Here’s the latest reader question, along with my reply!
Douglas asks: GM’s people didn’t, or wouldn’t understand their marketplace, and in 2007 GM failed. Went flat broke after 100 years of doing the same job. They learned nothing in a century of operating a business. No institutional knowledge seemed to carry from through.
When GM failed, they blamed their problems on workers’ wages and benefits, poor dealerships, hapless vendors, the economy, and a host of other things. They blamed everything except the single most important thing: The consumers’ perception of the value and quality of their vehicles.
GM never gave that a thought. It didn’t matter to them. Seriously.
Their attitude was, We’ll build ’em, and they’ll buy ’em. GM is a case study in arrogance and incompetence. A consumer psychologist I worked with warned GM that removing Oldsmobile from the brand lineup would devastate Cadillac sales. GM refused to believe it. So, they did it, and it did. They killed the reasons for customer loyalty. That’s the root cause of why they went broke.
In its genius, GM removed two of the major “stepping stones” of their customers’ brand-loyalty advancement.
My Reply: GM has, indeed, assumed a top-down management style; you will buy what we think you should have – as opposed to, we’ll build what you let us know you want. And I think you make a very solid point about Olds – which can be extrapolated to include Pontiac. I have argued for years that killing Pontiac was even more foolish than killings Oldsmobile – because Pontiac could have and ought to have been GM’s highline performance division, its BMW fighter… which would have made sense as well as historical sense. Because Pontiac had a history of high-line performance, one that predates BMW’s M and even, arguably, Benz’s AMG arm.
Instead, GM management trashed Pontiac and turned Cadillac – their luxury car division – into a performance car division… .
And now GM is pushing Cadillac to be the electric car division.
Someone’s on the pipe… and it’s not me, this time.
. . .
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