The Latest Auto Extremist
OUR AMERICAN WANDERLUST IS BEING BURIED ALIVE.
18 Jul 2017 at 11:58am
Editor-in-Chief's Note (July 18, 12:00 p.m.): Into the gloaming. As I’m basking in the unrelenting glow of the sun and suffocating humidity that define mid-summer here in the Midwest, I have been in search of some sort of cheery, glass-half-full pronouncements about the direction that the auto industry is heading in the hopes that it will spur all of us on to a renewed sense of optimism about the future of mobility and the future of this business. And I must admit that I am having tremendous difficulty in doing so. I am absolutely convinced that few of us are really prepared for the burgeoning realities going forward when it comes to the freedom of mobility, or more to the point, what will come to mean the new definition of mobility, because it is going to have nothing to do with the definition that we grew up with. A nation that was fueled by an indomitable can-do spirit, boundless optimism and the primal urge to explore the beckoning, wide-open spaces starting way back in the covered wagon era, and that was then fueled to new heights by the freedom brought forth by the invention of the automobile is now on the precipice of change in the way we move about our planet that will be so profound that I don’t think most of us are prepared for just how dramatic the transformation will be. Will a nation founded on the tenets of freedom and the option to go, and do, and see what we please all of a sudden succumb to groupthink and mindlessly queue up for nondescript, shared transportation devices based on convenience? Are we all just going to gleefully go along for a ride dictated by availability and most frequented "popular" travel destinations? I have a hard time believing that the transition is going to be smooth. In fact we’re in for a very bumpy ride. I covered much of this last March in a column that had resonance then - based on the comments we received - and in fact still does today since we're still hearing about it. So, we're seconding that emotion this week. -PMD
By Peter M. DeLorenzo
Detroit. In case you haven’t heard we, as a nation, are in a headlong rush to leave everything behind. The Best and The Brightest are feverishly working nonstop on transportation conveyances that remove the driver and the driving from the equation. It will be safer. It will be more environmentally friendly. It will mean less congestion. It will mean fewer deaths by human error and/or incompetence. It will mean more freedom for the elderly and the homebound. And it will mean reduced instances of individual car and truck ownership on a grand scale.
Many view this as a transition that is long overdue. Countless studies seem to appear out of nowhere extolling the virtues of our new transportation reality. Well-intentioned theorists envision a nirvana that will finally free us from the tyranny of the automobile. They insist with absolute certainty that with the costs of ownership being severely reduced, if not becoming a thing of the past, we will simply rent the vehicles we need for a defined duration, and the American automotive experience, as we’ve come to know it, will be well and truly over.
The automobile companies – at least the ones with the wherewithal and the vision - are embracing this New Technological Frontier with varying degrees of savvy, on a spectrum marked by, “We Definitely Know What We’re Doing” on the one end, and “We’re Throwing Money at Anyone Talking a Good Game in Hopes That In The End We Bet On The Right Horse” on the other.
This means the odd sight of senior auto executives lined up for painful photo ops with assorted Boffins of The Moment from Silicon Valley whom they barely know, after laying out hundreds of millions of dollars on the come, and then smiling wanly for the cameras as they mutter to themselves, ”I hope to hell this works out.” Or worse.
Why is this happening? Because the very last thing automobile execs want to be perceived as is anachronistic, old-school, head-in-sand operatives that the Shiny Happy Masters of The Universe in Silicon Valley have left in the dust. You can almost hear the battle cries from inside the executive enclaves at these companies, “We have been an integral part of this nation’s transportation solution for over 100 years and make no mistake, we will be an even more important part of the solution for the next 100 years.” Or something like that.
But there’s a large measure of hand-wringing in all of this, too, and that’s because the auto manufacturers hell bent on this quest to be part of the transportation future know damn well that the vehicles they’re designing, engineering and manufacturing right now and for the next 30 years at least will have to be successful enough – and profitable enough - to power the whims and dreams of this New Technological Frontier, which means that these manufacturers will be forced to do a two-step dance to keep the whole thing afloat. This means continuing to crank out compelling cars and trucks that people outside the touchy-feely – and congested – urban centers actually need for their real lives, while the people reveling in the autonomy of it all can be blissfully free of the nastiness of The Way Things Used To Be.
But make no mistake: this is a train wreck that will unfold in fits and starts. Will there be autonomy and touchy-feely ride sharing that suits a certain segment of the populace? Yes. But how much of the public it reaches on a mass scale and how soon that will all come in to play is pure conjecture right now, and I don’t care what the most optimistic of scenarios say. I’m sure in the 2020s the manufacturers and their Silicon Valley partners will point to isolated demonstrations of remarkable wonderfulness, but for the rest of this nation, it’s going to be a giant “we’ll see.”
For some, namely certain politicians in Northern California and in Washington, this fundamental transformation of our transportation model can’t come soon enough. For those people who view the automobile and the automobile industry and everyone and everything associated with it as a national scourge that needs to be eradicated once and for all - it will be Sweet Victory, a fitting denouement for the filthy automobile, a march of progress that will benefit everyone. For these people the historical context of the automobile has been overwrought and overexaggerated from the beginning, and to finally put paid to the notion of the automobile’s wonderfulness is an accomplishment that they will giddily revel in for decades to come, because for them historical perspective is just old stuff about old, irrelevant people.
But for the rest of us, it will mark nothing less than the end of the American experience as we’ve known it. The automobile is so crucially linked to the industrial fabric of this nation that pretending otherwise is simply impossible to do. The reason the Silicon Valley Overlords have come calling to the collective “Detroit” is that this industry and this area have been this country’s center of expertise in manufacturing, materials and advanced technology for well over a century. The automobile industry has stepped up time and time again to support this nation at its darkest times, with the forming of the incredible “Arsenal of Democracy” being just one notable – and remarkable - instance.
But that’s just one dimension of the impact, because the automobile has played such an inexorable role in creating much of the culture of this nation that it is simply incomprehensible to contemplate America, as we know it, without it.
Every dimension of the American experience has been shaped by the automobile - the roads we used to explore the vast expanses of the unbridled majesty of this nation (and ourselves along the way); the music that provided much of the soundtrack for those journeys, the roadside attractions and the road food that went with them; the big cities and little towns along the highways and byways; and on, and on, and on. (Talk to anyone who has visited The Henry Ford museum recently and see what he or she has to say. In so many words it will sound like this: The American experience is the automobile, and the automobile is the American experience.)
The automobile’s influence on this country’s culture is almost incalculable. But then again it’s even more than that. It’s part of this country’s soul, it’s who we are and it’s where we’ve been and it’s where we’ve always wanted to go. It’s the fundamental freedom of movement and unleashing of the spirit, and it’s the mechanical embodiment of our hopes and dreams.
In short, that distinctly American perspective, that wanderlust for seeing and doing and exploring that was fueled and driven by the automobile for over a century, is being buried alive, right before our eyes. So excuse me when I don’t get excited at The Great Enlightenment that’s coming just over the hill.
I’ll leave you with this: Poet, critic and Pulitzer Prize-winning novelist, James Agee wrote the following for the September 1934 issue of Fortune:
The characters in our story are five: this American continent; this American people; the automobile; the Great American Road, and the Great American Roadside. As an American, of course, you know these characters. This continent, an open palm spread frank before the sky against the bulk of the world. This curious people. The automobile you know as well as you know the slouch of the accustomed body at the wheel and the small stench of gas and hot metal. You know the sweat and the steady throes of the motor and the copious and thoughtless silence and the almost lack of hunger and the spreaded swell and swim of the hard highway toward and beneath and behind and gone and the parted roadside swarming past. This great road, too; you know that well. How it is scraggled and twisted along the coast of Maine, high-crowned and weak-shouldered in honor of long winter, how like a blacksnake in the sun it takes the ridges, the green and dim ravines which are the Cumberlands, and lolls loose into the hot Alabama valleys… Oh yes, you know this road… All such things you know… God and the conjunction of confused bloods, history and the bullying of this tough continent to heel, did something to the American people -- worked up in their blood a species of restiveness unlike any that any race before has known. Whatever we may think, we move for no better reason than for the plain unvarnished hell of it. And there is no better reason. So God made the American restive. The American in turn and in due time got into the automobile and found it good. The automobile became a hypnosis, the opium of the American people...
We move for no better reason than for the plain unvarnished hell of it.
Truer words were never written.
And that’s the High-Octane Truth for this week.
11 Jul 2017 at 11:20am
By Peter M. DeLorenzo
Detroit. In a development that was not unexpected, Cadillac, the automobile company formerly known as the Cadillac Division of General Motors, passed away peacefully last month at the age of 115. With the current Cadillac management overlords at its bedside, Cadillac slipped away quietly, destined for an afterlife as a Chinese car company.
Cadillac, the once-proud American luxury automotive standard-bearer named after Antoine de la Mothe Cadillac, the founder of the city of Detroit, which was resurrected from the remnants of the Henry Ford Company in 1902 and then purchased by the newly formed General Motors in 1909, led a full and at times vivaciously exuberant and dramatic life, blazing the trail for design and technological advancements that still resonate to this day.
Over the decades Cadillac not only thrived in its role as a technical leader for the automotive industry, earning and adhering to its most famous advertising slogan – “The Standard of the World” - it became an inexorable part of the American lexicon as the symbol for the very best of the best, no matter what the product. It was not uncommon for manufacturers of products of all stripes to tout the fact that they in fact made, “The Cadillac of…”.
With an impact that transcended the automobile industry, Cadillac enjoyed a long reign as an American cultural icon. Even today, in fact just this week, Senator Ted Cruz, while commenting about America’s health care debacle, I mean debate, underscored Cadillac’s indelible place in the American landscape by saying, “If you want to buy a plan with all the bells and whistles, with all of the mandates under Title 1 (Obamacare), you can buy that plan, those plans will be on the market. Those plans will have significant federal taxpayer money behind them. But on the other hand if you can't afford a full Cadillac plan, you should be able to buy another plan that meets your needs. And so the consumer freedom option gives you, the consumer, choice whether to go with the full Cadillac or a skinnier plan that's a lot more affordable…”
The full Cadillac. Think about that for a moment. I daresay that no other automotive nameplate in the world has held such a hallowed place in the American cultural landscape as has Cadillac. Even though the world has changed and competitors from Lincoln and Mercedes to Audi and Lexus have all had their place in the sun and enjoyed varying degrees of success over the years, no automotive nameplate has resonated longer and more brightly than Cadillac.
Yes, there have been down moments for the brand, too many in fact, but it is simply remarkable that the name Cadillac still resonates so strongly to this day.
To be frank, the later years for Cadillac had been difficult. Rejuvenated by a renaissance in its design presence, and bolstered by a newly invigorated engineering point of view, the brand was placed in the hands of a new overlord, one Johan de Nysschen, a talented man of vision with a successful track record of leading Audi to prominence in the U.S. market.
But nonetheless de Nysschen’s plan to remake the Cadillac brand in Audi’s likeness didn’t exactly find favor in this market. Yes, there were exceptions, with the runaway success of the full-size Escalade SUV and crossover-crazed consumers scarfing up the XT5, but the rest of the plan floundered, mired in its Audi-ness. The ATS and CTS were barely treading water, and the technically interesting CT6 was languishing, as if stuck in neutral, while the high-performance offerings, the ATS-V and the CTS-V – though scintillating – were outliers totally unrelated to the brand.
Though de Nysschen’s plan was coldly rational, based on the perceived New World Order overwhelming the automobile business, the glorious historical legacy of the Cadillac brand was ignored, only surfacing in three riveting GM Design concepts – the Ciel, Elmiraj and the most recent Escala. These beautifully rendered design statements bristled with promise, portraying the Cadillac ideal with renewed exuberance and presenting themselves as “influencers” of future Cadillac designs, while boasting emotionally compelling names that were well, somehow perfectly befitting of Cadillac.
Yet that’s as far as it went. Those design concepts, which resonated with automobile enthusiasts far and wide, were left rotting in the sun where all GM Design concepts are left to die, while Cadillac’s in-market models – except for the Escalade – were saddled with Audi-esque alphanumeric nameplates that resonated with no one.
The new reality? Last month it became official: Cadillac now sells more cars in the Chinese market than here in the U.S., and that is a reality that isn’t going to change, in fact it will only pick up speed in the coming years. A sign of the times? Sure, all rational thought simply points to the fact that the Chinese market is destined to be the dominant transportation market for decades to come.
But I see it as the death of one of the most storied automotive legacies in automotive history. And even though the Cadillac office in New York is filled with wonderful emblems and tchotchkes from Cadillac’s past to great effect, none of it really matters anymore.
Will Cadillac still be here? Certainly. But make no mistake, the Chinese market will dictate the future direction and composition of the brand.
I often fantasize that there should be two Cadillacs, the one marked by the coldly generic and unengaging names of the current lineup that would be let loose in China for pure profitability. And the other composed of dramatically breathtaking design statements aimed at this market, “real” Cadillacs blessed with real names that reaffirm the brand’s glorious historical legacy to its core.
Ah well, that is not to be. It’s a Technicolor pipedream of an era long since past. Cadillac has been sentenced to an inauspicious afterlife in China, and there’s no turning back now.
By the way, “Dare Greatly” is depicted in this column’s headline, in case you wondered. And like everything else associated with Cadillac of late, it resonates with exactly no one.
And that’s the High-Octane Truth for this week.
THE HIGH HARD ONES.
3 Jul 2017 at 9:25am
By Peter M. DeLorenzo
Detroit. I was going to do a column about this being the halfway point in the year and how little has changed since the Detroit Auto Show last January but the subject was too tedious for words. In fact, it bored me to death. As in why bother with that blah-blah-blah?
This business lives in a bubble of more built-in assumptions, rote regurgitations, etched-in-stone givens and mind-numbing inertia than most people immersed in it can even understand, let alone outsiders with even a casual interest. In fact the entire auto circus almost defies all rational explanation, which admittedly for some is comforting, while others find it infuriating.
As I’ve often described it, the swirling maelstrom that is the auto industry churns and ferments in a staccato cadence of fits and starts. It can swing wildly between unfettered brilliance and incredible stupidity on the same day, and the net-net of it results in a three steps forward and five back dance of mediocrity.
Anyone immersed in this business questions their involvement in it at least once a week, and if they don’t admit to that they’re flat-out lying. It can be one of the most soul-crushing pursuits that you can get yourself involved in, but every once in a while something really good or wondrous happens that keeps you coming back for more.
After taking all of this into account, at this mid-point in the year there are inevitably rumors and rumblings roiling about. And questions. Always questions. Some have obvious answers and some simply defy explanation. So I’ve assembled a few, keeping the focus on the high hard ones that consume most of the chatter in this town.
How can you explain a business where allegedly smart people knowingly squander an impeccable legacy and ignore historic authenticity all in the name of turning a brand into something it’s not?
How can you explain an automaker with a rich brand heritage of impeccable engineering filled with milestone motors that allows its machines to be swaddled in hideous bodywork that’s embarrassing to look at?
How can you explain the biggest bet on the come in the modern industrial-technological age, one defined by a mass movement to autonomy (occurring well, you know, somewhere down the road) that’s chewing up vast sums of R&D money in the here and now with promises of obscene profits that are also, well, you know, somewhere down the road?
How can you explain one of the largest automakers in the world with one of the largest marketing budgets in the world bumbling around in fits and starts with half-assed “marketers” impersonating qualified professionals, people who do less with more than anyone in the business?
How can you explain one of the most iconic brands in automotive history regularly engaging in lowest-common-denominator advertising, while seemingly going out of its way to ignore one of the most illustrious advertising legacies in the business?
How do you explain a glorified snake oil peddler who continues to mesmerize otherwise smart members of the financial community (and the media), who in turn willfully act as his built-in PR shills, while the company has yet to deliver a single dollar of profit in its entire existence?
Speaking of said media, how does a known, carpetbagging mercenary even merit more than a cursory mention in its coverage of the business after all these years of his overpromising and underdelivering?
How long can a company with one (very) trick pony contributing the majority of its profits continue to hinge its entire future upon it?
How long can companies continue to churn out immense profits on vehicles anathema to their brand legacies before those legacies are forgotten or destroyed altogether?
How long does an alleged “cultural” and “process” visionary have to make a difference for a company long known for its deep silos and entrenched fiefdoms?
How long does an earnest and well-intentioned CEO have before being replaced by the company’s very aggressive No. 2?
How can an auto company reinvent itself as a technology company when it’s approaching near paralysis due to its antiquated IT systems?
How long can a company with an incredible legacy of high-performance and numerous victories at the highest levels of racing continue to squander that legacy by pretending those achievements either don’t exist, or are only attractive to targeted segments of “intenders”?
How long does this industry have before the “flat” sales projections turn sharply into a slippery downward slope?
How long can an industry that allegedly believes in the long-term efficacy of electric vehicles continue to ignore the need for the development of a national, standardized, “quick charge” charging system?
Yes, there are countless more, but these are the questions percolating the loudest in this business right now. And by the way, the current tranquility in this business brought on by the “comfortably” flat SAAR is simply the lull before the storm that’s looming off on the horizon.
And when that hits only two questions will matter: How far down will it slide? And for how long?
And that’s the High-Octane Truth for this week.
BMW?S LONG SLOW SLIDE INTO MEDIOCRITY.
26 Jun 2017 at 2:37pm
By Peter M. DeLorenzo
Detroit. A few weeks ago, in our annual AE Brand Image Meter column, I had this to say about BMW: The ubiquitous German brand, which once upon a time in a galaxy far, far away created its destiny with the funky little 2002, has shockingly become the Chevy of German luxury brands, the result of leadership teams over the years pushing the brand into every segment – both real and imagined – that seemed to make sense. This quest to be in every garage in every toney community in America has delivered vast profits for the propeller brigade, but it has gutted its brand integrity. Yes, they still crank out “M” versions to remind everyone of what they used to be, but they’re not fooling anyone anymore. BMW’s brand image is lost in a choking haze of profitability over integrity, and it’s not likely to find its way back anytime soon.
This week, Automotive News is filled with notable hand-wringing about BMW from its dealers, corporate operatives and analysts, due to the fact that the company has a new U.S. CEO in place (since March 1). Bernhard Kuhnt, 49, (pronounced KOONT) has been given the unenviable task of running BMW of North America, but no one really has a clue as to what that means and how things are going to get better. Yes, there’s a new X3 arriving shortly, but the ho-hum feel of the new BMW model speaks volumes about the brand’s current state of ennui.
BMW’s dealers are pissed off because BMW is still building too many models and the push from the factory to deliver even more sales volume is simply out of hand. But, at the same time, of course, these dealers are also clamoring for a better truck-to-car inventory mix so that they can sell more vehicles. (Dealers wanting it both ways in this business is certainly nothing new. When you live in a world of 30-day increments it’s hard not to have a warped perspective.) But that’s not the real issue here, because BMW started losing its way a good 20 years ago. And BMW management has only itself to blame.
It’s not hard to see how it went wrong for BMW. Back when the 2002 performance sedan began to put BMW on the map over here, it was because its products were light, agile and fun to drive, and that endured even through the larger 3 Series and the E12 and E28 generation 5 Series. The boxy sedans with the large greenhouses of glass and a unrivaled level of responsiveness simply looked and felt like nothing else on the road.
Back then, BMW didn’t try to build something for everyone. Instead, the company focused on creating machines that bristled with the company’s distinctive point of view on sporting motoring. And that meant building machines that were exactly what BMW engineers wanted to drive, machines that marched to a different drummer in almost every aspect. Rather than mold its machines to a particular buyer, BMW expected, make that demanded a higher level of interest from its potential buyers, people who would come to appreciate the performance capability and come to share the passionate point of view that defined BMW. This single-mindedness on BMW’s part created a brand aura that achieved cult-like status with a growing number of devoted enthusiasts who believed that they knew what the rest of America’s motoring public didn’t. It was truly powerful and served BMW well for years.
Then in 1975, Martin Puris, CEO of the Ammirati & Puris advertising agency, came up with one of the most iconic automotive advertising themes of all time. “The Ultimate Driving Machine” not only perfectly captured the unbridled passion that drove BMW to create cars that marched to a different drummer and delivered an unrivaled driving experience, it also stirred the souls of legions of enthusiasts who simply couldn’t get enough of the brand’s offerings. The theme was magic, creating an aura for the brand that was not only unmistakable, but one that would dramatically remain all its own.
(It’s interesting, but I distinctly remember some of the comments by Detroit car company executives back in the late 70s. The unifying theme of their comments seemed to revolve around the fact that BMWs were homely oddities and that they didn’t get what the big deal was. But by the time I went to work on the Pontiac advertising account in early 1980, the battle cry around Detroit revolved around doings things “just like BMW” even though few understood what that really meant. Suffice to say, the success of BMW rocked Detroit to its core.)
So what happened? To paraphrase Joe Pesci as Nicky Santoro in Martin Scorsese’s “Casino,” when he described their downfall with the haunting words, “Then, we f---ked it all up.” BMW indeed f---ked it all up, there’s no elegant way to put it. In other words, the little German automaker that marched to a different drummer and was renowned for building genuine driving machines with a distinct point of view got lost. And got greedy.
Enjoying almost unfettered success, the powers that be in BMW management started to linger a little too long on their glowing press reviews and began thinking that they could do no wrong, which led them down the path of believing that they could get one of their products in damn near every garage in America. So a relatively simple BMW product lineup that consisted of a few sedans, coupes and a distinctive wagon here and there got swallowed up by a burgeoning product lineup that grew more cumbersome by the model year.
BMW unleashed niche products on top of niche products that stepped on each other in the market. Their cars became bloated and heavy, and their crossovers and SUVs grew bigger by the day. Luxury and technology for technology’s sake replaced performance, and the distinct point of view that defined BMW slowly but surely began to slip away.
BMW was no longer building “Ultimate Driving Machines” - instead they were building facsimiles of what the brand once stood for designed to extract as much money from consumers as possible. Yes, there were certainly some standout M cars unleashed over the years that reminded enthusiasts of how great BMW used to be, but for the most part BMW had traded in its hard-won authenticity for a volume play based on faux representations of what the brand once was, all for $699 (and up) per month.
And this volume push from the factory proved costly, because not only did dealers have trouble keeping up with the product onslaught, consumers wandered off to greener pastures because the raison d’etre for buying a BMW was becoming harder to find. After all, what did BMW stand for again? Not only had BMWs become too ubiquitous, but too often its models had become lost in a cloud of “me-too” blandness. To make matters worse, the choices from the other manufacturers seemed just as good to consumers, if not better, than what BMW had to offer.
In short, BMW’s long, slow slide into mediocrity has taken its toll, and it isn’t the Ultimate Driving Machine any longer. It’s a car company pretending to adhere to the core beliefs that it once stood for, but this just in: it isn’t fooling anyone. It has simply lost its way.
I have no idea if Mr. Kuhnt has a clue, but I am quite certain of one thing: There are few auto companies in the world that have done less with more than BMW. And before Mr. Kuhnt does anything, he must answer two burning questions: As in why BMW? And why now?
Because a legacy is a terrible thing to waste.
And that’s the High-Octane Truth for this week.
The new BMW X3 xDrive (the M40i version shown above) is just what BMW dealers are clamoring for, allegedly. It’s supposed to be better in every way but based on an overview of the product that the company released, it’s hard to discern a compelling reason to buy one. Talk about a giant “we’ll see.”
Mr. Hackett?s Quixotic Quest.
19 Jun 2017 at 7:10pm
By Peter M. DeLorenzo
Detroit. While writing this column over the years, I have tried to convey that Detroit is a company town like no other. Yes, there are other company towns that come to mind, of course, like L.A. and its omnipresent Hollywood raison d’etre. But Detroit? Well, it’s the company town of company towns.
Suspend what you’ve read or heard about the latest Detroit renaissance for a moment, because this just in: It’s real but only selectively intermittent, and don’t for a moment think that what we have going on here qualifies as The Shining City on the Hill by any stretch. The constant din of “we got it goin’ on” cheerleading in the local news has almost become unbearable, and there’s no end in sight. The city even has a glittery new light rail system called the QLine, which has become "The $137 million Answer to the Question That Absolutely No One was Asking Super Slo-Mo Train to Nowhere" literally overnight. So despite all that’s going on, or not going on in Dee-troit (aka HomerVille USA), depending on how you look at it, it’s easy to see that not all that much has actually changed in the giant scheme of things.
To wit? Executive realignments and corporate restructurings at the car companies and their suppliers still merit front-page news. Not just in the business sections of the newspapers and in focused features on Internet sites, but front and center as the dominant lead stories, surpassing even the latest hand-wringing du jour going on in the national news.
And when you live around these parts you’ll find that everywhere you go you’ll stumble upon a car display - at shopping malls, at corporate-sponsored charity events and golf tournaments, at high school and collegiate football games, and on and on. Everywhere you turn there’s some sort of vehicle display, which is more than a little mystifying when you really think about it because this is, after all, a region where 75 percent of the residents have some sort of direct or indirect connection with either an auto company or a major supplier. It begs the question: When we already eat, sleep and breathe this business 24/7, do you still need a car display to remind you what business we’re all connected to? Weird, right?
But this is only a brief snapshot of the landscape around here designed to set the table for what I really want to discuss today.
Last month, Bill Ford decided to make a change at the top of his family’s car company. Still smarting from the departure of the much-loved Alan Mulally three years after the fact, Ford grew impatient with Mulally’s replacement – Mark Fields – and jettisoned him in favor of one of his very best friends, Jim Hackett. Fields only delivered two of the most profitable years in the company’s history but, you know, “things just didn’t work out” or something like that.
And Hackett? He is the former Steelcase CEO who also did an interim stint as the University of Michigan’s athletic director. Hackett’s U of M connection? He was once on a Bo Schembechler-coached football team where he was able to learn valuable leadership and management lessons. His other claim to fame? He recruited Jim Harbaugh to take over the football program before he moved on to other things. Like running the Ford Motor Company.
Hackett has been the subject of many stories in the local media since he was anointed as the next Ford CEO, as is to be expected. But there have been a remarkable number of them, even for this town. Much of that has to do with this story being the biggest thing to hit this company town in a while, but it also has to do with the fact that Bill Ford, amid myriad other management changes, replaced the company’s public relations director with media and Ford veteran Mark Truby. And the PR function is now directly reporting to – ta-dah - Bill Ford himself.
Why? Well, Bill Ford’s name is on the door, lest anyone forget, and if he wants the story of his friend Jim Hackett’s ascendancy to be CEO of the Ford Motor Company handled just so, then so it shall be. Ford wants everyone to get to know the Jim he knows and likes, and if a story thread emerges that Hackett is remarkably like Alan Mulally, well, even better.
Hackett, as portrayed by the latest Ford PR spin, is supposed to be a gifted, contemporary, “inclusive” leader, one who prefers small meetings and swift action, and places extraordinary emphasis on personal integrity. He’s a “visionary” with extensive Silicon Valley connections and a deep understanding of how New Technology and its fundamental design imperative will shape our future and everyday life, someone who is not entrenched in the automobile business or in the Ford Motor Company’s moribund excuse for a “culture.” Sounds excellent, no?
In the latest – and lengthy - front-page feature on Hackett that appeared this past Sunday in the Detroit Free Press, Brent Snavely wrote what is – at least from Ford’s perspective – the definitive, in-depth, get-to-know Jim Hackett piece. (By the way, as is this company town’s wont, many carpal-tunnel-stained members of the media are now furiously jockeying to tell the story of Jim Hackett’s rise to become CEO of the Ford Motor Company in an “approved” book. It will be only semi-interesting to see who lands that “get.” And we’ll all find out soon enough.)
The big takeaways from Snavely’s piece? Bill Ford wants to accelerate the company’s decision-making and drive an increased focus on innovation, and to that end Hackett and Ford want to "create a flatter structure so that it doesn’t feel the weight of hierarchy on every decision."
That’s a lot to chew on, especially for a company such as Ford, which is dominated by its notoriously siloed culture and its seemingly endless network of fiefdoms filled with lethal, pitchfork-wielding operatives hell bent on maintaining the status quo at all costs. (You might ask, at this juncture, didn’t Alan Mulally do away with all of the hordes of negative sabre-rattlers during his tenure? No, but by the sheer force of Mulally’s will and presence those entities were shamed to go under ground. They’re back now, in full force.)
But Jim Hackett has a plan. In fact he has a 100-day plan that will be, according to him, transformative and help lead the Ford Motor Company to new heights. It consists of four main points, according to Snavely:
1. Reevaluate revenue opportunities.
2. Evaluate the fitness of the company.
3. Reevaluate capital deployment.
4. Renew focus on innovation.
Okay, none of this stuff is earth shattering by any means; in fact most of it is restating the obvious. Let me translate it for you:
1. In a declining auto market, Ford has to make more money, wherever and however it can.
2. Ford, as a company, has to be better and more efficient.
3. If Ford isn’t making money in certain aspects of its business, either fix it or stop doing it.
4. Ford will be vital part of the new mobility business, and all that entails.
This is all well and good, and on top of all of that if Hackett can instill more touchy-feelyness into what passes for the Ford culture, then more power to him because it will make Bill Ford very, very happy. But seriously, who’s kidding whom here? With all due respect to Mr. Hackett, his carefully worded platitudes about fostering a collaborative working environment to drive innovation might have sounded good at Steelcase or in a TED lecture that he attended, but the last time I checked the Ford Motor Company is not only a giant global manufacturing enterprise with a set of wide-ranging and never-ending challenges, it is also involved in one of the most complicated endeavors that exists on this earth. In other words, designing, engineering and building cars and trucks really doesn’t have anything to do with platitudes or pronouncements.
And to make matters even more daunting for Mr. Hackett, Ford, as a company, goes about its business wrapped in a suffocating culture that revolves around one remarkably ineffective and fundamentally flawed premise. What is that, you might ask? It’s the debilitating notion that the company can solve any problem and do anything – let me repeat, anything – better and cheaper than any outside entity. Translation? The Not Invented Here syndrome is a way of life at Ford.
And what are the ramifications of this oppressively pervasive “NIH” syndrome? Because of its steadfast refusal to work with companies with more knowledge and intellectually accurate property, Ford is lagging behind other automakers. And not by a little bit, either. Ford has missed opportunity after opportunity – especially in the area of electronics and connectivity – because of the quaint and woefully misguided notion that it not only knows better, but it can do it better. And cheaper. The reality? When Ford sets its mind to doing something it usually takes twice as long and costs twice as much. If not more. And this ingrained wrongheadedness has led the company down the primrose path of mediocrity more times than I care to count. (I am absolving the True Believers at Ford, because they know what they're doing and are not a part of the NIH hordes.)
Ford’s problems are not only systemic and part of a resolutely moribund culture; they’re deeply ingrained in the psyche of the company. Translation? A giant Blue Oval of Not Good.
To say that Mr. Hackett’s quest to make a difference in his first 100 days at the Ford Motor Company is Quixotic is the understatement of this and any other year.
And that’s the High-Octane Truth for this week.
THE AUTOEXTREMIST BRAND IMAGE METER VI: THE GOOD, THE BAD AND THE CLUELESS.
12 Jun 2017 at 8:52am
Editor-In-Chief's Note: Since last week's column is one of our three biggest of the year in terms of readership, impact (and length), WG and I have decided to leave it up one more week. As predicted, after the debut of the Autoextremist Brand Image Meter VI some car company marketers are smiling this morning, glowing with the knowledge that The Autoextremist confirmed that they indeed have it goin' on, while others are seething because they are absolutely convinced that they have it goin' on and no one - especially Yours Truly - is going to dissuade them from that notion. While others are still wandering around lost in the marketing desert, muttering to themselves that the turnaround in their fortunes "won't be long now!" As I've stated repeatedly, this automotive marketing business is tough, unforgiving and relentless. Hundred-million-dollar marketing campaigns can be left in a smoldering heap by the side of the road because of a bold miscalculation, a flat-out wrong-headed decision, or auto executives egos running amuck. Or, as I like to call it, The Trifecta of Not Good. That last one can be particularly devastating, because as smart as some of these people think they are, their ability to sort through the real from the imaginary sometimes gets lost in translation. Much of this is the result of a completely unrealistic assessment by these executives of their talent and their brand's place in the automotive world. They are so buried in the day-to-day minutiae of it all at their respective companies that they simply don't have the wherewithal to step back and objectively see or understand what's really going on. And to compound that, they don't really like people telling them what to do or that they're wrong either, because after all they're geniuses, remember? Just ask them. I find the insularity at the auto companies to be astonishing. Understandable mind you, but still astonishing. That's really the only adjective that fits. This insularity causes major missteps and blown opportunities left and right. When I see an iconic brand offering so much to work with, with so much historical relevance to bring to bear and yet it is so misguided and mishandled, it is simply unconscionable. Squandering a legacy is unforgivable in my book. I would suggest that the brand marketers that got hammered in our latest Brand Image Meter go back and reread my words carefully, because though painful, half the battle is realizing what you're doing wrong before you can even begin to see your way clear to making things right. As for the rest who fared better I wouldn't get too complacent, because you're only one bone-headed decision away - or a runaway ego unchained - from disaster. And that's the (updated) High-Octane Truth for this week. -PMD
By Peter M. DeLorenzo
Detroit. As I mentioned at the end of last week’s eighteenth anniversary column, it’s time for our annual Autoextremist Brand Image Meter, which, as hard as it is to believe, is now in its sixth year. This column grades the efforts of hordes of marketers and brand image wranglers at the various car companies who work long and hard, day after day, in order to make their respective brands the Bright Shining Stars in the market.
Some of the people toiling away in this pursuit are actually qualified and bring a certain sense of gravitas to the proceedings, but those executives are admittedly few and far between. Others are unfortunately assigned to the marketing function as part of a woefully misguided corporate effort to “round” executives’ experience resulting in ill-equipped operatives who stumble along wreaking havoc on everything and everyone in their path while attempting to learn the business of marketing by “feel,” which translates into making a bumbling mess of things over the duration of their assignment. That companies persist in this folly instead of recruiting and nurturing marketing talent remains one of the unsolved mysteries of this business. And unfortunately the rest, of course, are flat-out poseurs who inevitably turn up lost in the marketing desert in search of a clue.
That there is such a wide range of talent in the auto marketing ranks is no surprise, because it’s indicative of the general reality for the business as a whole. But this gaping disparity between a few star performers and the rest in the automotive marketing arena can have a devastating affect on a brand’s image, as you’ll see below.
Yes, some of the brands I’ll talk about today are blessed with auto marketers who actually get it and who know what their brands stand for (and almost more important, what they’re not) and the understanding that sometimes it’s better not to screw things up rather than set the world afire with their “I’m a genius, just ask me” brilliance. Other brands mentioned suffer the consequences of marketers who careen around throwing ideas and executions up against the wall to see what sticks, and their respective brand images pay dearly for it.
In this column I grade automotive brands on their fundamental raison d’etre, and of course in turn the people responsible for shaping what those brands stand for are directly or indirectly graded too. And believe me, no matter where these marketers fall on the competence spectrum, many of them believe that they’ve got it goin’ on, even though that isn’t even remotely the case.
Automotive marketing is a very big deal. And expert brand image wrangling is a crucial part of making all of the effort to design and engineer great products worthwhile. Billions of dollars are spent on brand image wrangling by the auto companies each and every year. Why? Because having the “right” brand image is absolutely essential for market success.
As you’ll see in my following commentary when a company does it well, it shows, but if a company misses even by a little, it can be very costly. And if a company’s marketers screw up, the effects can not only be devastating, they can linger for years.
Without further ado then, let’s see who’s doing it right, who’s doing just okay, and who is doing it so wrong that it hurts.
Acura. I’ve been asked repeatedly, is the Acura NSX sports car a fitting halo for the brand? On the one hand, I can say yes, yes, it is. The car is a little porky but overall it’s an excellent effort. But on the other hand, is there really any connection between Acura’s show pony sports car and the rest of the lineup? The answer unfortunately, is not much. Burdened by design mistakes from its recent past and constantly operating on the fringes of the top tier luxury-performance brands, Acura remains an enigma. Does Acura offer good cars and SUVs for the most part? Yes, of course, in fact some of them are truly excellent. But it isn’t enough, because the Acura brand image remains cloudy and unfocused to this day. And to make matters worse, there’s not enough differentiation from Honda’s regular lineup to justify the price. The Bottom Line? Where’s the juice with Acura? Why isn’t the passion that comes shining through in the NSX visible in the rest of the Acura lineup? I am astounded that after all of these years “the best of Honda” doesn’t resonate as the focus of the Acura brand.
Alfa Romeo. That this brand remains “Sergio’s Folly” is undeniable. Despite the media fanboy slobbering that went on after the carefully orchestrated advance drives for the Giulia, the ugly reality for FCA is that the car is s-l-o-w out of the gate. How slow? Well, at the current selling rate the brand isn’t sustainable, that slow. Now what or who Sergio is going to blame this failure on is pure conjecture at this point, but I’m voting on the “sun spot” defense, because he certainly isn’t going to assume responsibility for anything. After all, he hasn’t up until now so why mar a perfect record? But if you listen closely to the Italian PR wattage being generated in Auburn Hills, we should all move on from worrying about the Giulia, because – hallefrickinluja! - the new Stelvio SUV will project Alfa Romeo to the glorious heights Marchionne has been promising for oh, going on eight years now. As if. Alfa Romeo remains a fringe brand with a wonderful history that was hijacked by carpetbagging mercenaries with visions of fantastic profits dancing in their heads. No brand can live up to that pressure, especially one whose historic peak was five decades ago. Suffice to say I’ve seen this movie before, and it never ends well.
Aston Martin. The decision was taken to make Aston Martin even more of a luxury brand of late, which means besides cars there will be Aston Martin luxury boutiques, luxury yachts and well, luxury everything. CEO Andy Palmer knows that Aston Martin, as an independent luxury automobile manufacturer, can just barely survive in its present guise, which is also why Aston is introducing the DBX super luxury SUV in 2018. Aston desperately needs more of a limited volume play in the market and the DBX is the ticket, Palmer figures. He’s probably right. But here’s the thing, as long as Aston Martin continues to make some of the most stunningly beautiful cars on the road, machines that unquestionably live up to the legacy of the brand, it will be fine.
Audi. Audi seems to be chugging along with its brand mojo intact, despite the stain of the VW Group’s Diesel fiasco. Now fully ensconced in the top tier of mainstream luxury brands along with BMW and Mercedes-Benz here in the U.S., Audi continues to do what they do. Does it all work? For the most part, yes. Audi has even polished its own version of the classic German automotive arrogance to a new sheen, which is not unexpected, but that translates into higher prices, higher doses of attitude and a lingering feeling that the brand, though still hot, is headed for a cooling. The Marketing Meisters at Audi are still on course, except for when they take themselves much too seriously and allow their “holier than thou” attitude to creep into their advertising, which results in smarmy and annoying work. A B+. For now.
Bentley. Some people thought that with the arrival of the Bentayga SUV, Bentley would suffer immeasurable image damage, but instead the brand has been made even stronger. This is a classic example of image stewards for a brand displaying the kind of focused consistency – combined with savvy product decisions – needed to forge one of the most desirable luxury brands in the business.
BMW. The ubiquitous German brand, which once upon a time in a galaxy far, far away created its destiny with the funky little 2002, has shockingly become the Chevy of German luxury brands, the result of leadership teams over the years pushing the brand into every segment – both real and imagined – that seemed to make sense. This quest to be in every garage in every toney community in America has delivered vast profits for the propeller brigade, but it has gutted its brand integrity. Yes, they still crank out “M” versions to remind everyone of what they used to be, but they’re not fooling anyone anymore. BMW’s brand image is lost in a choking haze of profitability over integrity, and it’s not likely to find its way back anytime soon.
Buick. No brand wranglers pat themselves on the back more than those toiling away at Buick (well, not more than Chevrolet, but I’ll get to that in a minute). They will be the first to tell you that they have it so goin’ on that it’s a wonder they have to drive into work anymore. Instead, they should be able to float in to work riding the platitudes and accumulated “attaboys” that dominate their thought balloons. Contrary to those thoughts, and contrary to GM’s upper management who actually do believe that Buick really does have it goin’ on, the so-called marketers have dumbed down Buick only to occupy star status in Payment Land. As in “I can’t believe I get this much faux luxury for this little money!” GM Design has managed, by presenting some compelling concepts over the last few years, to imagine a Buick that simply doesn’t exist. Buick is yet another GM brand that exists for the edification of the Chinese market. Nothing more, nothing less.
Cadillac. Divisional honcho Johan de Nysschen has made no bones about the fact that he is on a mission to remake Cadillac in Audi’s image, a state of mind that he’s intimately familiar with, given that he was greatly responsible for Audi’s rise in this market. The problem is that Cadillac isn’t Audi, which - if some of the operatives involved at Cadillac would step away from the program long enough would realize - is a very good thing and something to be grateful for. Cadillac has a historical legacy unmatched by few automotive brands in the world, but many of de Nysschen’s initiatives are designed to suppress that fact, or ignore it all together. This is a giant wreath and crest of Not Good. Look at Cadillac’s lineup today - the ATS, the CTS, the XT5, the CT6 and the Escalade. (I left the XTS out intentionally.) Which one of these products has the can’t-mistake-it-for-anything-else street cred worthy of the brand? A hint: It’s the only one with a name. The XT5 is riding the SUV/Crossover craze somewhat successfully, but the rest? Damn-near dead in the water. (What about the CT6 you say? It’s technically impressive but uninspired and underwhelming.) Cadillac is another one of GM’s brands that has more going for it in China than anywhere else, and even though that’s an inevitable industry reality, the fact that this brand is squandering its legacy here is unconscionable. As an enthusiast, the superb Cadillac “V” cars are noteworthy and highly desirable, but they’re wasted in Cadillac showrooms because they have no context there, despite all of the money GM is pissing away on Cadillac’s so-called racing program, which is another foray into the Audi-ness of it all that isn’t working. (Now, take those “V” cars and remake them into Corvette coupes and sedans as part of the new Corvette Performance Division, and you’d have something, but that’s another column.) There are so many things wrong with Cadillac right now that I don’t know where to begin. I have one question: How can a brand that has displayed the industry's most compelling concept cars of the last decade – with equally compelling names, by the way – stumble along with a bunch of cars in the market that have nothing going for them? I’m sure Cadillac will heel to de Nysschen’s push into AudiLand as long as he’s there, but it’s not the right path. In fact it’s not even close. What a waste.
Chevrolet. No marketers have done less with more than the people charged with nurturing one of the most iconic American brands of all time. Think about that for a moment. These stumblebums have taken a larger-than-life brand that has thrived over the years with some of the most heroic, memorable car advertising campaigns of all time, and turned it into a sick version of marketing “small ball.” Chevrolet’s once-proud image has been reduced to a series of glorified retail spots that insult our intelligence and annoy with equal aplomb. Throw in the insipid “most rewarded” angle and it’s a marketing cocktail that absolutely no one is interested in except the so-called “marketers” down at the Silver Silos, who are absolutely convinced that they have it goin’ on. This just in: They don’t. We have been inundated of late by stories by our resident local media homers touting how wonderful Mary Barra is, how smart, how enlightened, how visionary and the usual blah-blah-blah. That’s all well and good and only somewhat deserved, but as long as she – and “Dan I Am” Ammann – continue to ignore the blatant mediocrity on constant display by GM’s so-called marketing troops, I will give them a big fat “F.” And as bad as that grade is, that’s more than Chevrolet’s brand image merits, unfortunately.
Chrysler. The “C” of FCA is a one-trick pony now as defined by the Chrysler Pacifica. The goodness of the Chrysler minivan brand image goes only so far, meaning the Pacifica is part of the competitive set of minivans to consider if one is interested in those particular vehicles. Not much to go on, is it?
Corvette. Once upon a time, the Corvette was the quintessential definition of a “halo” vehicle for Chevrolet. The notion that “there’s a little bit of Corvette in every Chevrolet” was used to great effect back in the day. Not so much today. Despite the fact that the Corvette is one of the best high-performance cars in the world, with an impeccable and accomplished record in racing, GM – and Chevrolet – really doesn’t do much with it. Oh sure, the enthusiast press and enthusiasts in general are well versed in the goodness of the Corvette, but you’d barely notice it exists at GM. It’s very strange in fact. It’s as if they’re afraid to talk about it too much or admit that it represents the very best thinking of GM’s True Believers. Why? Well, why ask why? It has been like this for the Corvette for decades. Despite this cloud of negativity, the Corvette name and image shine through. In fact it shares the top tier in our AE Brand Image Meter with five other brands. I am not kidding when I say that I would form a completely new GM Performance Division with the Corvette as the foundation. As long as Chevrolet marketers continue to squander the image of an American icon, why associate the Corvette with that relentlessly clueless marketing mediocrity? As I suggested five years ago I would take the Cadillac “V” cars and remake them as Corvette models, and I would add the outstanding Camaro into the mix too. If Mary Barra wants to be truly “visionary” she could start by shaking up GM’s “we’ve always done it this way” mentality and let GM’s exceptional performance cars have an arena that they can call their own.
Dodge. Muscle cars and cop cars are this brand’s thing. Is that enough to go on? Will Dodge survive once Sergio and his espresso-swilling minions finally find a dupe, err, I mean a buyer so that they can cash out for good? With now-ancient chassis underpinnings and a ton of cash needed for a completely new vehicle architecture, I wouldn’t bet on it. In the meantime Dodge is the brand for people who don’t want to live in today’s world. Can’t say I blame them, but the harsh reality is that the life expectancy of this circus is short.
Fiat. A complete waste of time, no matter what the fanboys in the media say about the 124 Spider. Notice how Marchionne isn’t saying much about Fiat anymore? Remember when he was promising dealers the brand would be the stepping stone to untold riches once they started selling Alfa Romeos too? Fiat is the forgotten Italian brand that had its day in this market decades ago, that is until people started discovering that there were small cars out there that were light years better in terms of quality, reliability, desirability and overall value. Funny how nothing has changed. There are a lot of pretty smart dealers out there talking to themselves right now about how they could let Marchionne – a known carpetbagging mercenary – take them to the cleaners with the complete fiasco known as Fiat. Oh well. Brand image? Fiat is dead to me. And everyone else too, apparently.
Ferrari. The brand with the impeccable legacy and unequaled image, at least for the most part, seems to find a never-ending supply of moneyed fanboys and girls to seduce. That the true Ferrari enthusiasts are drifting off to other shiny automotive objects, or drifting off of this Mortal Coil permanently, is not lost on Ferrari management. Unfortunately for the proud, prancing horse brand and the enthusiasts who desire it, the term “management” means that the dreaded Marchionne is now in charge, which lends a certain unmistakable foreboding to the proceedings. What does it all mean? More tchotchkes, more Ferrari “Worlds” and ominously, much more volume, as in almost 50 percent more volume. This is, in case you forgot, what flat-out greed looks like in the car business. I would have put Ferrari at the top of the AE Brand Image Meter along with the other select few, but as long as Marchionne is involved the chances of this brand being screwed up are better than 50-50. So the Ferrari brand is still red hot, at least for now, but how long that lasts remains to be seen.
Ford. Sad to say, but Ford is another iconic American brand that has lost its way. Except for the F-150 pickup - which boasts an image that is simply unimpeachable, and when considered on its own ascends to the top tier of the AE Brand Image Meter, and except for its performance cars, including the evergreen Mustang - Ford seems to be wallowing in abject mediocrity. Why? For one thing Ford design is decidedly lackluster (except for the two aforementioned star vehicles and the Ford GT) and forgettable. If I said that Ford design suffers from being too derivative, that would be kind. The ugly reality is that Ford models don’t look fresh and new, they just look old and tired, which is simply inexcusable. And Ford marketing has taken a decided turn toward the forgettable, too, which is equally inexcusable. Except for the F-150 work, which is still outstanding and befitting of the nameplate, the Ford advertising work is comprised of a bunch of scattershot executions that do not add up to a cohesive whole. Bill Ford’s insistence that the Ford legacy of putting America on wheels will continue isn’t nearly enough. In fact that notion counts for exactly nothing and is flat-out obsolete in the Silicon Valley-tinged world we live in today. Here are a few questions for the marketing types at Ford that should be answered immediately: What is Ford's compelling reason for being? And what differentiates it from the other brands out there? And why should we care?
Genesis. A year ago I was convinced that Hyundai was playing it right with its new Genesis luxury brand, and I still think the brand has huge potential. But not with just two cars that appear to be too close together to the average consumer, and not with the limited advertising and marketing Hyundai has undertaken for this new brand. I get the efficacy of avoiding the overpromise, underdeliver train wreck that so many manufacturers willingly embrace, but really, this is the best they can do in terms of marketing? Genesis is still a very new brand. But it’s destined to be a Lost Brand without more product and better marketing.
GMC. This brand just keeps going on, in some cases even defying rational thinking. Everyone knows that GMC vehicles are massaged versions of Chevrolet models, but for some that’s clearly more than enough. Granted, the exterior and interior designers at GM Design assigned to work on GMC have made the most of what they’ve been given, but even that doesn’t explain the brand’s consistent success in the market. And it’s certainly not the advertising and marketing either, lest GMC marketers start patting each other on their backs, because that stuff is eminently forgettable, when it’s not annoying. (The new "Like A Pro" campaign? It's visually better, but I'm not so enamored with the words. I need to spend some more time with it, but right now it seems a little awkward and forced.) I chalk up GMC's success to a very clear-cut marketing reality: For consumers GMC isn’t a Chevy, which apparently counts for a lot. And it’s not a Cadillac, either, which in their minds counts for even more, not being showy types and all. A solid brand, which in this chaotic marketing world is really saying something.
Honda. The brand that has such a rich legacy seems to be on the rebound with consumers, which is noteworthy. Honda is touting that it is getting back to its roots, which company operatives are insisting is why things are on the upswing for the brand, but I’m not going to go along with that assessment completely. I think that is true, but only intermittently. In fact, Honda Design has taken a giant step backwards with the new Civic, which, though an excellent car, looks so uncomfortable in its own skin that you can almost hear them squeal “help me!” as they drive by. If Honda insists that they have their mojo back I’m going to at least give them points for the thought, and maybe even the benefit of the doubt. But I’m not buying into the “it’s a new day at Honda” mantra just yet. Honda enjoys a positive brand image for some very good reasons. That’s still the case, but it's still a giant "we'll see" proposition.
Hyundai. Such a once-promising brand, what the hell happened? Was it the constant cries of “we got it goin’ on!” which were part of the rote speech at every press conference that everyone grew tired of five years ago? Was it the Too Many Models Syndrome, which resulted in a confusing showroom filled with too many cars that blended together and that no one wanted? In fact it was all of the above, and more. The reality is that there’s no use telling Korean auto executives what to do. They know absolutely everything there is to know about absolutely everything, and if, as an American car executive in their employ you don’t concur, you are jettisoned in favor of someone who will. Hyundai has been careening around like this for years, and there’s no relief in sight. The other major problem that the powers that be at Hyundai would never admit to is that Kia and Hyundai are interchangeable in most consumers’ minds. And now that Hyundai is pushing its Genesis division that problem is even more pronounced. Brand image? Ugh. Hyundai showrooms are where consumers go to get financed, and get a deal. And that’s all.
Infiniti. Quite simply Nissan’s luxury (sort of) brand has its following, a core group of consumers who, for some reason, can’t be bothered with other Japanese brands, let alone with the go-to German luxury brands. Normally you would call Infiniti the “marching to a different drummer” brand but that would be attaching too much gravitas to it. No, it’s a cynical play by Nissan to grab their share of a market that they believe they have just as much right to as any other manufacturer. Except everything about Infiniti seems like Nissan operatives are phoning it in, and devoid of a single original thought. I consider Infiniti a “ghost” brand, one that’s invisible except for the select few who have been issued the special glasses from the factory so that they can appreciate the inherent goodness of the brand. Brand Image? A well-intentioned afterthought.
Jaguar. Who would have thought that Jaguar could be on such a roll? But with a brace of excellent vehicles, including the F-Pace SUV, which is a runaway hit, and an image that has been well defined and polished to a high gloss, this brand definitely has it going on.
Jeep. This American icon is another brand that occupies the top spot in the AE Brand Image Meter. It is truly amazing – and I hate that overused word – but that’s the only explanation for this brand to have survived upheaval after upheaval and multiple stewards, and still emerged intact and stronger over time. It’s no secret that this brand, with the impeccable credentials and unrivaled imagery attached to it, has benefited from some superb image wrangling too. Jeep is the sole focus of Sergio Marchionne’s vision for untold riches when The Giant Payoff – aka when FCA parts the company out – occurs. It’s the only sure thing that he has, in fact. What’s it worth? Who knows? $10 - $12 billion with a capital “B” maybe? (Remember, Sergio and his Fiat heir overlords only paid $6 Billion for Chrysler, all in.) That could be, but there are storm clouds gathering for Jeep too. FCA has pushed out more Jeeps with questionable quality – and pushed more subprime financing to pump sales – than at any point in the brand’s history. Marchionne has pumped up Jeep’s volume to make it even more attractive to interested suitors, except that now that the market slowdown is accelerating, Jeep sales seem to be cooling at an accelerated rate too. Jeep is still at the top tier in the AE brand Image Meter, but beyond that anything can happen to derail Sergio’s grandiose plans for the iconic American brand.
Kia. As I mentioned above, Hyundai’s foray into the luxury arena spells trouble for its Hyundai and Kia brands. Before Genesis there was at least an attempt at differentiation between Kia and Hyundai, with Kia allegedly skewing younger. But now? Consumers don’t care how Korean auto executives parse their brands because Kia and Hyundai both fall into that subset of “deal” brands in the American market. The Korean auto executives with genuine decision-making power in this situation are too arrogant and shortsighted to see that having two brands stepping all over each other in the American market isn’t going to work. Brand image? Nonexistent, unless looking for a deal qualifies as such.
Lamborghini. This exotic, high-performance Italian supercar brand is the one for knowledgeable enthusiasts who don’t worship at the altar of the Prancing Horse. Since the VW Group took over, everything about Lamborghini has been elevated, from the products to the brand image itself. In ancient times, the name Lamborghini wouldn’t have been uttered in the same breath as Ferrari. Now? There are plenty of enthusiasts out there who consider Lamborghini to be the most desirable exotic Italian sports car.
Land Rover. That these super luxury crossovers and SUVs have found such favor in the suburban jungles across America is still a little bit hard to believe. It wasn’t too long ago that Land Rovers were something to appreciate but not drive, because they were too problematic for most people to deal with. Now, bristling with cachet and boasting sumptuous interiors, Land Rover has become one of the touchstones of affluent suburbia, and another brand at the top tier of the AE Brand Image Meter.
Lexus. Toyota’s luxury brand is going all-out to reinvent itself as something more than the “excellent service and customer care” brand. That’s all well and good, and maybe Akio Toyoda’s drive to make Lexus into a high-performance brand will succeed, but even if it doesn’t there are plenty of people who like Lexus just the way it used to be and still is. Impeccable customer service still resonates.
Lincoln. Still a work in progress, the Ford luxury brand can point to a lot of positives since it almost got axed in Alan Mulally’s “One Ford” era. But even though Lincoln has come a long way in just four years, there are still some glaring things about the brand that are irksome. First of all, when the revised MKZ came out a year ago featuring the new “Continental-esque” front end before the Continental came out, it was a blown opportunity. I’m well aware of the dictates of product cadence, but that one decision spoiled the impact of the Continental’s debut. And as well received as the Continental has been, Ford’s current weakness in design shows in the back end of the car, which is completely uninspired and forgettable, and decidedly unworthy of the Continental name. While I’m at it, there are negatives about the new Navigator SUV design, too, which is a mishmash of at least three other luxury SUVs. I was expected something more. Much more. And the advertising? Well, there's no doubt that some of Lincoln's advertising has been a cut above Cadillac's, especially when it stayed in the pure image play arena, as with the Annie Leibovitz photography campaign. But they've stayed with Matthew McConaughey far too long, which is annoying. Why not use him as a brand ambassador and keep him out of the advertising? But still, those problems aside, at least Lincoln has a name with historical relevance in Continental, one that it embraces and nurtures to great effect. That’s more than can be said for Cadillac, which clings to its Audi-esque naming regimen that resonates with exactly no one.
Lotus. Talk about your quintessential “marching to a different drummer” car company, Lotus is that and more. Colin Chapman, who rightfully sits among the greats of automotive history, was the brilliant innovator whose designs for Lotus racing and street cars remain legendary to this day. The fact that Lotus still exists with its founder’s name on it is one of the miracles of the modern automotive age, as its tumultuous history can attest, but there have always been True Believers associated with the brand it seems and they have managed to keep the flame alive through some very lean times. Lotus cars aren’t for everyone, thank goodness, and it’s easy to see why people seriously looking at the Porsche 718 Cayman don’t even give the Evora even a sideways glance. But that’s okay and probably as it should be, because Lotus has always appealed to iconoclast enthusiasts, those who march to a different drummer themselves. Now that Lotus has a fresh infusion of deep-pocketed investors from China, I believe the future of the brand is secure. And speaking of that brand, it has a new glow and new hope.
Maserati. This luxury performance machine is the attractive Italian sports car brand name with a historical legacy that repeatedly suffers in comparison to the rest of the competition. Does Maserati have attractive cars? Yes, somewhat, but the brand is not top of mind. In other words Maserati exists, but in a galaxy far, far away from the real luxury-performance retail action. Will the brand be able to live up to Marchionne’s typically over-aggressive projections? Not a chance. The AE Brand Image Meter? A glimpse of warmth, but only for those who still give a shit.
Mazda. Even though Mazda builds some notably outstanding cars, the brand always seems to be scrambling for respectability. Will it ever be more than it is right now, the scrappy purveyor of interesting cars if you would just take the time to look, and a media fanboy favorite? I seriously doubt it. But now that it’s about to pirouette off a cliff in its pursuit of elevated legitimacy, what are the Mazda overlords thinking? Sometimes big league brand image wrangling involves knowing what the brand isn’t. If you’re into the brand, it’s hot. For most of the rest of the automotive world it’s - did you see the Warriors game last night?
McLaren. This exotic English sports car micro-manufacturer keeps pouring on the credibility by building formidable high-performance machines that supersede the one before. And even though Ferrari may dismiss McLaren as a legitimate threat to its perpetual dominance of the hyper-exotic car market, the British supercar maker boasting the legacy of one of racing’s true legends keeps making serious inroads into Ferrari’s turf. I wouldn’t bet against McLaren, because the entire organization is focused on delivering excellence. And they don’t have a Marchionne to deal with, which is even more of an advantage.
Mercedes-Benz. As I’ve said countless times before, when Mercedes is “on” – see the magnificent new S-Class Coupe and the Mercedes-AMG GT, for instance – they build absolutely glorious machines that live up to one of the great automotive legacies in the world. When they’re off, well, they can stink up the joint like no other. Part of the problem is the fact that Daimler is forced to stretch out its model lineup because it’s trying to fight a brutally competitive auto world without the resources of the other auto manufacturer conglomerates. But the majority of the problem lies in previous piss-poor marketing and advertising strategies that have deeply damaged the brand. The Mercedes-Benz brand is in perpetual turmoil, and that’s not likely to change anytime soon.
Mini. The brand that was initially successful beyond all expectations has now fallen to earth with a thud. The powers that be at Mini have learned a very painful lesson, and that is that not every niche product idea they come up with is brilliant. I know it’s a bitter pill to swallow for most car executives, especially since they’re constantly reminded of their brilliance by hordes of bootlicking minions looking for their next promotion, but for Mini executives it had to be a humiliating blow. Mini exists in its own little world, which seems to be shrinking by the day.
Nissan. This company has slowly but surely become a mainstream force in the U.S. market despite flying almost completely under the radar. And I can’t for the life of me understand why. Is it great products? No. In fact they’re mediocre and for the most part, hideous to look at. I mean, let’s face it, Nissan is building some seriously ugly looking vehicles. Is it brilliant marketing? Are you kidding? Nissan marketing is a dismal exercise in futility, and that’s on a good day. So what is it, exactly? The only rational reason – and I am paraphrasing a hoary adage by H. L. Mencken here – is that no one ever went broke underestimating the intelligence of the American public. As in, mediocrity, when it comes to automobiles, is bliss for most consumers, because at the end of the day too many of them don’t understand the difference and couldn't be bothered to care. Confounding and tragic, but there you have it. And despite Carlos Ghosn’s promises of global dominance, nothing has changed to alter my assessment. (Can’t auto CEOs just be content with doing well without veering into talk about dominating the market? Ha! What was I thinking?) For those who revel in abject mediocrity, Nissan is just the ticket.
Porsche. No automotive company is better at executing a vision for its brand and staying relentlessly focused to the task at hand than Porsche. The company’s mission is to build the most enticing enthusiast machines they can muster, and in the process of doing so it has made Porsche the most desirable automotive brand in the world and one of the top performing brands on the AE Brand Image Meter. Every time I think Porsche has lost it with a new model, they just keep digging deep to reestablish the brand. Thankfully, even Porsche’s savvy marketing operatives are acutely aware that this roll won’t last indefinitely without consistent efforts at shoring up the brand’s legacy. At times arrogant as it goes about marketing its brilliant array of vehicles, Porsche nonetheless delivers on its brand promise repeatedly and with unwavering consistency. The powers that be at the company know that the profitability from selling SUVs is a blessing, and that it gives Porsche the luxury to create ever more desirable sports cars and compete in major league races around the world. But it comes with a heavy cost too. And Porsche operatives understand that they have to fight and claw to maintain their grip on the soul of the company. At least Porsche understands the task at hand. That’s more than most other companies can muster.
Ram Trucks. As I've said repeatedly, crafting a brand image is one of the most challenging tasks in this business. The True Believers out in Auburn Hills know trucks, and they're building a first-class pickup truck. But there's more to it than that. Not only are they executing their trucks almost flawlessly in terms of design, engineering and features, they've managed to hit it out of the park when it comes to image wrangling. It doesn’t hurt that FCA marketers are putting more cash on the hood than a down payment on a small house, but who’s counting? The only question remaining is which manufacturer will scarf up this brand when Sergio has his fire sale.
Rolls Royce. Nothing new here. Old School before Old School was even remotely cool again, Rolls Royce is still firmly planted in its own little brand world – especially since its rejuvenation due to BMW ownership and the debut of the iconic Phantom followed by the Ghost, the majestic Wraith and the seductive Dawn. And what a wonderful, splendiferous world it is. The Rolls-Royce brand Image is impeccable and smokin’ hot, in a sexy-flirty Helen Mirren kind of way.
Subaru. The most successful brand that no one thinks about (except for its rabid owners), Subaru has attracted loyal followers by emphasizing function over fantasy, and detailed execution over smoke-and-mirror gimmickry. More important, unlike some other automotive entities we know, Subaru marketers understand what the brand is and what it isn’t, and because of this and its focused consistency, it has been rewarded with intense brand loyalty. Kudos to the Subaru marketers, because they clearly understand who its customers are and what the brand means to people. And this is no small feat, which is why Subaru has ascended to the top tier on the AE Brand Image Meter.
Tesla. Nothing new here, either. Blue-sky thinking, old-time religion, and enough smoke and mirrors to last this industry a frickin’ lifetime, Elon Musk is a huge success, dammit, and don’t you dare forget it. Tesla is the car built for politicians in Washington and Northern California, and EcoSwells needing even more validation for who they think they are. Remarkably enough, Tesla is still riding a generously positive wave, even though it doesn’t make any money to speak of, thanks to the denizens of Wall Street who have gleefully written off the domestic automobile industry as an expendable part of this nation’s past. To the green intelligentsia, Tesla is still The White-Hot Future. For the rest of us, well, it’s a great deal less.
Toyota. Toyota is back with a renewed sense that it can do whatever it wants whenever it wants to. Why? It is armed with the richest war chest in this business by far (it dwarfs the other top companies combined), which allows the company the wherewithal to pursue anything it wants to do, even though it is whining about the recent hit it has taken to its profits. Toyota’s resilience and success in the market are proof positive that there are legions of Toyota buyers out there who relish the opportunity to own a blandtastic appliance that blends into the woodwork, no matter how much Akio Toyoda tries to juice things up. For Toyota loyalists the brand is a white-hot bowl of piping hot oatmeal. For everyone else it’s what they used to drive before they drifted off to Honda, Hyundai, Kia or other automotive parts unknown.
Volvo. This car company has juiced its product focus to such an extent that it has become a force to be reckoned with again. Volvo used to be the brand for people who questioned why they even bothered to own a car in the first place. Not any more. Now, Volvo is the beautifully executed smart choice.
VW. After the serious financial hit and image headache from the Diesel cheating scandal, the VW Group and the VW brand is on the rebound. Despite having to shell out billions to satisfy the legal requirements of the settlements with the various entities due piles of cold hard cash, VW is still generating serious profits, almost shockingly so, in fact. In the U.S. the VW brand never really suffered permanent damage to its image because Diesel loyalists loved their cars and still do. It’s easy to see why people love the VW brand because it provides an interesting alternative to the American, Japanese and Korean brands, while adhering to the basic values of overall efficiency with a fun-to-drive component that still resonates with consumers. It doesn’t hurt that VW offers two of the best enthusiast cars in the market in the GTI and the R, either. And it’s not going to hurt at all when VW dealers start getting the new Atlas SUV in stock, which is going to fly off of the lots like free beer. The VW brand is alive and well. Hopefully, now that the company has been severely chastened, it will seize this golden opportunity to do even better.
As I’ve said previously, if this stuff were easy, everyone would have 30 percent market share and the streets in auto centers around the world would be paved with platinum. And when you listen to CEOs like Carlos and Sergio long enough, you get the idea that is exactly what they expect. But this just in: It doesn’t work that way, and when you have multiple manufacturers clamoring for the same slice of the pie and making the same sort of promises, something has to give, which means brand image becomes even more crucial.
Automakers who are in search of a brand image and understand the power that comes with having a solid one garner the tiniest bit of slack from me, because at least they know what they want and where they need to go. But the automakers that have a brand image and don’t have the first clue as to what to do with it, or worse - have squandered a great brand legacy because of cluelessness, ineptitude, or both - draw zero sympathy from me.
It’s duly noted that the companies that are overflowing with True Believers and that focus every waking moment on the integrity and the fundamental desirability of the product are doing very well right now in the brand image department, and they will continue to do so. (There are exceptions, of course, as inept marketing has a tendency to overwhelm great products. See the aforementioned Chevrolet example.)
The rest? Well, for them flailing and floundering about seems to be standard operating procedure, if not a full-time career trajectory. And living in a world of reduced expectations is oddly comforting to them.
Brand image is a fleeting thing, except for those brand marketers that understand how they got it, what it took to get it to that point, and what it will take to keep it.
And that’s the High-Octane Truth for this week.
STILL INCENDIARY AFTER ALL THESE YEARS.
30 May 2017 at 12:46pm
By Peter M. DeLorenzo
Detroit. Longtime readers have heard this story before, so I’m not going to regurgitate all of it. How I grew up in a serious car family rooted in the heyday of Detroit, with a special emphasis on anything and everything to do with GM; how I hammered away in my automotive advertising/marketing career for over two decades, trying to make sense and make a difference in an environment - and a town - that was rapidly descending into a giant sinkhole of irrelevance; how I came up with the idea for a car magazine called “Autoextremist” in 1986 that wouldn’t have any advertising so we could say exactly what needed to be said about the cars and the business of designing, engineering, building and marketing cars; and how I had to shelve that idea because I was still toiling away in my ad career. And how, disgusted with what car advertising had become – both with the clients and ad agency side of the equation – and tired of watching “Detroit” wallow in its own serial incompetence, I resurrected that car magazine idea thirteen years later and honed and polished it for the Internet.
The result? Autoextremist.com debuted on June 1, 1999, as a weekly Internet magazine featuring my perspectives, insights and commentaries on all things automotive: specifically the people, the products, the marketing, and all of the good, the bad and the ugly that entailed.
Working under a pseudonym while my ad career was winding down, my “Rants” in Autoextremist.com blew the lid off of the oppressively staid auto business as practiced around these parts – as well as the rote press release regurgitation that passed for news coverage back then – and changed the way the business was covered, talked about and assessed.
My first two columns – “White Boy Culture,” which excoriated what the Detroit mindset had become and why it was contributing to the industry’s descent into madness; and “The Sad Saga of Saturn,” which blew the lid off of the fiefdoms and the egomaniacal game playing that dominated GM’s rigidly obsolete culture and which contributed to the demise of the once-promising Saturn division – set the tone for what was to follow.
As I said in my book The United State of Toyota, Autoextremist wasn’t for everybody and needless to say, it wasn’t for the faint of heart: "From Day One, the real essence of Autoextremist.com was the fact that I said what others were merely thinking, or would only discuss in 'deep background' and in 'off-the-record' conversations. It was never a 'touchy-feely' publication that coddled its readers and genuflected at the feet of the car companies. There's plenty of pabulum in this world. And if becoming a lifetime member of the 'Milquetoast & Crumpets Afternoon Tea & Automobile Society,' while sitting around the fire chatting about Renault Dauphines floats your boat, there are plenty of other automobile publications out there to satisfy your primordial need for blandness. But that's not Autoextremist.”
I continued: “Born out of a defiance and frustration with the status quo that I believed was stifling creativity and squeezing the very life out of the automobile business - particularly as practiced here in the Motor City - and then fueled by my passion and vision for how great the business could become again and what was necessary in order for it to get there, Autoextremist.com was not only a labor of love for me personally - it became an influential force to be reckoned with in this industry with an impact far beyond my most vivid imagination."
And today, on the eighteenth anniversary of this publication, I am immensely proud of Autoextremist.com and what we’ve accomplished with it. And I’m even more proud to say that, despite countless imitators, Autoextremist.com is still the force to be reckoned with and still the destination for the kind of commentary and insight about this business that simply can’t be found anywhere else.
And I’m also proud to say that Autoextremist.com is still The Incendiary Voice in this business. We are constantly regaled with stories from deep within the car companies about how my “Rants” and “On The Table” items reverberate through the hallowed executive halls like wildfire, and that there’s a race by PR minions to see what we’ve posted before the executives within these companies see it, so that some sort of spin can be initiated. Except that there’s no amount of “spin” that can blunt the impact of The Bare-Knuckled, Unvarnished, High-Octane Truth.
The common refrain we hear is, “It’s scary. It’s like he’s right here with us and he knows what we’re thinking before we even think it.” Or something similar to that. Much gnashing of teeth and stomping of feet usually ensues, as well. The reason for this is that I have an uncanny knack for knowing the automotive mindset cold, inside and out. I know what these executives are thinking and how they go about coming to the conclusions they do, even before they do, which allows me to expose the poseurs, the spineless weasels, the unmitigated hacks and, of course, the carpetbagging mercenaries. I also have a legendarily sensitive Bullshit Detector, which comes in handy each and every day.
My columns are not only regularly quoted from in meetings; my perspectives affect corporate PR strategies and the direction of entire marketing/advertising campaigns. I would be lying if I said all of this isn’t immensely gratifying, because it is. When we started this publication one of my stated goals was to “influence the influencers” - whether it be the auto executives themselves, or the journalists covering them. And we’ve exceeded that goal.
But that doesn’t mean I’m satisfied, or ready to call a truce with the industry and shuffle off into GoAlongToGetAlongLand to write about the calming effect of bunny rabbits and rainbows and make wind chimes in my spare time. It’s funny, but when I finally put my real name on the byline of Autoextremist.com on September 21, 1999, I heard a lot of antagonistic comments implying that I’d get bored with it all soon enough, and once that happened the industry could get back to its regularly scheduled programming.
After eighteen years I can safely say that isn’t going to happen. I still have just as much fire for what this business should be as I ever did (just ask WG), and I don’t plan on phoning it in anytime soon.
I start my week at 3:00 a.m. each Monday morning and I immerse myself in this business the rest of the time because I am passionate about what I do. The writing is almost all consuming, but I wouldn’t have it any other way. In order to bring it every week like I do, you have to love it. And I do.
So Autoextremist lives on. As a matter of fact next week - our 900th issue (gulp) – one of our most eagerly anticipated columns of the year is on deck. The Autoextremist Brand Image Meter, or as we refer to it internally, “The One That Has Them Quaking In Their Boots,” is the one column that’s poured over even more feverishly than the rest, if that’s possible. Some execs will be gloating, others will be defensive and cranky, and the rest will be polishing their resumes.
As it should be.
And that’s the High-Octane Truth, eighteen years on.
THE SWIRLING MAELSTROM OVERWHELMS FORD.
22 May 2017 at 10:00am
By Peter M. DeLorenzo
Detroit. For Mark Fields, the end came swiftly. Just three years into his tenure as CEO of the Ford Motor Company he’s out, replaced by 62-year-old Jim Hackett, who was brought into the company a year ago after a lengthy career at Steelcase to run its “Smart Mobility” division, which was supposed to be a center of innovation but so far has paid zero dividends.
Up until then Hackett’s biggest claim to fame – at least around these parts – was that, in an interim role as athletic director at the University of Michigan, he went out and recruited Jim Harbaugh, so there’s that. Hackett seems to have huge favor with Bill Ford and the Ford board of directors, but beyond that, this is a giant ”we’ll see” by any measure.
Fields, an exceedingly smart and capable Ford veteran of 28 years, had an impossible task in following in the footsteps of Alan Mulally. How difficult a task was it? It would be like whoever is going to follow Bill Belichick at the New England Patriots. Mulally was so revered in Dearborn that Bill Ford retained his counsel long after he left the company.
But make no mistake: Fields was responsible for some of the most profitable years in the company’s history. Fueled by the sales juggernaut that is the Ford F-150 and armed with an array of hot-selling crossovers and SUVs, Ford churned out huge profits. But alas, that wasn’t enough for Fields.
Why? Because of the coming autonomous/ride sharing/electric revolution that is swallowing Detroit whole. The Ford Motor Company could feel the icy chill of the swirling winds blowing in from the West Coast, and like GM, started to investigate getting a foothold in Silicon Valley. In fact Bill Ford made regular trips out to The New Center of the Universe, scouring the landscape for ideas, and he spurred Fields on to step up Ford’s involvement “out there.” Which he did, with vigorous urgency.
But - and there are always giant “buts” in anything to do with Silicon Valley - they play a different game out there. Investors and digital speculators throw vast amounts of money around betting on the come, what could happen and what might happen if everything goes well, and that is totally anathema to the Detroit mindset. When Detroit throws money around returns are expected – and soon – because that’s just the way the business rolls and has rolled for more than 100 years.
So there Fields was, making deals with digital and data companies, and throwing massive amounts of dough around in Silicon Valley with results expected, well, sometime down the road. Meanwhile, the giant slowdown for the auto business had started, and even though Ford was still cranking out cars and trucks and racking up big-time sales numbers, signs were ominous that the company was losing traction in the market, and, on top of that, out billions of dollars on new technology that would be neither here nor there anytime soon.
To complicate matters exponentially, since Fields had taken over from Mulally, Ford stock had fallen 40 percent, which, by any measure, was disastrous. This didn’t make the Ford family or the board of directors happy in the least. And lest we forget, Ford is very much a family owned and run company, and if they’re not happy, someone will be assigned blame, and pay dearly.
Now, let’s be clear here, I chalk up half that percentage drop in Ford stock to Wall Street, which makes no bones about the fact that they absolutely despise Detroit and the U.S. auto industry with an unwavering passion, so much so that Wall Street is singularly responsible for running up Tesla stock to such ridiculous heights that even St. Elon himself suggested last week that it was absurd. (As I commented on twitter: “Thanks, Elon, now shut up.”)
This gets right to the heart of the matter here for Fields, for Ford and for Detroit itself. Despite the collective “Detroit” being a mainstay of the industrial fabric of this country and responsible for thousands of jobs, while providing mobility for every purse and purpose, Wall Street and to a larger degree the prevailing winds in the greater media view the U.S. auto industry as Old School and not in a good way, as in a gasping dinosaur struggling for its last breath.
Fair? No. But as I said before, Silicon Valley is The New Center of the Universe, and whatever shape the future of transportation takes – at least to those in the cheap seats boasting a modicum of analytical capability about a business they know nothing about – it will be imagined, conceived and injected with unending wonderfulness by the Titans of Silicon Valley.
So Mark Fields got caught in the unenviable position of trying to make Ford be relevant in two worlds that are 180 degrees apart. And things weren’t going well, at least not well enough to satisfy the Ford family, the board and the miscreants on Wall Street. So now he’s out, and Ford has “a nice guy” with “a different way of looking at things,” according to insiders at the helm. A giant “we’ll see” is the understatement of this or any other year.
But there’s more to this story, much more. Ford – and I’m speaking for all of “Detroit” here – simply doesn’t understand what’s going on. The difference between Detroit and Silicon Valley is that the Titans on the West Coast understand fundamentally that IT rules the frickin’ world now, while the Detroit auto companies see IT as something off “over there” that they have to get to eventually. And this attitude is absolutely killing Ford, and GM, for that matter.
This fundamental question is this: How can Ford transform itself into a “mobility company” when mobility is another word for technology, and when it comes to technology Ford is at least ten years behind the curve? Ford runs IT as a separate business unit, which is what I meant by off “over there.” In other words, the company is nowhere with this mobility thing, despite throwing money around in the tech world like a drunken sailor. And that attitude has decimated Ford and GM (I’m leaving out FCA because, after all, that company is simply a monetary play orchestrated by Marchionne for the Fiat heirs; the future of the transportation business has nothing to do with those carpetbagging mercenaries).
The ugly reality in all of this is that Detroit does not believe that we've shifted to an IT world, and that IT should be the dominant equation going forward if it wants to survive. This just in: The “Todds” (my general term for the IT hordes) have won. And unless and until Detroit gets with the program, we’re at the beginning of a long, downward spiral.
A word about Bill Ford here is merited. Bill has dreams of Ford playing a major role in mobility because his great grandfather put this country on wheels. In fact, Alan Mulally had a giant reproduction of a famous early Ford ad on the wall in his office with the provocative headline: “Opening The Highways To All Mankind.” It is a stunning ad with beautiful illustrated art, and both Alan and Bill took great meaning – and motivation – from it.
But this is a different world now, and the center of the universe isn't Detroit, and it doesn't have anything to do with Ford or GM. It's in Silicon Valley. And the monstrous war chests of cash out there humiliate anything "Detroit" can muster. I’m afraid that Bill Ford’s dreams of playing a major role in mobility are just that, dreams of a simpler time, which ultimately are going nowhere. Instead, Ford has to get real, and it is nowhere even close right now, which is a Mount Rushmore-sized bowl of Not Good.
It’s clear that we live in two worlds now, with "the makers" (Ford and GM), who have to keep building vehicles that people want and need, going up against "the dreamers" who so love what The Future of Mobility is going to be like and are so convinced that it will be wonderful, and wildly profitable. Where does Detroit fit in all of this? Whichever company of the Detroit Two manages the transition to the New Mobility the best will survive, maybe even thrive. And right now Ford is clearly behind (the slide in electric vehicle development for instance, is simply inexcusable, which just adds to the company’s woes).
So the swirling maelstrom has overwhelmed Ford, triggering a massive reshuffling of executives at the top of the company. But it's also just the beginning of a tumultuous era that threatens to overwhelm Detroit, I’m afraid.
And that’s the High-Octane Truth for this week.
The famous 1924 ad for the Ford Motor Company.
PORSCHE DIGS DEEP.
16 May 2017 at 7:20pm
By Peter M. DeLorenzo
Detroit. After writing about advertising the last couple of weeks – “Volkswagen Turns Its Lonely Eyes To… America” and “Jeep Recalculates” – it seems appropriate that I close out my trifecta of advertising columns with a perspective on what Porsche is up to of late in terms of communicating to its faithful, while at the same time attempting to draw in newcomers to the brand.
As long-term readers of this website might recall, I’ve been immersed in the aura of Porsche since the late 60s. My first encounters with the tiny German sports car maker occurred on the racetrack, when in the course of accompanying my brother to road-racing circuits all over the country with our Corvettes, I got exposed to the racing machines from Porsche.
The most memorable experience for me back in the day, which got me started on the Porsche thing, was when I was assigned the task of giving pit signals to my brother at the 12 Hours of Sebring in 1968. Though we were running a Corvette in the GT class, the cars to beat for the overall win were the factory Porsche 907 prototype sports cars - low-slung, beautifully rendered racing machines that ended up dominating the race. And while holding out the signal board and leaning over the pit wall for my brother hour after hour, those 907 Porsches screamed by flat-out, under my extended pit board, as they were actually lower than the top of the pit wall! I’ll never forget it.
And later on, after the Corvette racing days came to an end, I got exposed to the Porsche mystique on my own terms, when I went out and purchased a used 911. During the brief course of owning that car I flogged it for all it was worth. I learned to love the 911 and I came to appreciate what the brand represented, because as a company, Porsche clearly marched to a different drummer.
And back in those days to drive a 911 well was a real accomplishment, because with its rear-engine placement it required absolute focus and concentration to drive fast. And to me that was the very best thing about the 911 because unlike today’s machines (including the latest 911s in fact), you had to drive the car. It wasn’t going to do it for you and if you made a mistake there were serious consequences. It was a wonderfully addicting driving experience. I owned several different Porsches after that, but none were as memorable or impressive as that chocolate brown 911.
Over the course of my ad career, I watched as Porsche transformed itself from a tiny company that made desirable sports cars that weren’t for everyone with their quirks and eccentricities charmingly intact, to a juggernaut purveyor of glistening sports cars and supercars that were pricier by the minute. And, oh yes, SUVs too. Lots and lots of SUVs. Yes, I decried – and cried – when the Cayenne made its debut, fighting the decision every step of the way, but that ship sailed long ago. In fact, that wonderfully quirky German sports car maker now sells more SUVs than anything else, making it one of the most profitable auto companies in the world. Today, the blistering hot sales of the Cayenne and Macan SUVs generate the mind-boggling profits that allow Porsche to still build desirable sports cars and to compete at the top levels of racing around the world.
But when all is said and done, I have to ask the obvious question: With more and more new customers being exposed to Porsche, and with most of those buyers only familiar with the Macan, or the Cayenne, or even the Panamera (the company's outstanding - and huge - luxury sedan) instead of the myriad variations of the 911 and the 718 sports cars, at what point does the Porsche brand become so far removed from its original essence that it completely loses its way? And at what point does the Macan, which is seemingly de rigueur at little league games and an essential part of the suburban landscape all across the country, become what Porsche represents?
I would say that we’ve already reached that point. Yes, the hardcore Porsche faithful still exist, but they seem to be dwindling in number. The reality is that the Porsche True Believers, who cling to their air-cooled dreams, are getting lost in the suburban shuffle, and there’s not much Porsche can do about it.
Except that Porsche isn’t giving up. Porsche operatives seem to be excruciatingly aware that if they lose the True Believers completely there would be nothing left. That’s why the company is feverishly building Porsche Experience Centers in its major markets. And that’s why it competes in GT racing around the world and for overall wins at the 24 Hours of Le Mans.
Another sign that Porsche isn’t going to give up on its founding mission anytime soon is the way it communicates about the brand. The company still believes that old-school direct mail serves its purpose. What? In this digital 24/7 social media circus that we live in today, Porsche is still clinging to direct mail? Yes, and its advertising agency, Cramer-Krasselt, seems to understand the enduring power of the written word too. In fact, a direct mail brochure for the new Porsche Panamera came across my desk the other day, and in this one masterfully written manifesto the passion for the Porsche brand is reignited in a cascade of wonderful words that are worth savoring. To wit:
For us, it’s always been the age of disruption.
The status quo dies hard. After all, it has one of the most powerful forces on the planet as its ally. Fear.
Enemy of change, stealer of ambition, fear is the champion of the half-measure, the checked swing, the almost-there. It softens the hard stance, rounds the sharp edge, and dulls the shine of a new idea.
None of us can pretend to be fearless. But every day we have the chance to decide how much influence our fears deserve. Sixty-nine years ago, we decided we wouldn’t fear what the world had to say about our cars. Instead of cowering behind research numbers seeking the most pedestrian design, or worrying about countering conventional wisdom, we would simply make the cars we wanted.
Correction: We would make the cars we desired. Dreamed of, actually.
So ever since that first Porsche, the 356 roadster, our market research has been our own heart rates. Fast, good. Slow, bad. We figure if something excites us tremendously, there’ll be enough people on the planet to make a business of it. If not, then not.
It’s a liberating thing, this leaving of fear on the side of the road. And the funny thing about it is that Porsche cars are more revered, more awarded, and more victorious in competition precisely because we didn’t caution our way and temper our enthusiasm.
A car of any form should never be a compromise, a settling for something less than spine-tingling. If you agree, consider getting behind the wheel of the new Panamera. It’s not the most expected path you could take. But a little disruption can be a good thing, as long as you’re the one doing the disrupting.
Courage changes everything.
In one fell swoop, the writer of this piece has reminded both the Porsche faithful and those who are new to the brand not only what Porsche stands for and how it thinks, but why it does things differently than any other car company in the world. The copy doubles down on Porsche’s “march to a different drummer” persona in a way that is compelling and memorable. Powerful stuff.
Now, admittedly, if the car mentioned at the end of this piece was the 911, all would be right with the world, but hey, you can’t have everything.
Porsche is digging deep here. The powers that be at the company know that the profitability from selling SUVs is a blessing, and that it gives Porsche the luxury to create ever more desirable sports cars and compete in major league races around the world.
But it comes with a heavy cost too. And Porsche operatives understand that they have to fight and claw to maintain their grip on the soul of the company.
At least Porsche understands the task at hand. That’s more than most other companies can muster.
And that’s the High-Octane Truth for this week.
The Autoextremist, East Lansing, Michigan, March 1976.
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