Friday, July 10, 2009

Tell Fritz!

Reading The New York Times story on G.M.'s emergence from bankruptcy, two seemingly minor paragraphs jumped out at me:
1. "[CEO Fritz] Henderson announced several new ways that G.M. planned to reach out to customers through the Internet. A Web site called 'Tell Fritz' will let consumers offer suggestions directly to Mr. Henderson, and the company will experiment with selling vehicles through the online auction site, eBay."
Thanks for the empty P.R. gesture, G.M. Do you think potential customers really believe Fritz will take regular breaks from saving a corporation on the brink of extinction to peruse random email suggestions? This reveals a lot about how G.M. regards the public. At best, the company is out of touch with its customer base. At worse, the G.M. executives think we're all a bunch of idiots.
2. "Robert A. Lutz, a G.M. vice chairman who planned to retire at the end of the year, will stay to oversee marketing and communications. Mr. Lutz, 77, is responsible for the improvements that G.M. has made in vehicle design recently, with notable examples such as the Chevrolet Malibu and the newly revived Chevrolet Camaro."
Do you really want a 77-year old, regardless of his management skills, in charge of marketing a company that is notoriously alienated from the younger demographic?

UPDATE: Anyone remember Chrysler's ill-fated "Ask Dr. Z"?


  1. Dave from MillingtonJuly 10, 2009 at 12:31 PM

    Instead of doing what? Ah, I get it, GM should heed the advice of a local blogger, right?

    Darn Gordon, its easy to sit on the sidelines and criticize. In fact, it appears that you had to look rather hard at that article to find a couple of nitpick issues.

    Look, I'm a bit pessimistic about the chance of the long-term survival of GM. But it seems that any innovation attempt is worth the effort. And if a 70 year old exec. can still cut the mustard, I say more power to him.

  2. Tell Fritz will probably work like the Dell Computer Community website "where everyone can go to tell Dell whats on their minds." I went on their comunity Blog and using politically correct language stated that I was tired of contacting clueless technical staff in India who could not help solve my computer problems due to a language barrier and a "care-less" philopsophy. The next day I received an email from Dell saying my comment was removed for violating Dell terms of service (TOS) and I am now put on a probation that will lead to total banishment if I tell anyone they wrote me (oops, I just did!). I wouldn't be surprised if "Tell Fritz" runs similarly. One would probably gain more satisfaction by writing the late Skitch, insteasd of Fritz, Henderson from the old Tonight Show.

  3. Dave, there's no way they should heed my advice. I know about as much about running an auto company as Bob Lutz knows about marketing to young people. I have no problem with his age; but I question his marketing experience. This is the guy, after all, who claimed that a 500 hp car he was developing would save G.M. And I'm sick of any corporation trying to be inclusive by setting up these fake-o websites that purport to gather ideas from the public. My question is if an intern will be sending back the form emails thanking the person for their vital input, or if it will be computer generated.

    Having said all that, I am rooting for G.M.

  4. Henry Ford back in the old days wanted a vehicle with a price that his workers could afford. That way he could sell more units. That concept worked great. The problem with G.M. now is they have eliminated most of their old customer base. Now we have a work force that is based on a McDonald's pay check. They say they are going to bring out a small car but I'm sure it will not have a small car price. The experts say that the Europeans will pay a premium price for a small car but that the Americans will not. They say that we just look at them as cheap. So we will not pay a premium price for a cheap car. The reasons Cadillac and Buick were historic money makers was the fact that all they had to do was stick a ritzy nameplate on the side and add a third more to the price. I did this price comparison myself back in the seventies. The Buick Riviera would cost $1500.00 more than an Electra or LeSabre, even though they were identical except for the badge on the side. Cadillac and Buick always had their bread and butter cars. It's a new day and we need new thinking, and a guy in his 70's is not new thinking. Bring back the Chevette and give it a price that a person making a minimum wage can afford. We could even make the price lower with steel stamped wheels, the old dog dish hub caps, no radio, no air, no undercoating, no pinstripes, cloth seats, no floor mats, no extra sound deadening, no cup holders, no multi. speed wipers,no arm rest's, cardboard headliner, no carpet just a rubber mat. Are you getting the idea. Just put a port to plug an I pod into and your good to go. Get me from point A to point B. Why not call it an "OBAMA". Dose anyone else have any ideas?

  5. Gerry:

    I think they called the car you described a Yugo.


  6. Gerry, your idea to bring back the concept of a Chevette type of auto is fine, but God forbid GM bring back the quality and roadworthiness of their original. They would soon be back in bankruptcy again if that is the kind of cars they produce. The Chevette's cardboard headliner you mentioned started tearing in my new car from road vibration on the way home from the showroom. It was only the first of many parts to give out. GM will have to lose that type of image as a manufacturer in order to compete.

  7. 1. There are two strategically critical problems with marketing a bare-bones car as your lowest price point:

    1a. Your customers will think that you're trying to "low-ball" them, then make your money on the "optional" accessories, many of which they consider essential. That approach has, after all, been SOP in Detroit since (regrettably) Billy Durant. (One of his three major mistakes...the others being the "big car expensive, small car cheap" concept, and the idea of expanding rapidly during booms by use of borrowed money, without an effective plan for the next recession.)

    1b. You're competing against at least four companies (Toyota, Subaru, Hyundai, Honda) that for a number of years, and continuing at present, utilize a "$xx,xxx for a well equipped model" marketing stance. They never advertise stripped model pricing and then offer you high-priced options, or even offer vehicles with anything less than a full set of accessories except on a special order basis.

    2. Bob Lutz is a car guy...the sort that bleeds motor oil, the kind of guy that good designers and engineers want to work for.

    History amply shows, I think, that car companies that are run by marketers, financiers and/or accountants eventually fade out, because ultimately they don't understand how to get people into showrooms.

    Yes, quality is essential. Yes, paying attention to the market's concern of the moment is essential. Yes, having people at the top that can play the political game is essential.

    Ultimately, though, people have to perceive the vehicle they buy as saying something favorable about themselves. It's that excitement factor and vehicle character that justifies the price margin above a bare bones transportation appliance. If all they want to buy is a character-less transportation appliance, they won't be willing to pay enough to support the corporate organization that is necessary to keep up with evolving safety standards, improve the state of the art, include aesthetic design in the vehicle, etc.

    Bob Lutz is a specialist in leading the part of the organization that gives the products the character and quality that justifies their pricing and causes people to choose GM's entry in a sector instead of one of the ten or so major competitors.

    It's an esoteric thing to do, but if you make a comparative review of GM's statistics--third party quality ratings, sales statistics, surveys of vehicle reviews--since Bob Lutz began his current position, it's plainly the case that his part of the company's activities has been highly successful. I'm glad that he's decided not to retire.

    That's not to say that GM shouldn't change its product scope. Lutz regards as fundamental that GM should only make cars that customers really want to buy *and* that GM can make profitably. With GM's lower cost base, it'll be possible to have a broader product range within profit bounds. I'm sure that Lutz will want to take advantage of that new operating room.

  8. I can't believe you're from Flint and have such a negative attitude toward General Motors. GM literally built this community and gave us everything we've ever had. Even though we've had so much pain, every good thing that we've ever had has come from GM. Please, be thankful for the good times. Be thankful for what GM has given us. And most of all, give them a break. Your negativity just makes it that much harder for our community to recover. GM is doing everything they can to save us all.

  9. Jon,

    Thanks for the comment. I can understand people getting sick of all the criticism the U.S. auto industry has had heaped upon it in the last year.

    But I don't have a "negative attitude" toward General Motors. If you look back over my past posts on the auto industry, especially the posts on the bailout, you'll see that I've been a defender of GM and the vital role it plays in the U.S. economy.

    I was a little stunned at the clowns in the media gleefully calling for the demise of the U.S. auto industry.

    At the same time, I don't agree that supporting the American auto industry means blindly agreeing to every move it makes. I made two minor criticisms of GM, and I stand by them. I think mailing suggestions to Fritz Henderson is a pointless PR gesture, and I don't think Bob Lutz is the best choice to oversee marketing at the company.

    I also have to disagree that my negativity (or positivity) has anything to do with Flint's recovery. I wish it did.

    And please keep commenting. I appreciate you taking the time.

  10. "Tell Fritz", hell yeh tell Fritz. The people he has reading email had better pay attention to what consumers say. He must do the online stuff and much more if GM is to survive. It is pretty silly to come out "guns blazing" against Bob Lutz. He is one of the most respected auto guys in the country. If you think his talents would be better utilized in engineering, rather than marketing, OK. But criticising his age, that's lame. GM may be in trouble, but they are family, and as family we should be a little careful about what we say.

  11. A corporation's not your family. It's a business looking to make money. If you view it as your friend or your family, you're bound to be disappointed at some point.

  12. Funny how people defend a company that didn't encourage ongoing learning and growth skills for its workers, then locked it's doors locally leaving those (obviously still) devoted workers and supporters to fend for themselves.

    I worked at "Buick World Headquarters" (put in quotes only because it sounds silly) and witnessed first-hand the white collar, old boys' club, fat budget mentality management style.

    Watch "Who Killed the Electric Car". Good riddance to a rusty elephant of a car company that can't change any more than just enough to keep padding the pockets of its execs. Greedy and dumb are a deadly combination.

  13. Interesting comments about my "family" take on GM. I am well aware that the GM BOD has a legal responsibility to maximize the profits of their stockholders. No argument. I would also agree that the current leadership at GM has not been very successful in adapting to a changeing automotive marketplace. However, that doesn't make them a bunch of uncaring ass holes. The rancor that some folks are so quick to throw at GM is a bit hard to swallow. I don't know where this stuff comes from. As far as them not educating their employees, that simply isn't true. I myself and countless others were encouraged and paid to attend a wide variety of college classes and seminars. I still maintain that we were family once and that counted for a lot. It's bad form to bite the hand that fed you.


  15. I would also disagree that GM didn't encourage education. GM paid my entire college tuition, as an employee's dependent. My dad (Delphi/GM retiree) got a criminal justice degree, made possible by Delphi paying the tuition. Granted, a lot of employees didn't take advantage of it, but it was available.

  16. Gotta chime in here- the return of Bob Lutz is the only good piece of news there is- the new Obama approved Board knows less than nothing about automobiles- and Bob is a car guy through and through.

    While he's not the Savior, GM would be doomed to failure without him. This gives them a chance.

  17. somehow if gm can harness the enthusiasm of the new camaro and translate it into more mainstream cars then they too will be successful.

    gm took quite a long time to introduce the new camaro but they did it right...quality, looks, and affordability...that's right affordability for what it is.

    the new equinox is a nice size suv with a 4cyl and is rated at 32mpg and stickers for $23k probably $21.5 gm price that's unbeleivable.

    the plain jane car such as a modern day chevette have to have some equipment because that is what people want. whether they work at McDonalds or UofM or GM or Wal-Mart...people do not like plain jane cars or trucks....granted there are a few who are willing to suffer along to have a new car but most will turn to a 2-4 yr old used car so they can have the bells and whistles they want.

    lutz is old...but he is a car guy...i'm not sure if marketing is his forte.....but i guess he is the global marketing guy...hopefully he surrounds himself with some younger, hipper talent.

    one of gm's problems is that car guys are not running the company...bean counters need to count beans and let the car guys lead the car business.

    much is made of gm's legacy costs they are attributable to the uaw pushing for those costs which evolved into legacy costs. when times were good and competition was lame the uaw asked for and got some things that according to a former negotiater that i know seemed ridiculous. often they would ask for something over the top to settle for a little bit less but what did gm do they accepted it so they could get back to moving iron.

    productivity was never thought of, hire more people, put on more first shift could go home after 4 hours and get paid for 10....or work more on pilfering parts to make a living on the side and bank the gm check...or concentrate on selling burgers, tacos, pop, and chips so they could bank that money and live off the gm check.

    now, the company, the union, and the workers realize that maybe they should have been paying closer attention to the costs of doing business, productivity, quality, and ways to reduce the cost of a legacy of ho-hum business as usual.

    hey fritz if you are listening put some color in the new line up people are getting tired of silver, black, white, and burgundy.

  18. You've attracted a lot of fire (and some really intelligent, experience based responses) regarding your GM post. As silly as the ask Fritz line might seem, it is at least a hand to the public. A more accurate tag line might be ask the low level marketing guy, who will then talk to his boss, who will then talk to his boss, who will then compile a neat list of acceptable responses that Fritz can take home to read on the weekend. But that wouldn't inspire you to write to GM now would it. And as for Lutz, sure he's old, but he is pretty dynamic, and heck, he got an appearance on Dave Letterman a few months ago. They wouldn't invite Bob the marketing guy in a blue suit. Let's just hope Bob L. is grooming the next, hopefully highly effective, marketing guy. In this market and with public sentiment where it is outside of the rust belt, they are going to need a good one!

  19. These are good comments about GM. The participants are speaking the truth as they see it. I especially like Slick's straightforward comments, with no wild exaggerations. I also hope our friend Fritz is listening.

  20. Dear Mr. Henderson;
    I’m a consumer down here in Oatmeal, Texas. I drive a 2003 VW Jetta TDI with 230,000 miles on it, my other one from 1998 is all wore out with 340,000 miles (5th gear is stripped out). I got my money’s worth; I do all my own maintenance and my little computer talks to the cars to find out what’s wrong. Fedex brings me parts next day.
    I’m reading about your problems up there and have nothing but good wishes for y’all’s success (since I make a living building steel mills). You can drive by the last place I worked, Severstal Steel, right down the street from your (old) world HeadQuarters, and see all the inactivity there. Now I’m thinking about my 19 year old who just graduated this spring and is looking for a car – where he is at today and where I was at when I was 19 years old and cars were a big part of my mental interior life.
    I went out and got a job and bought a new Oldsmobile Omega yellow convertible (from Generous Motors) for $2,378(??), stick shift, big engine. I was paying about $78/month (x24), and paid down one entire (week’s) paycheck of $485. I sucked in my gut. They filled it up with gas, and it had a real spare tire. My father gave me some tools, and I could carry them all in a little box in the trunk, and fix anything that broke on the car in about two hours. The car was pretty, but it did break quite often. I usually could get it towed home so I could jack it up and work underneath it; sometimes I just fixed it where it was at. I could time it by ear.
    Now we come to today and where Matt is at looking for a car. He works on the local municipal golf course part time so he can play for free when he’s not working. A bunch of high school kids (most of the golf team) work in hospitality services; when Matt goes off to tech school in September some more high school kids will take over. He makes about $100/bi-weekly. He likes your Camaro and Ford’s Mustang and has driven both (the VW is for old people). He could work for about 500 weeks and get either one of them for cash, or an extra 50 weeks (banks need money too) and get one today. He owns his own iPod and currently has about $25 saved up. I can give Matt some tools, but some of my tools are special purpose to remove only one tiny little inaccessible part, and I don’t think he wants to tow my shed around in back of the car.
    As you can easily see, the quality of car life, for young people today, is dramatically lower than it has been in the past. We didn’t get there overnight; we made one poor decision at a time. We’ve got ourselves into a position that someone can build a car in China, build a boat to ship it in, build ports on both ends, have a better economic structure, and have a nice value added business teaching the people in Detroit about Quality of Life. I think your culture has indeed been an impediment, for more than the last business quarter.
    Good luck lightening the ship,

    Dave McCrae

    [I sent it to Bob, Fritz doesn't have his site up yet]

  21. A couple of further thoughts on "...a 77-year old, regardless of his management skills, in charge of marketing a company that is notoriously alienated from the younger demographic?"

    Mr. Lutz isn't there to make detail marketing decisions himself, or even solely greenlight major programs. The people who define new products and messages are two and three levels below him, and often not even in the same offices. GM has design/marketing teams in California, China, Korea and Australia as well as Detroit to focus on what individual market segments and desired demographic targets want now, and what they'll want one design-cycle from now. Some of those marketers, in California and Detroit at least, are in their early twenties. That's a change from the pre-Lutz days.

    Mr. Lutz's primary reason-for-being, rather, is to out-*gravitas* the Board when it comes to strategic decisions about marketing and vehicle programs. These days the GM Board "gets it" about the primacy of showroom attraction and vehicle character...but they hear from a lot of inputs. Lutz is there to assure, by whatever means work, that GM doesn't drift back toward the John-Smale-Ron-Zarrella design-by-committee, vehicles-with-character-might-not-appeal-to-everyone, minimum-cost-is-the-prime-directive days. For that Boardroom-horsepower work, being 77 and universally recognized as a car guy's car guy isn't a disqualification at all. A 25-year-old marketer in front of the Board by him- or herself just wouldn't have the same effectiveness.


Thanks for commenting.