New York Auto Show – Taking the Pulse of GM

By Brendan Moore

03.20.2008

Autosavant has four writers at the New York Auto Show this year, and in the division of labor before the show, I got the General Motors beat this time around. I was happy to draw that duty as the General’s climb back into respectability is a great ongoing story, and I was curious to see what GM was going to roll out for the New York Auto Show.

I spent quite a bit of time with the General Motors people Tuesday night and Wednesday – I’ll see if I can sum up fairly quickly here.

First, as I noted yesterday, I was at the Saab event Tuesday night where they unveiled the Saab 9-4X and the BioHybrid Concept. They’re good-looking cars and lord knows, Saab needs something to break out of their years-long slump in the North American market. I spoke with Jan Ake Jonsson, Managing Director of Saab worldwide at some length the next day about Saab’s prospects in the U.S. going forward and they’re confident they now have the right mix of product in the pipe to reinvigorate their American sales numbers. Jonsson told me that they (Saab) felt they had strayed too far from their core values and basic Saab-ness in the U.S. and the Saab customers had wandered off from Saab as a result. Saab is now focused on winning those customers back while simultaneously broadening their appeal to the rest of the American consumer population. Of course, they’ve been saying they’ve been doing that the last couple of years, and sales just keep dropping, but I’m thinking they may now have a very good chance of realizing their turnaround ambitions.

Later in the day, I met with Bryan Nesbitt, Vice President Global Design at GM, a very open and engaging fellow, and we talked about design, and the results of that design as it appeared in finished products in China, Europe, Russia, India, and of course, the U.S. I found it very interesting that in response to a question from another journalist, Nesbitt said that one of the difficulties that faced GM in meeting the 35 mpg CAFE requirements in the future was the trouble GM would have selling smaller cars in the United States. He mainly laid this off on the safety requirements in the U.S., but, really, that is not GM’s main problem with selling small cars in the U.S. The main problem is that people in the United States, particularly domestic brand customers, tend to buy their vehicles “by the pound”. They balk at spending a lot of money on small cars – it’s just not in their cultural DNA. I brought this up to him, he acknowledged it was quite an impediment, but I don’t think you’ll ever hear him say it in public. Marketing 101 says that you don’t criticize the customer when you’re trying to get them to buy something from you.

By the way, pretty much like all designers, Bryan had on a very nice suit.

The last senior executive I met with was the always-interesting Bob Lutz, Vice Chairman of General Motors. Mr Lutz is generally quotable, and didn’t disappoint in our meeting, which was a small group format with perhaps a dozen journalists present. In the short meeting, he said there would be no more small RWD cars on the Kaapa platform after the new Pontiac Solstice coupe, and almost certainly no RWD cars in GM’s future as small as the Pontiac Solstice/Saturn Sky, no matter what the platform. He rebuked global warming, stated that the marketing people had nixed paddle shifters on the new Pontiac G8, and declared that he had given up on the Volt coming in at $30,000 USD, and was now hoping for something under $40,000 USD. Additionally, Lutz stated that GM’s business prospects looked great everywhere, except the United States, which was awful. He also said that the Holden Statesman, a very large, stretched version of the platform used for the Holden Commodore (aka Pontiac G8) would soon be sold in China with a direct-injection, turbocharged four-cylinder engine as the only available engine. He implied that under the new CAFE regulations, we should expect to see the same sort of thing here in the States, whether it showed up on a large sedan or a sports car like the Camaro. It seemed as if he was just getting loose, when of course, his folks whisked him away. I like Lutz, despite the fact that I fundamentally disagree with him on some things, but whether you like Lutz or not, there is no denying that he usually gives it you pretty straight.

It’s an impressive roster of executives, isn’t it? Well, yes, it is – GM was very gracious to make so many of their business leaders available to me during the show. I was also able to speak with many of the product managers during Wednesday as well, whom, although lower in level, were much closer to the actual product and very helpful in terms of gathering more information about the cars and the business part of General Motors.

The summing up of the summing up is that it’s obvious that everyone at GM is now convinced the worst is over from a business perspective, even with the recent setback of the new CAFE regulations, high gasoline prices, and the current spectre of recession in the general economy of the States. Personally, I am certain the economy in the United States has not reached its low point, but I think General Motors has decided that 2008 is the low point and things will get better the end of this year or the beginning of 2009.

From a product perspective, the beleaguered, frozen-smile faces that I saw at GM just a few years ago have now been replaced with genuinely happy visages on the engineers and product managers. They’re uniformly proud of their work now, and present it to you with no excuses or caveats. They seem to having a much better time of it everyday and really seem to be enjoying their work. The tremendous improvements in product quality and attractiveness across the General Motors family are reflected in their managers’ current attitudes.

It has been a long forced march through the desert for GM for decades in terms of product and they are now slaking their collective thirst. General Motors has some great product now, there is no denying it.

Could something still go wrong? You bet. Lots of things, actually. But for the first time in a long time, GM is now in the position of being able to make some of their own luck.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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1 Comment

  1. GM is a “buy” in my opinion. It’s not going to pay off this year, but it will not year.

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