Rick Wagoner and Bob Lutz on Charlie Rose
We’ve seen some comments on appearances by GM CEO Rick Wagoner and Vice Chairman Bob Lutz the Charlie Rose’s PBS interview program earlier this week.
In case you missed the shows, here’s a chance to download Rick’s and Bob’s interviews. Take a look to get a very interesting perspective and to hear a frank, open dialogue about GM and its place in the global automotive marketplace.
- Posted in Business
Eric
It was great seeing Wagoner and Lutz tell the true story about GM. I’d much rather hear the straight talk than some analyst who criticizes GM for things beyond the company’s control. A fresh look at the upcoming Volt didn’t hurt either! The company is on the right track for success. I read on Autonews.com that Bob will appear on 60 Minutes soon as well. When will this air??
chance
It’s good to see the honesty. I’m not sure that’s all it will take to pull GM back up? It’s not 1975 anymore and GM doesn’t have 45% of the market.
With “global manufactures” pressing the market GM’s volt will not be
widely accepted on a mass scale. The only thing that will pull GM up is doing something that no other car company is doing. GM seems to have a follow the pack mentality right now. Following the pack will not put them back in the lead. I don’t want to pressume anything, however, if GM wants
to see what will put them back on track in a very short time frame we believe we can help them with that. If you would like to review what we’ve
done you can contact me at this email address. In short, if Bob Lutz is in control of future projects for GM he should look at everything he can?
Right? If he doesn’t leave our shop shock. I’ll buy him a steak dinner. He looks like he likes steak!
edvard
I watched the entire Lutz interview. I’ll watch Mr. Wagoner’s interview next. To say the least, it was impressive to see the scale of testing for the batteries alone. I find it also to be a smart move to place GM in front of the eyes of the very demographic who probably scoffs at anything GM makes or says because they wrote GM off long ago as a company that only makes large SUVs and trucks. As Bob mentioned, cars and their brand names are judged along with the people driving them. Telling your story in an honest, open fashion to the so-called liberal elite is a good step towards redeeming your brand image in their eyes.
Kudos to everyone working on the Volt.
Edward Hayes
Rick, Bob, GM to whom it may concern, listen to me,
You are still missing one important detail and I am going to use this analogy.
The three issues I am concerned with are
1) Design
2) Quality
3) Brand
The analogy is we will compare it to a date, the ultimate goal is lifetime companionship.
1) Design - is the overall look and package of the date, the right category, size, shape, height, athleticism or whatever particular characteristics for whatever reason one’s preference that one looks for in their date - are they there? But do understand that it is generally agreed that beauty is universal. Okay Bob has that covered finally we are getting the right designs.
2) Quality - is the success of the date, were they nice, did they pay attention, did you like what you heard and felt as you took it for a test drive? Any indiosyncrasies that may cause it not to be considered?
Okay, so the General finally has the first two down pat. But here is where the paradigm explodes in GM’s face.
3) Brand - and brand is (watch this) BRAND IS THE MARRIAGE FOLKS!!! When one discovers and has found the beauty and quality in a partner they are looking for the prize of a long term relationship. When one commits to a brand it is a lot like a marriage.
In this sense they will forfeit, forget, not consider, and ignore potential new suitors, or dates that may have higher quality or beauty for the sake of a successful marriage.
But when we consider brand GM is falling apart. Look at the last month. Hummer is being put out to pasture, truck brand programs cancelled or delayed. Understand, when you take away Hummer from this 37 year old who has made a commitment to this brand to keep it and buy it for the rest of their life, (now at my age perhaps we are talking 20 sales in the following decades) that is the committment you are breaking. Considerer the literally hundreds of brands that came and went in Detroit, trying to find a long term relationship has as good of odds as finding a golden anniversary party in Hollywood.
Now consider Toyota with its commitment to consistent, continuous improvement in a continuity of product that is the envy of the industry. If I purchased the Land Cruiser for example, guess what, even in these bad times it’s still there, those relationships are still going strong, as is the 4 Runner, Tundra, FJ buyers etc. and you can bet they will be around for the rest of both our lives.
Now when and if I have to consider a new marriage do you think I will consider another GM product that has dumped our ring in the gutter, or will I consider Toyota that has proved a fine maiden or suitor and stuck with their relationship through thick and thin? And they all are raving of their happy marriages if you know what I mean.
Do you understand yet the importance of brand like the Camry brand or the Toyota FJ brand or are you still not understanding?
Let me give you another example. I drove a Ford Probe, my first brand new car. If the Probe was around today GM and I would have never found each other. Ford got rid of the Probe, so I got rid of Ford and found GM in the Cavalier. Then I found Hummer, if we break this relationship do understand that you may loose this young bachelor forever.
Don’t leave me with the FJ please or some weard funky import.
In short, stand behind the brand my man.
GM you are breaking my heart!!!
Charlie H
edvard, Tell me more about the “liberal elite.” All the liberals I know work for a living.
It also happens that quite a few of the liberals I know gave Saturn a try. They liked the practical, unpretentious, sensible transportation of a small car built with care and they liked that it was a US product. Most of them were disappointed with their Saturns and most of them would also identify with the recent, “That’s a Saturn?” ads, because Saturn doesn’t do practical, unpretentious, sensible small cars any more.
And straight talk from Lutz and Wagoner is valuable and to be swallowed whole, without critical analysis. It’s not like they have any reason to put any spin on news about GM, right?
edvard
Edward Hayes,
I have to disagree with you on this one. What you’re talking about specifically is Hummer, and in my opinion, Hummer is such a new brand for GM that cutting it wouldn’t be doing GM any harm. The Hummer brand is a victim of its own initial early success- having been introduced to the public at a time when fuel prices were low and large vehicles were all the rage. Its identity was all about being bigger than life. Even if GM were to suddenly offer a small compact fuel efficient Hummer pickup truck or for some reason- a car, the damage is already done, and most anyone on the street will automatically assume that it is an excessive gas guzzler. GM is doing the right thing by shedding the brand because GM is a very strong brand- perhaps one of the strongest right up there with Coca Cola, Apple, and Nike. There’s no sense in keeping a more recent arrival in the fold when the remaining deck is still strong.
As for Charlie, Perhaps I was painting with too broad a brush when I made the comment concerning the “liberal elite”. But as someone who grew up in rural TN and has lived on both the East and West Coast, there is a huge difference in the types of cars people drive in large, unquestionably liberal-branded cities like San Francisco- the city I currently reside in- and cities like Knoxville TN- where I grew up. What I witness out here is that no matter what GM, Ford, or Chrysler makes or improves, those who live in the more liberal cities are more often than not going to write their cars off because as far as they know, anything the US makes is utterly worthless and by driving such a vehicle, they would look stupid compared to all their intelligent friends who drive Hondas, Toyotas, Audis, and VW’s. Its ironic because in some cases, cars that are deemed more “intelligent” are actually worse in quality that anything the big three makes- like VW for example. Yet appearing to be smart heavily outweighs reality.
Just to make a anecdotal example, I have a small poster of the new Chevy Malibu hanging in my cubicle. My boss came in one day, saw the poster, and asked me what it was. Was it a Bugatti? I kid you not. When I told him it was a Chevrolet he was sort of puzzled. He drives an Audi himself and even though I’ve brought up GM a number of times in a positive light, He would NEVER consider one himself despite the fact that he drives an A4, which has a horrendous reliability record.
So when I mean the “Liberal elite”, I’m referring to my personal observations out here in one of the most liberal cities in the USA, which is to say that GM has a major perception problem with many of the people I know who live here. This perception will be difficult to overcome which is precisely what I assume GM already knows which in turn is why they must release a ground-breaking car such as the Volt to make the naysayers stand to attention.
bob weisberger
I watched both interviews and what struck me was the continued defensiveness about producing the big cars and trucks which are now weighing GM down. The rationale was that GM was producing what the people wanted and would otherwise have been irresponsible to its shareholders. I was provoked to write this by today’s article in the NY Times re Honda’s consistent commitment to fuel efficiency. Sometimes great companies have to lead, not follow. It is heartening to watch GM’s development of the Volt and let’s hope they succeed, but they are doing it because they have to, not because it is a rational response to limited and polluting resources.
http://www.nytimes.com/2008/08/26/business/26honda.html?scp=1&sq=honda&st=cse
Chris R
Edward Hayes,
Just as an FYI, Toyota has already announced that the FJ will not be replaced when it’s life cycle is complete. Besides, GM has plenty of other SUV’s to choose from. Though I’d personally rather they canceled all of the Cadillac SUV’s and continued to sell Hummer through Cadillac dealers.
Edvard,
I’ve noticed much the same thing here in the Minneapolis/St Paul area. Many people wouldn’t consider driving a domestic brand car as they are wrongly convinced that the cars GM, Ford and Chrysler make are not as good as their foreign brand cars. Never mind that nearly all Corollas, Civics, Camry’s and Accords sold here did not come from Japan.
What’s in a name?
I am thinking though that Edward does make an interesting point in that these Japanese brand cars are viewed as continual improvement. Even though one of these cars may be entirely different from the previous version at a model change, the name remains consistent. People hear Toyota Corolla and they know that it’s Toyota’s entry in the compact segment. GM’s recent rash of name changes, presumably just for the sake of changing model names, is rather worrying. Especially considering that some names, such as Pontiac Grand Am, have had a decent reputation with the buying public and were making some inroads into changing some peoples minds about GM. Buick LeSabre was another name that won a ton of quality awards and that name is gone. Names like that need to be preserved. Without them, there is a sense of uncertainty. A customer might say, I know the Grand Am or LeSabre is a good car, but is this G6 or LaCrosse going to give me trouble? Seriously, that’s what people think.
Edward Hayes
The bttom line is if the best truck brand in the world is not safe no one is safe from GM’s sword.
Do understand when you undercut customer loyalty all the brands suffer and customers are not dumb they know it. They will stick with a brand they know will survive. If you want to talk about resale value and all that, the very existence of the brand is the #1 consideration. Like a marriage, a brand and a purchase is an investment and a commitment on the part of both parties. And the only commitment that is credible is the one coming from Japan.
Eventually just like a bad currency the value of GM’s brands and their supposed book value and future value is not worth the paper it is written on if we can’t belive our vehicle or brand will be around in the future.
If GM wants a commited customer base that commitment has to come from both parties.
Charlie H
Chris R writes, “Many people wouldn’t consider driving a domestic brand car as they are wrongly convinced that the cars GM, Ford and Chrysler make are not as good as their foreign brand cars.”
Gee. What convinced them, wrongly, of that? And, guess what… their being “wrongly” convinced is not their problem. They are happy. If you buy another car from a vendor that treated you right, you sleep well until it surprises you by going bad. If you buy a car from a vendor that treated you shabbily, didn’t deliver value, etc, no matter how long ago, you will be uneasy until you are done with that car and survive the experience without trouble. Notice I’m not even going to bother with, “What makes you think they’re wrong?” It’s practicallyl irrelevant whether they are or not.
If GM, former holder of 50% market share in the US, isn’t happy that people left GM, “wrongly” convinced that something else was better, and are now buying something else, GM will just have to come up with a compelling reason to switch back. The Malibu being “as good as” something else is not a compelilng reason. In each class in which GM wants to make headway, GM must be appreciably better. GM probably also needs to find uncontested segments and build vehicles there.
Edvard, GM has a perception problem with Consumer Reports, too. But they just make stuff up, right? I mean, in 2003, Bob Lutz assured us that GM was as good as anybody. So, that’s the last word on reliability, right? Check Consumer Reports… they don’t think GM’s 2003 efforts are as good as anybody else. But they’re anti-American, right? Liberal, right? They just made that up, right?
motorman
to me anyone who needs CR to tell them what to buy has no courage to make judgements on their own. i have never read CR and at the age of 74 i have not been sorry with any purchase i have ever made including dozens of new chevys and 11 new corvettes.
edvard
Charlie,
I stand behind my previous statement. GM has a quality perception problem. I say this as a person who has ONLY driven Toyotas my entire life. Whats more is that I’ve serviced all of my vehicles myself.All throughout the 80’s and 90’s, the quality of the Toyotas I drove was impeccable. There was a huge amount of emphasis in the details. The careful considerations in regards to machining, hardware, design, and mechanical accessibility for mechanics to service the various drive train components. I pay close attention to the smallest details. I still drive a 13 year old Toyota truck. I do so because the newer versions of the Tacoma are disappointing. That isn’t to say that the reliability is still perhaps excellent. But the newer Toyota vehicles I see of late lack the same attention to detail, care, or even serviceability. It appears that Toyota is getting into the volume production game, and as a result, their products are being cheapened. You’d hardly ever see cut corners on Toyota cars ands trucks a few years ago. Now I see quite a few cut corners.
What I see in GM is marked improvement and attention to detail. My favorite car remains to be the Malibu. There’s a Chevy dealership down the road from me. I look at these new Malibus from time to time. The detail and attention is there: The way that the door closes, the evenness of the paint on the door sill interiors, and the clean layout of the interior, engine compartment, and undercarriage. To me, the new Malibu represents what a car should be and what the Camry used to be.
Then again, if I mention the word “Chevrolet” to any of my 30-something friends, who’ve probably never heard of a Chevy Malibu, I get funny looks. That is GM’s problem. I see the quality and I see the products they make, which to me are totally different than just a few years ago.
GMisCARKING
GM now has the same problem as Volkswagen in 2003. Take a look at this Fortune article dated Oct 13, 2003( http://money.cnn.com/magazines/fortune/fortune_archive/2003/10/13/350925/index.htm). GM has declining market share, falling profits and too many brands. I think you could learn something from the article.
Tim
I agree Motorman. I also want to know exactly how accurate CR’s ratings are. I remember looking at one CR, and they had 2 Pontiac Grand Prix’s listed. One was a GT, and the other a GTP. The GT had an average or above average reliability rating, and the other had the worst (black circle) rating. They are the same car!!! The only difference is one had a supercharger and a taller final drive ratio, and the other doesn’t. If basically the same car can have 2 very different reliabilty ratings it makes me wonder how big their sample size is, or how accurate consumers reporting is.
Charlie H
motorman, If you’re not planning to do a little research and base your “judgement” on the best available information, you might as well make your purchase decisions by rolling dice.
Charlie H
edvard,
Even if we presume you’re right and there is only a perception problem, what would you like us to do about it? Buy cars we don’t want? Waste time going to the Chevy dealer and shopping for a Chevy when we can go straight to the Toyota dealer, pick up a car we’re comfortable with at a good price, go home and sleep soundly? Overcoming a bad reputation takes time. There are no shortcuts. And the fact that they’re screwing the parts together properly doesn’t tell us anything about the long-term durability of said screwed parts or the tolerances or materials involved.
Business 101 - It’s cheaper to keep a customer than get a new one. Business 101A - It’s cheaper to get a new customer than win a pissed-off customer back.
Today, on my way in, I saw a Buick with the paint peeling off. Do I have a perception problem or does GM have a problem that I perceived a Buick with peeling paint? Why doesn’t GM repaint those cars? They’re rolling billboards for Toyota.
—
Tim,
So your thought there is that it’s better to argue with the messenger than listen to the message? Or just shoot the messenger? Or ignore him?
CR does what CR does. I happen to trust them. What they have to say about car repair history is based on ownership experiences. My experience with my vehicles is in good alighment with their recommendations. If there was a better way of getting information about vehicle reliability, I’d sign up for it.
When I take the time to check up on CR’s ratings of things, it usually pays off. Early this year, I switched dishwasher detergent based on their ratings. After I did this, our dishes were looking really good. Yesterday, I noticed that some dishes didn’t look so good. I checked under the sink… my wife had gone back to the old variety of detergent.
By the way, if one car has a supercharger and a taller final drive ratio and the other doesn’t, they are not the same car.
Chris R
Charlie H,
My point was more about people who have never owned or even driven a domestic brand car. They have probably been told since they were little about how bad GM cars were, and in the 70’s and 80’s many of them were quite bad. However, since about the mid 90’s GM has gotten serious about improving quality. Recently we’ve been seeing some major payoffs. The Ecotec engines are both powerful and fuel efficient, the new Malibu, Aura, Enclave and Acadia are the cars many of us remember GM used to build, only with the added bonus of actual reliability rivaling that of Honda and Toyota. I believe both Honda and Toyota have had more recalls in the past few years than GM has on competing models. GM’s lack of ability in shamelessly promoting itself in this way may be contributing to the lack of changed perceptions. If they take a page from the Toyota manual on self promotion, they’d make better gains.
As to motormans comments on CR. The manner in which they gather data and test different products basically works well for any product that isn’t very dynamic. In other words, the washing machine you bought 10 years ago is pretty much the same, both mechanically and in appearance, as the one you could go out and buy now. Not so with cars and trucks. They’re to dynamic. Even without a model change, new engines, transmissions, interiors, and other updates can be made to the cars. Entirely new models carrying on the model name from the model it replaces are given the reliability ratings from the previous model until CR can actually test one, and with entirely new models coming from every manufacturer every year, they have no hope of testing them all. CR is very good if you want ratings on appliances and such, not so good if you want to buy a car.
motorman
charlie h i never depend on anyone else’s opinion when i spend money as it is my money and my choice. i will not even ask my wife when i buy my next new corvette,number 12 since we were married i might regret that but after 49 years of being married she most likely let me slide,i hope
Tim
Charlie H,
So out of the tens of thousands of parts that go into a car, have 2 that are different make them significantly different? And I would bet my money that a supercharger and a different final drive ratio had anything other than a very minute affect on reliability. Not enough to go from average to worst. If the door panels were different, or the switch gear was different I would say, ok you might have a point.
And there is a difference between how CR tests cars and dishwasher soaps. CR does test cars, but most of CR’s reliability ratings come from outside sources (customers reporting to them). CR also tests dishwasher soap (I doubt there are reliability ratings of soaps) and can report directly on their findings, without having to rely on 3rd party sources. I’m not arguing with the messenger, I’m arguing the message, because they might not be getting accurate data from a 3rd party.
Charlie H
Tim,The cars are not identical. For all you know, the pressure and heat from using the supercharger makes a big difference.
Every Detroit fanboy in the world distrusts CR, except when CR reveals that Toyota has stumbled… then CR becomes gospel. At least for a paragraph.
Sure, I’m drinking the CR Kool-Aid… because it has proven to work for me. That’s why people subscribe. Well, I just use the library copy.
As for getting infromation from vehicle owners via survey… you got a better idea? Then go into business selling data. Whether or not the data is accurate is a good question… CR has quite a few statisticians to work the data. Now, if you’d like to imply bias… that someone who bought a $25K Detroit vehicle is more or less motivated to tell the truth than someone who bought a $25K Japanese vehicle… that’s an interesting thought. How would you go about proving it?
By the way, the most recent figures I saw, 2004 or so, said GM’s and Ford’s warranty costs were roughly twice Toyota’s and Honda’s. And Chryslers were far higher, still. Which bears an eerie resemblance to CR’s reliability reporting. I call that “confirmation.”
edvard
You know what? I used to be a fan of CR until some of their reports really missed the mark. I recall in 99′, they labeled the VW Jetta as a great buy. Never mind that most of those new VW products wound up being total hunks of garbage with cracking intake manifolds, door panels and hardware that literally fell off, and head lights that constantly burnt out. Either that or when they reported the Mercedes E class to be “One of the best cars ever made”, only to later find out that since the car was ridiculously complicated ( over 100 electric motors in the power seats), they were royal nightmares for the owners.
So no- I’m not 100% sold on CR as a valuable source of data.
Euroclydon
“They have probably been told since they were little about how bad GM cars were…”
And why did someone tell them that? Reasonable people don’t just make things up without cause.
Detroit3guy
While the Detroit 3’s reputations go down the drain, does anyone give thought to perhaps the reasons aren’t only mismanagement and bad designs. To me it’s market fairness. The Asiains, as do all golbal auto manufacurters, have unfettered access to the U.S. market while the Detroit 3 have at best limited access to theirs. The Chinese market is so closed they must partner with domestic companies to even manufacture or sell there. Yet all are welcome here. For decades in thier home markets they have been building small, fuel efficient vehicles that they had to have due to their weak economies, limited natural resources and high enery costs. Their first entries where received poorly. But with feedback from their forays, they were able to target segments of the U.S. market with R & D money from their domestic markets. If the Detroit 3 would have had acces to their markets, my money is on them wiping their clocks, because a country that could save the world from Tojo and Hitler and put a man on the Moon, could easily build a competitive 4 banger.
Now on to legacy costs. The UAW has bargained (?) their members out of a competitive place in the gobal market. After all, American workers are building all those Accords, Camrys and Sonatas
that we’re buying. When domestic manufacurers have to pay an employee regardless if he or she is producing a product, then a hastily designed and built product must be put into the pipeline. Result, an inferior product. When the American market demanded trucks and SUVs, the Detroit 3 put out world class products. While I believe a deal is a deal, all past UAW members deserve their just compensation. The new contracts reflect the realities and I hope when better times return to the Detroit 3 that UAW won’t revert to old tactics.
In closing, WAKE UP AMERICA! Although many domestic cars are sourced, their profits stay here as part of YOUR IRAs. Please, the next time you are shopping for a new car, check your local Detroit 3 dealer.
Thanks
Chris R
Euroclydon,
You may wish to go back and read the rest of that post you quoted. It goes on to explain what you are wondering about. Toyota and Honda once had a lock on reliability. Not so much anymore as GM and other manufacturers have caught up in the past decade or so.
btw, why is it that the cars I see most often that are broken down at the side of the road are Hondas? Just curious.
Phil
No matter WHAT YOU PRODUCE over the next couple of years, you will be
EXCORIATED
for marketing the Pontiac G3 in the USA! The fact that you don’t have anything
anywhere near unique in or on this car will be used to suffocate Bob Lutz on his claim that
badge engineering is dead at GM. Instead of ’saving $900M on tooling’ for the Astra, you could have
refitted a Mexican plant to produce the Astra and Corsa over here and actually be able to sell them at reasonable prices, plus have redesigned them to replace Vibe, G3 and G5!!
But if ENGINEERING is INVOLVED, or god forbid TOOLING, YOU RUN FOR THE HILLS!
No one’s going to give you a second, third, or fourth chance when this car comes out!!