Friday, October 10, 2008

Simple Math

What do you get when you shovel-up a pile of dog poo and dump it on top of another pile of dog poo?

Obviously, a bigger pile of dog poo.

Why the analogy?  Both companies have been poorly managed and Chrysler is already damaged goods after being dumped by its German master.  Mergers fail to realized the pre-merger goals 65-85% of the time because the people running the company post-merger are the same people who ran it pre-merger and mergers are often desperation, as opposed to a purchase/take-over.  Mergers are the uneasy alliance by two entities who couldn't make it alone, thinking that synergy is magic that happens as soon as the paperwork is signed.   But they fail to find the successful parts of the culture and evangelize it, they fail to quickly build cohesion, to quickly lay out a road map for the future and show their employees why the merger is good for them.  Instead, only fear.

Even the very fact of the announcement coming out now, late on a Friday.  GM and Chrysler employees have all weekend to sit at home and be panicked and depressed.  Class would have been to announce it to employees first (or simultaneously with the press/shareholders) and to begin the dialog about what a merger could mean.  It would speak to the idea of a re-birth, a celebration of American engineering and American-made cars.

Instead, this is another nail in the coffin.  It may buy time, but seriously, does General Motors need any more car divisions?  No, they have a big enough identity problem on their own.  They've failed to make their lines distinctive and obvious.

Pontiac - Driving Excitement?  Hardly.  Ok, new slogan is "Game Changing Performance."  Oh really?  Then why on earth was there ever a Pontiac Aztek?  If Pontiac is truly the sports car division, move the Camaro and the Corvette to the division.  (Sorry, purists!)  

Chevrolet - There's no cars on their homepage.  Just some blah blah about fuel economy.  When you finally find a page of cars, it's overwhelming.  Seven cars, six SUVs, four trucks and a van.   If this is the car of the everyman, simplify.

Hummer - Rumored to no longer be a unique truck, but just a Suburban with a different shell.  Also rumored to be in the process of being sold to a Russian company.

Buick/Cadillac - do you need both?  Ok, one is for rich white people and the other is for rich black people if TV and my own unscientific research is to be believed.  Buick best designs are coming out of their China design office.  Interesting.

Saab - Don't know much about these.  Know it's popular with some people.  Why not make it more of a Volvo competitor?

GMC - The truck company.  Except the ones from Hummer and Chevrolet.  Move all the Chevrolets SUVs and vans here.

Saturn - Once, the fun little startup breaking all the rules.  Now the fun is gone.  Bring back the fun.  Make it a Scion competitor.

Opel - not sold in this country, don't know anything about it.

Vauxhall - ditto, but sounds expensive.  Not sure it is.

Holden - ditto.  Australian, right?

GM Daewoo - why does this one have GM in front of it?  All the others don't.  Maybe they all should so you know that your car is backed by the largest auto manufacturer in the world?

Honestly, the line-up is too large.  Toyota is knocking down their door with only three divisions that are more clearly delineated.  Even the GM websites are all different and fail to tie back together to the mothership.  This, to me, is a failing.

To me, GM needs to bring simplicity and clarification to its line, reduce the number of different cars it produces and work harder at quality.

Even Ford is down to only five lines (Ford, Mazda, Lincoln, Mercury, Volvo) because they lost some really good ones like Land Rover and Jaguar through fire sales, but even there.. know anyone who is a repeat Mercury buyer?  Know anyone who owns a Mercury?  It's a brand that could probably be retired.

Lastly, they say the union costs, especially retired workers, are adding $3,000-$4,000 to the cost of every car.  Until the unions are brought into the mix and given a larger stake in the future of the companies, they're going to continue to contribute to the declines until one day, there's no car company teat for them to suck on.

Disclaimer: I've never run a car company.  Though I don't think I'd do any worse than what's already happening.
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