least of your problems and then you can concentrate on reducing your labor costs.
And don't even think of scrimping on costs for new platforms. You have to spend money to make money.
Speed up development for RWD vehicles and put AWD in more of your cars. I can't believe the Impala SS and malibu SS dont have AWD.

I am not a fiscal wizard, but it seems as though after every clearance event the auto market dries up. We are living in the aftermath of "Employee Pricing." The more the rebates, the more future shooting in the foot. Stop the rebates, the market will indeed not buy any cars, but only for a while. Give it a try. Also, as mentioned above, 11 yr/110,000 mile powertrain warranty. This has been the golden goose for importers, GM can handle it as well. If more GM Europe vehicles were over here, they would sell like hotcakes. For the life of me I can't understand why you don't bring more Opel models over here, slap a Pontiac badge on them, and watch them sell. Stop the rebates, make exciting cars, finally, consolidate manufacturing and healthcare. I know this is easier said than done, but there are a lot of people rooting for you! Remember what Alfred P. Sloan said:

1st Priority - Company
2nd Priority - Stockholders

Put the company first, long term the stockholders will then win also. Daytraders are omnipresent, don't fall victim to their stupid inclinations.

Mark,

I'm a little skeptical of your claim that "what you see is what you pay." During December of last year, I was considering the purchase of an '04 GTO. The red tag price was attractive. However, the dealer told me that not everyone qualified for the advertised discount in its entirety. The dealer explained that the advertised discount included a $500 active duty military discount as well as a $500 Oldsmobile owner loyalty discount. There were a few other items for which I did not qualify and the price that I would have had to pay was higher than the red tag price. Hopefully the red tag sale is more honest this year.

Being CEO of GM must be the second hardest job in America. That is a title no other car company hear or abroad or any jean retailer can take from General Motors.

Mark,

To save GM's credibility you needed to stay with the value pricing policy. Instead, GM is back to the give it away thru incentives game. What this does is errode the value of your vehicle. This is one reason why the domestic mfg's cannot oompete with Toyota and Honda on the retained value of the vehicle during it's life cycle. As previously stated by another post, if your product is great and you want to convince buyers that your products are as good as Toyota and Honda, then back it up with 10 year warranties.

Now the consumer will just wait around for the next great incentive program, as you have conditioned them to that. Saturn's way of selling cars should be the model you use throughout. You needed to stay with value pricing, and back it up with a 10 yr warranty. That would show consumers that you have a great product that you stand by. Wake up to that before the ship sinks.!!

Where's the evidence for this supposed "growing consumer awareness that GM stands for tremendous value"? If you mean that the EDFE campaign made people think of GM as the K Mart of carmakers-- we may not be the best but we are the cheapest-- fair enough.

But if you're suggesting that GM products are gaining traction against their competitors, the fact that Toyota just passed GM as America's favorite car company (if you remove fleet sales from the equation) explodes that theory.

And if this is a "What You See if What You Pay" policy, why is the Red Tag the maximum price rather than the final price?

You personally promised that GM would stay the course with its "Total Value Proposition" into '06, and then launched this duplicitous incentive/discount war halfway through the program.

Until and unless GM and its employees openly and honestly face reality, until and unless you make the tough decisions that create a limited number of class-leading products at the right price for buyers and the company, The General will continue sliding down the slippery slope to oblivion.

That Red Tag is in real danger of becoming a toe tag.

Dear Mark & Rick....

Price is always popular "provide a good product at a fair price and they will buy".
But, if you are going to offer rebates, give 'em what goes along with owning a car/truck.
Reduce the rebate, and give'em a Gas Card or a Service Card, or BOTH, for $500.00. You are giveing them Tires, they need Gas and Oil too....

In light of the red tag event, anyone who just bought a new GM car at the "value price" must feel pretty stupid, especially since red tag is about to kill his/her resale value.

I read the blog and all the comments that people posted. Man, did I have a good laugh. I think it's pretty unanimous. GM execs are out of touch with their market, and it shows. Instead of shouting down these ineffective "look at me" sales campaigns, why don't you spend some time listening to your customer base and try implementing their suggestions. Yes, it won't be your idea, but at least you'll save the ship from sinking in the next year. Then again, I've given up on GM long long ago. When you see imports with better reliability, prestige, dependability, performance, and styling at a comparable price to USDM cars even with the tariffs tacked on, it's no wonder GM has lost touch of what value means to a customer.

It seems to me that in the long term, GM either needs to offer more "gotta have" products, or in the alternative, lower the price of it's "not really gotta have" products.

I betcha, someone with alittle courage could make a great business case for more "gotta haves".

-Charlie

I'm rooting for you, GM, but you can ignore the feet marching towards the nearest Toyota dealer. (By the way, don't try and pass off that marketing speak to an ad guy; it reeks of insincerity.) Feel the vibration, Marky Mark. Feel it, feel it.

Mark

Why doesnt GM make compelling cars that people want. I am a friend of GM and I want it to survive as an American company. Gm ruined its entire car lineup with boring wimpy cars in the mid-to late 80s then it overcommitted to SUVs. I am an American car loyalist but GM doesnt build anything I like. GMs problems are legacy costs and with a few exceptions unexciting product and a negative public perception. I know that GM has made great strides in quality and technology but the public doesnt. GM needs to fix its cost structure, get a reputation for quality unbreakable cars like Toyota has and build compelling rear wheel drive cars.
The problems are cost, product and perception. I think that America always loses in trade with Asia. Why doesnt GM lobby congress to finance our defecits with tariffs.

GM needs something like the 'Toyota-thon'. I read the book 'Against All Odds: The Story of Toyota' and the way Toyota marketed their year-end sale, the 'Toyot-thon' was genious. GM needs something similar. 'Red Tag sale' just does not have the same marketing zing as the 'Toyota-thon', even though there intentions are similar.

As a follow up to an earlier post, here's a comment I posted to another weblog that sums up where I am:

"...I wish I could corner Bob Lutz and beg him to give me one model and 24 months to do it right. Let's see if GM is committed to be world leaders.

We keep focusing on The General's overabundance of brands in the US, and to be sure, there's no way to sustain so many dividions in today's marketplace, but we should also note that GM has many other divisions in Europe (Vauxhall and Opel), The Far East (Didn't they buy Daewoo?), and Australia (Holden), just to name a few, that also contribute to their institutional lethargy.

GM continues to whine about "legacy costs", but doesn't Toyota basically gaurantee cradle to grave employment? They're saddled with a tremendously inefficient japanese economy, yet they continue to excel.

Maximum Bob's latest pronouncement just illustrates the point: 14 new crossovers. FOURTEEN? Added to how many existing SUV's? I count 13 basic models, leaving out permutations like the Envoy XUV. So now we'll have 27 crossovers and SUV's? When gas is now above $2.50 per gallon?

Even if some of those replace existing models, GM can't possibly sustain that model lineup. Let's see, Honda has the CR-V, The Pilot, the Acura MDX, and a new crossover for Acura. That's 4 models to devleop and market. Oh, and they're all class leaders. Toyota has 7 or 8 across Toyota and Lexus. Again, class leading vehicles.

GM simply cannot develop, and just as importantly, market that many vehicles. They're spreading the dollars too thin to be good at anything. The best they can hope for is to sustain market share, but they'll be splitting it up among too many vehicles. Which means they all fail.

GM bet its future on trucks and SUV's. They forgot about cars, and now they find themselves BRAGGING about the Tahoe's 16/20 MPG. Are you nuts? As thousands of Tahoes, Suburbans, Yukons, and Yukon XL's sit on lots like so many dinosaurs.

They build the attractive Pontiac G6, then put a PUSHROD engine in it.

They're building the Solstice, but it's a specialty car, and then they'll cannibalize sales with the Saturn Sky.

They launched Saturn to great fanfare and sales, then left them to die with no development.

They killed Oldsmobile, just as that division finally had a lineup of good cars. Finally.

Chevy's once-great nameplates Malibu and Impala now adorn cost-cutter rental units, cars they can't GIVE away to consumers. And believe me, they've tried. With groaning pushrod engines when Honda and Toyota all have smooth DOHC screamers.

They had to PAY Fiat $2 BLN to get out of that deal, and didn't even get Alfa Romeo in the bargain. Why does anybody want to get in bed with Fiat? They can't even dominate their own market. What, GM expected to learn something from Lancia?

Other than Corvette, GM has not one single class leading vehicle. Corvette is a halo car, and it cannot save the whole ship.

The biggest car company in the world cannot build a Honda Civic or a Toyota Camry.

The biggest car company in the world cannot build a world-class DOHC four or V-6.

The small block V-8 is now 50 years old. No matter how well-developed, a pushrod motor canot hope to compete with an OHC multivalve engine.

GM needs, maybe, 4 nameplates:

1) Trucks: GMC
2) Mass Market: Chevy
3) Luxury: Cadillac
4) Sporty/International: Pontiac, Opel, or Saab. But only 1.

Kill all the others, wade through the dealer lawsuits, challenge the UAW to a deathmatch, and come out the other side lean and mean.

The US economy needs GM. There are too many jobs on the line.

Unfortunately, I fear GM cannot do what's necessary. The institutional inertia is too great. They're a huge tanker headed for the reef. Everyone can see the coming crash, but they're powerless or too cowardly to do anything about it.

I'm probably GM's target buyer. Household income over $125K. Mid 40's with 2 small kids. In my driveway are a Honda, and Acura, and two "play cars": a 1972 Mercedes-Benz and a 1990 Alfa Spider No GM vehicles, and I'm afraid there won't be. We drive our vehicles forever, and GM cars and trucks simply don't hold up mechanically or financially.

Buy American? I will, when they are as good as a Honda.

I could go on forever about this....."

I have been a part of a GM family for over 40 years. My dad worked for GM, my husband, and I contracted with GM for 20 years. I keep hearing the same old story...GM's ability to compete. Make great cars that are value priced and people will buy them. I am so sick of rebates, incentives, marketing blah, blah, blah....

What happened to "I promise"? GM employees telling us that GM is on track and promises to turn things around. You are back to the same old tune.

Listen....listen....listen to the customer...they have great ideas!

This article by mark was nothing more than an ad. An ad that makes GM look so pathetic now, that I will no longer even consider test driving a vehicle from your company.

I cross shop and test all - domestic and import. But a company that loses all credibility with me - I don't have any interest in their product. We own one car (Honda) and one SUV (Ford) that we're going to be trading in soon for another car. Since I have no faith in GM anymore as a company, and in my opinion will eventually declare bankruptcy, I will not even test drive your offerings.

Mark, one question, what happened to we promise value pricing for at least 90 days??? Another broken promise, like 'wait till next year'?

If MG, of all companies, could turn the front-drive Rover 75 into the V8, rear-drive ZT, why GM can't do the same with the Impala SS is beyond me.

But I didn't come here to talk about that...

Style is half the battle in public perception. Why do people still lust after first generation Camaros? Because it looks like it would kill you as soon as look at you--exactly how it should look.

And that's what GM lost. I don't think there's anything fundamentally wrong with a GM product's bones (except those awful V6s), it's just that everything's so "bleh." The GTO's a good example: Great fun to drive, but it looks like a melted Cavalier. (In fairness, I know it was a rush job from Oz, but it illustrates my point well.)

Steal Franz von Holzhausen back from Mazda, put a bunch of designers under him from somewhere other than Detroit and maybe even a few from outside the auto industry, split them between the epicenters of American design, New York and LA, and let them develop a unique new look for GM.

PS: Give those Cyrano de Bergerac minivans a nose job.

What I don't understand is why you don't push the cost of incentives over to an extended warrantee. An extra 3 years would cost the consumer about $1500 or so, assuming typical extended warrantees. But by doing so you end up with a couple of huge advantages. First, you get to show people you believe your cars to be good enough to last say, 5 years without requiring servicing. Second, you put the onus on the competition to match your warrantee -- if the competition is as good as us, have them provide the extra warrantee. We believe in our product.

Of course you have to advertise the fact that you're providing customers with added warrantees becuase of your belief in your product. I think it'd be cheaper than the never ending incentives you're going through now.

Plus, a no-hassle pricing structure would be nice to bring in WITH the warrantee would be welcome news to many: fair pricing, reasonable warrantee, belief in product, no (obvious) incentives.

New commercial after you wise up and finally put a 10 year Warranty on your products:

"GM cars have proven to be reliable and long lasting, but sometimes perception takes a long time to match reality. So, to bridge that gap GM is now offering a 10 Year Warranty on all its vehicles.
Come home, America, come back to The General".

When I was growing up the heated arguments about domestics and imports raged on for hours. My sister-in-law would rage on and on about how wonderful her Toyota was and my brother would tell her how wonderful his Camaro was. I would interject how America created the industry and on and on we went.

Well today the arguing is over my brother is the proud owner of a new Suburban and that sister-in-law is the proud owner of a new Tahoe and they both live happily ever after in Chevy coutry: Texas.

Just lock Lutz up in a room with some engineers for a couple months and they will come up with some more designs like the HHR, H3 and Solstice that is turning the tide.

I look forward to the day when Buick and kill are no longer mentioned in the same sentence, but it will be mentioned with Mercedes and Volvo. Truly global, distict and independant brands that stand for something.

Fix the designs first and then we will fix the dealerships and the people will find you again as they always do.

Don't worry they are coming around and don't worry about Wall Street. There is a reason they call them Traders.

And all of you sceptics and detractors I say...

GIVE LUTZ A CHANCE!!!!

The "red tag" sale that GM has recently announced is another way to move inventory out the door and burn cash even more quickly. Build cars that people want to buy, and then GM won't have to give them away. If GM keeps this up much longer, it will join Delphi in Chapter 11 bankruptcy. I know GM is denying bankruptcy, but GM can't go on remaining in a cash negative position indefinitely. GM is in such bad financial shape because of truly incompetent management. One would think that management would have gotten the message a long time ago to build vehicles that excite people, so that GM can make a profit on them. If GM doesn't do it very soon, GM will become insolvent. Management is so inept that it is now trying to sell a controlling interest in GMAC, the only profitable area of the entire business. With such inept management, one must wonder if GM can pull off that deal. GM wouldn't have to be selling off its assets if it had heard the customer a long time ago and built high quality vehicles. I wouldn't buy a GM vehicle now because of all the talk of bankruptcy. Who wants to buy a vehicle from a company that may soon be in bankruptcy court? I think GM is going to have a very, very bad 2006.

Regarding value pricing:

It’s the right path, but we still have more work to do. Think “Walmart” (hardly bothers advertising because Word of Mouth is the most effective, anyway) vs. Art Van’s “inventory blowout of the week”. We still seem to be leaning towards Art Van. If you build compelling cars and/or have compelling prices (product vs. price differentiation), Word of Mouth will get around.

Regarding pushrod engines:

I, like most consumers, don’t care if it’s powered by Gerbils- I care about how the vehicle drives (acceleration, handling, etc.), reliability and MPG. How you get there is irrelevant. Too many of these auto enthusiasts are barking up the wrong tree- hawking technology that doesn’t really deliver an actual cost-effective benefit. (IE- hybrids vs. diesels.)

Gotta have products, product that people want to buy and so on. I was looking at some historical datas from Consumer reports in 1985,1990, 1995, 2000,2005. If you look at a Cavalier , for ex, the ratings are less than stellar to say the least. Same thing applies for most models US manufacturers build. So the solution is to build a car that will be rated much better than average by CR. Toyota, for example does not produce "gotta have products". They produce vehicles rated much better than average as rated by CR's subscribers. This explain the latest acceleration in market share from the Asian. They have been rated this way for the last 25 years. Forget about focus groups and what people wish to buy. There is a big difference between "wish" and what they in fact buy. Women for example "wish" to buy sporty cars, stylish look, cool looking wheels in consumer focus group. What do they buy? Corollas, Camries, Echo, Civic, Accord. Look at CR and the reason for this behaviour is quite obvious. All of them are rated "better or much better" . I hope this message will be read by you, M. Laneve. No matter what measures or matrix you use, reliability, as viewed by Consumer Reports is the only one that counts. Unless you can convince me that a Camry is a "Gotta have product".......

All this is fine, but GM's missing the point. There is only so much demand and dollars for the old mold of cars. GM is on the cusp of bankruptcy, and is treating the massive losses like the Germans did in WWII.... "Wonder Weapons" will save us!

The real answer is not "Wonder Pricing". Face it, if things don't turn around quickly GM ceases to exist in its present form. At the very minimum, they should be producing today's cars with the technology of easily modified fuel systems to accommodate the new tech fuels. Follow this up with cars that are actually capable of what the Japanese and, especially the Koreans, are doing with automobiles: make them comfortable, efficient and safe.

Finally, GM has to solve the real reason people buy the latest Behemoths... they are terrified of the huge trucks now allowed on the road, and want parity in case of an accident. Develop a truck that doesn’t scare people but still moves cargo efficiently, and you will be able to convince people to buy smaller and more efficient vehicles.

I agree with the previous posts. You need to set a lower price (way lower) and stick to it. And when you need "incentives", just offer longer warranties or free regular maintenance or something. Stop messing around with prices making some people pay MSRP and some people getting 1/4-1/3 off.

I think someone may have already said this, but I just read an article about Dell so I'll risk repeating (and risk being off the Red Tag topic).

Dell's direct model is so successful because there's no middleman, so their prices are much lower than most competitors. I think their reliability is lousy and other people know it too, but they buy anyway because the price is too much of a bargain to pass up. And if a decent warranty is included (one that would get me through the expected useful life of the computer, I would even buy one sine I'd be "safe" from problems.

Why can't cars be sold via the "direct sales" model?? Before Dell, noone would have believed it could be done. But it can - obviously. You could build up cars to a certain point, and customize them when you get an order. I don't know much about car manufacturing - maybe you don't even need to start the car until the order comes in. The key is to get people the car 2 weeks from when they order it. You could start with an experiment, like Saturn. Switch Pontiac over to it or something.

Now of course, people want to test drive cars before buying. That may never change. I'm not suggesting the end of dealers. Just the addition of on-demand car building and dealers who get some sort of credit for helping you shop.

The ideal buying experience would be this: You are interested in a new car. You visit your local Pontiac Dealer to demo the car type you're interested in. No pressure, just helpful knowledgable salespeople. Across the different models on the lot, you can see in-person most of the colors available, and for each model you can test drive all the trim levels, engines, and transmission types (and any other major things like Stabilitrack or something). Then, to show you your other choices, the dealer will have physical samples of colors and fabrics, and tons of photos and interactive lcd displays with options. Sort of like buying a new house - you can see ones like it, but then you look at samples to pick all your options. Anyway, you decide you want a new RWD Pontiac G8 GXP V8 6-speed manual, but you don't care about leather or auto climate control or navigation, just having a stereo in the car with an iPod jack on the front and the ability to play CD's and DVD's with MP3's on them. The dealer can place the order for you, or you can do it yourself from the comfort of your own home. (And if you didn't care about a test drive, you could skip the dealer altogether). You thank the dealer and decide to do it later at home, and the dealer gives you a code to properly credit them for their help - and that lets you load the options you picked when you get online). That night you visit gmondemand.com. You decide that you actually DO want a navigation system and that you want midnight blue instead of black. After adjusting your car, you arrange all your financing and place the order, and put down a deposit (something reasonable) with your credit card. Then, the car shows up at the nearest dealer (or the dealer of your choice) within 2 weeks for pickup. While you wait, you are satisfied because you know that you didn't pay a huge markup to the dealer, and since you didn't get stuck with options you didn't want, you were able to get what you wanted (V8 6 speed) without having to buy everything in the GXP trim level (or that a dealer might have added to the GXP trim level), saving you a couple thousand bucks.

SteveG and other Ten Year Warranty advocates,

It’s already an option. It’s called an “Extended Warranty”. Your dealer would be more than happy to sell one to you with your new vehicle.

For those that don’t want the added cost, either from a corporate add on or dealer offer, they can just say NO.

From a marketing view point, I think Ten Year Warranties would be a great selling tool. However, it comes at a cost and someone will have to pay for it, i.e. Joe Consumer.

As a consumer, I like it better as an option.

I am so disappointed in our leadership, I can barely stand to go to work. What message are we sending potential consumers anymore. Does anyone know!?!? Is it fire-sale incentive programs or one low "total value" price with zero incentives? How can you claim TVP and then put a Red Tag on the same d**n vehicle? Is it then the Super Total Value Promise? I'm losing faith in you guys, Mark.

Ok, its been two days and the majority of the comments on here are in the same vein... so where's Mark with the follow-up? Don't we, as GM owners and fans, deserve an explanation (in plain english, not marketing-speak)? He's probably off dreaming up the next super duper blowout sale, which will start right after the Red Tag sale ends.

I'm not sure what the purpose even was for posting this as a blog entry. It should be obious the people who visit here and read/respond aren't the brain dead of society who would fall for this propaganda. So why even try?

Anyone who expected GM to bite the bullet and suck it up for the long term building of their reputation by sticking to its " total value promise" had to be dreaming or suffering from a blow to the head.

How could anyone make such a big investment (buying a new vehicle) from GM knowing that at least 4-5 times a year, The General will go and knock your resale value right out from under you and leave you feeling like a sap.

I can understand trying to get rid of last year's left over models, but doing it on current models is just kills comsumer faith. You walk in delusioned thinking you are getting a great deal, only to have GM give a sizeably better deal 3 payments later putting you even more upside down on your loan. Good luck trading it in or selling it before you pay off 70% of the loan.

Its just sickening. Even if the likes of Toyota and such aren't any better in mechanical reliiability or style, they at least offer some type of price reliability, new and used. Nearly ever a worry that you just paid $6K more than your neighbor on a new SUV or that someone will be able to buy a new one for less then your used one for next 2+ years.

Walmart keeps getting used for comparision here, maybe fairly, maybe not. But I know I won't have to worry about buying something there only to see a super blow out next week filling me full of purchaser regret. Maybe I will see it on clearence in a year or so, but even then not to a point where I regret not waiting to buy it.

I don't think anyone based in reality needs any help in seeing this death spiral....

Hi Mark,

First let me say that I am proud to see you as a Canadian making it up the ranks in GM. It is not easy these days to crack the line up from north of the 49th (even though I am from Windsor...ha ha). Now, on to the business at hand:

I agree with the multiple posts made stating that GM should stick with the one price strategy and offer a class leading warranty for all brands across the board. This will create the value in the products you talk about as consumers need to get over the perception that your cars lack quality. I understand putting more features into the product for less cost is building value, but the warranty is what keeps the value over the longer term. I know your cars are good and are of quality, but the majority of the population does not. The cost for offering the extended warranty should be offset by the fact the quality is already built into the product. It adds a safety net for consumers to return to the brands they once owned and cherished. It allows the re-conquest sale to take place. It is not admitting your cars are currently having issues, it does say sorry for years of poor products that hurt the conusmers confidence and pocket books by offering once inferior products. It offers young consumers the protection of knowing their car will be covered during their first time buyer experience, when they are just starting out and want to make a statement by buying that first new car. It is giving back to the consumer what was taken away in the past by badge engineering, lack lustre performance, and poor quality. All of these items have been cleared from your current stable of vehicles... now stand behind your product with confidence and offer the public what it deserves. One Price and Warranty Leadership. It is a clear message, a fresh start, and a value creator. Sounds like a winner to me.

I will tell you something Mr. President, It does not look good for GM right now with all the talk about possible bankruptcy, as false as that may be, for you to have another discount program.
On the street people will not buy because they think you are loosing money soo fast you will not be around to honor your warranties.
I for one I am worried about re-sale if I bought the HHR, with GM gone, how am I going to service the thing, and if it breaks, who is going to cover the repairs?

It seems to me that GM's reluctance to offer a 10-year warranty reflects their true opinion of their product -- that it is too expensive to do the expected repairs for that length of time.

I have loved my GM cars for years, and especially my 2006 GXP Grand Prix, but I get rid of them in about 5 to 6 years. My son tried to keep a Buick Regal for more than 6 and had no end of grief.

So GM knows something about the long-term cost of repairs that we don't...?

A Ten Year Warranty should not be an extra cost. Does Hundai and Kia charge extra for it? Did they raise the prices of their vehicles?
A powertrain SHOULD last 10 years, there is no reason that a properly built car shouldn't last 10 years.
The perception out there is that GM makes unrelaible cars. Hyundai had the same perception and they changed that overnight by offering that 10 year warranty. It was a bold move, it was a brash move, it was a move that saved Hyundai.
It is a move that would save GM also.

"That Red Tag is in real danger of becoming a toe tag."

Although I like the idea of a Red Tag event; it should only be used for end of the model year clearances.

GM currently loses $1227 per vehicle sold. During the Employee Discount offer that rose to abour $1500-1600 per vehicle. I guess you were trying to make up the difference in volume???

Now your Red Tag sale is setting you up for more losses when you sell vehicles. But more importantly GM customerrs will no longer buy your product unless it is on sale. Did you happen to notice the 26% drop in sales after the last discount offer?

Is GM so strapped for cash that it will resort to selling at a loss to retrieve some of its operating cash?

What if GM and Ford would choose not to compete head-on in niche markets or in the allready too aglomerated markets and go head on with Toyota?

What if Ford wouldn't spend money reviving Lincoln and GM would forget about Camaro?

This way Ford would turn in profits from Mustang and Cadillac would be able to squeeze some profits in an allready crowded luxury market.

The money saved this way by each of the two could be invested in some top-quality( hybrids eventually) mid-size sedans to take on Camry or Avalon or Accord.

Also Ford should not throw in all the available money against GM's big SUV's.

The money saved could be used in finding/or financing a trustworthy supplier of hybrid components(Escape )

I can't believe all the comments! Obviously this is a hot issue. Where's the reply from GM? Where are the answers as to why they think this is a good idea? I mean real answers, not PR spin. Show us the marketing analysis. I recently had someone tell me "When you find that the world is always against you.....its probably you". Why on earth does practically everyone with any education whatsoever disagree with GM's strategy, while they continue to plod along? Is the leadership that stupid? I say flush the company out. Let all of the old timers who can't keep up with the times go and start fresh. Its time for a purge....

When everyday people do bad at their jobs, they get fired. When GM leadership does bad, they still go home with millions of dollars in their pockets. This is ridiculous. I really would like to purchase a G6 Coupe next spring, but making a purchase like this from a company who can't even play the game just doesn't feel right.

You need a BIG move, and you need it NOW. No tag will fix this....

Oh yeah....and NO UNIONS. No one in general assembly needs to be making more than $20/hour.

D/C just upped the warranty to 5 years and 60,000 miles along with some rebates. the longer warranty is here to stay if american car builders want to sell cars. the warranty has to be as long as the payments last because most car buyers can not afford car payments and repair bills at the same time.

This is interesting; 10 years warranties. Why is it that Korea offers this? Because Korea's manufacturers are backed by their country. It is impossible to tell if they are dumping their products because it is not possible to evaluate them, since they are subsidized by their government.Now any other manufacturers who would offer a 10 year warranty would create a downward spiral in the industry. The costs would escalate like there's no tomorrow, and the whole industry would collapse under it's own weight.Long warranties are very very expensive, especially with the trash me-myself and I culture so prevalent nowadays.

dave, i completely disagree with your comments. i'd say a bigger problem would be if you bought a car last month at the Total Value Promise price and are concerned about the resale of your car 1 month later!

Chrysler offering free scheduled maintenance too.
http://www.gminsidenews.com/forums/showthread.php?threadid=22851

Puzzling Sales Experience:
My mom just bought a 2006 Impala LT today. I helped her out with the salesman. She wanted the light gray interior which looks like a** with the fake wood so she had to order the aluminum interior trim because Chevy only offers it as an option (which is really stupid-fake wood doesn't look very good next to grey).
It will take 6 weeks to get the car. here's the kicker-the red tag sale ends on Jan 3, and the dealer said if they don't get the car by then than they can't give her the red tag price! Is this insane or what? She signed the contract today, so why should it matter when the car arrives at the dealer?
I told them if she doesn't get the red tag price (the one on the contract) then she isn't taking the car. They basically said OK.
What is up with that!?
That took what would have been a good car buying experience to an eye rolling experience.

To Mr. LaNeve and the GM team.

Wow, six whole weeks on the Total Value Promise. So who in the GM marketing department or at the legions of ad and PR firms you employ thought it would take just six weeks to convince consumers that the 30-year old era of rebates and discounts is now over at GM? Now you're back to Employee Pr... I mean Red Tag Sales? What has all this distress marketing achieved? Almost double-digit share loss, billions wiped off the bottom line, worker turmoil and the spectre of GM going bankrupt. Mr. LaNeve please, please, please get off the discount drug, accept lower share and fewer sales, invest in product, people and process (you'll save a fortune in ad spending alone). State the price, be proud of your product and have the backbone to ride the storm. No one said going clean was easy. Make me proud to own shares of GM again!

GM

All I can say is that the GTO deserved way better than what you did. If anything the styling should harkin back to the mid or late sixties soul empowering looks and performance. You guys got performance right but what was upper management thinking with the design. Rebadging the Monaro and thinking the public wouldnt notice was a paramount mistake even if it did save you money. Having owned a 68' Goat Convertible I was loyal to the GTO. With the latest generation you have insulted to very people who made the GTO a legend. So I guess it comes down to respect. And its seems like you guys have completely lost the plot.

Dear Mr. La Neve,

This message is the latest piece of garbage from a PR department that is either locked in a basement somewhere in the middle of nowhere in Michigan or is part of a corporate culture that still thinks it can insult the intelligence of the general public.

A great value proposition is producing a world-class automobile at a fair price and receiving sticker price for it.

Zarba has it so right - and good for him for voting with his feet by owning a car produced by a Japanese company - except for one thing - at this point in time GM in all of its self-inflicted and UAW inflicted woes can only at its very best seem to produce middlebrow subpar TOYOTA copy cats and therefore stop throwing good money after bad by throwing in the towel on Buick, Pontiac and GMC. Become a new company with three car lines for North America:
Cadillac, Chevy and Saturn (which will be homologated Opels). And then sell Saab (and if possible that soon to be a rolling dinosaur Hummer) for a loss like the genius beancounting MBAs did Subaru and Fiat. And if the dealer lawsuits get to be too much, "the General" should seek refuge in bankruptcy court and us bloggers instead of suffering through the company's growing list of travails should go out and get on with our lives.

Look at page 59 of the November 19 edition of The Economist. I can see now why the article used the Titanic as an allegory or symbolic representation of the company. The ship is sinking and all the apt, if not desperate messages of warning in this blog sound like passengers banging against the bulkheads on a ship about one-quarter submerged. These messages cannot change a culture shaped and dominated by short-sighted beancounters - and executives complacently sure they will be no. 1 (just because they have for the last 73 years), insulated and numb to the forces plotting to overtake them - not to mention a rancorous and problematic UAW from within.

There's not even a government to turn to - Bush in my estimation is too beholden to Koizumi for his support in the Iraq quagmire - so no Clinton type economic team of Laura Tyson and Robert Rubin to bail out the home team (not even with support on purported currency exchange manipulation).

Besides that's not even the problem - the truth is some auto suppliers with great technology do not even knock on GM's door anymore because the company only considers price or I guess we can call it "value" - all the more reason to buy a Honda, BMW or Lexus.

My best suggestion for all of us who can only stand by and watch this beached whale flounder on shore as it cuts key car programs and sings to us the praises of marketing and other Detroit-style gimmickry and continues to line the pockets of its incompetent executives is to... well make some money ourselves. Don't let Kirk Kerkorian be the only one to have fun - if Rick Wagoner, the UAW leadership and the rest of TEAM TITANIC can be left to preside over the destruction of this formerly great American icon then at least we can make some money off it too.

The stock price has bounced back some but the wise money has got to be on shorting the stock as the company continues to drain reserves and lose market share on its long and excruciating journey to Chapter 11. GM literally has had two decades of platitudes followed by empty promises and false hopes - the latest being Rick Wagoner's proclamation in the Wall Street Journal that TOYOTA would not overtake it has the world's largest producer of automobiles.

That's already one you can take to the bank - Las Vegas has to have an odds maker working on that one - so there's a second source of income.

The other idea is mine.

Tiger

Mr. LaNeve: Congratulations on a very successful HHR launch, this vehicle shows what can happen when a good product is coupled with value pricing. The HHR is not only has a good base price, it has the best option packages at
GM, it is nice to see chrome mirrors, fog lights and larger engines packaged as stand alone options or well priced on the next model level. The only things missing are 4 wheel disc brakes, a V-6 option, 6 speed Automatic and the option of getting one in Arrival Blue. But these are minor issues and can easily be added to a future model – an SS maybe?

While on the subject of paint color, is there any way that Steel Gray and Deep Blue could be added to the Sierra Denali along with a chrome package. The option to add backup sensors would also be nice, the backup sensors are offered on the Escalade and those of us with small children would greatly appreciate it.

One other thing, will you please drop the black plastic side mirrors; at least offer body colored or chrome mirrors on your full line-up. These mirrors make any car not painted black look like a rental car, even the ones offered on the Cobalt and Malibu are not completely painted and it is noticeable. I think that you lose a lot of sales when potential customers are taking that last long look at a vehicle before making the buying decision that this strikes them – directly or indirectly and they decide to pass on a GM product.

It is just frustrating to see a company that has great new products fall down on the smallest details that separate a sale from a pass in this competitive market. GM has made great strides in quality, styling and product content and is in the red zone and need only to push it those last few yards over the goal line.

If you extend the HHR packaging across the lineup along with the new product content (6-speed automatic) that GM is developing and fix some of these minor problems, you can only be successful.

A side note to some respondents – GM does offer excellent overhead cam inline 4, inline 5, V6, inline 6 and V-8 engines, but remains one of the few companies that thankfully sees the great value that pushrod V6 and V8 engines offer. The 3.5 and 3.8 V6 engines provide more than adequate performance for even a large family car but still can produce 4 cylinder economy on the highway with 30 to 33 MPG (at keeping up with traffic speeds) and over 20 MPG can be achieved in mixed around town driving. The 3.8L is also one of the lowest emission (SULEV rated by the EPA) engines on the market – not bad for an all cast iron, two valve pushrod engine. As for the pushrod V-8 there are Corvette owners that can get 30 MPG with the 6-speed manual and the new Impala SS is rated at 28 MPG highway. And no I do not work for GM or even in the automotive business.

Thank you for your hard work at GM and would like to thank you for listening.

GM management, I and many others would like to know why you forgot the customer? How can top management forget that they have to build what the customer wants? GM's customer service is terrible, and that is just a fact. I am not the only who isn't pleased. Get off your perch from the time when GM dominated the market. If GM's management really wants the company to prosper, it will listen to the customers, who are your source of profits, and right now your lack of profits. Also, I will not be buying a GM vehicle. I was looking at Toyota and GM, and I must say some GM vehicles interested me. However, I did not like being talked down to because I am a woman. I am paying a lot of money for a vehicle, and I am going to do my research first. When I ask questions, I expect them to be answered, no to pooh-hooh me like I am an idiot. Women buy a lot of vehicles, and you are turning away customers with this sexism. Also, I don't like the job banks that add to the cost of vehicles while the laid off UAW workers sit home and do nothing as they wait for their welfare from GM. I am going to pay more for a vehicle for this nonsense. I asked questions about Toyota's vehicles, and I did not have to put up with the garbage I got from GM. I was treated with courtesy and respect, which is why it is say hello Toyota, and go to h**l GM. If GM wants to turn away women, GM certainly can, but our money can and will go to other auto manufacturers.

How's 'bout just fixing the issues that p**s people off like intake gaskets and intermediate steering shafts
oh yeah and one price period forever

GM Sinking Ship
I grew up on GM vehicles. My dad was a high school autoshop teacher and with access to the shop on evenings and weekends many chevrolet engines and vehicles have been moulded by my loving hands. We loved GM because the cars were simple to work on! Many of the parts were the same and you could find spare parts everywhere. Ford engineers could not quite figure where to place the bolts. You had to contort your arms and hands to take them apart. Not so with the GM vehicles they were a breeze. Once on my 63 corvette I raced to see how fast I could pull the engine and replace the clutch, just under four hours and I drove it out of the shop. No NASCAR record but I have become pretty good with those beloved small and big block pre 80's vintage engines.

As a mechanical engineer who grew up with a wrench in my hand I consider myself to have a different angle to my thoughts about cars than most folks. I used to often say "I will never drive anything but a chevy". I still have a 55 chevy with an original napco 4x4 front end and have had many other pre 80's GM trucks and cars all of which were regretfully sold to some very lucky people. Today I would not trade my 55 for a brand new 2006 chevy truck or any current model chevy. I drive TOYOTA!

How much money and time would you like to spend at the dealer getting your car fixed? They have missed the boat! Its their MISSION STATEMENT, GM actually pays their engineers to design parts on their vehicles to fail. Some bean counter CFO had the great idea that they could sell less expensive cars and make even more cash at the parts counter and the service bay. As an engineer I find this offensive. My toyota T100 has 160,000 miles on it and other than the $15 that Toyota Parts charged me for new brushes for my starter.

My point is that listening recently to GM executives on CNN discuss their plans to roll out new offerings that will knock your socks off, all I see is too many grille changes. How about some quality! Remember when Toyota offered 7 year bumper to bumper warrenty. GM LISTEN! We buy a vehicle for QUALITY! You don't have it anymore. Let the engineers loose!

I consider myself an automobile enthusiast. I like cars, I know what everything is that is on the road, but I am not an engineer, mechanic or even an expert on how a car company works. After reading just some of the many comments appearing on this page, I am amazed at how many people are experts! It's not dissimilar to the throngs who critisize our President--even though they don't have the same facts in front of them, they KNOW what should be done.

I understand and do believe that GM suffers from quailty and product excitement problems duly earned primarily in the 80's, but I need someone to explain to me exactly how Honda and Toyota excel.

For example, in 2003 I was considering purchasing a Pontiac Bonneville SSEI, but I thought I would first educate myself on what everyone else seems to know--nothing beats Toyota. So I went to my local Toyota dealer, explained my interest in the Pontiac to the sales manager and challenged him to show me a comparable Toyota car and exactly why it is superior. He showed me an Avalon. Let's see: It doesn't even compare to the Pontiac in style, performance, handling, etc., but I am supposed to believe it is better quality? So I said okay, show me any part on this toyota that excels in quality from that of the Pontiac. He could not show me one. He simply expected me to believe that this was a better car because being a Toyota, after a couple of years it would only depreciate a couple grand! I bought the Pontiac.

I am confident I could make the same type of comparisons today with any Honda or Toyota. What does Honda have? The Pilot, yeah, that's a real exciting vehicle, Someone explain to me how that outclasses a TrailBlazer. And where is Honda's SuperSport line-up? let's be honest. People buy Pilots because they don't know beans about cars, don't really even like cars and want their neighbors and associates to think they know beans about cars and conform to the status quo.

Again, it's like critisizing the President, why do people do it? To try to sound smart, not because they could do the job better.

I like GM's cars more and more all the time. I believe they are at least trying to respond to customers desires. It all comes down to bias and perception.

so now that the red tag event has ended, what is gm's next move to keep sales going. i am planning on purchasing a new gm vehicle in the spring time, but now seeing how prices are so much lower, how can gm expect anyone to pay anything more than what has been offered on the red tags? please tell me that this offer will be extended so that i don't have to sweat the salesman at the dealer and he wont do the same to me.

What GM needs more than anything is to take a good long look at what America has become over recent years and deal with it. Cheap cars are cheap cars. Put a high price tag on it, and it's an expensive cheap car. They will only sell if your prices match your quality, and the people who used to buy the cheapest cars are gone. U.S. manufacturers have moved far too many manufacturing jobs overseas, so the uneducated masses you continue to market too are either out of work and broke, or have by necessity become more educated in order to survive. There is noone left you can market to this way. Build quality, stand behind it to prove its quality, and can the all too obvious salesman doublespeak. Car consumers are intelligent, educated, and market savvy. Treat them that way, or be happy with your place in history when you become the Industry leader in failure. A good first step would be to dissociate your brand from Mark LaNeve!

OK here goes...

i am 36 and have a 2005 cad escalade (great design crummy reliability and dealer servic)
2003 bmw z4 loaded under lease
2004 dodge ram

i can buy pretty much whatever car within reason that i want. i love cars and am a car junky i guess.

my prescription for GM....

i wont get into the labor unions and the health care. i am not pro union at all.

let us just talk cars.

it is obvious to me that GM as a big market share company is not going to work. however that is not necessarily a bad thing. GM needs to put an emphasis on its history and brands and models.

i just took my caddy in for service and got a pontiac 2006 gran prix. what a horrible old style example of the old late 80s and on GM. yuck. i would not buy that car for any price.

GM is currently known for cheap prices, cheap marketing ploys (employee prices, kmart blue light special aka red tag sale). yikes. there is no future in that.

i think the model u all need to be looking at is BMW. yes. BMW. small company but it is growing. they HIDE their discounts in high residuals on leases and decent interest rates. they then HOLD the value (somehow i dont know) thru their CPO program. maybe u can do this with caddy.

cars...

1. kill saab. small swedish company while i liked their cars in the 80s and 90s. they are known for turbos and fwd which no one wants anymore. u can not price them anywhere near a bmw or mercedes bec u will get slaughtered. look at your lease deals on the saab and tell me u are making money. kill saab. plus they are low low volume. it is a lose lose situation. dump them. it is another fiat.

2. hummer. personally i dont like them but they are popular. keep them under the cadillac fold and continue. upgrade the H2 based on the 07 tahoe and u will be profiting handsomely.

3. pontiac. please make a firebird/transam like the 2005 mustang. ford is making a killing on the mustang. where is GM on this? i think u need to kill pontiac though. u can not sell pontiac minivans and boring 4 door cars. it KILLS the brand. pontiac is excitement (or more recently rental car Grand Ams). the G6 is styled nicely but it is a big yawn. kill the brand as a whole (dealerships etc if u can just like with oldsmobile)but KEEP the name for specialty sports cars like firebirds and solstices (not my favorite but seems well received). if u want a four door car buy a chevrolet or buick.
3. u killed oldsmobile. shame i loved them. but the same goes for buick. at the very least u need to TRIM the models down on buick. buicks dont make much sense anymore when u have a leather impala v6 and v8 that is decent on the low end and nice v6 STS on the high end. why bother with this middle ground? again trim it. maybe keep the buick name for a great convertible or something. and bring back oldsmobile name for something great if u can.
4. caddy. obviously your investments in this one division are paying off. i have owned 3 escalades and i love them but they are built horrible (but hey they are CHEAPER than the competition (again the rebates)!). the dealer service is worse than bmw and mercedes. not even close. the designs are great though. the CTS (getting old now i think u are redesigning) and STS and the SRX are all great designs. the STS is very nice looking inside and outside (but again i can lease a bmw for cheaper i bet).

5. chevrolet. redesign the pickups for gods sake. toyota is going to eat your lunch if and when they go full size. the tahoe (and 07 escalade i want one i thnk) looks great. the 4 spd auto is an oversite. GM costcutting. brand new truck with a parts bin 4 spd auto in. shame on you. but the interior FINALLY looks great.
trust me on this. i am not a nascar fan but please make a REAR drive monte carlo for the nascar fans. u now have a front drive v8 montecarlo ss. fwd? please that is a shame. u have nascar editions that sell great. the upscale nascar fans with kids need the monte carlo in addition to the upcoming camaro. rear drive and NOT too small. bigger than the GTO. needs to have real rear seats. needs to have a sunroof and leather and automatic and 6.0 liter engine. i am telling u you will sell that thing for up to $35k ALL DAY LONG.

u need to get that union monkey off your back and trim GM down to make cars that people want at any price (witness mustang and chrysler 300c to some extent). also look to the Opel division as they have pretty good cars and are well regarded in Europe. the cobalt has had good reviews (opel design).

no more FWD in the luxury brands!!!!!! and no more 1983 buick century t type euro wannabe designs (my first car i drove!). that is what killed oldsmobile. trade on your history like the chrysler 300c, mustang and future monte carlo, firebird, and camaro and corvettes. if i want a euro car i will fly to germany and pick up a bmw or mercedes.

good luck. and please sell GMAC i bought $15,000 in GMAC bonds and if they default i am going to be upset.