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11 June 2009/

GM

by Wally Olins at 2:39 pm 11 June 2009
Filed under: Branding

Everything about bankrupt GM is a mess. Including its brands. And everything has been a mess for a long time.  I first wrote about GM 20 years ago, in 1989. In my book Corporate Identity (1989) I admiringly described how Alfred Sloan created GM’s branding structure.

Round about 1918 Alfred Sloan, the commercial genius who managed the growth of General Motors, was alarmed by the overwhelming dominance of Ford in the market place. Ford had one car – the Model T – which until VW’s Beetle was the world’s most ubiquitous automobile. General Motors, on the other hand, had a multiplicity of makes and models  which defied description or analysis. It had grown simply by acquiring every automobile manufacturing and component company in sight. So, although General Motors was a vast company, it was – in the words of Sloan – a ramshackle business. 

‘The product policy we proposed’, says Sloan in his classic book My Years with General Motors (1963), ‘is the one for which General Motors has now long been known.  We said first that the corporation should produce a line of cars in each price area, from the lowest price up to one for strictly high-grade quality production.

As Sloan put it in his dry way:  ‘The core of the product policy lies in its concept of mass-producing a full line of cars graded upward in quality and price’.

At the time Sloan introduced the policy in 1919/1920, Ford had 60 per cent of the market and Chevrolet had 4 per cent.  Within ten years, Chevrolet alone had a higher market share than Ford, and General Motors had become the world’s largest manufacturing enterprise.

Since the late 1970s GM has gone right back to where it started in branding terms.  Branding in GM is a shambles which defies description. The simple branding ladder is in shreds and tatters.   Brands like Saturn and Hummer have come and are in the course of going. Oldsmobile has been dropped, Pontiac is probably on the way out; Buick proclaimed as a domestic brand is also  marketed in China; what’s left, just about, are Chevrolet with badges plastered over everything in sight from simple small cars built in South Korea up to exotic sporting machines, and Cadillac the demoralised wreck of a once great luxury brand.

Outside the US there is Germany’s Opel badged for reasons known only to GM as Vauxhall in Britain. There’s Saab, still clear and distinctive, despite GM’s efforts to undermine it but still loss making. There’s also Holden in Australia which has the personality of a chameleon – and a few more bits and pieces. Whatever anybody else could do with GM brands could not possibly be worse than what GM has itself done to them.

What would we do?

There are probably 3 brands worth saving:  Chevrolet, Cadillac and Opel.

Chevrolet remarkably still has great respect worldwide.  It could still be a successful global mass market brand competing with Toyota, Nissan, Ford, Fiat and VW.

Cadillac still has a surprisingly good cachet in the luxury space. All it needs is a decent  and competitive product.

Opel under good management could fit into the space in the middle; a stylish European brand.

Its not likely that this will happen because the various brands will go to different owners as the business gets broken up. But there’s still a chance – a really good one.

Anybody willing to give it a go? We at Saffron would love to help.