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October 08, 2007 The General Motors Branding Lesson Toyota passed General Motors' seven-decade reign earlier this year as the world's largest car producer by volume. That’s right 70 years of leadership came to an end. Today, Toyota has America’s best selling car, the Camry, and GM is struggling to make dwindling brands, such as Buick and Pontiac, mean something to consumers. When something like this happens to a company of this stature, it's important to discover why this occurred. These are important lessons as George Santayana warned, "Those who cannot remember the past are condemned to repeat it." What went went wrong with GM? Here’s a detailed analysis. When Alfred Sloan joined GM in 1924 as operating vice president, he inherited what he called an "irrational product line"--one that had no guiding policy for the marketing of its many brands. The company's only objective was to sell the cars. The brands stole volume from each other and, with the exception of Buick and Cadillac, all lost money. Sloan immediately realized that GM had too many models and too much duplication and lacked a product policy. In one of the earliest examples of market segmentation, he reduced GM’s offerings to five models, separated them by price grades and emphasized individual brand image to entice customers into the GM family and move them up. These distinct and strong brands allowed GM to capture more than 57% of the U.S. market by 1955. Aware that pursuing more market share could lead to antitrust actions and the threat of a breakup, GM fatefully shifted its strategy from making better cars to making more and more money from a relatively stable number of sales. Nothing dramatized this new direction more than the concept of "badge engineering," or selling identical vehicles under different model names. This invention of GM's finance staff was a way to increase profits through uniformity, by, among other things, making parts interchangeable. Slowly but surely, the different brands lost the individual personalities that the company had so painstakingly established. At the same time, to improve their numbers (and bonuses), the GM divisions began to push the boundaries of the product policies that defined their brands: Chevrolet went up in price with fancier models, as did Pontiac. Buick and Oldsmobile offered cheaper versions. In time, GM was once again producing multiple cars of different brands that both looked and were priced alike. For GM, it was 1921 all over again, with brands that look alike and are priced alike. Like BMW, Toyota pushed one brand in many forms. All of these cars benefited by sharing in one powerful differentiating idea: reliability. And when they went up into the super-premium category, it became a Lexus with all of the "Toyota" identity carefully eliminated. Also, they are quick to invest in new innovations such as the hybrid Prius. The bottom line is that in the branding business, less is more. A successful brand has to stand for something. And the more variations to attach to it, the more you risk standing for nothing. This is especially true when what you add actually clashes with your perception. If Altira's Marlboro stands for cowboys out in Marlboro Country, how can it sell Marlboro Menthol or Marlboro Ultra Light cigarettes? Real cowboys don’t smoke Menthols or Ultra Lights. If Coca-Cola is the company that invented cola and the owner of that special formula, how can it be the "Real Thing" when the company offers a parade of new things including one called "Zero"? Why change that unique formula? Should Wal-Mart Stores try to sell more up-market products to compete with Target? No, that's not its market. Should Porsche risk its sports car image by selling SUVs? No, it's an iconic sports car brand. Should Dell try to sell home electronics to compete with the Japanese and Koreans in this category? No, it sells computers directly to businesses. Until companies come to grips with the simple fact that they don’t really have an inordinate need to grow, but an inordinate desire to grow (because of Wall Street), bad things will continue to happen. Slowly but surely, brands will lose their meaning as they try to become more. What is happening to General Motors should be a lesson to all companies no matter how big and powerful they are. You cannot be everything for everybody, and the more you try, the more you risk sinking the ship. As I say to many senior executives as a reminder of what can happen, put a simple sign on the wall that reads: Remember the Titanic.

GM to set up car venture in Uzbekistan Mon Oct 8, 2007 12:19 PM BST Email This Article | Print This Article | RSS [-] Text [+] TASHKENT (Reuters) - General Motors Corp (GM.N: Quote, Profile , Research) has set up a joint venture in Uzbekistan to produce and sell cars in the central Asian state, the Uzbek state auto company said on Monday. The state company, Uzavtoprom, said in a statement the two had signed an agreement to set up the venture, based on an existing car plant in Uzbekistan with annual production capacity of 250,000 Chevrolet cars. The statement said GM would hold a 25 percent in the venture with a possibility to raise it to 40 percent. The statement did not say how much the deal is worth and GM could not immediately be reached for comment. The plant in eastern Uzbekistan was set up in 1996 together with South Korean company Daewoo Motor. Uzavtoprom has been looking for a strategic partner in the project since the Korean firm went bankrupt during a financial crisis in the late 1990s.

Chrysler, UAW talks heat up Negotiations over labor contract progress as United Auto Workers union gives notice of potential strike. October 8 2007: 3:51 AM EDT DETROIT (AP) -- The United Auto Workers put Chrysler LLC on notice that a strike is possible if contract talks stall, a person briefed on the talks said, but a labor expert said the union's action could be a bargaining tactic. The union on Sunday gave Chrysler a 72-hour notice of a potential strike, the person said, but it was unclear exactly whether the notice would end on Tuesday or Wednesday. Bargainers working in committees made progress during the weekend but still have much work to do on difficult issues, said the person, who asked not to be identified because the talks are private. Negotiators bargained Saturday and into Sunday evening, then recessed for the night with plans to resume talks Monday. "We remain optimistic," Chrysler spokeswoman Michele Tinson said Sunday afternoon. UAW spokesman Roger Kerson declined to comment on the talks. A strike notice could be a tactic by the union to put pressure on the company as the talks intensify, said Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues. "The union wants the deadline to encourage a settlement sooner rather than later," Shaiken said. The UAW went on strike for nearly two days last month before coming to a tentative agreement with General Motors Corp. (Charts, Fortune 500) The union normally settles with one U.S. automaker and then uses that deal as a pattern for an agreement the other two. But this year, both Chrysler and Ford Motor Co. (Charts, Fortune 500) have said they have different needs than GM and may need different contract terms. Shaiken said the notice doesn't necessarily mean there will be a strike because the UAW could extend its contract hour-by-hour when the deadline passes. A second strike in one set of negotiations would be rare, he said. "I think the union may feel things are going well, but they want the discipline of a deadline," Shaiken said. A short strike might not hurt Chrysler much. It has five U.S. plants scheduled to be shut down for a week or two starting Monday due to lower market demand for their products. GM workers are now voting on the tentative agreement reached with the company, with totals expected to be done on Wednesday. The union has not formally picked the second company it will negotiate with, but talks with Chrysler have intensified in recent days. The UAW's contracts with Chrysler, Ford and GM were originally set to expire Sept. 14. The UAW chose GM as the lead company and strike target and reached a tentative agreement Sept. 26. The UAW represents about 49,000 hourly workers at Chrysler, making it the smallest of the domestic automakers. The company also has about 78,000 retirees and surviving spouses represented by the UAW. Chrysler has become a private company, which could be a factor in the talks. Private equity firm Cerberus Capital Management LP bought a majority share of Chrysler in August from DaimlerChrysler AG, which is now known as Daimler AG. As a private company, Chrysler no longer has shares and isn't required to file earnings reports. Chrysler pays its workers an average of $75.86 per hour in wages, pension and health care costs, the highest among the Detroit automakers.

Pickup for Auto Makers May Not Last Cash Incentives Boost Sales on Trucks, But Some Question Sustainability By JOHN D. STOLL October 8, 2007; Page A12 With gasoline prices hovering near $3 a gallon and the housing market in a slump, large pickup sales should be suffocating. Instead, a price war among the major players in the sector is boosting sales and market share for gas-thirsty vehicles such as the Toyota Tundra, Chevrolet Silverado and Dodge Ram. The increased truck sales contributed to last month's mixed overall auto-sales report, which offered the industry hope that a months-long sales slide could be coming to an end. THE HITCH ON TRUCKS • Share Increase: Big pickups are making up a larger share of U.S. vehicle sales as auto makers offer incentives. • Bracing Head Winds: The auto makers are trying to offset high fuel prices and broad economic concerns pressuring consumers. • Payback Ahead? Some analysts think heavy discounting on pickups is creating unsustainable demand.Still, the battle among General Motors Corp., Ford Motor Co., Chrysler LLC and Toyota Motor Corp. has created demand that some analysts say is both artificial and unsustainable, calling into question how much sales of high-profit trucks will contribute to the bottom lines of industry players contending with intense competition. "We're all watering down this truck market," Ford sales-analysis manager George Pipas said. "There's only so many buyers here, and we're not going to get more buyers from Mars." Through the first nine months of the year, large-pickup sales as a share of the total U.S. light-vehicle market have stabilized at about 13.5%, after a blistering decline last year, when they fell from 14.7% at the beginning of the year. In August, discounts pushed the segment to a 14.9% share, a 20-month high, according to research firm J.D. Power & Associates, of Westlake Village, Calif. In September, large pickups grabbed 14.2% as auto makers spent an average of $4,000 on incentives such as no-interest loans and rebates for each large pickup they sold, compared with $2,700 on the average vehicle, according to consumer-information firm Edmunds.com. This month, the Big Three and Toyota are offering 0% financing on five-year loans for last year's model trucks still on the lots, the equivalent of at least a $4,000 to $6,000 discount per truck. In some cases, the auto makers are combining the free loans with lump-sum rebates of $1,000 or more. The rebates and financing deals effectively put in consumers' pockets a subsidy to offset higher fuel costs. At $2.65 a gallon, a base Chevrolet Silverado costs on average $2,210 to fill up annually. At $3, the annual tab jumps to $2,500. Given the pervasiveness of no-interest 60-month loans, which he calls "the new norm," Ford's Mr. Pipas sees the only logical next step as offering 72-month loans at no charge. Even if the auto makers move in that direction, "payback is inevitable," he says. Mr. Pipas predicts a "rough fourth quarter" for pickup sales, especially if the deals don't increase to keep luring people who aren't necessarily buying pickups out of necessity. Mr. Pipas insists Ford has tried to maintain a steady, modest spending approach relative to pickup incentives. But the company should theoretically be spending more than certain rivals because its F-150 truck is set to be replaced by the end of 2008, he said. Modesty has hurt Ford; its best-selling F-Series lineup is off 13% this year. It is unclear when or whether the deal-making will dwindle. Each of the major players in the full-size truck market is fighting to maintain market share in a segment that still offers substantially more profit opportunity and revenue than most other market segments. Chrysler, intent on stabilizing sales of its outdated Dodge Ram as some of its recently launched products stumble, is ladling out discounts worth $6,000 or more on the truck. The result: a 20% sales increase last month. Analysts say Chrysler likely will keep its foot on the gas because development costs on the Ram, last given an extensive makeover early in the decade, have been amortized, giving profit margins some cushion. Nissan Motor Co., which entered the large-truck segment in 2004 with its U.S.-made Titan model, isn't offering discounts as deep as its rivals at this point. Nissan's discounts amount to less than $3,500 per Titan sold, according to Edmunds. Nissan is offering 0.9% financing for 60 months. Sales of the Titan are off 10% this year. For people who need big pickups, the price war -- and the entry of Toyota as a serious contender in the market -- is a bonanza. When George Smith's Ford pickup truck hit 106,000 miles in late summer, he decided it was finally time to buy a new model. The 63-year-old retired hospital administrator and horse owner from Harrisburg, Pa., knew there were "attractive" model-year-clearance deals floating around in the market, and he had his eye on GMC's newly revamped Sierra pickup. But he had trouble finding the Sierra he wanted and the ones he could find weren't priced attractively. After decades of buying American trucks and sport-utility vehicles, Mr. Smith walked into a Toyota dealer, was offered a 0% loan for 48 months, and took the deal. "They gave me a very good price," he said. Though he says he was uncertain about buying a Japanese truck to haul horses around America's heartland, six weeks into owning the Tundra he says, "I'm thrilled to death that I bought it." Toyota's aggressive efforts to sell production from its new factory in San Antonio and establish itself in the large pickup market represent a big challenge for Detroit's three struggling auto makers, particularly GM. Sales of the Tundra have boomed 55% since Toyota unveiled its redesigned Tundra, and started offering no interest loans to move it. GM, which launched redesigned Silverado and GMC Sierra trucks late last year, had hoped to use a new pricing strategy to keep rebates and financing discounts to a minimum, thus bolstering resale value and profits. Pricing to minimize rebates and boost revenue per vehicle was a major part of its turnaround strategy. When Toyota began discounting the Tundra, GM officials complained the Japanese auto maker was "throwing hand grenades." Now, GM has matched Toyota's deals. The Sierra Mr. Smith wanted is much less expensive, thanks to GM's offer of free five-year loans on the models. The success puts auto makers at a crossroads, J.D. Power Chief Economist Bob Schnorbus said. "The decline in the housing market is clearly having an impact on the auto industry, and pickups may be the most directly affected segment," he said in a report issued late last month. "With consumers fearing further declines in the housing market, the large pickup segment will continue to face considerable challenges, and incentives will be critical in softening the blow in the months ahead." Write to John D. Stoll at [email protected]

General Motors Europe 3Q Sales Up 14.6% October 08, 2007: 04:16 AM EST Edited Press Release ZURICH -(Dow Jones)- General Motors Corp's (GM) General Motors Europe third quarter sales rose 14.6%, the company said Monday. The resulting market share of 9.5% constitutes a growth of 0.3 points. It is the highest market share for the group since 1999. In September, GM Europe sold a record 205,497 cars and LCVs, a plus of 20,950 vehicles or 11.4%. Opel/Vauxhall Astra brand was Europe's best-selling car in September with 49, 268 cars registered, the company said Monday. Together with the new Corsa, that sold 347,800 cars this year, an increase of 52%, and segment-leaders Meriva and Zafira, Opel/Vauxhall's best sellers led to a strong sales increase of 12% for the brand in the third quarter and 4% for the first nine months of the year. Opel almost tripled its sales in Russia in the third quarter and successfully grew sales in Southern Europe as well as in the South Eastern Europe markets. Vauxhall sold 306,078 cars and LCVs in the first three quarters this year, an increase of 8.8%, leading to a market share of 13.7%. In September, Vauxhall achieved second place in the market and a sales growth of 13.1%. Vectra and Zafira were the best selling cars in their respective segments, Astra was first in fleet sales. In the first three quarters of 2007, General Motors (GM) Europe sold a record 1,652,082 vehicles, up 123,725 units or 8.1% from the same period last year. The resulting market share of 9.5% constitutes a growth of 0.3 points. It is the highest market share for the group since 1999. In Sep., GM Europe sold a record 205,497 cars and LCVs, a plus of 20,950 vehicles or 11.4%. GM Russia sales in the first nine months almost doubled from last year, +98%, with Chevrolet contributing 61% and Opel 37%. GM's market share in Russia grew by an outstanding 3.2 points, to 9.34%. This is the highest market share increase of any manufacturer group in any of the world's fastest-growing markets. The U.K., Italy and Greece were the main contributors to GM's growth in Western Europe. With 112,800 cars sold in the third quarter of this year, constituting a growth of 28%, Chevrolet reached a record market share of 2.05%, an improvement of 0.3 points Saab sold 64,580 cars in the first three quarters of this year. While experiencing a slight decrease in sales overall, the brand is growing in Southern Europe as well as in Central and Eastern Europe. Cadillac sales of 3,390 for the calendar year in Europe grew by 30.7%, with strong growth in Russia, Austria, Denmark, Spain and Italy. Corvette sold 1,034 cars and Hummer sales increased by 11.5% to 1,520 vehicles. (END) Dow Jones Newswires 10-08-07 0416ET Copyright © 2007 Dow Jones & Company, Inc.

Bob lutz says this... "The Lambdas all have unique sheet metal except for doors. The Chevrolet will be dramatically different from the others." Interesting he doesnt refer to it as a Traverse...

na theres a difference... its just plain offensive, to have your ambassodor send telegrams of peace, as your fleet is on its way... sure its tactics... but if it fails... it is asking for a lifetime + of discrimination... hey Fog, do you know who's winning the 2007 anual sales? seemed like at the 2nd quarter it was tied up 1 quarter to gm, the other to toyota... but when is 3rd quarter global sales coming in>?

Every design starts somewhere, Every Great design starts with a bowtie!

Every, car has its stages of development... But All great cars start with a bowtie... its been a long time since i touched any editing software

makes me want to get back into doing that sort of thing... break out the adobe or corel...

man, i was delusional... i was looking for some typo i made... haha

i think it will too... but ford complaining only helps... it shows that, these union employees could really get the shaft... and ford/chysler employees, might read into gm's gripes after they get it ratified, and take less concessions then gm... ford and chyrsler may not get a majority even with the same contract...

eat your heart out America, theres a new kid on the block, GM!

Acadia in the cadillac forum... **Snaps fingers** 2 hench men (moderators) quickly drag this topic to another forum...

why do people say toyota has passed GM... if i remember correctly, last year, GM sold more regaurdless of them claiming a companies sales that they didnt own more then 50% of... but isnt GM on its way to being number 1 this year too?

Christine Tierney Mixed signals trip up Toyota Toyota Motor Corp. took a drubbing this week from people who are normally fans -- American environmentalists who feel betrayed by the Japanese automaker's stance on U.S. mileage regulations. Toyota, along with Detroit's Big Three, is lobbying against the toughest fuel-economy measures before Congress. But it was the only automaker singled out in attacks ranging from a congressman's rebuke to an environmental firm's reprimand and a blistering diatribe by New York Times columnist Thomas Friedman. The Natural Resources Defense Council was incensed by what it viewed as Toyota's hypocrisy in "marketing itself as 'green' and producing its 55 mile per gallon Prius hybrid while lobbying Capitol Hill against strong fuel-economy legislation." In his column, Friedman questioned Toyota's motives. Was the automaker pressing for easier norms to keep Detroit's automakers from developing more fuel-efficient cars? "Hey, Toyota," he wrote, "If you are going to become the biggest U.S. automaker, could you at least bring to America your best practices -- the ones that made you the world leader -- instead of prolonging our worst practices?" If it was odd to see eco-pundits sniping at Toyota, it was even odder to find GM rushing to its rival's defense. "There is nothing sinister about Toyota -- or anyone else -- building trucks," GM spokesman Tom Wilkinson wrote on GM's FYI blog. "Even with gas at $3 per gallon, Americans are buying enough midsize and full-size trucks to account for 40 percent of the market." The tough mileage proposal in a bill passed by the Senate requires a 40 percent improvement by 2020 and would hike automakers' engine-manufacturing costs by more than 30 percent, said analyst Philip Gott at research firm Global Insight. Even less stringent House proposals are still very costly for the industry. Toyota officials, who were celebrating the 50th anniversary of the company's entry into the U.S. market, were stunned by all the controversy. But they might as well get used to it. Toyota will come under increasing scrutiny now that it has passed GM to become the world's No. 1 automaker. There's a natural tendency to go after the front-runner, but part of the backlash against Toyota also reflects some contradictions that the company hasn't publicly reconciled. Statements such as CEO Katsuaki Watanabe's declaration that his dream is to make a car that can cross the entire United States on a single tank of gas don't square with the automaker's recent launch of what it boasted was the baddest, brawniest truck on the market -- the redesigned Tundra pickup. The reality is, Toyota lives in both worlds: It spends more than any other carmaker on research and development -- $23 million a day -- and is the leading seller of clean hybrid cars. But unlike Honda Motor Co., which specializes in fuel-efficient cars, Toyota is a full-line manufacturer whose offerings reflect consumer preferences in each of its markets. It sells Daihatsu minicars in Japan, hybrids and full-size pickups in the United States -- in short, whatever people are buying. Honda doesn't offer a V-8 engine, not even in its premium Acura line. But Honda recently retired its Insight, the most fuel-efficient gas-electric car sold in the United States, because of weak demand. "In order to fund the good things you do, you need to sell trucks as well," said Toyota spokeswoman Martha Voss. But there are other contradictions that cloud the company's image. Toyota executives' claims that they are not striving for first place in the global market are undercut by the sight of a relentlessly aggressive company so intent on growth that it has permitted worrying slips in vehicle quality. Advertising that promotes Toyota as an American company also rings false. Toyota has a big presence in the United States, where it has invested nearly $16 billion. But it is a company based in the Japanese heartland of Chubu, not what most people would consider an American corporation. But it is increasingly a global company. And now that Toyota has risen to No. 1, the company needs to define itself more clearly -- or be defined by others. You can reach Christine Tierney at (313) 222-1463 or [email protected].

haha nice... i like to see hippies running vegtable oil in their desiels... they smell like french fries... but who cares... expecially when you can get free oil from resturants... (got to filter it first though)

you know... every day, i seem to be impressed more and more by Lutz... it seems everything he has said is coming true... GM seems to be lining up a whole fleet of considerable vehicles for the average public... Alpha, Kappa, Epsilon II, Zeta, Sigma II, Lambda, Gamma, next gen Equinox, C7, Ute, CUV(ridgeline competition), C3XX and more are expected within the next 4-5 years... thats basically everything GM sells is going to be redesigned... on more flexible, cheaper, more desireable platforms... I really see GM growing year of year until at least 2013...it would be nice to see them get back into the 30% market share again...

so far... its 3-9... majority is still in gm's favor... one of the 3 is one of the plants that might get shut down... so, i understand their complaint... i think, ford and chrysler crying bloody murder about how bad GM's deal was might help ratify gm's deal...

probably means 51% of the 84 plants or however many the UAW control... must approve... so 2 plants wont hurt anything... you will never get 100 people to all agree on something

that would make me want to buy a chrysler like 10% more... cool emblem

UAW says two locals vote down GM contract Fri Oct 5, 2007 4:17 PM ET By Jui Chakravorty DETROIT, Oct 5 (Reuters) - A United Auto Workers union local in Romulus, Michigan, is the second to reject General Motors Corp's <GM.N> tentative labor contract with the union, the local's president said on Friday. Members of local 163 voted down the contract on Friday despite the automaker's promise to keep work at the plant. Local President Larry Long said he was unsure why more than 50 percent of the voters were against the deal. Union members at UAW Local 465, which represents the engine factory in Massena, New York, also voted down the contract on Friday, local President Tony Arquiett said. Under the tentative contract, that plant is scheduled to close in 2008. At least ten UAW locals representing more than 12,000 of the active members completed voting this week and eight approved the contract. The UAW's more than 73,000 active GM members in dozens of locals across the United States must vote on the contract reached last week, which ended a two-day national strike against the largest U.S. automaker. A majority of workers casting ballots must approve the contract for it to be ratified. The UAW is aiming to complete voting by Oct. 10. The UAW still does not have contracts with Ford Motor Co <F.N>> and privately held Chrysler LLC. The contract with GM would set a second-tier lower wage for workers not involved in direct production and establish a trust for retiree health-care that would be partly overseen by the union. It also would make 3,000 temporary workers permanent and permit buyouts. A quarter of the factory workers could be replaced with lower cost hires under the contract. If approved, the contract would allow GM to greatly reduce the labor cost advantage enjoyed by Toyota Motor Corp <7203.T> and the two other Japanese automakers operating production plants in the United States. The average UAW-represented GM assembly line worker makes just under $28 per hour before health-care and other benefits that take total hourly labor costs to $73, the automaker has said. By contrast, Toyota's average hourly cost for workers at its U.S. plants is under $48 per hour including benefits. GM and other U.S. automakers have argued that they need more flexibility to hire lower cost temporary workers and to pay janitorial and other workers in their plants below the UAW-mandated wage scale. UAW President Ron Gettelfinger said last week that the union and GM were negotiating a program of buyouts and early retirement offers for the automaker's workers who are making the higher wages.

yea i'm quite the opposite, i speed to keep myself out of accidents... i pay at least twice as much atention when i'm going above the speed limit then when i'm going below

well i know my dad drives relitively slow, but hes been driving faster recently... but when i asked him, what was the fastest he'd ever driven i was shocked, when he said about 120 mph... i thought this man has never gone above 70 ever... but then he illistrated, that he'd never do that again because when he did it in the 60's the car took forever to slow back down to a reasonable speed... thus he doesnt speed, because if an accident or something needed to be changed about the volocity of the vehicle, it takes too long, and would generally make it a dangerous situation... now me... i know cars can stop a lot faster now, after driving in my buddys old mustang... cars are a lot more efficent when it comes to deceloration... but thats just my dad... who knows about everyone else

yes i beleive that to be true... at least thats what ive read about it... but it wouldnt make any sense to keep retired persons healtcare for 80 years, i garrantee after someone retires (30 years) so at youngest their 58 or so... plus 80 years = 138... the only reason i suggest maybe those funds will be allocated to current employees... is because i dont feel as though your average worker will live to 138 years of age...