The Latest Auto Extremist
THE DETROIT EXECUTIVE MINDSET GETS DERAILED. AGAIN.
12 Nov 2018 at 11:02am
By Peter M. DeLorenzo
Detroit. I don’t think it’s much of a secret that I really don’t care for the direction this business is going right now. The headlong rush in pursuit of “mobility” has automobile companies and suppliers burning money at a furious rate to the detriment of future product programs, and it stinks.
I listen to the rhetoric spewed by some of the leaders of these companies, and it makes me cringe, because everyone is predicting the coming autonomous Nirvana with such confidence that you just know the reality is going to be far less than predicted or imagined. And it’s going to be the ruination of some of these auto companies and suppliers, with some being forced to merge or even worse, be forced right out of existence because of the fanciful decisions being made right now.
When I see full-grown automobile companies touting their investments in scooters and electric bikes, then it’s time to start taking everything they do and say not with a grain of salt, but with an entire salt mine. This isn’t prudent thinking, this is a bunch of allegedly smart people throwing everything plus the kitchen sink up against the wall to see what sticks. These auto company honchos are running so scared at this juncture that it’s flat-out frightening to watch, because these decisions aren’t being made with clear minds, they’re being made while clouded by delusions of grandeur and thoughts of unlimited profit potential that internal and external futurists are predicting.
But the chaos doesn’t stop there. With the auto companies properly chastened by what happened in The Great Recession that wreaked havoc on the industry beginning in 2008, they’re now trying to be smart by getting out in front of the next one looming off on the horizon. This is commendable, at least on the surface, but the reality of this bunker mentality is that horrendous mistakes are being made as you read this.
GM wants to get 18,000 employees to take an early buyout and go away, and I have it on good authority that many key people in design and engineering have gotten “the nudge” to get out. The problem with this is that this may cause a brain drain that this company might never recover from. It’s fine to hire endless young techies for the coming electric/AI future – even though AI is decades away and electrification hasn’t captured the fancy of the auto buying consumer populace as of yet – but with ICEs (internal combustion engines) being around for the foreseeable future, exiting men and women who actually understand how to design and engineer machines that real people will actually want to buy for the next three decades at least is a skill that cannot be overestimated. GM management is trying to look smart in all of this, but I see a looming disaster on the horizon as they exit True Believers en masse and decimate the company by leaving a skeleton crew of inexperienced people with no mentors and no guidance to get things done.
Why is this happening? Mary Barra and Dan “I Am” Ammann want to look golden for the denizens of Wall Street, demonstrating that they indeed do have it goin’ on and that GM’s stock price should be rewarded because of it. Because after all, they’re getting way out ahead of the coming slowdown by demonstrating their fiscal acuity. But is that what’s really happening here? No, of course not. These two have also deluded themselves into thinking that with the coming Mobility Revolution, “old” automotive manufacturing skills won’t be needed because they will be replaced by new people with new skills, and in order to attract these people they will have to appear hip and relevant to a new generation of employees who will churn out digitally acceptable transportation devices with unbridled abandon.
The Valley of Silicon’s effect on the automobile companies and their executives has been a sight to behold, and in the most negative way possible too. Tired of being pummeled by the most virulent strain of Washington bureaucrats in this nation’s history, and tired of being perceived as perpetually unhip, uncool and even worse – obsolete and outdated – especially in comparison to the West Coast Digital Intelligentsia, the Detroit executive mindset (and I am including all auto companies in this description) has gone completely off of the rails.
And they’re striking back with a fury, except that in many instances that fury is misguided and marked by highly questionable decisions that will come back to bite them in the ass, hard. Yes, I am acutely aware that in our Digitized Future IT will rule and IT minions will inherit the earth, but this is getting ridiculous. The collective Detroit “mindset” has completely forgotten what its role should be and will be when it comes to the future of mobility.
Let’s not forget that the one thing that the Masters of The Universe out in the Valley of Silicon have come to respect and marvel at about “Detroit” is just how relentlessly complicated designing, engineering and manufacturing vehicles that not only work and perform with remarkable reliability but do so while complying with international safety and emissions standards really is. It is one of the most challenging business pursuits on earth, and to do it while delivering a modicum of profitability makes it all that more difficult.
I appreciate the challenges facing the auto company executives, and just how much they are determined to be part of the Future of Mobility, but to entirely lose their collective minds in the process is inexcusable.
They need to be reminded that what they do is a unique pursuit, and to create machines that are reliable, efficient, and perform well to their stated missions while being compelling to look at is a calling still worth pursuing, one that isn’t going to become obsolete anytime soon.
Memo to auto executives: Leave the eBikes and the meBikes to the others – and get back to work.
And that’s the High-Octane Truth for this week.
RUNNIN? DOWN A DREAM.
7 Nov 2018 at 9:09am
Editor's Note: Although this column ran just a short time ago, it struck such a chord with so many of you that we've decided to re-run it this week. As PMD says at the end here, "the memorable moments in life are fleeting and precious, and still worth pursuing." A hopeful sentiment that bears repeating today and every day, really. -WG
By Peter M. DeLorenzo
Detroit. Deep in the throes of another sleepless night, delirious with the knowledge that it was the early hours of Wednesday morning and I still hadn’t written a column, the urgent, searing guitar riffs of one of Mr. Petty’s signature songs took over my thoughts.
And suddenly, it was 2030.
I stepped out into the darkness, wandering around in a world that looked, well, remarkably as it looks today. I noticed a few stray autonomous vehicles doing their rote routines, with their blue LEDs indicating what they were. But they were - not surprisingly - insignificant, part of the thrum of a new reality, but only a bit part.
And as the darkness lightened slightly, I started to see the ebb and flow of traffic on Woodward Avenue. Some avant-garde designs were noticeable - aero shapes punctuated by their wildly diverse lighting systems - but they were clearly full-zoot luxury machines. Other cars were decidedly less adventurous, a mix of small to medium sized conveyances that really didn’t look all that much different from today. And yes, the traffic flow was dominated by SUV-like vehicles still, the American consumer having long ago abandoned any thought of going back to a typical passenger car.
The sounds were diverse too. A mix of BEV whine, hybrids and yes, full-on ICE machines as well. It was obvious that the prognostications of a complete transition to BEVs were dead wrong. The “grand transformation” was clearly a work in progress, with scores of people happily clinging to their piston-powered vehicles for two reasons: cost and the freedom of movement with no limitations. I did notice that as I walked past the local Speedway gas station/convenience store, a row of quick charging stations for BEVs had been added. They were empty now, but the gas pumps were already busy.
I found myself back at my computer and I began to peruse some of the stories. The “C” of FCA had been bought out eight years ago, so Jeep and Ram Truck were now part of the Hyundai Group, with the Italians keeping control of Alfa Romeo, Ferrari, Fiat and Maserati.
The Toyota conglomerate now included Honda and Mazda - as completely separate entities - as well as Subaru. And Lexus survived as a fully-electric brand after Toyota bought out the assets of Tesla, which had gone bankrupt eleven years earlier. Peugeot-Citroën had taken over Renault and solidified into one company, with Nissan being absorbed and rebranded as Datsun worldwide, Infiniti having been discontinued.
Daimler and BMW had entered into a joint operating agreement; both Mercedes and BMW retained product independence in the new German company and were joined by Aston Martin, which finally ran out of time and money trying to keep its luxury brand afloat.
The VW Group long ago established itself as the largest automotive conglomerate in the world. The news? Its working agreement with the Ford Motor Company had evolved into a full takeover, as Ford’s restructuring was stalled by its perpetually late product cadence, ineffectual leadership and having pissed away billions trying to become a mobility company. And for the first time in its history Ford was no longer controlled by the Ford family, although the family still maintained a significant - but notably reduced - presence in terms of stock and influence.
And what of GM? Dan Ammann had succeeded Mary Barra, with 99 percent of the company’s profitability originating in China. The Buick, Cadillac, Chevrolet and GMC divisions remained, with Hummer having been resurrected from the scrap heap and brought back to prominence. Those brands were now joined by Jaguar and Land Rover, as GM became part of the Tata conglomerate in 2025.
The most amazing thing I discovered in my future dream was that all of the hundreds of billions of dollars spent on the development of autonomous vehicles had turned out to be the biggest financial disaster - this side of The Great Recession - in automotive history. The focus on autonomous conveyances and the promise of a Utopian future of no-involvement ride sharing and rent-by-the-minute usage had devolved into lawyered-up tech companies fighting over a few big municipal fleets, contracts with the U. S. Post Office and very narrowly-focused utilization for the elderly. The Masters from The Valley of Silicon were incredulous that consumers just didn’t buy into their all-encompassing brilliance.
The wholesale consumer acceptance of mass usage rental vehicles turned out to be a mirage, as real people with real lives convincingly reminded the brainiacs that the reality of mass ride sharing just doesn’t work in the real world, where the comings and goings of an average family will never fit into a perfect little autonomous box.
The brightening sky was now getting dark again, as storm clouds rolled in from the west. I went out and fired up The Beast one more time, just to remind myself that the memorable moments in life are fleeting and precious, and still worth pursuing.
And then I woke up and began writing...
I’ll leave it to Mr. Petty to close this one out:
I rolled on as the sky grew dark
I put the pedal down to make some time
There’s something good waitin’ down this road
I’m pickin’ up whatever’s mine
I'm runnin' down a dream
That never would've come to me
Workin' on a mystery, goin' wherever it leads
Runnin' down a dream
And that’s the High-Octane Truth for this week.
PERPETUALLY LATE TO THE PARTY.
29 Oct 2018 at 10:40am
By Peter M. DeLorenzo
Detroit. I’ve often wondered over the years about automotive marketers: how they got there, where their sensibilities about the world originated and how their various educational experiences played a role in their thinking. There are countless dimensions to their stories, and I’ve had a lot of time to think about this since I first got involved in automotive advertising and marketing on the agency side way back when.
I have encountered a kaleidoscope of marketing types over the years. There are the ill-equipped and the overmatched who are thrust into crucial marketing roles due to an arcane philosophy of executive “rounding,” something that has plagued the automotive marketing pursuit with a particularly virulent strain of mediocrity. I distinctly remember a Dodge client (who shall remain nameless because his incompetence was only surpassed by his malicious stupidity) who announced in his first meeting with our agency (BBDO), “I know what good advertising is; I watch a lot of TV.”
This man had just been handed the keys to the multi-million-dollar Dodge advertising budget for car, truck and dealer advertising for no rational reason whatsoever other than his bosses had decided that it was time to give him a go at it. I knew at that very moment that this was going to be an “up at dawn, pride swallowing siege” as Cameron Crowe so eloquently put it in “Jerry Maguire.” It proved to be even worse than that.
There were others in a rogue’s gallery of serial marketing incompetence over the years as I traversed the advertising landscape. GM was notoriously bad, with clients on Pontiac (in the early 80s) and Chevrolet (in the 90s) that boasted a relentlessly ugly combination of incompetence and arrogance, which was unfathomable given those divisions’ excruciating pirouette into the Abyss. Yes, we were able to deliver some good work in spite of it all, but nevertheless, clients were too often obstacles to creativity than anything else. I guess it shouldn’t have been a surprise after all, especially when the executives in question started out their days with the mantra: “What do I have to do to cover my ass today?”
Nissan was its own weirdness altogether. I joined their agency (William Esty in New York, with a satellite office in L.A.) just after the brainiacs at Nissan headquarters in Japan decided to shift the name “Datsun” to Nissan, one of the dumbest moves in the history of automotive marketing. Datsun went from “We Are Driven” – one of the most memorable automotive ad themes of all time – to… nothing even remotely memorable for Nissan overnight. This was all compounded by the fact that the Americans in marketing based at headquarters in Carson, California, were saddled with two anvils hanging off of their necks. The first was the same CYA mentality that ran rampant through the business (after all, most of them were ex-Detroiters), and the fact that there was a “shadow” group of Japanese executives who undermined their every move. It was a dead-air circus with no redeeming value whatsoever, but I will admit that the people I worked with were some of the best and we had so much fun it almost made it worthwhile. Almost.
Over the years, I also encountered marketers on my accounts who were smart, on point and dedicated to advancing their brands in the most creative ways possible. These people were fun to work with because none of the usual bullshit got in the way. They were receptive to ideas and were willing to fight their bosses for what they believed in. And great work was the result, even if it was often fleeting in the “what have you done for me lately?” world of automotive marketing.
And, remarkably enough, after years on the agency side and years trying to help clients do better and get better at marketing while writing for this publication, it’s depressing to report that not a damn thing has fundamentally changed. Oh, sure, there are new digital “tools” to exploit, but make no mistake – the kaleidoscope of clients involved in marketing runs the gamut from flat-out incompetence to occasional flashes of brilliance. In other words, same as it ever was.
The latest example of this is the “discovery” by American automakers – particularly GM and Ford – that retaining and nurturing the customers they have has become a very big deal, according to Automotive News. The realization that it is far cheaper to retain existing customers than it is going after new ones is becoming the revelation of the business, at least for this month, so both Ford and GM are cranking up new owner retention programs.
That this is some sort of revelation for these two domestic automakers – and their dealers – is particularly worrisome, as in, where the hell have they been? Have they been living under a rock for the last several decades, or what?
What am I thinking? When it comes to marketing as practiced by GM and Ford that question answers itself. In fact, they have been living under a rock not to have seen how car companies like BMW, Mercedes-Benz, Porsche and VW have aggressively nurtured their buyers with early turn-in lease incentives, and buyer loyalty programs and such. These car companies have been out front of this for years and it has paid off handsomely for them.
So now Detroit is just realizing this? It says all you need to know as to why Ford and GM have perpetual marketing problems. They’re late to the party, late to the realization, late to just about everything.
Here’s what Jim “I’m a genius, just ask me” Farley, Ford’s self-appointed all-knowing – and all-tedious –marketing guru told Automotive News: "When we did all the data analytics, it became really clear: A loyal owner is so much easier for us to do business with than trying to get a customer from someone else. It was a big 'aha' moment for us."
Really? A big “aha” moment? How about an a-ha-ha moment if you’re one of the import marketers reading about this? As in, WTF? have you guys been doing since oh, the 1980s? I would say Farley qualifies as the new Master of the Obvious, but that would actually mean that he is “master” of something, which, when he’s Ford’s reigning King of Nothing, really doesn’t fly. (The drums of negativity from inside the halls in Dearborn are beating loudly about Ford’s marketing guru, and I’m just wondering how much longer he is going to be allowed to run amuck and unimpeded before someone with clout suggests that he is not in any way, shape or form, The Answer. Farley’s charm offensive isn’t really working internally, and no one is really buying it. But Ford is s-l-o-w to act about everything, so I am dismayed but not surprised that he continues to run wild, accountable to exactly no one.)
Am I shocked by all of this? Not at all. Automotive marketing as practiced around here rarely leads. It is a reactive, hackneyed, mishmash of recycled ideas marked by obvious and predictably mundane choices. Yes, there are flashes of creativity and even moments of fleeting brilliance, but it is never sustained, and it never becomes standard operating procedure. Why? The “system” just won’t allow it because these companies are only capable of understanding the power of excellent marketing after the fact, or when someone else does it first, which is the quintessential bowl of Not Good.
And that’s the High-Octane Truth for this week.
FORD?S DR. FEELGOOD MOMENT.
22 Oct 2018 at 8:22am
By Peter M. DeLorenzo
Detroit. If you were watching football this weekend you had to see at least some of Ford’s new Big Bang advertising campaign on television, which revolves around the theme “Built Ford Proud.” Part internal rallying cry, and part reaffirmation of what Ford is all about and has always been about, this new campaign, by the ad agency Wieden + Kennedy out in Portlandia, is exactly the kind of campaign that resonates with executives, dealers and hopefully, Ford customers.
It’s all about the fact that talk is cheap and that when it comes time to build the products that are needed now and in the future, Ford will be there, just as it has been for the last 115 years. The eminently watchable and likable Bryan Cranston is the presenting spokesperson in the first spots (you can watch the lead spot here -WG), and he comes off well, especially in the very last moment when he’s driving in an F-150 Raptor and says, “So let the other guys keep dreaming about the future, we’ll be the ones building it.”
The campaign is very interesting, for a number of reasons. First of all, Ford has been getting relentlessly hammered by Wall Street and industry analysts ever since Bill Ford Jr. announced that Jim Hackett would be the new CEO. Hackett, by all accounts personable and whip smart, was either an inspired choice or a puzzling one because of his lack auto industry experience, depending how you looked at it. And his performance on analyst calls and meetings didn’t exactly set that cynical world on fire. Why? Because his professorial talks seem to center on platitudes and culture reimagination – two things direly anathema to the Justice League of Super Bean Counters – and the lingering impression was and still is one of puzzlement, especially when analysts wanted to know what was happening at Ford that was worth talking about.
Lately, things have changed on a couple of fronts, as Hackett has upped the ante describing upcoming global workforce reductions and how the product cadence – Ford’s perennial problem – is coming together, but the stock has tanked, and skepticism remains high. So, this new ad campaign is designed partly to mollify the negativity on Wall Street, if that’s possible.
Secondly, Ford has been dancing about its “connected cities” vision – one of Hackett’s favorite topics – suggesting that no matter what happens in the future, Ford will be a part of it. Ford has had its toes in two camps – building what’s needed right now and trying to conceptualize what will be happening in the future – for a long time now, just like most other global automakers. I will say that when this idea is featured in the spot it comes off flat and as a throwaway, what with all the talk of brawny building going on in the rest of the spot. Ford is about to announce major linkups with another manufacturer and new ventures with tech companies, so the company is determined to be part of whatever the future holds, but this new ad campaign is clearly about right now and the next four years from now in terms of new product that’s coming, because that’s going to make or break the company’s bacon.
But make no mistake, this new campaign is as much an internal rallying cry that plays well at dealer conventions and in executive meetings in Dearborn as anything else. Dealer meetings remain one of the strangest phenomena in the car business, when dealers from all over the country are herded over to Las Vegas to be entertained and, in this case, be reminded why “we” (Ford and its dealers) are there in the first place. There’s talk of business strategy and product, and executives get up and make promises about the future whether they really know what’s going to happen or not, and from all reports the new ad campaign went over like gangbusters.
And why wouldn’t it? It is exactly what dealers wanted – and Ford makes no bones about the fact that the top dealers had input into it (as if I couldn’t tell). It’s a chest-beating, “We’re Ford and You’re Not” kind of spot calculated to make everyone feel good, and remind them that if Ford and its dealers stay true to who they are and what they believe in and what they do, then that F-150 gravy train – along with other new products (e.g., the Bronco) coming – will never stop.
Finally, this campaign was calculated to resonate with current Ford customers, too, and that is no small thing. Auto manufacturers around the globe are in a hot war to keep the customers they have and not lose them to competitors. And this campaign goes after loyal Ford customers with a ball-peen hammer. I don’t doubt that they will love it.
But whether or not it attracts new customers to Ford is another thing altogether, that’s the giant “we’ll see” that will have to play out. At any rate, kudos to Wieden + Kennedy for this excellent a la carte work (this was a one-shot campaign; BBDO will assume the lead role on the Ford account soon). It’s calculated to be sure, and it plays right into the needy mindsets of executives down in Dearborn who are just craving for a reason to feel good about themselves, but given the parameters, it works. I can almost hear the huzzahs shouted from the rooftops from Dearborn carried far and wide by the chilly winds of fall, as in, “They’re finally telling our story!”
Oh, and one more thing, the use of an instrumental version of “Paint It, Black” by The Rolling Stones in the lead spot was an interesting choice. I hope it is a sly reference to Henry Ford’s penchant for offering any color you wanted back in the day as long as it was black, because it is one of the darkest tracks the Stones ever recorded. As I said, interesting.
And that’s the High-Octane Truth for this week.
Editor's Note: There's more perspective about Ford's new ad campaign in this week's "On The Table." -WG
THINKIN? BOUT THE TIMES I DROVE IN MY CAR, PART I.
17 Oct 2018 at 6:38am
By Peter M. DeLorenzo
Detroit. I won’t deny that this is a very melancholy week here at AE, what with the passing of our friend John Thawley (please see this week’s Fumes -WG), so, it’s all I can do to muster up the energy to write my column. But it’s 3:00 a.m., so often my normal writing time, and it’s time to get it into gear.
This business is so dominated by betting on the come of the autonomous vehicle explosion, artificial intelligence and a far-off distant point of transportation nirvana, that I’m afraid this industry – and its new Valley of Silicon players and associated hangers-on – have completely lost the plot. Yes, I know, this is nothing exactly new from me, but it bears repeating. I am going to set that aside, however, since this is a drum that will need beating for years to come.
Today I'd rather write about what got us here in the first place. I’m talking about our collective experiences with cars and the road that are all different and individually significant, but all special in their own way. The people you were with, the places you experienced along the way, and the fleeting moments in time that are indelibly seared in our memories. And they’re simply irreplaceable.
As you might imagine, I have a few car stories. I try to dribble them out now and again – people never get tired of my Bill Mitchell columns, for instance – just to keep things interesting, but today I will offer up a few more glimpses of what has amounted to be a pretty special car life.
It was late March 1966, and my brother Tony was in his last year at the University of Notre Dame. He and a friend – Gary Kohs – and others had organized the third edition of a sports car show on campus for the first three days of April. This “Sports Car Spectacular” as it was called, turned out to be spectacular, indeed.
Because of my dad’s heavy-duty contacts throughout the industry, this little car show was a very big deal. All the manufacturers weighed-in: Ford sent Jim Clark’s 1965 Indianapolis 500-winning Lotus-Ford and several hot production and racing cars from its “Total Performance” marketing era, including one of Fred Lorenzen's cars. Chrysler was represented, too, with a plethora of hot production Hemis and a full-on NASCAR stocker from Richard Petty. But that wasn’t all, because besides several of its current Styling concepts like the Corvette Mako Shark I and II and Monza GT and SS, what GM brought to the show was a shocker and is still talked about to this day.
I will get to that in a moment, but it’s worth talking about how we traveled down to South Bend from Birmingham, Michigan, the day before the show. A remarkable collection of cars was poised in my parent’s driveway for the trip down to the Notre Dame campus, because they were going to be added to the show once we got down there. There was a bright red 1965 289 Shelby Cobra and a 1965 Shelby GT350 Mustang (white with blue stripes) borrowed from Ford. And then there was a Nassau Blue 1965 Chevrolet Corvette Sting Ray roadster with a removable top and white interior, complete with a 396 cu. in. V8, bulging hood and side pipes.
This was no ordinary Corvette, however. This car was specially built for Ed Cole (one of GM’s legendary engineers who developed the small block V8, among a thousand other brilliant accomplishments) to give to his wife, Dolly. As I’ve said many times before, many of the legends of GM’s heyday were family friends we hung out with, it was just the way it was back in the day. Dolly was a memorable, fiery blonde from Texas with a razor-sharp wit who loved to drive her “Bluebird” as she called her special Corvette; and she didn’t mind letting my brother borrow it now and again. And this was one of those times.
Our Horsepower Convoy left at 4:00 a.m. with two additional chase cars (including a 396 Impala). As quiet as we meant to be, it was damn-near impossible as the Cobra, GT350 Mustang and Corvette woke the neighborhood and rumbled out into the darkness. Tony was in the “Bluebird” followed by the Cobra, and I was riding shotgun with my brother’s college roommate in the GT350. The ride was memorable in that it rained most of the time and the rawness of the GT350 - and the wonderful noise - made it even more interesting. And visibility was challenging, to put it mildly, as the wipers were a mere suggestion in the heavier bits of rain we encountered. It didn’t matter, it was a flat-out blast. I mean, how often do you get to be in a convoy of cars like that?
We had some dry road moments on the way to South Bend, where we were able to hammer the cars at will, but there were moments when we had to cool it, too, as the cops took great interest in our little convoy at times. But we made it just fine, with no tickets, which we rightly assessed was a notable achievement.
Not long after we arrived, a GM transporter showed up. Zora Arkus-Duntov had called Tony and said that he’d be sending “something special” down to the show, and he wasn’t kidding. After the back doors were opened and the ramps installed, out comes a silver metallic blue Corvette Grand Sport roadster. Not only were the Grand Sports not supposed to exist after one of GM’s annoying “no more racing” edicts, this roadster had clearly just been finished and refined down to the last detail. It was simply stunning to behold. The transporter driver fired it up and drove it into position on the show floor, and right then and there, that little “Sports Car Spectacular” became legendary. All for just a $.75 admission fee too.
(One other side note: there was a Griffith Ford on display at the show that had been painstakingly hand-painted in a Tartan Plaid. Remember, no “wraps” back then. We all agreed that whoever painted it went crazy soon after.)
The road trip back was memorable for another reason. As some of you out there may have experienced along the way, when you rode in a Cobra back then you could smell the burnt rubber from the soles of your tennis shoes because the floor got so blistering hot. That wasn't all. The Cobra developed a pinpoint fuel line leak under the car that would deposit wisps of fuel on the exhaust pipe about every 20 minutes, which would then flare up with a brief flash while we were driving. Needless to say, that wasn’t good, but we decided to press on and made it back okay.
What does it all mean? As I said, our individual and collective experiences with cars and being on the road are seared in our memories and are irreplaceable. Where we’ve been has everything to do with who we are. This nation was transformed with a wandering spirit that allowed us to roam for the sheer hell of it. And our culture was and is still defined by it.
I’m afraid if we lose that piece of who we are, we will lose a large part of the soul of this nation. Our machines may change but our need to wander never will. That’s why this headlong rush to AV and AI leaves me cold. It may have its place in extremely limited applications in select urban centers, but any expectation that it will grow to be more than that is a dead end.
As for the title of this week’s column, it’s an homage to the memorable Eric Clapton/George Harrison composition “Badge,” as performed by Cream.
And that’s the High-Octane Truth for this week.
(Photo by Robert O. Craig)
Editor-in-Chief's Note: This is Corvette Grand Sport 002 restored to as it appeared at the 'Sports Car Spectacular" at Notre Dame; part of the Jim Jaeger collection.
RAGING AGAINST THE DYING OF THE LIGHT.
9 Oct 2018 at 11:27am
By Peter M. DeLorenzo
Detroit. Almost six months to the 20th Anniversary of this publication it’s clear to me that many of the issues that vexed the auto industry two decades ago are still present. Yes, they may have different terms and executives’ names attached, but remarkably enough the same three steps forward and five back dance of mediocrity continues.
And it still pisses me off just as much as it always has. I often get asked – or it’s just assumed – that I have mellowed and that I can’t possibly continue to rage against the machine like I have. But then again, “they” said the same thing when I first attached my real name to this publication in the fall of 1999 three months after its start. I distinctly remember hearing “oh, he’ll get tired of it in about six months” more than once.
Well, I didn’t. Sure, there have been times when the sheer tedium of this business drove me crazy, and the relentless cadence of a weekly deadline threatened to swallow me whole, but dedication, perseverance, focused consistency and my inner drive prevailed, and as long as I had something worthwhile to say – and people wanted to listen – I was going to continue the writing.
Having a Voice is an interesting way to go through life and being a nationally recognized columnist covering this industry can be more than a little surreal at times. One week I'm a hero and the next I'm an asshole, depending on whether people agree with me or not. It just comes with the territory and I am definitely used to it by now. Having established a reputation with this website that has only grown in stature over time comes with a sense of responsibility, because people have come to expect a certain level of quality here. And that’s definitely gratifying. But as I’ve said many times over the years, once you set that kind of a bar “phoning it in” is not – and never was – an option.
Back to being pissed off. It’s pretty close to a perpetual state for me. Why? Because when an entire industry presses the reset button each and every day and has to learn the hard way all over again, it’s more than a little disheartening. It’s infuriating, in fact. When so many (allegedly) smart people repeat the same mistakes over and over again in this business you begin to wonder about that definition of insanity.
For instance, the current swirling maelstrom that defines this business is well and truly on fire. To wit? The rumbling that higher transaction prices – a very good thing for the car companies – is running up hard against the rev limiter and that people are beginning to be priced out of the market is one of those warning signs that the industry is conveniently ignoring en masse. Understandably so, especially given the fact that the automakers are churning out $60,000 (and up) pickup trucks and buyers are scarfing them up like loss-leader compact cars from a bygone era. This is the classic Alfred E. Neuman-esque, “What, me worry?” industry mantra on display. This business is so thrilled with cranking out money-making trucks and the profits that come with them that the notion that this might not go on forever rarely if ever occurs to anyone.
But this just in: It never does. Luxury trucks are the show ponies of the American landscape. For now. But what’s going on is just not sustainable. Which car companies are preparing for that inevitability? Will the new Ranger be Ford’s hedge against the F150 money machine slowing? Maybe. But no one really knows for sure. What about Chevrolet, GMC and FCA’s Ram? What’s their plan? And what will replace the lost profitability?
Could these companies crank out decontented pickups in a hurry? Sure. But then again, the successful companies in this business tend to get out front of shifting market conditions instead of reacting to them. When the Great Slow Down hits the red-hot pickup truck market, watch out. The impact to these companies’ bottom lines could be swift and devastating.
As dire as even a minor collapse of pickup sales could be, even a bigger unknown could be the looming sink hole that defines the electric vehicle push in this industry. As readers of this website well know, this industry is lavishing billions upon billions on the Promised Land of Electrification. This land will offer consumers untold freedoms from the drudgery of Internal Combustion Engines, and we’ll all lead Shiny Happy Lives as the industry basks in a brand spanking new era of profitability.
Except it’s not going to exactly work out that way, is it? Electric vehicles are expensive, and it could be several years – if not more – before you will be able to buy a fully electric mainstream car without government incentives that makes realistic sense. Because right now electric vehicles are reserved for, if not the “1-percenters” at the very least the “10-percenters.” The upcoming new Audi E-Tron SUV is a perfect example of what I’m talking about. It comes in around $70,000 (and up). That’s luxury SUV territory and it’s the size of a Q5. Audi clearly won't be able to flip a switch and have these vehicles be an instant hit overnight.
And what about the other fully-electric vehicles from the VW Group? They’re between two and five years away, depending on the segment. The fundamental question persists: VW hasn’t announced the price of its fully-electric I.D. BUZZ van as of yet, but will it be as hip and desirable at $60,000? Even if battery development – and reduced cost – accelerate, will it still be desirable at $50,000? Those are billion-dollar questions that the entire industry will have to face with their fully electric product entries.
As I’ve said repeatedly, the marketing of electric vehicles will be one of the marketing challenges in automotive history. Getting consumers to pay $15,000 to $25,000 more – and up – for a fully electric vehicle over a traditional ICE vehicle is far from a given. And the marketers are going to struggle mightily to convince consumers that electrification is exactly what they need and want.
Some marketers are taking steps to get out in front of this push (see what Ford is doing in this week’s “On The Table” -WG), but the same assumptions – and mistakes – are bound to be made. Because automotive marketers all want the same thing: a brilliant new idea that’s absolutely proven to work. And there’s no amount of money in the world that can guarantee that, even though there are plenty of automotive marketers out there who are convinced that they can do exactly that. That stunning level of hubris never ends, in fact.
Yes, I can still find plenty of things to write about when it comes to this business. When I see the same serial incompetence, the same unbridled arrogance, and the same conviction that somehow this time it will be different and that executives are smarter than any automotive historical context, well, it’s the same as it ever was.
And with all due respect to Dylan Thomas, I don’t plan on going gentle into this or any other good night anytime soon.
And that’s the High-Octane Truth for this week.
ON CADILLAC. AGAIN.
1 Oct 2018 at 1:24pm
By Peter M. DeLorenzo
Detroit. I have been inundated by readers and others over the last few days to comment on several current news items, first and foremost being the situation at Cadillac, but also the ongoing train wreck involving Elon Musk.
Without belaboring the point, I have to say that nothing has surprised me about Musk and the Sturm und Drang associated with his egomaniacal actions of late. His twitter account has grown more bizarre by the minute, displaying his unbridled hubris to great effect, which only proved that he is no different than any other “smartest guy in the room” that came before him. Yes, Musk is brilliant and a visionary, but when he can’t run a business because his massive ego constantly gets in the way, there’s not much that can be done about it. This is going to play out like a bad “B” movie, and a lot of smart people are going to get burned and relieved of their cash. A couple of years ago, I predicted that the Model 3 and everything associated with its launch would prove to be Musk’s Waterloo, and I confidently stand by that prediction.
But even more than being asked for my opinion on “St. Elon,” I’ve been asked to comment on the goings-on at Cadillac, specifically the move of its headquarters back to Detroit. (Don’t forget that the division’s engineering, product development and design functions never left Detroit.)
Let us not forget, too, that the move to New York was an idea that originated well before Johan de Nysschen arrived at GM in the summer of 2014. To be sure, de Nysschen was given the “go/no-go” decision, and consequently (mostly) everyone bought into the idea that to understand the luxury market you had to be in a luxury market. I didn’t necessarily buy into that, of course.
As I have written in this space and in my columns many, many times over the last four years, the idea of moving the brand to New York made sense on one level in that Cadillac's intent was to become its own individual entity as a luxury brand, completely separate from GM's headquarters hard by the Detroit River. This all sounded well and good, of course, but the reality was that Cadillac executives based in New York were spending three weeks out of a typical month in Detroit, if not more. It just wasn't working. I suggested not long after the move was made that if I were running Cadillac, I would want the headquarters to be no more than 45 driving minutes from the GM Milford Proving Grounds or the GM Technical Center in Warren. It sounds like Steve Carlisle – Cadillac’s new brand president and a GM veteran – understands the ramifications of that statement.
Don’t misunderstand, the idea of putting a young, hipster marketing team in Manhattan as idea generators was a good one, but that’s not what happened. Instead, GM operatives made a very public pronouncement that this would be a key to Cadillac’s success. And now? Well, it’s just not very good, is it? A while ago I asked the following question: Instead of moving to New York, what if Cadillac had instead refurbished a warehouse space in Detroit with a historical connection to the origins of the automobile industry, and the birth of Cadillac itself? Wouldn’t they look like the mavens of hipness now?
(And Cadillac isn’t actually moving to Detroit, in case you wondered. No, instead the Cadillac divisional headquarters is being moved from Manhattan to a generic tower across from the GM Technical Center in Warren. This building actually housed Campbell-Ewald, Chevrolet's former advertising agency. It’s a nondescript, uninspiring office tower that I spent the last nine-and-one-half years of my ad career in. Believe me, it won’t make a positive statement for the brand. It’s just another faceless, characterless office tower.)
Getting back to Mr. Carlisle, what has he gotten himself into, exactly? Johan de Nysschen’s quest to remake Cadillac in Audi's image was a nonstarter from the get-go. It was a product strategy that started with the notion that Cadillac would chase the German ideal of a luxury-performance car and go from there. But it not only ignored Cadillac’s historical legacy, it emphatically stomped on it. And now Carlisle is the one tasked with leading Cadillac out of the wilderness.
In reality, the recent years for Cadillac have been exceedingly difficult. The brand lost its way, accelerated by stiff competition in the luxury segment and GM operatives becoming out of touch on almost every level. On the product front at least Cadillac has been rejuvenated by a renaissance in its design presence and bolstered by a newly invigorated engineering point of view, but that didn’t necessarily translate into dynamic retail sales, with a few notable exceptions. The runaway success of the full-size Escalade SUV powers the entire division, and crossover-crazed consumers are scarfing up the XT5, so there's that. But the ATS and CTS are dead in the water, and the technically interesting CT6 is languishing, stuck in neutral. The high-performance offerings, the ATS-V and the CTS-V – though scintillating – are outliers totally unrelated to the brand.
The glorious historical legacy of the Cadillac brand has been ignored for the most part, 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. But 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.
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. Remember it’s a legacy that has survived countless product missteps, management faux pas and false starts, yet still resonates with consumers like few other brands have throughout history. To this day you still hear people and companies say, “It’s the Cadillac of ____” to bestow a certain gravitas to a product, an instant, collective recognition that transcends all other adjectives.
This just in: Cadillac’s future success shouldn’t hinge on becoming a faux interpretation of any other luxury brand just to achieve relevance again. Cadillac still has all the tools to become a highly sought after and desired brand. It has the historical legacy, it has a treasure trove of evocative names – and some new ones too – and GM not only has the engineering chops, it has the design talent to craft a visual renaissance befitting of the brand's legacy.
Ms. Barra and Messrs. Ammann and Carlisle need to ask themselves the following hard questions: What is Cadillac? Better yet, what should Cadillac be about going forward? Then, instead of paying lip service to the brand they need to become True Believers, because the Cadillac name has resonance and power and a genuine historical legacy that could and should become the foundation for greatness again. But unless and until there is a strategic shift in Cadillac management’s thinking, the brand is destined to tread water for years to come.
Which brings me to the bottom line in this discussion. Some people have gotten the (very) wrong impression that I simply want to mire Cadillac in a nostalgia play that would be woefully irrelevant in today’s market. And that couldn’t be further from the truth. Cadillac deserves better than that. Much better.
It’s clear to me that GM operatives and marketers have simply forgotten what the true essence of Cadillac is. And what is that, exactly? The words that best describe what Cadillac should be are: Seductive. Luxurious. Powerful. Distinctive. Memorable. Right now, there is only one Cadillac that even comes close to those words and that is, of course, the Escalade.
I cannot stress enough that if Cadillac is going to return to its rightful place in the pecking order of American automobiles, then it must create products that ooze those descriptive words mentioned above without exception or excuse. Authentic vehicles worthy of the Cadillac name and reputation that exude the essence of the brand, because after all it's always about the product.
GM operatives must let Cadillac be Cadillac.
And they can start by getting back to building the Cadillac…of Cadillacs.
And that’s the High-Octane Truth for this week.
(GM Design images)
The Cadillac Ciel.
The Cadillac Elmiraj.
The Cadillac Escala.
THE SMOKE FROM A DISTANT FIRE.
18 Sep 2018 at 12:55pm
By Peter M. DeLorenzo
Detroit. As this business careens toward The Future, it’s very clear to me that the autonomous/AI transformation of this industry is a long, long way away, no matter what the zealots at the participating companies say. The black clouds gathering on the horizon are there for all to see, and the hedging has begun in earnest. Why? Because the headlong rush into autonomous vehicles is a bet on the come that few companies are going to benefit from, and the notion that an entire industry is out over its skis is quickly gaining favor.
This perspective is anathema to the companies that are throwing billions up against the wall to see what sticks toward the autonomous movement, however, because many of the top executives at these companies have convinced themselves that it looks like the wave of the future, so they desperately want to get out front of it for fear of being left behind. But the question has to be asked, out front of what exactly?
Even under the most optimistic circumstances, autonomous technology will have very limited applications. Commercial usage where repetitive tasks and routes can be exploited will be the obvious first wave of this technology, and just may be the only application for a long time to come. As for mainstream consumers, the idea that a switch will be flipped and we’ll all be blissfully transported to our myriad destinations in a stupor? Well, the term “wildly optimistic” only begins to cover it.
This march to transformational technology hasn’t reached “Fool’s Errand” status as of yet, but it is definitely mired in technology for technology’s sake, and to what end is highly questionable at this juncture. Some of the companies betting billions on autonomous technology are going to get caught out, there’s just no way of getting around it. And the companies with the wherewithal to hedge their bets and keep both feet in separate transportation disciplines – the what's now and the what's next – are the ones that will survive, because this just in: The New Frontier of automotive technology has to go through electrification first, and even our highly-touted Electric Future is filled with burgeoning problems and questions of its own.
Just this week Audi unveiled its first production all-electric vehicle, the "e-tron" SUV, which will arrive in this market next spring. (Audi’s lower-case naming regimen is so tedious at this point that we can barely stand it so we're not going to do it, but please go to “On the Table” if you want to see it. -WG)
At first blush, the E-Tron seems competent and somewhat technically sophisticated, but a passage in the press release stood out to me as a clear warning that electrification on a mass scale is going to be fraught with problems. To wit:
“For charging on the go, the e-tron will be supported by a nationwide charging network, “Powered by Electrify America.” By July 2019, this network will include nearly 500 fast-charging sites complete or under development throughout 40 states and 17 metro areas. Offering advanced charging, Electrify America’s chargers are capable of delivering up to 350kW. With the purchase of the Audi e-tron, customers will receive 1,000 kWh of charging at Electrify America sites over four years of ownership.”
Sounds all well and good, right? Not so fast. Do you realize how pathetic the reality of “nearly 500 fast-charging sites” is in this vast country? And 17 metro areas over 40 states? That’s not even a teardrop in a raging river. But to put a finer point on all of this, this fully electric Audi SUV is just the beginning of a full-on electrification onslaught from the Volkswagen Group. It plans on building around 10 million electric vehicles – 27 different models across its four group brands – based on its new modular MEB platform by the end of 2022. And remember, that’s from just one manufacturer. The others are going to weigh-in in a big way too.
To say this nation isn’t ready for this transformation to electrification is an understatement. The infrastructure just isn’t there, no matter how optimistic the projections are for charging stations coming online. For instance, have you been to a large metropolitan airport lately? Have you seen the limited number of chargers available? Can you envision a whole floor of your airport's parking structure given over to charging stations? Yeah, I didn’t think so. But then again this is just one dimension of this “mass electrification” impetus that has to be dealt with.
The other? Widespread consumer acceptance of fully-electric vehicles is another issue altogether. I’m not talking about the early adopters here, because those people don’t have to be convinced; they’ve already bought in all the way. But what about the rest of the automotive shoppers out there in ConsumerVille? What about the people who make real monthly payments on vehicles they need and/or want? Do you think the notion of fully-electric vehicles will be a slam dunk to these consumers? Think again, because if that were the case the Chevrolet Bolt would be flying off the lots as Chevrolet’s top seller just this side of the Silverado pickup. And though the Bolt is an impressive, well-engineered vehicle and is doing fairly well of late, it’s not even close to that kind of retail acceptance. (And the same goes for the VW e-Golf too.)
And I haven’t even gotten to the cost of these BEV machines. The announced prices for Audi’s new E-Tron SUV are, ahem, impressive. The E-Tron is available in three trim levels: Premium Plus ($74,800), Prestige ($81,800) and First Edition ($86,700). And remember, this is for an Audi Q5-sized SUV. And with government incentives receding into the woodwork, do you really think consumers are going to rush in to go fully-electric? Let’s just say that I am highly skeptical. The marketing and advertising of fully-electric vehicles is going to be nothing short of the biggest single challenge facing automotive marketers in the coming years.
So here we are. Before this business can get its autonomy on, it’s going to have to get its electrification on. But before it can get its electrification on, this business has to deal with the fact that the vast majority of the cars and trucks being sold over the next ten years will be traditional, ICE-powered vehicles.
Maybe those black clouds off to the horizon aren’t clouds after all. Instead, maybe it’s the smoke from a distant fire that’s threatening to consume everything in this industry’s path.
And that’s the High-Octane Truth for this week.
WELCOME TO THE LAND OF SELF-AGGRANDIZEMENT.
11 Sep 2018 at 6:05pm
By Peter M. DeLorenzo
Detroit. Wandering through the auto landscape is always good for a few laughs, a few tears and a few eye-opening revelations. That this business chews people up and spits them out is well-documented. It’s a grind that bows to no other, and that includes the Valley of Silicon too. Here, you’re only as good as your last good decision (or wild guess), or as bad as your last bad decision, except that depending on the scope of that bad decision, you could be relegated to the slag heap of forgotten sorrows in a heartbeat.
Yes, there are other businesses with colorful dimensions, but the auto business is uniquely unrelenting. While you’re working on the latest new vehicle introduction, your mind is focused on what’s happening five years from now. And as you and your colleagues assure each other that what’s coming is The Answer, in reality you don’t even have a shred of a clue if it’s going to work or not. A sure-fire “hit” can be derailed by a wildly unpredictable market, with consumer tastes shifting dramatically three years into a five-year product cycle. That’s part of the fun of this business, believe it or not. And part of the profound agony too.
It’s also a land where self-aggrandizement is not only a cottage industry, it’s a way of life. It’s where luck and calculated hype can propel an otherwise mediocre executive into the rarefied air of self-importance and exaltation. And if he or she can time it just right, they’re able to parlay their flimsy credentials and manufactured star power to the point where they get an actual fiefdom to run inside one of the companies. And once an executive arrives at that level, it takes an egregious act – usually involving blatant stupidity – to force them to relinquish their throne.
Now this is nothing new in the auto business (and it’s nothing new when it comes to corporate America either), but the auto pursuit has its own particularly warped cadence, one that consumes everyone and everything in its path.
It’s inevitable that these executives on the road to their exalted fiefdoms can get lost in the sheer wonder of it all, blinded by the indelible glow of their own light, to be exact. When they occupy a world where oversolicitous minions hang – or cringe as the case may be – on every word, it’s hard to retain perspective. In fact, it’s damn near impossible.
And this situation is most magnified in the marketing function, which seems to attract a particular strain of dysfunctional executives, those who bask in the glow of their own brilliance, whether there’s any “there” there, or not. These people are notorious micromanagers who wreak havoc on the marketing function at their respective companies, reserving special attention for the advertising. This can be a very dangerous thing, because many of these self-promoting geniuses are singularly unqualified to do so.
And to make matters worse, many of these self-aggrandizing marketing “wizards” hold sway over the Public Relations function, too, even though these serial practitioners of pomposity have no business being anywhere near the task of image wrangling. The business of image wrangling is a tough and sensitive discipline. It’s not for the faint of heart and it’s not suited to the egomaniacal ramblings of the exalted executive trolls who fancy themselves experts on all things, but inevitably these are the people who end up having the PR function report to them, even if it’s a kaleidoscope of wrong.
It’s easy to tell the auto companies who are being poorly served when it comes to their so-called marketing “leaders.” The marketing is, at best, reactionary and misguided, and at worst, tone deaf and flat-out offensive. That too much of the car advertising today comes off as being relentlessly lame, piss-poor or just plain annoying should be no surprise. When you have marketing honchos who are amateurish, ego-driven, or simply not qualified for the job, those less-than-satisfactory results are inevitable.
Think of the car advertising that resonates today. If you squint really hard you should be able to put together an assemblage of car companies that actually seem to know what they’re doing, but those would add up to fewer than the fingers on one hand.
Take Ford for instance. Other than the advertising for the F150 pickup, Ford advertising is predictable, boring and damn near unwatchable, and that means both traditional advertising avenues and the all-important digital. This company is in the midst of a “review” of its main Ford account, which has become an exercise in futility as the incumbent agency - WPP’s GTB - was written off before it even started. In fact, the term “review” shouldn’t have even been used in this case, because this was a blatant railroad job to assuage marketing guru Jim Farley’s considerable – and runaway – ego. That Farley fancies himself as the “Crown Prince” of Ford and sees himself as the heir apparent of Jim Hackett’s temporary throne is there for all to see. And it has disaster written all over it. If there’s any hope at all for Ford, cooler heads – as in Bill Ford – will prevail.
And GM is in even worse shape. Never have so many done so little with so much than the marketing “experts” at GM. In my travels around I have never heard more unsolicited negative comments about car advertising than I have for the GM divisions’ work. And why is this, you might ask? It’s simple, really. It’s because Mary Barra and Dan “I Am” Ammann don’t have a clue as to what’s important when it comes to advertising and marketing. And by deferring to Alan Batey as their in-house marketing “expert” it has predictably been a complete farce of Brobdingnagian proportions. It must make the True Believers at GM wince whenever they see one of their stellar products diminished by the advertising.
But then again, the list of auto advertising underachievers is long. Audi? Have they done one single memorable thing of late? No. BMW? Which company are they trying to be today? Your sporty car purveyor, or your SUV buddy? Mercedes-Benz? That Jekyll and Hyde company is so lost it doesn’t even know what it represents internally let alone what they want to communicate.
I could go on, but I won’t. Is there an answer to this mayhem? Yes, in fact there is. Very few of these companies have real, qualified marketing talent on their boards of directors. Start by fixing that and then hold the people responsible for marketing accountable. I think having people tapping these “geniuses” on the shoulder saying, “Excuse me, but WTF?” would go a long way toward ending the mediocrity, and it would put a serious dent in the self-aggrandizement running amuck as well.
And that’s the High-Octane Truth for this week.
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