Friday, March 25, 2005

GM’s Cocooned Fourteenth Floor

It’s typical of a company that’s suffering from a stultified executive culture to grab at a marketing effort to gloss over decades of failed imagination.  Such is the case at General Motors.

The air on the fourteenth floor at GM Headquarters is rarified by its old-boy culture, allowing only those chosen by insiders from among insiders to occupy an office among them.  Fourteen makes membership at Augusta National Golf Club look egalitarian by comparison.  Possibly the executive floor is jinxed.  It is, after all, the thirteenth floor . . . who’s kidding whom when the elevator sails directly from twelve to fourteen?

No matter the floor number, GM has been building the wrong cars, marketed at a declining buyer base for decades now.  Living up to an old-folks mentality, it continued developing old-folks cars as it did with great success in 1959 when my old daddy bought his first new Cadillac. Daddy’s car was very starchy and proper, in the seventeen-foot-long, tailfinned definition of proper from those days and the fourteenth-floor execs never really got over the shock of that market disappearing out from under their yellow brick road.

Side issue: From 1946 to 1956 there was virtually no existing automobile manufacturing facility         outside the continental United States.  What Detroit interpreted as cutting-edge design development     and customer satisfaction was, to a large degree, merely a desperate world buying whatever they         could get.

Since those salad days, Detroit has been the last to innovate, the last to concern themselves with customer preferences, the last to bring anything exciting to their loyal buyers and the absolute last to disconnect themselves from reliance on big-platform, high-profit behemoths.  GM distinguished itself by being the last among the last. Every innovative trend at GM has earned halfhearted acceptance and the attitude up on fourteen drove good people elsewhere. Saturn, which might have been a model for the corporation, had to be developed as a separate entity because it's premise was so alien. General Motors finally, in desperation, turned to a retired Chrysler executive to take over the Vice Chairmanship for Product Development. What does that say about the once-largest auto builder in the world, that they were and are so inbred and incapable and incompetent as to have to go outside for product development.

Over the years I’ve owned Oldsmobiles (2), Pontiacs (3) and Chevrolets (7) and I’m mostly angry because they were damned fine automobiles in their day, but their day is long gone, lost to the hubris of the fourteenth floor. It’s a shame. I haven’t owned an American automobile (or motorcycle) since 1978 and I loved my GM cars, but they’ve become overpriced, behind-the-times pieces of junk and without rebates (essentially a kickback to the buyer) no one in their right mind would buy one.

I didn't leave America's auto industry, America's auto industry left me. Instead of listening to the world in terms of features and benefits, GM is betting on Mark LaNeve to market it out of its stagnation, decline and ultimate demise.  It won’t work.  Marketing is not the problem. It’ll buy some time, but it won’t work. 

The Japanese have too great a lead, with over three decades of fourteenth floor avoidance leaving the field of innovative development wide open, and now the Koreans are coming on strong. GM has over 6,000 design employees for eight products. What do seven hundred fifty design people do at Buick, get each other coffee? These are shared-platform cars, not custom built one-offs.  The wildly popular and enduring Mazda Miata was designed and brought to market in blazingly fast time by less than a dozen designers, outsourced by Mazda. I owned a Miata. It was (and is) an elegant little spitfire of a 2-seat roadster that sets your pants on fire and makes you smile every time you settle behind the wheel.  When did GM last make you feel like that? The 1954 Corvette?

Industrial goliaths the size and complexity of General Motors, much like super-tankers, are unwieldy masses of inertia that resist quick changes in course.  GM is at a crossroads right now that might have been avoided, could have been avoided, should have been avoided in the years since 1960.  To any forward looking, reasonably efficient and competitive industry, an influx of successful foreign product would have rung an alarm on the management floor. Fourteen at GM was complacent.  Hubris and in-house chefs were the order of the day.  Bonuses reinforced the status-quo and denial dominated long term planning.

If GM can be saved, it won’t be by the guys on fourteen.  Ford, Chrysler and GM have done takeover deals with foreign competitors for years, always (up until now) from the driver’s seat.  Don’t be surprised if one of these days Hyundai or Kia swoops in to take over what’s left of GM.

One thing’s for sure, it’ll be a fire-sale but it'll be good for product and good for the buyer of a GM car.