The Latest Auto Extremist
WHAT COULD POSSIBLY GO WRONG?
11 Dec 2018 at 10:50am
By Peter M. DeLorenzo
Detroit. As the auto business turns and churns, it’s clear that we’re heading for some sort of cataclysmic denouement, when things will not be what they seem and everything we knew – or assumed – will somehow by fundamentally altered. Companies will be absorbed, merged or flat-out go out of business, and new alliances and companies will emerge positioned to power the “new” mobility to wherever it is going.
And that is the ultimate question. Where is it all going? The people who are most certain of where things are going are all involved in autonomous vehicle development; they call themselves visionaries and are smugly emboldened in their pursuit. And that’s fine, I appreciate visionaries, at least to a point. But make no mistake, there is a sinister aspect to this pursuit, and it revolves around the basic conceit of “We know what’s best for you even though you don’t have the capacity to understand it.” In case you’re puzzled by this don’t be, it’s just third-degree hubris in all of its ugliness, something the “we know what’s best for you” contingent is expert at.
As I’ve said repeatedly, autonomous vehicles will have their place in the future, but in limited applications and for specific uses. And that’s fine. But beware of the idea that AVs will be the panacea for all of our transportation problems and needs, because it’s just not going to work that way. I get the fact that the people toiling away in the AV space are steadfast in their convictions, that they truly believe that they’re the new Masters of the Universe and that the hoi polloi – aka you and me – are just too dim to understand the ramifications of their extraordinary work. But the boundless enthusiasm I see coming from the AV True Believers, combined with the massive amounts of money being thrown around, has disaster written all over it.
Legacy auto companies downloading huge sums of cash into the AV space are gambling the future of their companies on an idea bolstered by a wing and a prayer. It’s a Faustian bargain with no guarantees. There’s a stark either/or quality surrounding all of this. If they guess right, they will live to fight another day and maybe even tap into a revenue stream of gargantuan proportions. If they guess wrong, it could mean the permanent end of their involvement in the automobile business.
I’m getting the distinct feeling that for two of the companies involved in the AV pursuit – Ford and GM - there is no “Plan B.” They’re neck-deep all-in, to the detriment of their ongoing business. Sure, they will vehemently deny this is so, that they have things under control and that they understand the need to balance their traditional business with their future endeavors, but who’s kidding whom here? As I’ve said before, I understand the Detroit executive mindset to a “T.” I know the way they think and why they’re thinking it, and I understand how they approach their assignments. AVs are the latest shiny objects, and these companies are willing to jettison seasoned executives by the thousands in favor of younger digital disciples who will competitively project these companies successfully into the AV circus. It’s amazing how much Detroit executives look like short-term thinkers while they’re delving into The Future. It’s the damnedest thing, in fact.
Yes, to some I will be immediately dismissed as a dullard and thrown in with The Unenlightened who will be stubborn obstacles on our Path to The Future, and so be it. I’ve been in and around this business for a long time, however, and I have observed as executives have made the same mistakes over and over and over again. They just can’t help it.
I will admit that, as shiny objects go, the promise of AVs is a wondrous thing filled with superlatives and bathed in the glow of a future society that’s somehow inherently better, so what could possibly go wrong?
But as much as the road to The Future is paved with good intentions, there’s a high probability that unforeseen obstacles are going to disrupt the self-proclaimed disruptors. And it won’t be pretty.
And that’s the High-Octane Truth for this week.
ZERO TO OBLIVION IN JUST THREE YEARS.
3 Dec 2018 at 3:48pm
By Peter M. DeLorenzo
Detroit. It was positioned as “The Pinnacle of design, technology and comfort.” It represented new breakthroughs by GM Engineering in the blending of mixed metals and advanced lightweighting applications. It was everything the company had learned from more than 100 years of car building wrapped up in one flagship sedan. It was to be The Future of the brand and it would signal the resurgence of a newer, hipper, next-generation Cadillac that would go toe-to-toe with the German and Japanese automotive luxury brands with no excuses.
And now? The Cadillac CT6 is being put out to pasture, deep-CT-sixed by the onslaught of a changing market, and consumer buying tastes marked by an insatiable desire for SUVs, crossovers and trucks.
I can’t think of a more perfect example of the swirling maelstrom that defines the automotive market right now than the imminent demise of the Cadillac CT6. This machine, after all, was going to lead Cadillac – and GM – out of the wilderness; it would be The Answer to all of the lingering questions about the future of GM’s luxury brand, while marking the dawn of a brand-new day.
The CT6 was unveiled at the New York International Auto Show to much fanfare in April of 2015, and it made its retail debut in Cadillac showrooms a year later. And sometime in the next eighteen months it will be exited from Cadillac’s brand portfolio, to be replaced by a brace of new SUVs.
Zero to oblivion in just three years.
The time and effort to design, engineer, develop and create expensive marketing and advertising programs for the CT6 in order to bring it to market translates into hundreds of millions of dollars. It was the entire focus of GM’s luxury division for four years. And what was the result of all that effort?
To be charitable, it was mixed, at best. The front-end design of the CT6 has overtones of the Cadillac Ciel and Elmiraj concepts, but that’s pretty much where the resemblance ends. Purposely understated – almost excruciatingly so, I might add – the rest of the car is as bland as bland can be. And though the interior was decently rendered it wasn’t sensational, and the idea that this was Cadillac’s flagship never seemed to materialize. And the generally weak retail sales seemed to underscore all of this.
To give you an idea of how difficult this business is, the entire raison d’etre for the CT6 evaporated literally overnight. The market shift, make that stampede, to SUVs, crossovers and trucks was seismic, and the entire thought process and effort that went into the CT6 was made obsolete before the first year of its retail existence could be completed. It was fortunate for Cadillac that it at least had the Escalade and the XT5, but the fact that the CT6 ended up dead in the water is a cruel blow.
But then again, I have to think GM and Cadillac divisional operatives got what they deserved. The prevailing mentality within GM is that Cadillac is a much better car – and car company – than people realize, and by aggressively going after the existing import luxury auto makers in terms of content, then pricing the CT6 right on the nose with its most formidable competitors would ultimately lead to market success.
But GM’s internal perception of Cadillac, especially the CT6, never matched the reality “out there” in the market. It’s not that people have bad impressions of Cadillac, because the success of the Escalade proves that isn’t completely true, but when Cadillac specifically went after BMW and Mercedes-Benz with the CT6 and priced it right on the money with those luxury competitors, consumers weren’t buying it because the perception of the Cadillac brand just isn’t there. When loaded CT6 models first arrived at dealer lots with sticker prices in the $70,000 to $80,000 range, the response was underwhelming, to say the least. And the CT6 was crippled right out of the gate.
I recall what Toyota and Nissan did when launching the Lexus and Infiniti brands here in this country many years ago. They willfully took a loss of at least $15,000 per car in order to establish the new luxury brands in this market, something a U.S. automaker would never do. And it has paid off handsomely for them. In Cadillac’s case, it has one of the richest brand legacies in automotive history, but years of serial incompetence by GM management have suppressed the perceived value of the brand.
But that’s all irrelevant now, because even if Cadillac operatives had priced the CT6 for $10,000 less, it was too late. The tidal wave of SUVs and crossovers has put paid to the notion that a top-shelf Cadillac luxury sedan is actually needed, so the CT6 has become expendable. And GM has a brace of new Cadillac SUVs in the pipeline. (I am leaving the XT4 out of this discussion because it is a piss-poor effort from start to finish. In fact, the XT4 is a worrisome vehicle, leaving seasoned observers wondering if GM has lost more than a step when it comes to product development.)
And there’s a lesson in here for all other automakers too. While we watch as automobile companies divert billions of dollars into electrification and the promised endless riches of autonomous technology, while more “traditional” ICE vehicle programs are left stagnant by the wayside, there’s always something else coming. Example? If you’re an automaker going all-in for electrification right now and you don’t take into account the fact that hydrogen-fuel-cell-powered electric vehicles will supersede the BEVs planned now, then you might be out of business in a decade. Or less.
The swirling maelstrom called the auto business never stops, and the pot never unboils. The CT6 was just another piece of collateral damage in a war that never ends.
And that’s the High-Octane Truth for this week.
Editor-in-Chief's Note: GM's Mark Reuss has pointed out to me that the Cadillac CT6 will live on in China, the world's largest car market. And that the XT4 is doing very well in its segment. -PMD
26 Nov 2018 at 2:56pm
By Peter M. DeLorenzo
Detroit. With GM’s announcement today that it is suspending operations at several of its underperforming manufacturing facilities including three plants in particular - Lordstown, Ohio; Hamtramck, Michigan; and Oshawa, Ontario - and cutting fifteen percent of its workforce, including streamlining its executive ranks by a whopping 25 percent, this is the most definitive sign yet that after running flat-out for years, the U.S. auto industry is bracing for a serious downturn. The shakeout cometh, the most serious, in fact, since the Great Recession that began in 2008.
Although not exclusive to GM - Ford and FCA are planning or considering similar maneuvers - it’s no secret that GM is most exposed by the stunning abandonment of traditional sedans by its U.S. consumers. The hue and cry was immediate by the people most affected – as if no one could possibly imagine that any of this would be necessary or even a remote possibility – but it’s just the first step in a transition that will be painful for everyone, including autoworkers, executives and even consumers, who are going to see their vehicle choices not only slashed, but reoriented dramatically.
A few of the vehicle nameplates that will be affected include the Buick LaCrosse, the Cadillac CT6, the Chevrolet Impala and Cruze, and most surprisingly, the Chevrolet Volt. All of these models will be supplanted by next-generation SUVs and crossovers, but the dismissal of the Volt is shocking, especially when you consider that GM is going all-in on electrification for its future product lineup. The Volt is a technological tour de force for this or any other century and a glittering reaffirmation that there is such a thing as American ingenuity, that we haven’t completely devolved into a parasitic consumer society that can’t build anything of consequence anymore, and that we can and will fight our way out of this morass of mediocrity that has plagued this industry – and this country I might add – for far too long. Granted, the Volt’s second-generation electric-with-hybrid-assist technology has already been succeeded by advanced, new, fully electric technologies that GM has in the works, but still, the second-generation Volt is an outstanding machine that was crippled from the get-go by GM’s egregiously inept marketing, or lack thereof.
Which begs the question – and this is for all automakers as well – if the Volt was such a clearly excellent machine, hamstrung though it was by the criminally nonexistent GM marketing efforts, how do GM and the rest of these automakers plan on convincing the American consumer to go all-in on battery electric vehicles (BEVs) in the future, when they clearly weren’t all that interested up until this point, except, of course, for Elon’s Musketeers?
An even bigger question is, what is going to convince the American consumer to pay a lot more to plug-in? The onslaught of global warming? Really? When the main crisis for the planet is the continued use of burning coal to supply electricity? It appears to me that the electric-cars-save-the-planet argument will have a short shelf life, especially when the realities of how the world generates power become a burgeoning concern.
I mean let’s be real here - between the massive electrification plans of the VW Group and GM alone, BEVs are going to be launched into the U.S. market at a furious rate over the next five years. And where will the buyers come from, exactly? What will convince the average America car-buying consumer that a BEV is The Answer?
And while you’re contemplating that thought, here’s GM basically talking out of both sides of its mouth, laying off and firing “old tech” workers while hiring “new tech” workers for its vision of The Future filled with shiny happy BEVs, and even shinier and happier Autonomous vehicles. A future that is purely speculative at this point, by the way, but you can bet GM will be doing everything in its power to convince people to buy and drive their BEVs simply by not building vehicles with ICEs anymore.
Sounds like a plan, right? Not really. Because in GM’s case it’s very shaky one, at best. After all, this is a company that builds the Chevrolet Bolt, an excellent BEV, by the way - except for being yet another example of GM’s notoriously lackluster interior design capability – and they can’t sell it enough to make any noise in the market at all. Yes, GM marketing, those consummate experts at doing less with more than any other automotive marketer on the planet are the culprits here, yet again, but GM is going to flip a switch and have consumers beating their dealers’ doors down to get their hands on a brace of new BEVs? I don’t think so.
GM’s PR minions are already spinning this as the company taking the necessary but challenging steps on the way to a productive future with wildly impressive profit potential, promising to improve annual cash flow to the tune of $6 billion by the end of 2020, but who’s kidding whom here?
Now, it should be said that the “new” GM, burned by years of serial mediocrity because of reacting to market conditions and changes instead of getting out front of them should be commended for these actions, and CEO Mary Barra is reaping the benefit from analyst accolades, who are already calling the restructuring hugely beneficial and smart. And true to form, the denizens of Wall Street have already weighed in, too, spiking GM’s stock price.
But CEO Mary Barra is walking on sunshine here – and blowing a lot of smoke too – promising the moon and the stars as long as we don’t look too closely or pay attention to those things that she doesn’t want us to pay attention to. GM’s track record in marketing is so reprehensibly bad that if those so-called analysts bothered to dig deeper, they’d realize that Barra’s plan is beyond frightening, and the company’s stock price would be plummeting instead of enjoying a spike.
The bottom line is that GM can’t get where it says it wants to go. It is planning for an electrified future that only exists in projections, and on top of that, the company has demonstrated conclusively that it can’t market its way out of a paper bag. Oh well, at least it has the capability to keep cranking out ICE-powered crossovers and SUVs, at least until they start jamming BEVs down consumers’ throats.
GM has a social-media hashtag rolling around – #IWorkForGM – that supposedly stands for the pride and passion that come with being associated with – and employed by – the company.
Unfortunately for the people on their way out at GM, my hashtag headline is more accurate.
And that’s the High-Octane Truth for this week.
THE UNTOUCHABLE GOES DOWN.
19 Nov 2018 at 8:48am
By Peter M. DeLorenzo
Detroit. The news that Carlos Ghosn, the all-knowing and all-seeing leader of the Renault-Nissan-Mitsubishi alliance, would be fired from his position for underreporting income and misusing company assets – to the tune of millions of dollars – and that he had been arrested by Japanese authorities, came as a complete shock to the business this morning. A board member – Greg Kelly – who is said to have also been deeply involved in the scheme, has also been fired, according to reports from Automotive News and Japan’s Yomiuri newspaper.
But perhaps “complete shock” isn’t really accurate, certainly not as far as I’m concerned. Having been around high-level auto executives since childhood, I have been exposed to The Good, The Bad and The Ugly (aka the Unctuous Pricks) when it comes to auto executives and the auto executive mindset.
The good ones share similar traits: A steady brilliance, clear thinking, the ability to listen, vision, a focused consistency, and the ability to stay ahead of the curve by grasping the details while keeping the Big Picture in mind. These executives lead with clear purpose and an unwavering drive, and their stellar example results in the ability to inspire and get the best out of people. It sounds easy, but it definitely isn’t because the truly good ones only come along once in a while.
The opposite end of the spectrum, remarkably enough, is not all that far from the good side. In fact, the executives on the “ugly” side of the spectrum share many of the same “good” traits. And that's why these executives are the most dangerous, because they lull people into thinking that they are something that they are most definitely not. These executives are usually diploma-carrying graduates of Unctuous Prick University and they mix a particularly nasty cocktail for themselves every morning made up of one-part arrogance and one-part hubris.
And these executives, if you pay attention, are easy to spot. They thrive on the notion that they are a Master of the Universe, that they harbor a kaleidoscope of gifts that make them the smartest guy or girl in the room – any room. They love to create a legendary aura for themselves, carefully crafted by their PR minions and then disseminated to the press in drips and drabs, so that the media can dutifully report details as scoops to help manufacture the legend.
You should be familiar with this by now, as recent leaders both within and outside this industry have been a party to it: The incredible schedules. The intensive, long hours. The ability to multitask on a scale that’s beyond mere mortals. The need for little sleep. The behind-the-scenes berating and verbal abuse of direct reports. And the slow but steady belief in their burgeoning press clippings, which results in a suffocating arrogance that permeates everything with its stench.
That these executives eventually become toxic and overbearing is usually The End Game for their respective companies. The domination of all things with impunity by these “ugly” executives becomes an extreme liability because they inject themselves into every facet of the enterprise, leaving these companies with little or no recourse to do anything about it.
I heard the same stories and witnessed the same behavior with the former CEO of FCA, obviously. But Ghosn has always been a particularly hard case, hoodwinking his fellow Japanese and French executives into believing that perhaps he did really walk on water, and that to have the temerity to question him usually led to an executive’s swift demise.
I saw through his act almost from Day One, and I winced every time I read another glowing review about the “brilliant” Ghosn. And it was all there too. The incomprehensible schedule. The almost incomprehensible depth and breadth of knowledge. The ability to keep multiple balls in the air that would flummox mere mortal executives. The carefully crafted aura of The Legend.
And it was all unmitigated bullshit, as the news of the day proves. Ghosn’s arrogance was boundless, and his hubris was uncontrollable. He was just the latest in a long line of Unctuous Pricks in this business who was allowed to run roughshod over everyone around him and not only lived to boast about it but thrived on every last morsel of the legend that was created around him. So, of course he skimmed millions, and of course he thought he could get away with it. Because when all was said and done, he was above it all.
He. Was. Untouchable.
Now, Carlos Ghosn is yet another cautionary tale in a long line of cautionary tales that this business has been subjected to over the decades. It’s a story that has played out time and time again: The arrogance. The hubris. The manufactured aura. And then, the inevitable denouement.
He won’t be missed.
And that’s the High-Octane Truth for this week.
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.
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