THE AUTOEXTREMIST

December 9, 2009

GM’s classic "two steps forward, three back" dance of mediocrity is alive and well.

By Peter M. De Lorenzo

(Posted 12/6, 5:00pm) Detroit. Some of my colleagues in the media have been quick to canonize Ed Whitacre, characterizing the new “interim” GM CEO as some sort of visionary for his latest management shake-up this week. And judging from what I’ve been reading, “Big Ed” seems to be getting a huge pat on the back for making the most rudimentary executive moves he could have possibly made - some of which are highly suspect, at best – and for using the words “accountability” and “responsibility” and phrases like “taking risks” as examples of GM’s new mantra.

Please. If coming up with a new set of corporate buzz words was all it took to get GM back on track then we could all breathe a sigh of relief and book that loan payback ceremony at the White House for sometime in early March.

But before I get into Whitacre’s executive moves, you’re probably gathering I’m not buying “Big Ed’s” act, and you’d be right. After doing some digging around Whitacre’s previous executive life at AT&T, it’s easy to come away with a highly unflattering portrayal of GM’s “interim” CEO. First of all, the “aw shucks I’m just a country boy who has a few good ideas” persona is total bullshit. In his previous executive life Whitacre was known as an arrogant know-it-all who was never wrong, never listened to reasoned advice and who brought absolutely nothing to the table of his own on a day-in, day-out basis. Shocking? Hardly. Anyone who thinks The Peter Principle isn’t alive and well in corporate America today is kidding themselves.

The fact that Whitacre was plucked from semi-obscurity after a lukewarm career punctuated by abject mediocrity at AT&T to lead what was once one of America’s greatest corporations out of the wilderness was not only puzzling, but immediately makes the entire “new age” GM board suspect right along with him.

Let’s take a microscope to some of “Big Ed’s” so-called “visionary” moves, shall we?

First of all, I commented on the Fritz Henderson situation in last week’s issue, so if you missed it scroll down to the bottom of the page and click on “next entry.” There you’ll find my take on the Fritz firing in my column and in “On The Table.”

As for Bob Lutz’s new “advisory” role? This announcement was made in preparation for Bob leaving the company at the end of this month. Lutz was originally going to leave at the end of this year but then last spring he and Fritz got to talking about what he’d like to do when he did leave, and that’s when Bob mentioned that he’d like to keep his hand in product development and design, but that he’d really like to take a shot at revamping GM’s marketing, which he viewed as one of the company’s weakest links (he was right, of course). One thing led to another, and all of a sudden Bob was Vice Chairman in charge of marketing for GM.

Bob was slated to stay in that capacity at least through the end of 2010, but it was no secret that he has become less than enchanted with developments down at the RenCen of late, so he has decided that now would be a good time to end his day-to-day involvement in this business. But Bob isn’t going away by any means, so no premature career send-offs need to be written. He will continue to advise GM on product development and design, and - seeing as I consider him to be the top product guy of the last 40 years in this business - that will be a very good thing for GM, or at least it should be if they continue to listen to him. But remember what I said about “Big Ed’s” listening skills?

And what about Susan Docherty being promoted to run all of GM’s Sales, Marketing and Service? Yes, Docherty’s young, which the media latched on to as some sort of signal that Whitacre was shaping things up in a positive direction, but upon closer review, what exactly has Docherty accomplished over her career other than just being there?

Two words for you: Not Much.

As a matter of fact, this has been the unfortunate career path for a lot of GM executives over the last 30 years. What I mean by that is that longevity in the GM system does not necessarily mean that there’s a dimension of success involved, it just means that an executive has survived long enough to make it to the next level on the “Big Magic Wheel” of executive job assignments.

A classic example of what I’m talking about? Docherty has just benefited from the latest spin of the “Wheel” - and been entrusted with the toughest task in automotive marketing history - and that is to somehow break through the black cloud hovering low over the “new” GM and to gain consumer consideration for GM’s excellent new vehicles through laser-focused marketing and advertising.

Really? This from the person who green-lighted the embarrassing “Take A Look At Me Now” campaign for Buick, the one that she tried to defend to Lutz when he first took over marketing and that he immediately killed? And now Docherty is going to ride herd over awarding ultra-crucial new advertising agency assignments for Cadillac (the launch of the CTS Coupe) and Chevrolet (the launch of the all-important Cruze)?

Just off the top of my head, that isn’t shaping up to be a good scenario for GM.

I’ve said it before and I’ll say it again, GM marketing has a long history of being stocked with people who have no business making these kinds of decisions. They don’t get it, they’ve never gotten it, and they’re unlikely to get it anytime soon either. They lack a solid frame of reference and a measurable track record of success in the advertising/marketing game, and it shows, time and time and time again. (As if to make matters worse, Docherty’s replacement named to run Buick-GMC is Michael Richards, an ex-Ford marketing guy who brings absolutely nothing to the table. I mean z-e-r-o. Talk about perpetuating the mediocrity...)

And to think that “Big Ed” and the Board are entrusting the very future existence of the company - betting the whole damn rodeo on it as a matter of fact - on the idea that somehow, some way a miracle will transpire within the GM marketing ranks and that it will all come right for once?

This is a seething cauldron of Not Good, folks.

One positive development at GM in the past week, however, was the elevation of Mark Reuss to become president of GM North America. Mark - who just completed a less than two-year stint running GM’s Holden operation in Australia and who was brought back to head engineering – will now have more of a direct say in what happens down at the RenCen, and believe me that’s a very good thing. If they let Mark run, that is. The other was that Stephen J. Girsky, who’s already on the GM Board, will become another personal adviser to Whitacre (along with Lutz).

The positives I’ve mentioned are all well and good for GM, but anyone who thinks Ed Whitacre is the answer – short or long term – is sadly mistaken. You either have a feel for this business or you don’t, and “Big Ed” Whitacre clearly doesn’t. And there’s no amount of schooling on the fly by Lutz and Girsky as to the “whys” and “wherefores” of this game that’s going to make a damn bit of difference either. Certainly not in the time frame that’s required, which is like yesterday.

But the most crucial issue facing GM is the fact that a highly skeptical American consumer public is finding it hard to be impressed with GM’s excellent new vehicle lineup. And until that consideration needle is moved in a dramatically positive direction, the company will literally and figuratively be nowhere.

And it’s the one crucial issue that has not been addressed by Whitacre’s changes.

Why is that do you suppose? I’ll answer that one for you: 1. He doesn’t have the first clue at to how to go about it, and 2. Even if he did there’s no one currently in the building in the post-Lutzian era who is capable of taking them where they need to go.

There continues to be a massive disconnect between GM’s excellent new products and the ability or, more accurately, the inability of the company’s marketing minions to communicate their strengths in compelling fashion to an entire nation of consumers who are all of a sudden from the “show me” state of Missouri.

And until this company figures it out – or somebody is brought in to figure it out for the Board and “Big Ed” – then this company will continue chugging along in time-honored fashion, lost in its classic “M.O.” - the "two-steps forward, three back" dance of mediocrity - indefinitely.

Thanks for listening.

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