A Ten-Point Plan to Fix General Motors

By now, it is common knowledge that the Big Three is now the Big Two. Chrysler, ever the more anemic of the three beasts, has filed for bankruptcy, and only two are left. Ford seems to be doing okay, in fact, they sold more cars in April than Toyota did. So now it’s GM that’s close to hearing that death knell. But fear not, for here is my ten-point plan to pin the medals back on the mighty General.

Mind you, this isn’t a plan designed to save GM from a very likely bankruptcy, as that would take an angel from car heaven to flip a switch in everyone’s head so that they suddenly buy American. Rather, this is a plan designed to fix GM, and to ensure that the General’s current predicament will never happen again after GM bounces back. Also keep in mind that this is a plan only for GM North America (for I propose cutting Buick, which would alarm the reader living in, say, China).

UPDATE: Well, looks like this is strictly a plan to fix GM after recovering, as the (once) powerful General went into bankruptcy today. Strange and scary times we are living in

1) Keep Pontiac

Pontiac G8 GXP

I’m still reeling over GM’s decision to axe Pontiac. Next to Chevrolet, this is the brand that has the highest potential to make money! After all, look at all the effort GM has put into this brand. They’ve spent all that money developing the Solstice GXP Coupe, the Pontiac G8 and variants, and now they are going to just kill the whole thing off? That doesn’t make sense. What’s more, the decision to return to the four “core brands” of GMC, Chevrolet, Buick, and Cadillac does not make sense either. Chevrolet and Cadillac should be kept, of course, but GMC and Buick? Neither are making GM enough money to justify their continued existence, and neither fulfill a market that the other two (Chevy and Cadillac) can’t.

2) Cut models, not brands

It’s necessary to do what you can to conserve cash in a financially hard time, but GM is going about it the wrong way. But this should have been obvious. When you cut an entire brand, you cut all of the models, regardless of whether they make money or not. By cutting specific models, however, you can pick and choose, and weed out everything that is non-essential. If it was me, I would cut everything in Pontiac except the Solstice and G8 (and their variants), the useless Colorado, HHR, Impala, Equinox, and Trailblazer from Chevy, either the STS or DTS (or both) from Cadillac, the Lucerne from Buick, and everything from GMC except for the Sierra and Acadia. I’d even keep Saturn, just weed out everything but the Sky, Aura, and maybe even the Vue. But Hummer and Saab have got to go.

3) Ditch the Volt

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This may seem like a shocker, but it’ll make sense if you think about it. The much ballyhooed Chevy Volt sounds like a great idea, but it’s really nothing more than a publicity stunt. I’m not saying that it isn’t applicable, I’m saying that it won’t make money. And all GM needs right now is money. The reason it won’t sell is because of it’s price. No matter how advanced it is, no one in America will spend $40,000 on a small Chevy sedan. It’s just that simple. And Bob Lutz has already announced that even at 40K, GM won’t make a nickel, because the technology is so expensive. Solution? Ditch the Volt, but make the Cadillac Converj. The Converj is the same thing as the Volt, only dressed up in Cadillac style and swagger. One of the sexiest concepts GM has ever produced, it will not only be a huge image car, but also has sales potential. Why? Because while GM can only charge $40K for the Volt, it can charge a lot more for the Converj, due to the brand. And while people won’t pay that much green for a simple Chevy, a surprisingly large target consumer base has the cash and the desire to pay up to $60,000 on such a nice Caddy. The end result? GM will still make money on the whole Volt idea, but will also please the airheads in Congress and boost its self-image.

4) Create an aftermarket division

The aftermarket demographic is huge, as proof, just listen to that ricer roaring down the street. What GM needs to do is tap that market. Take the models that will be modded, and offer everything tuner markets do but at a lower price, with a GM backed warranty. Not only will buyers flock to dealers, but this will also give GM a leg up over the competition, because no one else has it yet. Divisions like AMG, M, and SVT don’t count, because they are for the high end performance models. GM’s aftermarket division will be for the common car buyer, while offering aftermarket mods such as body kits, grilles, wheels, interior kits, performance mods, etc. at a lower price than private companies with a company backed warranty.

5) Create an exotic division

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My idea of creating rather than destroying brands seems completely out of sync with what GM is doing, but that’s because what GM is doing is wrong. Cutting and consolidating is only happening because the stock holders and upper brass of General Motors are scared and are only looking after their own retirement funds, and are searching for a way to secure them by being cowards and retreating from action. GM will not survive this way. It has to take a gamble, and reach out with everything it’s got, and hope that the world will respond. Which is why GM should create an exotic division. This division would be the dream car division, and would host models that directly take on the likes of Ferrari, Rolls-Royce, Lamborghini, Maserati, and the other uber-exotics. And I’m not talking about models like the Corvette. While it certainly is world class, foreign competitors still see it as a lower breed. GM needs to build cars to combat the aforementioned brands, but on their terms. It don’t think there is any dispute over GM’s ability to build beastly cars. But these news cars will need to be flawless, they need to be luxurious, they need to be elegant, but above all, they need to be insanely expensive and be worth the price.

6) Have aggressive commercials

Believe it or not, but commercials have a huge impact on what people buy. More than anything else, commercials spread the news about a certain product, and when done right, they all but guide the viewer to the nearest dealer. So GM needs to utilize commercials. Stop with the boring, typical stuff. Stop advertising the cars that no one cares about. Instead, advertise the cars that get viewer’s blood pumping, that get them excited, that get them motivated. A crazed human being will do stuff they wouldn’t do otherwise, and GM needs to take advantage of that. And as the final coupe de grace, they need to take these hormone inducing cars and crush the competition with them. Attack the competitors. Slam their faults while glorifying your merits. Take the Camaro and show it thundering ahead of the Mustang and Challenger. Play soft gentle music when showing the M3 ambling along, and play loud crashing rock music when showing the CTS-V blasting through a curve. Stop showing the Malibu slowly rotating on a stand with a calm narrator and start showing the Corvette tearing up a track with only the scream of rubber, the roar of the exhaust, and the howl of the engine for narrative description. Stop showing a man or woman calmly talking while driving in a CTS, instead, show an ultra-smooth dude coming out of his CTS at a nightclub and picking up three hot, sexy girls right on the spot. Emphasize beastly-ness, emphasize sex appeal, show on national television that not only is your car the one to buy but that there is no better, and you have the nation’s viewers in the palm of your hand, and what’s more, you have their cash, too.

7) Build the damn concepts

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I have lost count of the times where GM has a great concept and they can it. What GM doesn’t seem to realize is that concepts generate the greatest public interest, and by association, the greatest possible revenue. Just look at the huge response when GM showed the Camaro concept at the 2006 Detroit show. And when the public is all pumped up for a great concept, they get pissed and disappointed when they find out that they’re not gonna be able to buy it. They will be dissatisfied, not only with the decision, but with the company itself. And a dissatisfied customer tends to stay that way. So next time you do roll out a hot ride, those people who were pissed before are less likely to buy.

8) Charge more money where possible

GM needs money and one easy way to get it is to charge more. Not on the normal consumer models, as that would enrage the public, but on the cars that are already very expensive. Simply make the car a bit more appealing and charge a heckuva lot more. Take the Cadillac XLR, for example. Sharpen up the design, sharpen up the interior, increase horsepower, and generally just fix the little complaints that people have with it to make it more appealing. Spend about $5,000 in changes and charge up to $15,000 more. The trick is to make it seem like it’s worth it. Glitz up the exterior, shine up that chrome, use red stitching on the black leather and viola- Mr. Rich But Dumb Joe thinks he has the best deal ever. It’s a dirty trick, yes, but when your very survival is on the line you had better be prepared to do whatever it takes.

9) Speed up the bureaucracy

Right now, the whole process of making a car is just way too slow. From concept to production takes about 10 years, which is insane. That’s due mainly to the bureaucracy, where power over decisions is spread way to thin. What GM needs to do is centralize. Have one man be in total control of a specific area, and make his word law. If he wants something done, then it gets done. No bickering, no discussion, just direct action. By cutting out all the bureaucratic crap, I’m willing to bet that the process from concept to production could be more than halved. And that’s important, because in order to maximize sales, you have to take advantage of the period when your car is the craze. If you can sell a car at the exact time when people want it, then you’ll be netting in huge profits. Like I said before, when people are fired up, they’ll do anything. If a man is caught up in the Camaro craze, and he’s got the cash, he will buy a Camaro. But wait too long, like GM did, and the initial surge of interest will have died down, and you lose money in the long run.

10) Break the Union

anti-union.jpgThis last point is perhaps the most crucial of all. None of the above points can be managed in the time needed if the union still lives. In fact, I accuse the union of bringing General Motors to the brink of anarchy and bankruptcy. It is because of the union that General Motors could not advance at the pace it needed. So in order to bring about GM’s renaissance, the General must first break the back of the union. And once it is broken, it must be insured that it never returns, or if it does, that it never regains the power it once had. The union here is key, because without it, GM can do so much more. The General can automate, it can cut out the bureaucratic crap, it can quicken production and make marketing more effective, it can safeguard against the cowardly acts taken by the top brass right now, it can be adventurous, it can be all that it was before the virus that is the union dragged it down.

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11 Comments on "A Ten-Point Plan to Fix General Motors"

  1. Tom

    Break the unions = YES.. Auto worker jobs should be for college kids, not for adults… Work in a plant till you get your education… that would keep the salarys down. Union drones are milking this country dry. Ditch the Volt? No way. More engineering into this type of car will gain customers.. Just do it right like Toyota and Honda are doing with their Hybrids… Agressive Advertising? What you're really saying is "False advertising." I'll take my 2004 M3 over anything GM can offer, including a Z06.. why? because it's a better product. Higher quality, better engineered.. Hey GM… start building better cars and maybe we'll buy them. Camaro is on the showroom floors for 2 weeks and already a massive recall. Nice job, GM.

  2. fyi buick is one of the biggest sections of GM, and accounts for around 20-30% of all GM sales…..just not in USA. Buick is GM's arm in china. Anything GM in china is pretty much badged Buick. However i think that Pontiac would do fantastically as their own company. As would Holden and Opel. So i suggest that GM cut them free.

  3. Stewart: Buick is huge in China, and that’s the primary reason they’re ditching Pontiac instead; it’s a NA brand only. Will did address that, though: “Also keep in mind that this is a plan only for GM North America (for I propose cutting Buick, which would alarm the reader living in, say, China).”

    Pontiac breaking into its own brand sounds like a good idea, but the problem is that they don’t really have any of their own vehicles; they’re all taken from other GMs around the world. Opel, Vauxhall, Holden, or rebadged GMNA vehicles.

  4. Very true – however the alternative is much scarier for GM. If they were to separate from GM and become their own group. The only thing they really borrow from the GM “true” brands the big engines…..but I’m sure a company like Rotax etc would happily step forward and fill that void. Actually a 6L V8 rotax doesn’t sound to bad.
    I personally think that their could be a partial separation (like 80% sell off) where technologies could still be shared and developed. Very similar to the Ford/Mazda/Suzuki and the Toyota/Subaru/Yamaha teamups.

  5. HHRKID

    They should keep GMC. If they do have to drop a major brand, it should be Buick. And the point made shot droping different cars rather than whole brands is not a bad idea but the cars mentioned above in the article are making money for GM more than othersbnot mentioned. For example, the HHR brings in more money than the Aveo or the Aveo5 (which GM should only make one Or the other). And as far as hybrids go, I think GM should (for now) only make one hybrid truck and one hybrid SUV ( keep the Tahoe Hybrid and for the time being, stop making the Yukon and Escalade Hybrids. They should Also should work on making the Equinox in hybrid and fuel cell ( like they planned) and help get hydrergon alternatives as a source of energy!

    HHRKID

  6. seattleforge

    You missed the most important item. Certainly more important than your comment about the union. They need to break the executives. Executives who make ludicrous amounts of money for long term failure needs to end. We can't forget that this company got to this point by not thinking long term – which included caving to unions to make short term profits to stuff their pockets with.

  7. Douglas King Sr

    The union is not at fault for GM's woes. Poor management foresight and trade inequeties are the major faults. The unions were formed because the company had to be FORCED to treat workers fairly. Without a union they would revert back to the same heavy handed "rule by fear of losing your job" tactics of the past. Breaking the union will plunge workers back into the browbeat days of near slavery with no job security or hope of getting ahead. There is very little job security in the non-union "transplants". It was only a few short years ago that the big three were making record profits and they had the unions and legacy costs then. You have to look somewhere else to hang the blame.

  8. I agree that most of the blame lies on GM execs here. However, I do think the unions had something to do with it. Douglas, your description of the union is correct in that that's why it was created, and that's how it should be, but it's no longer that way. Greed simply got the best of them, and the unions are no longer there "to protect the workers," but to make as much profit as they can.

    My Father is in the union, and he just lost a huge job because his local got too greedy and "negotiated" themselves out of a big contract. Now he and his fellow workers are collecting unemployment until another job comes along, which I'm sure is really helping the state budget.

    Here is why GM is bankrupt. Here is why we are in this economic meltdown:

    GREED

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