The Latest Auto Extremist
10 Jul 2018 at 10:17am
By Peter M. DeLorenzo
Detroit. Since it has all but been confirmed that the Detroit Auto Show (NAIAS) is moving to June in 2020 - after one last hurrah at Cobo Hall next January – I think it would be a good idea to rethink this event in its entirety. The people involved with staging the show are feverishly working on this as you read this, but as you might imagine, I have a few definitive suggestions.
Back in January I had this to say: The Detroit Auto Show needs to move from its traditional January date to June, immediately following the IndyCar weekend at Belle Isle. I am tired of hearing the media attendees at the press days complain about the weather. But I’m not tired of what they’re saying – because it’s dead accurate – I’m tired of hearing about it because it can be easily addressed with some calculated planning. And all of the naysayers who insist that it can’t be done are exactly the reason that the Detroit Auto Show is stuck in neutral. Everything associated with the Detroit show right now – the media attention, the charity preview, the positive effects on the economy – can take place in June when visitors will not only take away a much better impression of this city, they can see this city in a completely new light.
But moving the show to a new time frame on the calendar can be only the beginning, because the idea that staging anything resembling a traditional auto show is still valid has already been put to rest. The Detroit show became the canary in the coal mine a few years ago when manufacturers started dropping out of participating in our annual January slog left and right. But then it quickly became obvious that it wasn’t just the Detroit show, because manufacturers started dropping out of the major auto shows all over the world.
Old timey “major” auto shows are dead, although let’s be clear, the regional auto shows will still be valid in this country. The Internet, product-specific launch events and other forms of communication, particularly social media, have made traditional auto-focused media events obsolete. With access to information immediate and saturated, assembling the media - and the public - for a major auto show, as previously defined, is just not going to work.
So, what then? What can Detroit auto show organizers do to redefine the show and turn it into a worthwhile event that has serious allure and a “must-see” quality to it? Well, they can begin by throwing out all the knowledge they’ve accumulated about auto shows and start over. But that’s the beauty of starting with a blank canvas - there are no bad ideas, creativity is paramount, and the show’s raison d’etre can be crafted from scratch.
With the Detroit auto experience – and that’s what it must be – moving to one of this region’s most beautiful months, the previous limitations of biting cold, icy streets, treacherous sidewalks and bitter winds are immediately things of the past. This event should take on an immersive, almost Olympic-like quality, with events staged all over the city. Manufacturers should be encouraged to carve out space for experiential displays at venues they deem appropriate (especially with the Detroit Grand Prix weekend handily kicking off the proceedings), while keeping the core show at Cobo. People should be able to drive the cars and trucks, experience major league entertainment, sample the pulse of the city, and take in music and restaurants. I am talking a full week of events and attractions for all ages.
And one more thing, an event like this needs a new name. “Detroit Auto Show” won’t cut it, because this week-long event as redefined, deserves something more. Much more. Remember, the manufacturers will have a blank canvas, too, and they’ll want to showcase advancements in mobility and technology. This will have to be a very big deal if it has a chance at all.
Back in the 50s and early 60s, the “old” GM staged a traveling road show that showcased their products, from production cars to concepts. And it was exceedingly popular. The PR impact was huge, and it captured the imagination of the press and the consumer public. That show was called General Motors Motorama, and its impact still resonates to this day.
I don’t think GM CEO Mary Barra would mind at all lending the “Motorama” moniker to the auto industry extravaganza that will unfold here in the first weeks of June 2020. As a matter of fact, there’s a certain symmetry to the idea. Especially with the “new” Detroit trying to project itself as a glimmering beacon of hope in the darkness.
Showcasing a domestic auto industry emboldened with new products, new vision and a feisty new competitive spirit, augmented by a city that has been reborn and rejuvenated after years of being the country's punchline, one teeming with new enlightenment and perspective while pointing to a limitless future, is just what the doctor ordered.
I think Motorama Detroit has a beautiful ring to it.
And that’s the High-Octane Truth for this week.
The 1953 Corvette was unveiled at the GM Motorama in New York.
The 1953 Cadillac Le Mans concept was another GM Styling project unveiled at the GM Motorama.
The 1956 Buick Centurion was a Motorama star.
GM Styling cemented its visionary reputation with the 1956 Pontiac Club de Mer concept unveiled at GM's Motorama.
The radical, gas turbine-powered Firebird III was designed in 1958 and made its Motorama debut in 1959.
The 1954 Chevrolet Corvette "Corvair" was another concept unveiled at the Motorama.
AMERICA WIDE OPEN.
2 Jul 2018 at 10:49am
By Peter M. DeLorenzo
Detroit. Since this week’s issue falls on Independence Day, I thought it might be appropriate to take a time out and think about this country of ours and what it means to be free. If you’re so inclined, you should take the time and read the Declaration of Independence, because it is a most remarkable document with uncomfortable parallels to where we, as a country, find ourselves today.
It’s quite obvious that too many of us have lulled ourselves into taking for granted what it means to be really free, and it’s not hard to see why. Our most solemn national remembrances are now distilled down to days on the calendar for retail sales events, as if all of the sacrifices of the millions of men and women who came before us are mere backdrops for a deal on a couch.
That this is unsettling for a lot of people across the country is no secret, but it seems that any efforts to quell the commercialism surrounding Memorial Day, Independence Day and Veteran’s Day are dismissed as being inconsequential and unwanted.
No, I am not throwing ice water on what now passes for tradition in this country when it comes to Independence Day - the backyard barbecues, family get-togethers and fireworks, but it concerns me that a large faction of this country goes about making plans for “the 4th” completely and conveniently ignoring what it all means.
So, let this be the slightest of reminders, that you might pause at least momentarily to think about what Independence Day really means.
Let’s start with independence of thought. In a country that was founded on the fundamental principles of freedom, I can’t think of a more essential privilege of living here than the freedom to intellectually explore without the threat of reprisal. Yes, this one essential ingredient causes this country myriad problems at times, but it’s who we are and it’s what we do.
Then there’s independence of beliefs. Whether it be political or religious beliefs, we have rights in this nation that other people in the world can only dream about. People still want to come here based on these two factors alone, just as the original settlers of this land did.
An independence to roam. Now, I know this is a quality of living here that most people have all but forgotten, but we live in a vast country that’s as distinctive as the multiple geographies that define it. And we’ve been free to roam and wander and take it all in for so long that we find it hard to believe that places still exist in the world where you simply can’t do that. Dismiss this fundamental freedom of mobility at your peril, because it’s essential to the American experience.
Things may feel a little grim right now, but I don’t believe for a moment that we, together, can’t rise above the current rancor and savor the independence we all enjoy every single day. And it’s important to remember too that it is our unending privilege to honor those that came before us because we are reveling in the fruits of their sacrifices.
I could go on, but I will leave the rest of this to your own thoughts. Think about the big things and the little things that surprise you and at times astound you about living here. We are so very fortunate to be able to call America our home, because it’s a 24/7 experience that’s simply a wonder to behold.
It’s America Wide Open, and I wouldn’t have it any other way.
And that’s the High-Octane Truth for this week.
THE NEXT PRECIPICE.
26 Jun 2018 at 11:21am
By Peter M. DeLorenzo
Detroit. Last Sunday, Volkswagen made history at the Pikes Peak International Hill Climb. Romain Dumas, driving the purpose-built, 500-kW (680 PS) I.D. R Pikes Peak, not only broke the previous record for electric vehicles, but also bettered Sébastien Loeb’s all-time course record from 2013 by a full sixteen seconds. Dumas attacked the 19.99-kilometer, 156-corner mountain course in a record time of 7m 57.148s minutes.
It was an incredible achievement, not just because the I.D. R Pikes Peak was developed and built in just 250 days in an all-hands-on-deck effort by the True Believers at Volkswagen, but because it represents the final, seismic, transformational shift to electrification in the automobile industry and for electric power in our mass-produced vehicles.
Leave it to racing to signal this sea change. After all, racing has historically pioneered advancements and innovations that end up in the automobiles we drive. And the road to electrification is no different. When I proposed the Hydrogen Electric Racing Federation to the industry in January 2007, the idea was to accelerate the development of electric vehicles powered by hydrogen fuel cells by racing them in a special event at the Indianapolis Motor Speedway. Major manufacturers were seriously interested - even though the idea was clearly ahead of its time - but ultimately, they balked because a fundamental step needed to be taken first, and that was engineering fully electric consumer vehicles. And now, after many years of fits and starts and promises, we’re getting a serious look at our driving future.
It has been one thing to have Tesla, and individual models like the Chevrolet Bolt and Nissan Leaf in the market; it’s quite another to have many major automobile manufacturers preparing to unleash fully electric vehicles across several segments. This will be decidedly different, and I doubt that most of us are really prepared for it. Aston Martin, Audi, BMW, GM, Honda, Hyundai, Jaguar, Kia, Mercedes-Benz, Range Rover, Toyota, et al. are preparing technically advanced, fully electric machines to bring to market, and this business will never be the same.
But then again, the automobile business has always been a seething cauldron of change and innovation over the decades. The vehicles we have access to now – from economy to high-performance and everything in between – are the finest vehicles that have ever been built. Yes, I believe we’re suffering through a unpleasant phase of technical overkill, but nonetheless the vehicles being built are considerably better when compared to where we were even ten years ago.
But time doesn’t stand still. New developments in battery capability and associated technologies are proceeding at a furious rate. And we have now arrived at The Next Precipice.
But selling these fully electric vehicles isn’t going to be easy by any stretch, especially since the $7500 government tax credit on fully electric vehicles is coming to an end shortly. With that tax credit gone, fully electric cars are going to have to be sold on their merits alone, which is far from an automatic proposition. Let’s face it, this country simply doesn’t have the infrastructure to support these cars. As I’ve said repeatedly, unless you can pull up to a recharging station at your corner or on the interstate and “fill up” with juice in less than five minutes, BEVs aren’t viable for anything more than urban duty.
And make no mistake, range is an issue. It’s fine to say a vehicle gets 250 miles on a charge, but your battery usage will vary, and on a trip where there is a minimal network of charging stations to access, that’s going to be a real problem. But I think even more of a problem for fully electric vehicles is the amount of time it takes to locally charge vehicles at consumers’ homes and such. Even with 220 installed in your garage, it simply takes too much time to recharge these vehicles. Not to mention the fact that mass adoption of fully electric vehicles will severely affect the nation’s power grid, which no one seems to want to talk about.
I am all for advancements in vehicle technology, but I must say fully electric vehicles hold very little appeal for me, and even the high-performance-oriented ones leave me cold. Their sound is uninvolving, soulless and lacking in fundamental visceral appeal. (Even VW’s Pikes Peak super car, impressive as it is, sounds like a glorified slot car.) And that electric sound signature will be a real problem for consumers as well, because it’s unlike anything most people have ever experienced before, so it’s going to be a big-time adjustment. (Saying that, I could see myself considering a BEV urban runabout as a second car.)
But there’s a sobering reality looming for these manufacturers, too, because there’s a real chance that the number of electric vehicles available for sale by 2020 and beyond will far outstrip consumer demand for them, so this industry is headed for a rocky road during this transition. Creating desirability for vehicles that basically all sound alike will be one of the marketing challenges for the ages.
And what about racing? The sport is headed for a transition as well. It’s clear to me that even though internal combustion engines will be around indefinitely, racing is likely to become more of nostalgia exercise. That means major racing organizations will find it tougher and tougher to sustain what they do, so they will have to focus on fewer, bigger events (which, come to think of it, isn’t a bad idea at all). NASCAR in particular needs to get its arms around this idea, because unless major changes are made in that aging, oversaturated series it will go back to be a regional series like it was in the 60s and 70s.
No, racing isn’t going to disappear altogether and Formula E, the relatively new, all-electric racing series, will continue. (Although I was bullish on this series early on, my opinion of it has soured. Without the sound and fury of ICE-powered racing machines, the appeal of Formula E is severely limited.)
This transition of the automobile business will be pivotal and seminal. Traditional companies will survive with savvy and guile, while others will be forced to partner up in order to live to fight another day. And then again, some won’t survive at all.
Kudos to the True Believers at VW for establishing a new record at Pikes Peak. This was a no excuses, “run-what-you-brung” technical exercise and they nailed it by setting a new all-time record, bringing The Next Precipice right along with them.
And that’s the High-Octane Truth for this week.
CHASING THE NEW GHOSTS OF MOBILITY, DETROIT FACES AN UNCERTAIN FUTURE.
18 Jun 2018 at 5:47pm
By Peter M. DeLorenzo
Detroit. We’re living in the midst of strange days here. The once-vaunted Motor City, which has been up and down again and again, is now on one of its upward trajectories. And this time it looks like it’s going to stick around for a while.
All is sweetness and light of late, with top-down investments into new and rehabbed buildings and new living spaces unfurling at a furious rate. Every day it seems that new investments are being touted, with the latest high-visibility project being Ford’s purchase of the Michigan Central Station, the long-abandoned architectural gem in Corktown that has been dormant for decades.
Ford wants to turn it into a center for advanced innovation in the hopes that it will attract the young and the brightest to come work for the company on its Autonomous, AI and future mobility projects. And it is all good. Or so it seems, anyway.
But even if the prevailing winds seem overwhelmingly positive at this juncture, there’s always a ghostlike reality hovering over the proceedings around here. Yes, the investment is real and seemingly endless, but the downside of it is there for all to see.
Dan Gilbert (the Quicken Loans and Rock Ventures Gajillionaire and owner of the Cleveland Cavaliers) is on a quest to be Master of All Things in Detroit, while he accumulates huge chunks of the city’s real estate. Yes, it’s all wonderful, except that anyone who believes this is some altruistic nod to the gods of righteous decency is kidding themselves. Repeat after me: in case you’re wondering, he’s doing it for the money. The sudden explosion in Gilbert’s real estate investments in the city has caused rents to skyrocket, and long-term stores, shop owners and restaurants have been driven from the city, unable to keep up. You can just feel the pendulum already beginning to slow as you read this, and when it swings back it’s going to leave a lot of people in the lurch, especially the newly-minted condo owners who jumped in at the high end with both feet.
Then there’s the $150 million, 3.1-mile QLine, a light rail train to nowhere. That this project was a quintessential waste of time and money can’t be disputed, in fact it’s the poster child of how this latest Detroit renaissance can be borderline irresponsible. A little over a year into its existence the lingering question remains, as in why? It’s so slow it’s glacier-like, it impedes traffic without offering any real reason for being, and it doesn’t offer anything more than a mildly amusing diversion. Except that gigantic number for building it is flat-out criminal, because it would have been much more useful had that cash been applied to the glaring infrastructure problems that continue to plague this city. Detroit would have been better off sponsoring the building of a giant Ferris wheel, at least there’d be a view of something.
And it’s about all of this top-down investment happening right now. I use the term “top-down” because that’s exactly what it is. New projects are being built to attract younger workers and technically hip businesses to the city. In turn housing is being added and the city is lively again, or so it seems. But the real problems facing this city have not been addressed. Year after year the school system is an abject embarrassment, churning out students who are, to put it mildly, ill-prepared for the real world. And the abhorrent crime continues, a dismal daily cadence of atrocities that no glowing headlines about a city allegedly on the move can conceal.
Before I believe in yet another renaissance for this city, I will have to see it happening from the bottom up. That means infrastructures will have to be rebuilt, schools will have to become relevant, and the hopelessness that breeds crime will have to be addressed. And then all the glittery hype of The New Emerald City could be the cherry on top of a solid foundation.
Along with this municipal rejuvenation, the collective “Detroit” and its headlong rush into transforming itself from the Motor City into the Mobility City is the other Big Story. Ford and General Motors in particular are spending money on mobility – no matter what form it takes - like college kids on a drunken bender.
Why, you might ask? Because “Detroit” collectively doesn’t want to be left at the gate of the new mobility revolution, whatever that is. And it’s a noble notion to be sure. Detroit doesn’t want to cede its 120 years of transportation leadership to any other entity, especially to the Used-to-be-Masters of the Universe out in Silicon Valley, because it’s anathema to their very existence.
But therein lies the conundrum. Detroit is chasing the New Ghosts of Mobility, running after so many projects – both real and imagined – at such a dizzying rate that it’s beginning to feel forced, and more than a little dangerous.
Perhaps ominous might be the better word. Detroit is rushing to be a part of a movement that ultimately will destroy its raison d’etre. Every calculated move Detroit is making right now is based on the belief that the future lies in the planned obsolescence of its existence. And Detroit steadfastly believes that it can monetize this new mobility – from electric bicycles to autonomous balsa wood smiley cars – to the degree that untold profits will be automatic and considerable.
I’m not buying it. But the frequency of the “bunny rabbit and rainbow” pronouncements about the New Mobility emanating from Detroit PR operatives on a daily basis are begging us to think otherwise. Based on these communiqués you would think that the time-honored and classically Detroit doctrine of “it won’t be long now” was not only alive and well but thriving.
And that may be the most ominous development of all.
And that’s the High-Octane Truth for this week.
WHY I?M NOT IN THE PLATITUDES BUSINESS.
11 Jun 2018 at 9:05am
By Peter M. DeLorenzo
Detroit. Roaring through life hard on the gas can be an exhilarating ride. It’s visceral, it’s dynamic, it’s loud and colorful at times, and it can be full of memorable stories and experiences that stay with you forever. There are certain pursuits that allow us to experience life out loud like this, and more than a few of us actually get to do what we want to do. But for many, societal demands force us into a go-along-to-get-along dance of drudgery that gets old almost from the moment you sign up for it. Sure, there are fleeting moments of pure joy, but it’s always punctuated, of course, by the sheer sameness that’s part and parcel of the day-to-day reality of it all.
Needless to say, writing for this publication is no dance of drudgery for me. Yes, it’s demanding, relentless and never ending, but I wouldn’t have it any other way. Phoning it in is never an option here. I show up and bring it every week because that is what is expected of me, by me.
That this publication fundamentally altered the way this business is covered and written about can’t be denied. And that is tremendously gratifying. Being part of the go-along-to-get-along posse was never going to work for me, and that this has rankled many in this business is no secret. (I have been on more “enemy of the state” lists at the various car companies than I can even count.) The resentment toward me stems from the fact that I don’t play the game the way it has been played – the way it should be played, according to some – for decades before I arrived on the scene.
Up until I came along, access to auto executives was the name of the game for auto journalists. Access was the carrot that PR chiefs dangled – if you played nice and sprayed around the appropriate stories that were favorable to the given auto company -then you were considered one of the “good” ones, and you were granted access to one-on-one interviews and “exclusives.” The PR chiefs were happy, the journalists were happy and more important, their editors were thrilled that their charges were getting insider scoops ahead of the competition.
Then I came along and messed with the status quo. I grew up being exposed to some of the legendary titans of this business and I learned early on what made auto executives tick. I didn’t need access to the modern-day auto executive mindset because I knew how their minds worked. I knew how they approached things, I knew what they were thinking even before their closest colleagues did, I knew whom they were beholden too and why, and I knew where they lived, what they liked and where they were coming from.
So, when I started Autoextremist.com with the column entitled “White Boy Culture” nineteen years ago, to say it was a shock to the order of things in this town was the understatement of understatements. From that moment on I named names, and I exposed the insider stories that were only whispered in “off the record” conversations and in late night bar talk by journalists. I took particular aim at GM not long after with “The Sad Saga of Saturn," and from that moment on my “relationship” with GM was toxic because I knew too much and I made a point of saying it down to the last, excruciating detail.
Needless to say, this didn’t sit well with a lot of people. Why couldn’t I be “nice” and do “nice” stories like the others? Why couldn’t I just go with the flow? Things would be so much better if I played along and didn’t write “those” kinds of columns. Yes, it would be but for whom? The PR chiefs? The executives who wear their egos on their sleeves, some who are so thin-skinned and insecure that it’s painful to observe? How about the business as a whole? Wouldn’t it be nice if I was a cheerleader for the good of the team?
How about no? Dispensing platitudes and “attaboys” has never been for me. I don’t think you should get a trophy for just showing up and participating. It stinks in Little League and it really stinks when we’re talking about how the global automakers conduct their business.
These companies don’t want to be exposed when they’re screwing things up or phoning it in. They don’t want to be reminded that they’re woefully late to a segment or that their product cadence is unfolding at a glacial pace. These executives don’t want to be called out for bumbling their way through their jobs and leaving a trail of mediocrity in their wake. And the so-called marketing “stars” at these companies don’t want to be reminded that they can’t seem to market their way out of a paper bag and that their serial careening is doing deep damage to their company brands.
As we like to remind people around here, the High-Octane Truth hurts. It doesn’t suffer fools and it has no time for pretenders or dilettantes. It acknowledges the True Believers who give it their all every day to make things better but offers no quarter to those who are content with mediocrity, or even worse, those who run amuck with impunity.
This hasn’t been an easy road for me, but living out loud never is. So few of us get to do what we want to do that I will never allow myself to take this for granted, and the memorable stories and experiences will stay with me forever. I call them as I see ‘em and I will continue to do so. When people agree with me I’m a hero, and when they don’t, I’m an asshole. Thus, it was ever so.
And I wouldn’t have it any other way.
And that’s the High-Octane Truth for this week.
THE AUTOEXTREMIST BRAND IMAGE METER VII: THE "TRIFECTA OF NOT GOOD" EDITION.
4 Jun 2018 at 5:33pm
By Peter M. DeLorenzo
Detroit. Needless to say, I have been inundated with emails from readers and others awaiting my take on Sergio Marchionne’s latest plan for FCA. And even though it will disappoint some, my comments will be brief. For starters, it is plainly obvious that FCA is no longer, it is now JARM (for Jeep, Alfa Romeo, Ram and Maserati). The reason Fiat, Dodge and Chrysler weren’t mentioned during the press event is that those divisions are simply going to cease to exist here. Yes, the minivan will survive, and the True Believers in Auburn Hills will churn out muscle cars as long as that plan is sustainable (which isn’t long), but Chrysler will fade away and the Fiat brand will be confined to the markets where it has a chance. (As if the Fiat dealers here in the U.S. need to be reminded, the brand never should have been brought here in the first place, and it cost them dearly because they bought into Sergio’s charade hook, line and sinker, and now they have to be content with the fact that they’re mere specks in Sergio’s rearview mirror and he couldn’t care less. Nicely done.)
So here in the U.S. the focus will be on Jeep and Ram, and around the world Jeep will be the straw that stirs the drink for JARM. This all makes sense, because Marchionne always has a nose for where the money is, and he realized that Jeep was the cash machine that would propel him to greatness while lining his pockets and those of his Fiat heirs/handlers. As for the myriad Alfa Romeo models promised, what would a Sergio plan be without some grossly optimistic projections? And don’t be fooled like several analysts seemed to be, because the electrification part of Sergio’s plan for JARM can only be termed as an electrification strategy "by gunpoint.” Sergio still couldn't care less about electrification, and he’s leaving that task to whoever replaces him. And so it goes.
As is now tradition, this point on the AE calendar is reserved for our Brand Image Meter, one of our most anticipated and widely read columns of the year. Brand image wrangling is the mystery science that brings out the best – and worst – in auto executives, with some being naturally savvy stewards of their brands while others stumble around lost in the desert, achieving only fleeting success. The rest? Well, to say they well and truly suck at it is being kind.
If we were a certain kind of publication, our Brand Image awards would come complete with glittery trophies and massive publicity campaigns attached, and we would be Ka-Chinging a happy tune as auto companies advertised their success to the world, with the Autoextremist brand logo prominently displayed in those ads. We’re not slimy purveyors of vacuous marketing streams, thank goodness, but we are confident in the knowledge that the AE Brand Image Meter column is in the top three in unique visitors and page views each and every year that we have presented it, garnishing loads of buzz and in some cases, voluminous and pitiful “woe is me” and "we're screwed" hand-wringing in executive suites throughout the industry. And beginning our 20th year of publication, that’s not about to change.
As I said when we first introduced our Brand Image Meter six years ago, when it comes to the power of brands and the inescapable importance of brand image: “It’s the one thing that car companies – both good and bad – cannot escape. How a brand is perceived can make or break a car company, regardless of how long and illustrious a run that brand has enjoyed up until any given point in time, because one false move or one discordant note can be crippling in a matter of months.”
Not surprisingly, none of that has changed, and image wrangling is now the Number 1 priority in this business. Why? The democratization of technology and luxury has allowed auto manufacturers the world over to have access to the crucial ingredients that make automobiles desirable. And with supplier expertise greater than ever, any car company can dial up a witch’s brew of ingredients to compete in almost any given segment they set their sights on. But does having the right cocktail of ingredients mean that success will be guaranteed? Not a chance, because the expertise of the rest of the organization in terms of design, engineering and product development comes into play. And even if the entire package is indeed thoroughly executed to the highest standards, the last and most meaningful ingredient – brand image – has to be there in order for the effort to come together.
Sounds easy enough, doesn’t it? Dial in brand image and everything will be good, right? Yes, but it is just not that easy. Far from it, in fact. This business is littered with strategic missteps, ham-fisted executions, an endless stream of miscalculations and that ever-present danger – rampant cluelessness – that can serve to impede a brand image from resonating in the market. Get it right and a manufacturer can live to fight another day. Nail it perfectly and a company may be able to build sustained momentum for a brand for years to come. Get it wrong and that will guarantee a life of misery for a brand as it flounders and sputters in the market.
Winning car companies understand that expert brand image wrangling can make or break their efforts. Having outstanding products is a fundamental requirement, of course, but knowing how to present those products and being able to expertly nurture a brand’s image completes the equation. And less-than-winning car companies, or car companies only intermittently able to be on their games for whatever the reasons (infighting, lack of talent, abject stupidity or all of the above), pay for their mistakes exponentially, compounding their troubles with each misstep.
Some of the people toiling away in this brand image wrangling pursuit are actually qualified and bring a certain sense of gravitas to the proceedings, but those executives are admittedly few and far between. Others are unfortunately assigned to the marketing function as part of a woefully misguided corporate effort to “round” executives’ experience resulting in ill-equipped operatives who stumble along wreaking havoc on everything and everyone in their path while attempting to learn the business of marketing by “feel,” which translates into making a bumbling mess of things over the duration of their assignment. That companies persist in this folly instead of recruiting and nurturing marketing talent remains one of the unsolved mysteries of this business. And unfortunately, the rest, of course, are flat-out poseurs who inevitably turn up lost in the marketing desert in search of a clue. That there is such a wide range of talent in the auto marketing ranks is no surprise, because it’s indicative of the general reality for the business as a whole. But this gaping disparity between a few star performers and the rest in the automotive marketing arena can have a devastating effect on a brand’s image, as you’ll see below.
Yes, some of the brands I’ll talk about today are blessed with auto marketers who actually get it and who know what their brands stand for (and almost more important, what they’re not), and the understanding that sometimes it’s better not to screw things up rather than set the world afire with their “I’m a genius, just ask me” brilliance. Other brands mentioned suffer the consequences of marketers who careen around throwing ideas and executions up against the wall to see what sticks, and their respective brand images pay dearly for it.
In this column I grade automotive brands on their fundamental raison d’etre, and of course in turn the people responsible for shaping what those brands stand for are directly or indirectly graded too. And believe me, no matter where these marketers fall on the competence spectrum, many of them believe that they’ve got it goin’ on, even though that isn’t even remotely the case.
Automotive marketing is a very big deal. And expert brand image wrangling is a crucial part of making all of the effort to design and engineer great products worthwhile. Billions of dollars are spent on brand image wrangling by the auto companies each and every year. Why? Because having the “right” brand image is absolutely essential for market success. As you’ll see in my following commentary when a company does it well, it shows, but if a company misses even by a little, it can be very costly. And if a company’s marketers screw up, the effects can not only be devastating, they can linger for years.
Executives at the underperforming car companies get into trouble because they actually start to think that they’re selling something they’re not, which leads them to deluding themselves into thinking that their products are something other than what they are. In other words, an incurable case of brand delusion.
And when the people running the company don’t know how and why the brand earned its chops to begin with and are confused as to what their brand stands for now, how can they possibly guide it properly? The painfully short answer? They can’t. And even worse, they allow the wrong products to creep into their portfolios, which ultimately will lead to a corrosive level of brand dilution. The difference between getting things right and getting them horribly wrong when it comes to this brand image wrangling business is the finest of lines. But then again people are paid very well to do these jobs, so it’s okay to expect them to know what they’re doing, even though some clearly don’t.
So, who is on their game right now when it comes to this business of brand image wrangling? And who doesn’t even have a glimpse of a clue? The updated Autoextremist Brand Image Meter VII ratings range from Hot to Cold, Neutral to Clueless, Flat-out Delusional to WTF? And the time-honored Pathetic, with a few surprises thrown in for good measure. Let’s get to it, shall we?
Acura. Is the Acura NSX sports car a fitting halo for the brand? On the one hand, I can say yes, yes, it is. The car is a little porky but overall, it’s an excellent effort. But on the other hand, is there really any connection between Acura’s show pony sports car and the rest of the lineup? The answer unfortunately, is not much. Burdened by design mistakes from its recent past and constantly operating on the fringes of the top-tier luxury-performance segment, Acura remains an enigma. And realistically, right now the proper Acura brand image is confined to two vehicles, the NSX and the brand-new – and nicely executed - RDX. The Bottom Line is that Acura is in desperate need of more product juice. The aforementioned two Acuras worth talking about constitute a good start at least.
Alfa Romeo. Despite the fact that I am evaluating a Stelvio as my personal driver (and I am very pleased with it so far), my overall opinion of Alfa hasn’t changed. It’s a niche brand that will always operate on the fringe of the automotive enthusiast spectrum. And there’s nothing wrong with that, especially now that Sergio has shelved his ridiculous obsession with turning Alfa into the next Audi. That didn’t prevent Sergio from promising an array of hot new Alfa products last week at his big meeting in Italy. After all, it wouldn’t be a Sergio “plan” meeting without some bombast, right? Alfa Romeo is officially the “march to a different drummer” Italian brand and I’m fine with that. The new range of Alfa Romeo products are clearly the best in the company's long history, and as long as Alfa Romeo remains a fringe brand with a wonderful history and doesn’t try to be anything more than that, it will be fine. Because no brand can live up to that kind of pressure.
Aston Martin. CEO Andy Palmer knows that Aston Martin, as an independent luxury automobile manufacturer, can just barely survive in its present guise, which is also why Aston is introducing the DBX super luxury SUV in 2020 and is injecting itself into the luxury space in a variety of ways, including partnering with the Red Bull F1 team. Aston desperately needs more of a “limited” volume play in the market and the DBX is the ticket, Palmer figures. He’s probably right. But here’s the thing, as long as Aston Martin continues to build some of the most stunningly beautiful cars on the road, machines that unquestionably live up to the legacy of the brand, it will be fine.
Audi. Audi seems to be chugging along with its brand mojo intact, especially now that the stain of the VW Group’s Diesel fiasco is fading from view. Now fully ensconced in the top tier of mainstream luxury brands along with BMW, Lexus and Mercedes-Benz here in the U.S., Audi continues to do what they do. Does it all work? For the most part, yes. Audi has even polished its own version of the classic German automotive arrogance to a new sheen, which is not unexpected, but that translates into higher prices, higher doses of attitude and a lingering feeling that the brand, though still hot, is headed for a cooling. The Marketing Meisters at Audi are still on course, except for when they take themselves much too seriously and allow their “holier than thou” attitude to creep into their advertising, which results in smarmy and annoying work. We shall see what happens when it brings out its all-electric crossover next year, but in the meantime Audi is good. At least for now.
Bentley. Some people thought that with the arrival of the Bentayga SUV, Bentley would suffer immeasurable image damage, but instead the brand has been made even stronger. This is a classic example of image stewards for a brand displaying the kind of focused consistency – combined with savvy product decisions – needed to forge one of the most desirable luxury brands in the business.
BMW. The ubiquitous German brand, which once upon a time in a galaxy far, far away created its destiny with the funky little 2002, has shockingly become the Chevy of German luxury brands, the result of leadership teams over the years pushing the brand into every segment – both real and imagined – that seemed to make sense. This quest to be in every garage in every tony community in America has delivered vast profits for the propeller brigade, but it has gutted its brand integrity. Yes, they still crank out “M” versions to remind everyone of what they used to be, but they’re not fooling anyone anymore. BMW’s brand image is lost in a choking haze of profitability over integrity, and it’s not likely to find its way back anytime soon.
Buick. No brand wranglers pat themselves on the back more than those toiling away at Buick (well, except for those at Chevrolet, but I’ll get to that in a minute). They will be the first to tell you that they have it so goin’ on that it’s a wonder they have to drive into work anymore. Instead, they should be able to float in to work riding the platitudes and accumulated “attaboys” that dominate their thought balloons. Contrary to those thoughts, and contrary to GM’s upper management, which actually does believe that Buick really has it goin’ on, the so-called marketers have dumbed-down Buick only to occupy star status in Payment Land. As in “I can’t believe I get this much faux luxury for this little money!” GM Design has managed, by presenting some compelling concepts over the last few years, to imagine a Buick that lives only in its dreams. Buick is yet another GM brand that exists for the edification of the Chinese market. Nothing more, nothing less.
Cadillac. Now that the push to remake Cadillac in Audi’s image is over, what’s next? Looking at Cadillac’s lineup today, the ATS is gone and the CTS should be. The CT6 is nicely executed but it needs a much more aggressively beautiful skin, at least as good as the Ciel concept car. The XT5 is selling in a SUV/Crossover-crazed market, but the XT4 doesn’t show much promise, especially in the interior. As for the Escalade, which one of the Cadillac products has the can’t-mistake-it-for-anything-else street cred worthy of the brand? A hint: It’s the only one with a name. (And thankfully, the next-generation Escalade will be a show stopper.) Cadillac is another one of GM’s brands that has more going for it in China than anywhere else, and even though that’s an inevitable industry reality, the fact that this brand is squandering its legacy here is unconscionable. As an enthusiast, the superb Cadillac “V” cars are noteworthy and highly desirable, but they’re wasted in Cadillac showrooms because they have no context there, despite all of the money GM is pissing away on Cadillac’s so-called racing program, which is another foray into the Audi-ness of it all that isn’t working. (Now, take those “V” cars and remake them into Corvette coupes and sedans as part of the new Corvette Performance Division, and you’d have something, but that’s another column.) I have one question: How can a brand that has displayed the industry's most compelling concept cars of the last decade – with equally compelling names, by the way – stumble along with a bunch of cars in the market that have nothing going for them? What a waste. Cadillac has a historical legacy unmatched by few automotive brands in the world, yet it doesn’t occupy nearly enough space in the luxury market, which is a giant wreath and crest of Not Good.
Chevrolet. No marketers have done less with more than the people charged with nurturing one of the most iconic American brands of all time. Think about that for a moment. These stumblebums have taken a larger-than-life brand that has thrived over the years with some of the most heroic, memorable car advertising campaigns of all time, and turned it into a sick version of marketing “small ball.” Chevrolet’s once-proud image has been reduced to a series of glorified retail spots that insult our intelligence and annoy with equal aplomb (I'll grant, however, that the new truck versions of the "real people" campaign are at least watchable). Throw in the insipid “most rewarded” angle and it’s a marketing cocktail that absolutely no one is interested in except the so-called “marketers” down at the Silver Silos, who are absolutely convinced that they have it goin’ on. This just in: They don’t. We have been inundated of late by stories by our resident local media homers touting how wonderful Mary Barra is, how smart, how enlightened, how visionary and the usual blah-blah-blah. That’s all well and good and at least somewhat deserved, but as long as she – and “Dan I Am” Ammann – continue to ignore the blatant mediocrity on constant display by GM’s so-called marketing troops, I will give them a big fat “F.” And as bad as that grade is, that’s more than Chevrolet’s brand image merits, unfortunately.
Chrysler. The “C” of the company formerly known as FCA is fading away, because JARM doesn’t need it. Sure it will hang on to the Chrysler Pacifica, but the goodness of the Chrysler minivan brand image goes only so far, meaning the Pacifica is part of the competitive set of minivans to consider if one is interested in those particular vehicles. Not much to go on, is it?
Corvette. Once upon a time, the Corvette was the quintessential definition of a “halo” vehicle for Chevrolet. The notion that “there’s a little bit of Corvette in every Chevrolet” was used to great effect back in the day. Not so much today. Despite the fact that the Corvette is one of the best high-performance cars in the world, with an impeccable and accomplished record in racing, GM – and Chevrolet – really doesn’t do much with it. Oh sure, the enthusiast media and enthusiasts in general are well versed in the goodness of the Corvette, but you’d barely notice it exists at GM. It’s very strange, in fact. It’s as if they’re afraid to talk about it too much or admit that it represents the very best thinking of GM’s True Believers. Why? Well, why ask why? It has been like this for the Corvette for three decades, at least. Despite this cloud of negativity, the Corvette name and image shine through. In fact, it shares the top tier in our AE Brand Image Meter with five other brands. I am not kidding when I say that I would form a completely new GM Performance Division with the Corvette as the foundation. As long as Chevrolet marketers continue to squander the image of an American icon, why associate the Corvette with that relentlessly clueless marketing mediocrity? As I suggested six years ago I would take the Cadillac “V” cars and remake them as Corvette models, and I would add the outstanding Camaro into the mix too. If Mary Barra wants to be truly “visionary” she could start by shaking up GM’s “we’ve always done it this way” mentality and let GM’s exceptional performance cars have an arena that they can call their own.
Dodge. Muscle cars and cop cars are this brand’s thing. Is that enough to go on? Will Dodge survive in this new era of JARM? With now-ancient chassis underpinnings and a ton of cash needed for a completely new vehicle architecture, I wouldn’t bet on it. In the meantime, Dodge is the brand for people who don’t want to live in today’s world. Can’t say I blame them, but the harsh reality is that the life expectancy of this circus is short.
Fiat. A complete waste of time. Remember when Marchionne was promising dealers the brand would be the stepping stone to untold riches once they started selling Alfa Romeos too? Fiat is the forgotten Italian brand that had its day in this market decades ago, that is until people started discovering that there were small cars out there that were light years better in terms of quality, reliability, desirability and overall value. Funny how not much has changed. There are a lot of pretty smart dealers out there talking to themselves right now about how they could let Marchionne – a known carpetbagging mercenary – take them to the cleaners with the complete fiasco known as Fiat. Oh well. Brand image? Fiat is dead to me. And everyone else now too, apparently.
Ferrari. The brand with the impeccable legacy and unequaled image, at least for the most part, seems to find a never-ending supply of moneyed fanboys and girls to seduce. That the true Ferrari enthusiasts are drifting off to other shiny automotive objects, or drifting off of this Mortal Coil permanently, is not lost on Ferrari management. Unfortunately for the proud, prancing horse brand and the enthusiasts who desire it, the term “management” means that the dreaded Marchionne is now in charge, which lends a certain unmistakable foreboding to the proceedings. What does it all mean? More tchotchkes, more Ferrari “Worlds” and ominously, much more volume, as in almost 50 percent more volume. This is, in case you forgot, what flat-out greed looks like in the car business. I would have put Ferrari at the top of the AE Brand Image Meter along with the other select few, but as long as Marchionne is involved the chances of this brand being screwed up are better than 50-50. So, the Ferrari brand is still red hot, at least for now, but how long that lasts remains to be seen.
Ford. Ford is the new, card-carrying Jekyll & Hyde car company. On the one hand, it's the iconic American brand boasting the F-150 juggernaut, which is the envy of the industry. And its fleet of crossovers are getting better - and growing - by the month. On the other hand, where Ford goes from here will be very interesting to watch. Is it a mobility company? Possibly, but what does that mean, exactly? If the pursuit of the mobility moniker gets in the way of Ford’s real bread-and-butter business and the company takes its eye off of the ball, then it will become a huge problem. If, on the other hand, Ford puts the pedal down hard and keeps its product focus and momentum, it will remain a formidable competitor for the foreseeable future. The AE Brand Image Meter rating for Ford is split. If we’re talking about the F-150 pickup, it’s white hot and one of five top-rated brands in our ratings. As for Ford passenger cars, they’re warm to the touch but not nearly warm enough. As for the Ford Mobility play, it's a giant blue oval of "we'll see."
Genesis. A year ago, I was convinced that Hyundai was playing it right with its new Genesis luxury brand. Boy, was I wrong. Hyundai operatives have demonstrated their relentless incompetence for all to see, flip-flopping, changing course, and then flip-flopping all over again. And it never seems to end. It doesn’t matter how good the cars are if there’s no cohesive marketing strategy. What a mess.
GMC. This brand just keeps going on, in some cases even defying rational thinking. Everyone knows that GMC vehicles are massaged versions of Chevrolet models, but for some that’s clearly more than enough. Granted, the exterior and interior designers at GM Design assigned to work on GMC have made the most of what they’ve been given, but even that doesn’t explain the brand’s consistent success in the market. And it’s certainly not the advertising and marketing either, lest GMC marketers start patting each other on their backs, because that stuff is eminently forgettable, when it’s not annoying. (The "Like A Pro" campaign always seems a little awkward and forced.) I chalk up GMC's success to a very clear-cut marketing reality: For consumers GMC isn’t a Chevy, which apparently counts for a lot. And it’s not a Cadillac, either, which in their minds counts for even more, not being showy types and all. A solid brand, which in this chaotic marketing world is really saying something.
Honda. The brand that has such a rich legacy seems to be on the rebound with consumers, which is noteworthy. Honda is touting that it is getting back to its roots, with company operatives insisting that’s why things are on the upswing for the brand, but I’m not going to go along with that assessment completely. I think that is true, but only intermittently. In fact, Honda Design has taken a giant step backwards with the new Civic, which, though an excellent car, looks so uncomfortable in its own skin that you can almost hear them squeal “help me!” as they drive by. If Honda insists that they have their mojo back I’m going to at least give them points for the thought, and maybe even the benefit of the doubt. But I’m not buying into the “it’s a new day at Honda” mantra just yet. Honda enjoys a positive brand image for some very good reasons. That’s still the case, but it's still a giant "we'll see" proposition.
Hyundai. Such a once-promising brand, what the hell happened? Was it the constant cries of “we got it goin’ on!” which were part of the rote speech at every press conference that everyone grew tired of five years ago? Was it the Too Many Models Syndrome, which resulted in a confusing showroom filled with too many cars that blended together and that no one wanted? In fact, it was all of the above, and more. The reality is that there’s no use telling Korean auto executives what to do. They know absolutely everything there is to know about absolutely everything, and if, as an American car executive in their employ you don’t concur, you are jettisoned in favor of someone who will. Hyundai has been careening around like this for years, and there’s no relief in sight. The other major problem that the powers that be at Hyundai would never admit to is that Kia and Hyundai are interchangeable in most consumers’ minds. And now that Hyundai is pushing its Genesis division that problem is even more pronounced. Brand image? Ugh. Hyundai showrooms are where consumers go to get financed and get a deal. And that’s all.
Infiniti. Quite simply Nissan’s luxury (sort of) brand has its following, a core group of consumers who, for some reason, can’t be bothered with other Japanese brands, let alone with the go-to German luxury brands. Normally you would call Infiniti the “marching to a different drummer” brand but that would be attaching too much gravitas to it and besides, Alfa Romeo has now claimed that space. No, it’s a cynical play by Nissan to grab their share of a market that they believe they have just as much right to as any other manufacturer. Except everything about Infiniti seems like Nissan operatives are phoning it in, and devoid of a single original thought. I consider Infiniti a “ghost” brand, one that’s invisible except for the select few who have been issued the special glasses from the factory so that they can appreciate the inherent goodness of the brand. Brand Image? A well-intentioned afterthought.
Jaguar. Who would have thought that Jaguar could be on such a roll? But with a brace of excellent vehicles, including the fabulous I-Pace SUV, which is a design masterpiece, and an image that has been well defined and polished to a high gloss, this brand definitely has it going on.
Jeep. This American icon is another brand that occupies the top spot in the AE Brand Image Meter. It is truly amazing – and I hate that overused word – but that’s the only explanation for this brand to have survived upheaval after upheaval and multiple stewards, and still emerge intact and stronger over time. It’s no secret that this brand, with the impeccable credentials and unrivaled imagery attached to it, has benefited from some superb image wrangling too. Jeep has been the sole focus of Sergio Marchionne’s vision for JARM, and it’s easy to see why. It’s where the money is. But in his quest to make money hand over fist, Marchionne has pumped up Jeep’s volume, churning out more Jeeps with questionable quality – and pushed more subprime financing to pump sales – than at any point in the brand’s history. Jeep is still at the top tier of the AE brand Image Meter, and now that Sergio is hinging his vision for global domination on Jeep, the iconic American brand has its work cut out for it.
Kia. As I mentioned above, Hyundai’s foray into the luxury arena spells trouble for its Hyundai and Kia brands. Before Genesis there was at least an attempt at differentiation between Kia and Hyundai, with Kia allegedly skewing younger. But now? Consumers don’t care how Korean auto executives parse their brands because Kia and Hyundai both fall into that subset of “deal” brands in the American market. The Korean auto executives with genuine decision-making power in this situation are too arrogant and shortsighted to see that having two brands stepping all over each other in the American market isn’t going to work. Brand image? I guess if you think the Stinger is the greatest thing since sliced bread (I don’t), it’s hot. But in reality the Kia Brand Image is nonexistent, unless looking for a deal qualifies as such.
Lamborghini. This exotic, high-performance Italian supercar brand is the one for knowledgeable enthusiasts who don’t worship at the altar of the Prancing Horse. Since the VW Group took over, everything about Lamborghini has been elevated, from the products to the brand image itself. In ancient times, the name Lamborghini wouldn’t have been uttered in the same breath as Ferrari. Now? There are plenty of enthusiasts out there who consider Lamborghini to be the most desirable exotic Italian sports car.
Land Rover. That these super luxury crossovers and SUVs have found such favor in the suburban jungles across America is still a little bit hard to believe. It wasn’t too long ago that Land Rovers were something to appreciate but not drive, because they were too problematic for most people to deal with. Now, bristling with cachet and boasting sumptuous interiors, Land Rover has become one of the touchstones of affluent suburbia, and another brand at the top tier of the AE Brand Image Meter.
Lexus. Toyota’s luxury brand is going all-out to reinvent itself as something more than the “excellent service and customer care” brand. That’s all well and good, and maybe Akio Toyoda’s drive to make Lexus into a high-performance brand will succeed, but even if it doesn’t there are plenty of people who like Lexus just the way it used to be and still is. Impeccable customer service still resonates.
Lincoln. Lincoln has come a long way in just four years. The switch back to names is such a huge positive that it has rejuvenated the brand. And even though the Continental isn’t nearly the car it should be, it still resonates in the market. On the other hand, the new Navigator SUV has exceeded all expectations, and as much of a success as it is, the upcoming Aviator is the SUV that will become a segment leader and a grand slam home run. Lincoln has a name with historical relevance, one that Lincoln operatives are beginning to embrace and nurture to great effect. It’s refreshing to see.
Lotus. Talk about the original “marching to a different drummer” car company, Lotus is that and more. Colin Chapman, who rightfully sits among the greats of automotive history, was the brilliant innovator whose designs for Lotus racing and street cars remain legendary to this day. The fact that Lotus still exists with its founder’s name on it is one of the miracles of the modern automotive age, as its tumultuous history can attest, but there have always been True Believers associated with the brand it seems, and they have managed to keep the flame alive through some very lean times. Lotus cars aren’t for everyone, thank goodness, and it’s easy to see why people seriously looking at the Porsche 718 Cayman don’t even give the Evora even a sideways glance. But that’s okay and probably as it should be, because Lotus has always appealed to iconoclast enthusiasts, those who march to a different drummer themselves. Now that Lotus has a fresh infusion of deep-pocketed investors from China, I believe the future of the brand is secure. And speaking of that brand, it has a new glow and new hope.
Maserati. This luxury performance machine is the attractive Italian sports car brand name with a historical legacy that repeatedly suffers in comparison to the rest of the competition. Does Maserati have attractive cars? Yes, somewhat, but the brand is not top of mind. In other words, Maserati exists, but in a galaxy far, far away from the real luxury-performance retail action. Will the brand be able to live up to Marchionne’s typically over-aggressive projections? Not a chance. The AE Brand Image Meter? A glimpse of warmth, but only for those who still give a shit.
Mazda. Even though Mazda builds some notably outstanding cars, the brand always seems to be scrambling for respectability. Will it ever be more than it is right now, the scrappy purveyor of interesting cars if you would just take the time to look, and a media fanboy favorite? I seriously doubt it. But now that it’s about to pirouette off a cliff in its pursuit of elevated legitimacy, what are the Mazda overlords thinking? Sometimes big-league brand image wrangling involves knowing what the brand isn’t. If you’re into the brand, it’s hot. For most of the rest of the automotive world it’s - did you see the Warriors game last night?
McLaren. This exotic English sports car micro-manufacturer keeps pouring on the credibility by building formidable high-performance machines that supersede the one before. And even though Ferrari may dismiss McLaren as a legitimate threat to its perpetual dominance of the hyper-exotic car market, the British supercar maker boasting the legacy of one of racing’s true legends keeps making serious inroads into Ferrari’s turf. I wouldn’t bet against McLaren, because the entire organization is focused on delivering excellence. And they don’t have a Marchionne to deal with, which is even more of an advantage.
Mercedes-Benz. As I’ve said countless times before, when Mercedes is “on” – see the magnificent new S-Class Coupe, the Mercedes-AMG GT and the new G-Class, for instance – they build absolutely glorious machines that live up to one of the great automotive legacies in the world. When they’re off, well, they can stink up the joint like no other. Part of the problem is the fact that Daimler is forced to stretch out its model lineup because it’s trying to fight a brutally competitive auto world without the resources of the other auto manufacturer conglomerates. But the majority of the problem lies in previous piss-poor marketing and advertising strategies that have deeply damaged the brand. The Mercedes-Benz brand is in perpetual turmoil, and that’s not likely to change anytime soon.
Mini. The brand that was initially successful beyond all expectations has now fallen to earth with a thud. The powers that be at Mini have learned a very painful lesson, and that is that not every niche product idea they come up with is brilliant. I know it’s a bitter pill to swallow for most car executives, especially since they’re constantly reminded of their brilliance by hordes of bootlicking minions looking for their next promotion, but for Mini executives it had to be a humiliating blow. Mini exists in its own little world, which seems to be shrinking by the day.
Nissan. This company has slowly but surely become a mainstream force in the U.S. market despite flying almost completely under the radar. And I can’t for the life of me understand why. Is it great products? No. In fact they’re mediocre and for the most part, hideous to look at. I mean, let’s face it, Nissan is building some seriously ugly looking vehicles. Is it brilliant marketing? Are you kidding? Nissan marketing is a dismal exercise in futility, and that’s on a good day. So, what is it, exactly? The only rational reason – and I am paraphrasing a hoary adage by H. L. Mencken here – is that no one ever went broke underestimating the intelligence of the American public. As in, mediocrity, when it comes to automobiles, is bliss for most consumers, because at the end of the day too many of them don’t understand the difference and couldn't be bothered to care. Confounding and tragic, but there you have it. And despite Carlos Ghosn’s promises of global dominance, nothing has changed to alter my assessment. (Can’t auto CEOs just be content with doing well without veering into talk about dominating the market? Ha! What was I thinking?) For those who revel in abject mediocrity, Nissan is just the ticket.
Porsche. No automotive company is better at executing a vision for its brand and staying relentlessly focused to the task at hand than Porsche. The company’s mission is to build the most enticing enthusiast machines they can muster, and in the process of doing so it has made Porsche the most desirable automotive brand in the world and one of the top performing brands on the AE Brand Image Meter. Every time I think Porsche has lost it with a new model, they just keep digging deep to reestablish the brand. Thankfully, even Porsche’s savvy marketing operatives are acutely aware that this roll won’t last indefinitely without consistent efforts at shoring up the brand’s legacy. At times arrogant as it goes about marketing its brilliant array of vehicles, Porsche nonetheless delivers on its brand promise repeatedly and with unwavering consistency. The powers that be at the company know that the profitability from selling SUVs is a blessing, and that it gives Porsche the luxury to create ever more desirable sports cars and compete in major league races around the world. But it comes with a heavy cost too. And Porsche operatives understand that they have to fight and claw to maintain their grip on the soul of the company. At least Porsche understands the task at hand. That’s more than most other companies can muster.
Ram Trucks. As I've said repeatedly, crafting a brand image is one of the most challenging tasks in this business. The True Believers out in Auburn Hills know trucks, and they're building a first-class pickup truck. But there's more to it than that. Not only are they executing their trucks almost flawlessly in terms of design, engineering and features, they've managed to hit it out of the park when it comes to image wrangling. It doesn’t hurt that JARM marketers are putting more cash on the hood than a down payment on a small house, but who’s counting? The only question remaining is how far can Ram go?
Rolls Royce. Nothing new here. Old School before Old School was even remotely cool again, Rolls Royce is still firmly planted in its own little brand world – especially since its rejuvenation due to BMW ownership and the debut of the iconic Phantom followed by the Ghost, the majestic Wraith and the seductive Dawn. (The Cullinan, however, is a step back.) Oh well, what a wonderful, splendiferous world it is. The Rolls-Royce brand Image is impeccable and smokin’ hot, in a sexy-flirty Helen Mirren kind of way.
Subaru. The most successful brand that no one thinks about (except for its rabid owners), Subaru has attracted loyal followers by emphasizing function over fantasy, and detailed execution over smoke-and-mirrors gimmickry. More important, unlike some other automotive entities we know, Subaru marketers understand what the brand is and what it isn’t, and because of this and its focused consistency, it has been rewarded with intense brand loyalty. Kudos to the Subaru marketers, because they clearly understand who its customers are and what the brand means to people. And this is no small feat, which is why Subaru has ascended to the top tier on the AE Brand Image Meter.
Tesla. Nothing new here, either. Blue-sky thinking, old-time religion, and enough smoke and mirrors to last this industry a frickin’ lifetime, Elon Musk is a huge success, dammit, and don’t you dare forget it. Tesla is the car built for politicians in Washington and Northern California, and EcoSwells needing even more validation for who they think they are. But it’s no secret that the Tesla miracle is running out of juice. The denizens of Wall Street who have gleefully written off the domestic automobile industry as an expendable part of this nation’s past have finally realized that Tesla is a smoke-and-mirrors exercise burning mountains of cash and heading nowhere good. To the green intelligentsia, Tesla is still The White-Hot Future. For the rest of us, well, it’s a great deal less.
Toyota. Toyota is back with a renewed sense that it can do whatever it wants whenever it wants to. Why? It is armed with the richest war chest in this business by far (it dwarfs the other top companies combined), which allows the company the wherewithal to pursue anything it wants to do. Toyota’s resilience and success in the market are proof positive of its focused consistency, and it never, ever quits. The blandtastic appliance era for Toyota is fading from view, thanks to Akio Toyoda’s push to heat things up. There’s a real air of substance to Toyota, and it shows.
Volvo. This car company has honed its product focus to such an extent that it has become a force to be reckoned with again. Volvo used to be the brand for people who questioned why they even bothered to own a car in the first place. Not anymore. Now, Volvo is the beautifully executed smart choice.
VW. After the serious financial hit and image headache from the Diesel cheating scandal, the VW Group and the VW brand are on the rebound. Despite having to shell out billions to satisfy the legal requirements of the settlements with the various entities due piles of cold hard cash, VW is still generating serious profits, almost shockingly so, in fact. In the U.S. the VW brand never really suffered permanent damage to its image because Diesel loyalists loved their cars and still do. It’s easy to see why people love the VW brand because it provides an interesting alternative to the American, Japanese and Korean brands, while adhering to the basic values of overall efficiency with a fun-to-drive component that still resonates with consumers. It doesn’t hurt that VW offers two of the best enthusiast cars in the market in the GTI and the R, either. The new Atlas SUV has been a much-needed boon for dealers, because they’re flying off of the lots like free beer. And the new Tiguan is a noteworthy product entry too. The VW brand is alive and well. Hopefully, now that the company has been severely chastened, it will seize this golden opportunity to do even better.
As I've stated repeatedly on many occasions, if this stuff were easy, everyone would have 30 percent market share and the streets in auto centers around the world would be paved with platinum. And when you listen to CEOs like Carlos and Sergio long enough, you get the idea that is exactly what they expect. But this just in: It doesn’t work that way, and when you have multiple manufacturers clamoring for the same slice of the pie and making the same sort of promises, something has to give, which means brand image becomes even more crucial.
This automotive marketing business is tough, unforgiving and relentless. Hundred-million-dollar marketing campaigns can be left in a smoldering heap by the side of the road because of a bold miscalculation, a flat-out wrong-headed decision or auto executives egos running amuck. Or, as I like to call it, The Trifecta of Not Good. That last one can be particularly devastating, because as smart as some of these people think they are, their ability to sort through the real from the imaginary sometimes gets lost in translation. Much of this is the result of a completely unrealistic assessment by these executives of their brand's place in the automotive world. They are so buried in the day-to-day minutiae of it all at their respective companies that they simply don't have the wherewithal to step back and objectively see or understand what's really going on. And to compound that, they don't really like people telling them what to do or that they're wrong either, because after all they're geniuses, remember? Just ask them.
After nineteen years of writing this column, I find the insularity at the auto companies to be astonishing. Understandable mind you, but still astonishing. That's really the only adjective that fits. This insularity causes major missteps and blown opportunities left and right. When I see an iconic brand offering so much to work with, with so much historical relevance to bring to bear and yet it is so misguided and mishandled, it is simply unconscionable. Squandering a legacy is unforgivable in my book. I would suggest that the brand marketers that got hammered in our latest Brand Image Meter go back and reread my words carefully, because though painful, half the battle is realizing what you're doing wrong before you can even begin to see your way clear to making things right. As for the rest who fared better I wouldn't get too complacent, because you're only one bone-headed decision away - or a runaway ego unchained - from disaster.
Automakers who are in search of a brand image and understand the power that comes with having a solid one garner the tiniest bit of slack from me, because at least they know what they want and where they need to go. But the automakers that have a brand image and don’t have the first clue as to what to do with it, or worse - have squandered a great brand legacy because of cluelessness, ineptitude, or both - draw zero sympathy from me.
It’s duly noted that the companies that are overflowing with True Believers and that focus every waking moment on the integrity and the fundamental desirability of the product are doing very well right now in the brand image department, and they will continue to do so. (There are exceptions, of course, as inept marketing has a tendency to overwhelm great products. See the aforementioned Chevrolet example.)
The rest? Well, for them flailing and floundering about seems to be standard operating procedure, if not a full-time career trajectory. And living in a world of reduced expectations is oddly comforting to them.
Brand image is a fleeting thing, except for those brand marketers that understand how they got it, what it took to get it to that point, and what it will take to keep it.
And that’s the High-Octane Truth for this week.
WRITE HARD, DIE FREE CONTINUED.
30 May 2018 at 6:34am
Editor's Note: When we embarked on a journey with this publication with whereabouts unknown way back when, little did we know we'd be here nineteen years later. Today, we feel it's a perfect time to remind everyone what this site - and The Autoextremist - are all about. To do that, we need to travel back in time, to the beliefs that formed the foundation for this site, and that continue to drive us to this day. The world is a different place than it was that June day in 1999, but in so many ways, when it comes to this business, there’s a mind-numbing sameness about it all that is truly unbelievable. -WG
By Peter M. De Lorenzo
Detroit. Nineteen years ago, when I became tired of what the ad biz had become, tired of the sycophants, the ass kissers, the spineless weasels and the other two-bit players who had turned what was once a pretty interesting profession into a vapid wasteland, I knew I had to do something different. I had also grown tired of seeing the auto business – as practiced here in Detroit – sink further into the Abyss of risk-avoidance-driven mediocrity, and watching legions of so-called "executives" make horrendous, piss-poor decisions day after day on behalf of their respective auto companies.
As I watched the carnage unfold around me, I knew that something had to be said by someone who had firsthand knowledge of what was going on – someone who was in the trenches and on the front lines of the ongoing battle – and that someone turned out to be me.
And Autoextremist.com became my forum to say it.
As some of you insiders may know, Autoextremist originally was a concept I had for a new car magazine back in 1986. The print version of Autoextremist was going to target hard-core enthusiasts, while telling it like it is with a distinctive, combative style. It would also be the first enthusiast car publication that wouldn’t accept advertising.
The state of the enthusiast car mags back then was a dismal parade of sameness that left me cold, and I was determined to breathe some life into the genre (and it is different today, how? –WG). But my ad career got in the way, and by the time I looked up it was the late spring of 1999, and I knew that if I didn’t do it then, I’d never do it – so the time was finally right for Autoextremist. The Internet, of course, would replace the print magazine idea, but the essence of my original manifesto written back in 1986 remained unchanged.
And that's how this publication and "The High-Octane Truth" came about, whether people were ready for it or not. A lot has changed about this business over the ensuing years, but as I am continually reminded, then again, a lot hasn’t.
I am certain of one thing, however, and that is my set of fundamental beliefs about this business hasn’t changed. I thought it would be a good time to reiterate what those beliefs are today, where I’m coming from, how I look at things and why I say the things I do.
I believe that the business of designing, building, engineering, marketing and advertising cars and trucks should begin with one simple premise – the Product is King – and everything else has to flow from that fundamental fact. Cars and trucks should be exciting to look at, fun to drive, flat-out desirable and worth owning in all respects. If you (as an individual or a company) forget that fact, you will fail.
I believe people whose cumulative marketing experience basically consists of 1.) An MBA combined with 2.) A stint at the zone level (with the added "benefit" of P&G indoctrination -WG) and 3.) Being part of a rotational executive "rounding" stint through the system, shouldn't automatically be qualified to get near the serious business of marketing and advertising cars, let alone be able to tell an ad agency what's good or not good about an ad campaign that has just been worked on for the last 47 days straight.
I believe that car company executives whose first order of business is to cover their own asses and then shamelessly promote themselves the rest of the time – while bringing absolutely nothing positive to the job at hand – should be encouraged to take that long "break" they keep droning on about in off-the-record moments. Please do us all a favor – and leave now.
I believe that a rampant, "let's not offend anyone" mentality taints every decision made by almost every car executive (yes, there are a few brilliant exceptions) working in the business today. (By the way Lowe’s called, backbones are on special today, Aisle 6.)
I believe that the typical car company executive's reckless and utter disdain for anything the least bit creative or provocative – while at the same time endorsing a process that consistently "dumbs down" the advertising and the product itself with a series of debilitating steps and hand-wringing meetings – directly results in the churning out of an endless stream of cars and trucks that are too often nothing more than monuments to tedium, mediocrity and bad management. Back then I called it "engineering to the lowest common denominator" – and it still stinks.
I believe that politics permeates every decision in the car business down to the very last detail, ensuring that all butts are "covered" and that no one is left "exposed" to any ugly consequences. The business is still populated by people more worried about what their political standing "entitles" them to than about bringing to the table an attitude of "what can I do?" or "how can we make it better?" Accountability? Maybe that can be found in Aisle 6 too.
I believe – and this is etched in stone – that whenever the shit hits the fan and there is the least bit of advertising or marketing or product controversy, a car company will always do the wrong thing, and then turn around and blame the agency or a supplier for their predicament at the drop of a hat. You can take that one to the bank.
I believe that the ad agency side of the business has strayed as far away from being a creative environment as you can get – short of working airport security. In many cases, it has deteriorated into a constant battle between The Wimps and The Twerps, people who are intent on taking over the agency and turning it into a cesspool of "Yes Men" and "Yes Women" who are more concerned with their political futures and the "process" than about working on great advertising and marketing.
I believe that ad agencies have forgotten what their mission is, because they're spending 90% of their time, money, resources and effort on everything else under the sun except actually trying to make great advertising. And I believe that, in most cases, their clients are directly responsible for this revolting development – and that they ultimately get the advertising they deserve because of it.
I believe that runaway complacency on both sides (car companies and their ad agencies), combined with an atmosphere corrupted by an absolutely suffocating fear of taking any kind of risk (or standing behind it once you do), is killing the chance to get great work produced. Don’t think that’s the case? Take a look at the dismal state of car advertising today.
I believe that in too many cases in this business bad people are making bad decisions negatively affecting good people who know better, people who have been shuffled off to the side for political "considerations" (i.e., they have a backbone and a point of view – and they're not afraid to share it).
I believe that instead of a joyful celebration of the indefatigable nature of the American Spirit and the role the automobile has had, continues to have, and always will play, the business has become nothing but a pathetic caricature of itself – complete with bad actors and even worse props.
I believe that the glaring sameness of the so-called “enthusiast” car mags is still there and it’s still highly annoying. And there’s no denying that the days for the hard-copy print mags are severely numbered, and when the shakeout finally comes, it will be ugly.
I believe the state of automotive journalism has never been as weak as it is right now. There are too few writers worth going out of your way to bother with today, and that’s a flat-out disgrace. Automotive journalism (yes, of course there are notable exceptions) has devolved into a thinly disguised pay-to-play-for-access game. And it’s embarrassing.
There are some positives in this business today, thankfully. But there are lingering issues too.
As for the car biz itself, is it still about the Product? Absolutely. More so today than ever before. But if you don’t have the accurate, enticing and properly funded marketing firepower to put behind a new product, then it doesn’t matter how good it is – it will be forgotten 120 days after its launch in this oversaturated automotive market we live in.
As for the execs making key decisions about the marketing and advertising at the car companies nowadays, I still see woefully underqualified individuals being given the reins on major marketing decisions, and it’s still baffling.
Are auto execs any more willing to take a stand these days? It’s intermittent when it happens, but there’s some noticeable movement in the right direction at least. But it’s not nearly enough. And I’m sure a search party will have to be organized to find executives with backbones to shore up the ranks.
As for those “lowest-common-denominator” product decisions, I’m thankfully seeing that mentality fade into the woodwork. Detroit is creating some excellent new products right now, but getting people to care about them is an entirely different story altogether.
I still believe leaving major product and marketing decisions in the hands of a few focus groups is a dangerous practice and a monumental waste of time and money. And it’s still being done. It has been proven time and time again that focus groups are, at best, inconsistent if not inaccurate barometers – and it’s a crime. After all, the only people actually listened to in these focus groups are the ones who agree with the client's preconceived mindset to begin with, which makes the whole process a colossal waste of time and money.
Politics and politically charged decisions still hold sway over these companies to a degree, some less than others, fortunately. As for accountability, it’s still in exceedingly short supply.
As for the whole ad agency vs. client thing, the profitability of the advertising business is being squeezed down to next to nothing, leaving agencies to fight over scraps while clients display the loyalty of your average fair-weather sports fan, In other words, the state of the ad biz when it comes to the auto industry is beyond pathetic. It’s no wonder that ad agencies have forgotten what their basic mission is – which is to deliver the best, most provocative communications on behalf of their clients that they can muster – in this toxic environment. Do clients still get the advertising they deserve because of it? Yes.
As for those aforementioned legions of Wimps and Twerps and “Yes Men” and “Yes Women” they’re all still present and accounted for – on both sides of the ball. I know, because some of the people who were shoveling shit in this town when I was still in the ad biz are still doing it today. And it’s unconscionable.
As for bad people making bad decisions negatively affecting good people who know better in this business, same as it ever was, unfortunately.
And what about that whole “joyful celebration of the indefatigable nature of the American Spirit and the role the automobile has had, continues to have, and always will play...” thing? Well, let’s just say that it’s a work in progress.
That “Detroit” finally got product religion and is saying and doing all of the right things is commendable, but there’s still the lingering fear that this business as practiced here will slip back into bad old habits at any given moment. Those shining beacons of product light and creativity are still threatened by churning storm clouds defined by a “three steps forward, five back” cadence of rampant mediocrity. And that is sobering.
Add in the great unknown of the autonomous vehicle movement, the hopeful nirvana of ride sharing and the promises of untold profits in a new Emerald Auto City just over the hill, and well, to say I am beyond skeptical would be an understatement. Let's just call it a giant "we'll see" for now and leave it at that.
Now, at the beginning of our 20th year, I am proud to say that we still take you "behind the curtain" to give you an up-close look at the Wizards, the Dullards and everyone else in between in this business. I still say what the others are only thinking (or whispering) in deep background or “off-the-record” conversations, and I will continue to do so. And this publication will continue to "influence the influencers" every single week, even though they're loathe to admit it.
Delivering The Truth, The Whole Truth... and absolutely nothing but The High-Octane Truth has been an exhilarating ride.
Write Hard, Die Free indeed.
And that's the High-Octane Truth for this week.
THE CADILLAC?OF CADILLACS.
22 May 2018 at 9:28pm
By Peter M. DeLorenzo
Detroit. The amount of hand-wringing that has been expended by GM operatives over the future of Cadillac over the past five years has been prodigious. Legendary even. People in this business are continually shaking their heads over the fact that the $12 billion committed to yet another rebirth of Cadillac hasn’t translated into much. Yes, the True Believers in GM Design and Product Development have done some superb work on behalf of GM’s luxury brand, but the net-net of it all has been decidedly lacking, and Cadillac is not even close to where it should be, despite a few product successes and the notable inroads into the Chinese market.
The concerted effort to push Cadillac into the future at all costs - to the detriment of its historic past - has been painfully obvious to even the most casual of observers. There is something that has been seriously lost in translation, despite the fact that GM Design has put together three of the most stunning concepts in the industry over the last decade in the Ciel, the Elmiraj and the Escala. One of the mysteries of the modern industrial age is the fact that GM operatives didn’t capitalize on the dramatic impact of those concepts. GM insiders insist that the CT6 captures the impact of those vehicles but they’re lying through their teeth. The CT6 has a front end that is “kinda-sorta” like those concepts, but the rest of the car is uninspired and ordinary, and there is no amount of squinting that will make it right.
Ask the casual observer on the street what Cadillac means to them and they will say “Escalade.” Yes, the True Believers at GM who churned out the “V” cars are to be commended because they are truly excellent machines, but let’s face it, a few enthusiasts who gravitated to the “V” cars do not constitute a movement, and Cadillac’s street cred is the visual impact and sheer on-the-road presence of the Escalade.
Cadillac finds itself at a critical juncture at this moment in time. The recently departed Johan de Nysschen’s remaking of GM’s luxury brand in Audi’s image has now officially run aground. The strategy sounded good and looked good on paper, but the vehicles were handicapped by being ridiculously overpriced right out of the gate. Again, the Escalade is the exception, but the rest of Cadillac’s lineup is desperate for traction. The XT5 is doing decently in an SUV-crazed market, but the new XT4 is decidedly lackluster, so it remains a giant “we’ll see.” The ATS is going away but the High-Octane Truth is that the CTS should follow it out the door. And the XTS, which Cadillac operatives refuse to acknowledge and dismiss as an embarrassment and an afterthought, is still the best-selling Cadillac car. So what does that tell you?
The next Escalade is dramatic and will make the Navigator look like yesterday’s news, but Cadillac operatives also have an opportunity to put stunning, memorable bodywork on that wonderfully-executed CT6 vehicle architecture and reestablish Cadillac as the design and luxury leader. But will they do it? Or maybe the better questions is, do they understand why they should do it? Let’s just say I have serious doubts.
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.
Do you realize that the power of the Cadillac brand is still seared in the American consciousness? Let’s think about that for a moment. The moniker, “The Cadillac of…” is used by any number of businesses – big and small – because to this day it connotates the top of the line. And this is in spite the fact that Cadillac, through serial ineptitude and strategic mistakes, has been marginalized for years. Yet Cadillac still has such resonance and power as a brand that it is simply staggering. (Don’t forget that it wasn’t all that long ago – pre-Escalade of course – that the Chevrolet Suburban was referred to as the “Texas Cadillac” in Texas.)
It’s clear that the aforementioned energy and hand-wringing expended to “fix” Cadillac haven’t accounted for much. And the reason for that is 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 vehicles 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.
GM operatives must let Cadillac be Cadillac. Not facsimiles of a Cadillac. Not “kinda-sorta” Cadillacs.
They can start by getting back to building the Cadillac…of Cadillacs.
And that’s the High-Octane Truth for this week.
The Cadillac Ciel.
The Cadillac Ciel.
The Cadillac Ciel.
The Cadillac Elmiraj.(GM)
The Cadillac Escala.
LOOKING THROUGH THE INDUSTRY KALEIDOSCOPE.
14 May 2018 at 11:01am
By Peter M. DeLorenzo
Detroit. Every time I hear top industry execs speak of late, I cringe. It’s as if they’re looking through a telescope that only gives them images of clarity and predictability, and their confident tones take on an air of emphatic certainty that is eerily and ominously matter-of-fact. It’s frightening in that even the most detached observers of this industry know this isn’t even close to being the way things really are.
The reality is that this industry keeps churning with a relentless ferocity that shows no sign of abating. In fact, this swirling maelstrom can only be viewed through a kaleidoscope that gives you glimpses of bits and pieces of what you think is going on, and even then, one can’t be sure.
Speaking of glimpsing bits and pieces, what can I say about the goings on at GM? They gained some believers on Wall Street, but that didn't last long and neither did the pumped up stock price. And whatever euphoria was temporarily present has been replaced by a resounding "now what?" After committing $12 billion to Cadillac, what do they have to show for it? Since adopting the “chasing Audi” strategic posture under former chief Johan de Nysschen’s leadership, the division appears to be starting over yet again. The dropping of the smaller ATS wasn’t a surprise, it’s the fact that it was even built in the first place that was a revelation. But what now? The new Escalade will be stunningly good, the XT5 is doing acceptably well in this all-SUV-all-the-time market, and Cadillac operatives are pinning hopes on the XT4 adding to their momentum. But this is only the immediate situation. The bigger question is what will Cadillac stand for going forward? How will GM/Cadillac marketing strategists project Cadillac into the future? Will Cadillac abandon cars altogether? Or will they double-down on designing, engineering and building a “statement” Cadillac that will continue to define the brand as being part of a genuine historical legacy? Mary Barra and Dan "I Am" Ammann have soaked up a lot of accolades lately, but if they don't solve the future of Cadillac, those kudos won't count for much.
And what of Ford? Suffice to say that the “we’re reducing our footprint in the car business” announcement did not go well. Instead of controlling the rollout of the sequence of events over time to lessen the impact, Ford operatives double-barreled it and set off a firestorm of hand-wringing in the mainstream media. As I said last week, certain Ford executives were directly responsible for botching this announcement, and the stench of it is going to linger over the company for the foreseeable future. It also revealed that Ford has a huge problem with the strength of its executive bench, which is something that is going to grow more crucial by the hour.
There is no doubt that Jim Hackett – aka “The Professor” – is a forward-thinking futurist who appears to be entrenched in that space, which, as Bill Ford has stated repeatedly, is a vital part of the company’s strategy for continued relevance in the future. Where Ford ends up in all of this would only be pure conjecture at this point. I am more concerned with the pressing realities facing the company for the next 36 months. Ford’s product lineup shows promise, but the company’s apparent inability to get new vehicles out with a proper cadence is alarming. Take the new Bronco, for instance. This vehicle has all the earmarks of grand slam home run, yet its appearance in the market a long two years from now is simply unacceptable. The F-150 remains the straw that stirs the drink for Ford, but how long can its runaway success continue? Ford needs new and punchier products in the market. Yes, the Explorer and Escape do well, but they’re not new enough. Ford needs to accelerate its product development cycle. And by the way, it’s a good thing Ford has Lincoln to nurture and grow. And to think the company was actually considering pulling the plug on its luxury brand six years ago. Not Good.
And what to make of FCA? Its CEO has hinged everything – meaning all of its profitability, aka its appeal to suitors – on the success of Jeep and Ram Truck. The new Wrangler is a dramatic improvement in every way, and it appears to live up to the task. But the Ram Truck launch has been a disaster, and it’s killing Marchionne’s Grand Plan. I don’t think that “Grand Plan” has changed one iota either. FCA’s succession order can be talked about and speculated upon, but if Marchionne can get a corporate entity to buy the whole shebang for somewhere between $22 billion and $25 billion, he and his Fiat heir-handlers will retreat to café society back in Italy to toast the setting sun and regale each other about saving the automobile industry, while ignoring the fact that the American True Believers involved should really get the credit.
As for the rest, Hyundai and Kia appear to have it together, but then again that’s only an illusion. Both companies are careening around insisting they can cover all of the bases and deal with any curves thrown their way – from the current market to the challenges of future mobility – but you only have to look as far as the disastrous situation at Genesis to understand how truly screwed up these companies really are. The corroded Korean auto executive mindset continues to be a built-in liability that apparently can’t be overcome. This “we know it all, just watch us” mentality continues to wreak havoc on the Korean automakers, and that will continue to be a perennial, unsolvable problem.
As for Toyota, Nissan and Honda, there are bright spots in thought, especially from Akio Toyoda, who has established a war footing at Toyota to counteract complacency and position itself for an ill-defined future. This is helpful but then again, this business will continue to be all about the product. Toyota (and Lexus) continue to have glaring inconsistencies throughout their product lineups, some of them simply inexplicable. The same goes for Honda. Yes, there are bright spots, but how can the abject futility surrounding Acura be explained? After years of ineptitude? And Nissan (and Infiniti) remain mysteries of the modern automotive world. Ghosn & Co. have managed to present rampant product mediocrity as a viable strategy and continue to succeed. Why?
And what can be said about the German automakers? Audi, BMW and Mercedes-Benz continue to try to be all things to all people with varying degrees of success, churning out everything from electric cars to SUVs to high-performance monster cars that remind them of their glory days. Except that there are such fundamental issues roiling these German automobile companies that they cannot be ignored or swept under the rug. The identifying brand identities for these manufacturers have been so watered-down and muddled that it’s no wonder that they’re having trouble defining their futures. The “good” parts of these companies are being overwhelmed by the “bad,” and then the German auto execs are left to wonder why they’re having so much trouble keeping their respective brand focuses intact. Well, it doesn’t work that way. Trying to play the “all things to all people” game eventually catches up to you. And now these German auto executives have woken up collectively muttering to themselves, "What happened?”
Take Porsche, for instance. Porsche executives remain absolutely convinced that the company’s foray into its new, all-electric vehicle will be fully embraced by its buyers, a constituency made up of the original enthusiasts who embraced the brand way back when but who are now drifting away only to be replaced by consumers with only a casual relationship with the rasion d’etre that used to define Porsche. This isn’t an insignificant problem, but Porsche executives feel that since they managed the transition into SUVs, having one or two (or more) all-electric Porsches shouldn’t be much of a problem. Except that the qualities that Porsche has long espoused as being part of its brand makeup simply won’t be a part of its new all-electric super sedan, starting with the lack of that distinctive Porsche sound. Porsche executives are about to find out that this silence will indeed be deafening, no matter how they spin it.
This business remains a glittering spectrum made up of a million bits and pieces. Yes, there are shards of light and excellence, but those are just furtive glimpses. The broader view is of a teeming stew of mediocrity that ebbs and flows with the inflated certainty and optimistic pronouncement of too many executives with only a fleeting familiarity with reality.
And that’s the High-Octane Truth for this week.
FORD IN FREE FALL.
5 May 2018 at 9:50am
By Peter M. DeLorenzo
Detroit. Depending on one’s point of view, last week’s column either praised the Ford executive team for making a market-driven decision to reduce the number of its car nameplates, or slammed Ford for abandoning the car market. Though I took pains to present the rationale behind both sides of the decision, the more I’ve thought about it, the more it became very clear to me that Ford – at least certain Ford executives – have lost their frickin’ minds for walking away from the car market, especially with its very competitive Fusion.
I should point out that there is much more to this story (there always is), and it should also serve as a reminder of why you come here in the first place, which is to get the nitty-gritty insider stories of this business that you can’t find anywhere else.
But before I get into that, Ford in Free Fall? Come on! How can that be? Isn’t this the home of the vaunted F-150, the most dominant vehicle in this business for more than four decades and a cash machine of Brobdingnagian proportions? Yes, it is. The F-150 is The Franchise, and its success powers the company machine, keeping the whole enterprise going.
This success doesn’t come easily or automatically, however. Ford happens to have the best sales team at its disposal, led by one of the savviest executives in the business – Mark LaNeve – and it’s because of him and his team, the consistent excellence of the F-150 and the fact that Ford has some of the finest dealers in the industry that the Ford cash machine keeps going, month after month and year after year. But take away the F-150, and Ford would be just another car company struggling to keep the enterprise afloat.
It may also help to remember that Ford is an extremely unique enterprise in that the Ford family controls 40 percent of the company through special stock. And for most around these parts that is a very good thing. Often referred to as “Ford’s” - as in, “I work at Ford’s” – Ford dominates so much of the local landscape (The Detroit Lions, The Henry Ford museum, etc., etc.) that through its many involvements with social and charitable initiatives over the decades, it has become an integral part of the fabric of this community, and there is a distinct sense of pride associated with the company because of that. But that doesn’t mean everything is rosy in Dearborn. Far from it in fact, because the internal hand-wringing over this “let’s get out of the car business” decision has exposed the ugly underbelly of what the Ford Motor Company has become, and it now finds itself at the most precarious moment in its history – yet again – because of it.
Yes, the resolute and intransigent bureaucratic fiefdoms that have always defined Ford have reared their ugly heads again, but then again that was to be expected. After Alan Mulally left, they just dusted off their pitchforks and resumed their narrow-minded shit disturbing, company goals be damned. But that’s almost a given at Ford, it’s as much a part of the company’s corporate culture as the Mustang. But that’s not the reason the company is in trouble again.
Chairman Bill Ford Jr., who made the brilliant and gutty move to bring Mulally in when the company was in danger of imploding more than a decade ago, was faced with a similar decision when Mark Fields was exited from the company a little more than a year ago. If Bill had his druthers, Alan would be just now getting ready to retire, he wanted him to remain as CEO that badly. And although this was a view that was shared by many, alas it wasn’t to be the case. So, having gotten to know Jim Hackett over the years, Bill alighted on the notion that Hackett could be The Guy.
And in some respects, Jim showed flashes that he could be The Guy, but only intermittently. Hackett’s esoteric pronouncements and his vision of the future – defined by connected cities et al. – and the Ford Motor Company’s role in it were all deemed well and good, but meanwhile the machine that defines Ford wasn’t being served. The High-Octane Truth is that Hackett, a decent, smart and well-meaning guy, just doesn’t have the depth and breadth of experience to make a real difference at Ford. And right now, the one thing Ford desperately needs more than anything else is a chief executive who understands this business inside and out, and can guide Ford through perilous waters.
I mentioned the notion of "cutting to prosperity" last week, which never, ever works in this industry. But unfortunately the internal climate at Ford right now is exactly that: cutting, cutting and more cutting, which is a giant bowl of Not Good. You would have to assume that what to do with Hackett would be Bill Ford’s most pressing problem and it certainly is, because many now view the selection of Hackett as being an interim choice. And whether Bill Ford is willing to admit that to himself or not, the difficult decision about who will lead Ford into the future is now front and center, as well it should be.
But another situation is roiling Bill Ford’s decision making at this very moment, and it involves the rise of another executive, one who is unfettered by rational thought and untethered by accountability, and who has gone completely off the rails. Jim Farley, the former Toyota wunderkind who was responsible for the launch of the Scion brand, was brought in by Alan Mulally to be Chief Marketing Officer way back when. And not unexpectedly, his debut at Ford didn’t exactly get off to an auspicious start. Farley didn’t waste any time transforming himself into an enfant terrible right out of the gate. Displaying a prodigiously short attention span and burdened by an excruciatingly painful interpersonal awkwardness, Farley’s belligerent, condescending style of dealing with underlings, along with his classic “parachute in, helicopter out” M.O. that has defined bad actor executives for decades in this business, became his calling card. Internally, Farley became known as "The Two Jims," and interactions with him became a crap shoot, hinging upon whether people encountered the "good" Jim or the "bad" Jim on that particular day. Needless to say when the "bad" Jim was unleashed, Farley left a trail of bad feelings and highly questionable decisions in his wake.
Farley has long considered himself to be “the smartest guy in the room” at Ford, much to everyone’s endless chagrin, because the reality is that he isn’t. It’s a carefully crafted façade that is hollow to its core. Farley’s bad executive behavior starts with his inability to listen, considering his own counsel to be by far the best source when it comes to decision making. (Ironically this is the absolute opposite of Alan Mulally, who regularly canvassed multiple constituencies on major decisions.) And because of that, as well as a host of other annoyances, Farley left such a bitter taste in people’s mouths that when he was shipped off to run Ford of Europe several years ago the overwhelming sense of relief internally at Ford was palpable.
Blissfully unaware that he was universally loathed back in Dearborn, Farley seized upon his assignment in Europe, seeing it as a stepping stone to the executive suite at Ford. And the planets were aligned for him to come off as a hero there, too, because the European market had been in the doldrums for so long that the only way it could go was up. Steve Odell, who had been running Ford of Europe and had done all of the heavy lifting by closing plants and laying off people, set the table for Farley to succeed. And the inevitable happened, as Ford’s fortunes recovered in Europe along with the overall market. Farley took advantage of the opportunity and made sure all of the execs back in Dearborn could see what a genius he was, and unfortunately, too many fell for it.
The problem with all of this was that once Mark Fields was jettisoned from the company, not only did Bill Ford bring in Hackett, he brought Farley back from Europe, and made Joe Hinrichs and Farley co-No. 2 executives reporting to Hackett. And it proved to be a fateful decision, because at that very moment Farley decided that he was very much going to be The Guy.
As I said previously, an emboldened Farley, unfettered and untethered, turned out – predictably – to be disastrous. With his eyes set firmly on Hackett’s job, the very worst of Farley returned to Ford headquarters, only now his most repugnant qualities were magnified and amplified, with no one seemingly able to rein him in.
Besides his now-signature belligerence and rudeness in full view, Farley started to get out ahead of his skis, making decisions that were puzzling at best and potentially harmful to the long-term health of the company. Having been gunning for Ford’s advertising agency – the WPP-owned GTB – for years for slights both real and imagined, Farley almost immediately put the massive Ford account up for review. This, after WPP/GTB had been involved with Ford for 73 years. Could the advertising be improved? Certainly. And there's a way to do that. But destroying a long, fruitful relationship to assuage Farley’s gargantuan ego was flat-out irresponsible and uncalled for.
Farley also commandeered company appearances in front of financial analysts, something completely beyond his ken, thinking that if he demonstrated his acumen there that he would gain favor with Bill Ford and the board. And true to form, this proved to be a total disaster as well. Industry analysts are still talking about Farley’s cringeworthy performance at the Deutsche Bank Global Auto Industry Conference here in Detroit back in January, where he came off as being someone who was flippant, woefully ill-prepared and not ready for prime time, and consequently Ford came off poorly too. Do you wonder why Ford can’t gain any traction on Wall Street? Farley’s dismal performance that night didn't do the company any favors.
And then there was the “we’re going to get out of the car business” decision that turned out to be an unmitigated PR disaster, because it was handled poorly and came off as a knee-jerk pronouncement that hadn’t been thought through. It turns out that the idea was Farley’s (no big surprise), wittingly or unwittingly aided and abetted by CFO Bob Shanks. And internally it bore the signature of a classic Machiavellian move by Farley as well, because Joe Hinrichs wasn’t even aware that it was going down until after the fact, which is almost beyond comprehension. (Editor-in-Chief's Note: I spoke with Mark Truby, Ford's PR Chief, and he said that Joe Hinrichs was aware of the car decision. I stand corrected. -PMD)
Am I picking on Farley? Hardly. I have only scratched the surface in describing this egomaniacal character and his blatant power grab, and the sad thing is that there are several other areas he is seeing fit to mess with inside of Ford that could wreak havoc on the company’s future for years. And this simply shouldn’t be, of course. One bad actor shouldn’t be causing this much consternation and hand-wringing throughout the enterprise, threatening to jeopardize everything the Ford Motor Company stands for. When everything is factored in, Jim Farley is simply the wrong person, in the wrong place, at the wrong time.
Bill Ford has a very difficult task facing him. He has to admit publicly (after first admitting it to himself) that Jim Hackett isn’t The Guy. Then he has to make sure that Jim Farley is kept as far away from being The Guy as is humanly possible, because left unimpeded Farley will be detrimental to the future of his family's company.
I closed last week’s column with the following words, which still resonate loud and clear today:
“In the meantime, since its future product announcement didn’t exactly set the world afire, the Ford executive team needs to press the reset button and focus on the task at hand. That means focusing on designing, engineering and building the best products they can muster for every segment the company competes in, despite the Wall Street cloud of negativity hanging over them.
Because in the end, there is one fundamental aspect of this business that will never change, and that is that it’s about the product, it has always been about the product, and it always will be about the product.”
And that’s the High-Octane Truth for this week.
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