Markethaus Musings

When I read this post from Paul Eisenstein this morning, I spit up my coffee. In Paul's article, he covers statements from Paul Horbury, chief designer for Lincoln:

'I would hope we could make a change like they did at Cadillac,' which has been transformed from a stodgy, sinking brand into one of the market's hottest marques, said Horbury. 'We have to get something on the road that is desirable to the sort of youthful luxury buyers who drive market trends,' added Horbury, who has been trying to pump new life into Ford styling since assuming the North American post last year.

Cough, cough. I encourage you to go to the Lincoln website this am and peruse their product offering. Two weak car entries and three trucks. Like it or not, Cadillac has world class vehicle dynamics and performance in some of its new vehicles - that's how they separated themselves from Lincoln. That's the difference! A luxury buyer wants to know that the vehicle they are buying has some high level of excellence....somewhere. Styling is a small part of that package. Styling, we used to say, is a differentiator, not the required level of entry. Powertrain, handling and package are the requirements to compete with true luxury buyers.

Lincoln's problems have a lot more to do with their basic product platforms. Ride, handling, powertrain...etc. In comparison reviews, the products are routinely left out or savaged by the press. That's not a styling problem. Look at the Thunderbird...press/people were wowed by the styling. Consumers stood in line for months. Turns out the car was less than adequate in other areas. Now, the car is DOA. Don't get me wrong, I'd love to see Lincoln I could buy...uniquely styled with a powertrain that says, "this is as good as anything out there." We need a Lincoln that can go head to head with the M series from BMW or the S series from Audi. Then...we will know Lincoln has arrived. Making large SUVs with chrome is easy. Take an F150, put rear seats in it and slap in a nice sound system and some opera windows/gaudy trim. Lee Iacocca was the king of rapid 1 year makeovers. But a luxury brand this does not make.

Perhaps the Zephyr will rival Cadillac? Let's hope so, we need 2 strong domestic luxury brands to compete with the folks from Germany and Japan (and now...even Korea).

Have really enjoyed some of Robert Farago's insights into the car business. Whether speaking about the mistakes by GM or his insight into specific.

The concept of putting GM on every seatbelt...in every GM brand car is completely puzzling to me. GM is a holding company that makes products. GM adds nothing to a Saturn, Saab or Cadillac. If anything, it detracts...because it suggests to me that I'm buying something that may be watered down. Especially in the current automotive climate. GM's brand name doesn't connote a special level of excellence, quality or financial strength. Hurts to say it, but right now, GM connotes, "how the US automotive business went wrong."

I also see this in their advertising...when I do see it (I don't watch much television anymore -- I often feel dumber, fatter and older after watching TV -- please, no jokes abou the fact that I am dumber, fatter and older than I was 10 years ago...I already know that). I don't understand the idea of a mass mailer to me that piles all the brands together in one mailer and offers me discounts. Same goes with the GM brand commercials. GM is not a brand, despite what some at the corp. ad agency insist. GM is a stock that you buy and sell. Cadillac is a brand. Sure, it's nice to squander $100 million/year on "communicating" with our stockholders about how great things are at the corporation. But, I'd rather put the money into explaining what makes Saab special and unique. That's what sways consumers and helps sell cars. Incentives, practiced the way they are today, simply avoid the inevitable. Profit and share decline. You can buy customers for only so long. And...it's really expensive.

We took a look the other day at our internet traffic at www.motoralley.com. We compared demand for Chrysler Group, Ford and GM in every zipcode in the US vs. the "imports," Toyota, Honda, Nissan. Rather shocking. We'll be publishing that info in real time soon so everyone on the web can get their fill of a mass of colorful and confusing statistics. Here's the most important tidbit. From our little perch, the 2 most researched brands are Toyota and Honda. Strangely, GM is not researched at all. Which takes me back to my original point. Why is the GM logo going everywhere?

On the Today show, Alison Vaughn, the Founder of Jackets for Jobs was interviewed. She helps the unemployed in Detroit through her non-profit Jackets for Jobs." What a great idea.

Why do I bring this up? The Today show was talking to people about making a difference in your town. They went on to say that Detroit has the highest unemployment of any major city in the country...this of course primarily due to the struggles of the formerly Big Three car manufacturers based here (GM, Ford and what used be Chrysler and is now DaimlerChrysler). At the end of the interview...are you ready for this (please be seated), Al Roker donates a van...courtesy of, not Ford, not GM and not Chrysler...but Toyota. The company who has had more to do with unemployment in Detroit than anyone. I couldn't help but think, "wow...how embarrassing."

I know for a fact that DaimlerChrysler has provided assistance to the organization but wouldn't it have been better for one of the Big Three to help?

Toyota Moves To Detroit...or Honda

So, before anyone beats me to the punch, imagine the increase in consideration and market share in the world's largest market, if Toyota moved their HQ to Detroit? Wouldn't take much, really. Boeing moved to Chicago. Of course, they lost 2 CEOs in 2 years in the process, but that wasn't move related.

I think it would be a brilliant PR and marketing move. Why? Suddenly Toyota becomes "American." They have North American HQ in Detroit. They could even buy a few half dead brands and jam Toyota powertrains into them. How about Packard? Or Oldsmobile? This is definitely not your father's Oldmobile now. How about Plymouth? Tucker?

Ok...so, I joke a little...but I am serious about the PR potential. They'd be on every show in America, talking about how they will revitalize the inner city and reduce unemployment.

So, you doubt that Toyota, Honda or Nissan could be Americanized? Hmm...don't forget...DaimlerChrysler is actually a German company. But they sure act like one of the Big Three domestics. It can be done.

The biggest objection will be the Michigan winter. But that's why you keep all the California design facilities...for frequent visits to check on prototypes, in say, February. Also, another huge benefit? Cost of Living. Southeast Michigan real estate is bottom of the market and salaries are much more reasonable due to cost of living. Most employees would actually live in better homes. A Toyota employee could sell their $750k house in congested LA and live in a palace here.

I'm thinking I have a burgeoning career in PR. Toyota? Honda? Nissan? Governor Granholm? Feel free to contact me to hatch and execute the strategy. I stand ready to assist in greasing the skids. This can work!

Let's go! Let's do it!

Ok...so, it has been fashionable to bash GM lately. I'm going to do something unusual and focus on the good stuff:

• GM has memorable brands. Everyone has heard of Cadillac, Buicks, GMC, Chevrolet, Pontiac, Saturn, Saab and Hummer
• GM has some excellent powertrains and Cadillac has successfully (in my opinion at least) made their lineup younger and more attractive with some high performance entry luxury products. I'd seriously consider them if I were looking at a 4 door entry luxury car alongside the best European and Japanese products. I am not happy about the sacrilegious abuse of Led Zeppelin, though.
  
• Saturn is still a great brand...the products could be better, but the dealer network does a great job of taking care of its customers
• GM has great dealers and reach and service capabilities unmatched by any other automaker because they are in practically every small town in America. Is this being leveraged?
  
• GM has a large base of current customers that would buy another GM, give them a chance, if they deliver the right product and stand behind it
• GM, Ford and Chrysler (DCX) might benefit from the increased focus on how screwed up our health care costs are...frankly, when Pharmaceutical sales reps make the income they do..."selling" stuff that "must" be bought, we know the system is broken.
• GM has a huge base of retirees...wouldn't it be great if those folks could somehow be leveraged to build a grass roots campaign for GM's brands? A support/advocacy network? Imagine how many retired GM engineers there are who might be willing to spend an hour or two on the phone helping a customer with a problem...

Certainly, there's more...but sometimes, it's good to think about the bright side. But please stop with the Zeppelin campaign...I grew up with Zeppelin and it's just not right. If you're not sure, check out the Led Zeppelin site and tell me if Cadillac and Zeppelin are a match. Still not sure? Ok...check out the lyrics. Ok...so, it's a great song...but what does this have to do with Cadillac? know what they were thinking..."breakthough...it will make people say...wow...Cadillac and Zeppelin. I need to go buy one now...NOT." Everytime I see it, I cringe. I will say this though...you get points for trying to change the image.

Rock And Roll
(Bonham/Jones/Page/Plant)

It's been a long time since I rock and rolled,
It's been a long time since I did the Stroll.
Ooh, let me get it back, let me get it back,
Let me get it back, baby, where I come from.
It's been a long time, been a long time,
Been a long lonely, lonely, lonely, lonely, lonely time. Yes it has.

It's been a long time since the book of love,
I can't count the tears of a life with no love.
Carry me back, carry me back,
Carry me back, baby, where I come from.
It's been a long time, been a long time,
Been a long lonely, lonely, lonely, lonely, lonely time.

Seems so long since we walked in the moonlight,
Making vows that just can't work right.
Open your arms, opens your arms,
Open your arms, baby, let my love come running in.
It's been a long time, been a long time,
Been a long lonely, lonely, lonely, lonely, lonely time.