Today GM and Chrysler are approaching the US Treasury for more aid. They have been preparing their case to prove that they need more money to survive in the current economy, and that they are being responsible in cutting costs, headcount, and negotiating with the unions and creditors.
This leads me to a question. What are they going to make? Before you roll your eyes thinking "of course they'll make cars", hear me out. In reading about what it is they are going to do differently, I have not read anything about how they are going to ensure that the cars they make will appeal to the people they most desperately need to buy them. I know they have a mandate to make more energy efficient cars, but that is a technology. What type of car – or should I say, motorized people mover – will the new technology be powering? Who are the people who will buy these cars, what do they need, and how do GM and Chrysler plan to meet those needs?
Simply cutting costs, or investing in technology is not enough. The car companies are in trouble because they were not able to make cars that people wanted. Yes, consumer needs changed quickly, and another part of their plan should focus on how they will be more flexible and responsive to rapidly changing conditions.
These are things that will enable long-term success for any company. Yet today, we continue to see focus on operational efficiency, cost cutting, and investment in technology without a holistic sense of purpose. At the end of the day, the wrong product is still the wrong product, regardless of its technical superiority or efficient production.
Let's hope the answers to the questions I'm posing are buried somewhere in the 100 page report that will be presented today, but I suspect they are not. As part of a network of people who make their living solving problems like this, I can tell you that car companies are not among the new clients calling.
Love this, I have not read anything about how they are going to ensure that the cars they make will appeal to the people they most desperately need to buy them.
In general, the auto industry is an example of what I would call a brand hostile organization. There is a fundamental disregard for customers and car owners that prevents the industry from framing their innovations from the perspective of customers.
In the 90s Saturn emerged as an attempt to place the car buyer at the center of brand performance. It was a heroic attempt only to be reversed in time by the dominate culture of GM.
Saturn was GM’s attempt at an extreme makeover. And like many subjects of extreme makeovers, GM went back to their old familiar ways of dressing and doing business.
The product is a problem as you point out. But it is also the product plus the brand experience that surrounds the product that hold companies like GM back.
Sorry to ramble…I do like your post…it got my mind racing!
Keep creating,
Mike
i read an article (on the times or something equally as authoritive) that these companies were losing money on all their small cars and didn’t do anything about it for years because they were recouping in from their big petrol guzzers. I say let them roll over and die and bring in some new innovative car companies
@Mike – I agree that the brand experience is equally important, and these companies have done a very good job of destroying any brand equity they may have had as well. On one hand, it would be good to help them, but would it just be an exercise in futility? Have they learned yet to listen?
@MC – Yes, it is amazing how the writing on the wall was ignored…