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      11-25-2009, 05:24 PM   #1
JSpira
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Why the auto industry has problems...

GM´s problems in shedding brands are emblematic of the problems it had when it lost its focus and - at the same time - its brand differentiation.

Here is one take on the current situation - Breaking Up is Hard to Do.
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      11-26-2009, 12:49 AM   #2
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Great article. Short, simple, and down to the point.


I like the authors proposed idea of having GM go back to its roots. The thought of a "Structured" line up is a great.


The cuts they have recently made to me make NO sense. Why in gods name do you need a GMC AND Chevy? They are identical cars, put aside some plastic.

And why would they cut Pontiac AND Saturn?



GM has failed on so many levels in the last 20 years....
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      11-26-2009, 12:57 AM   #3
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Great article. Short, simple, and down to the point.
Thanks! Glad you liked it.

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I like the authors proposed idea of having GM go back to its roots. The thought of a "Structured" line up is a great.
Maybe someone at GM will listen to me.

Plus ça change, plus c'est la même chose
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      11-26-2009, 03:58 PM   #4
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Thanks! Glad you liked it.

Maybe someone at GM will listen to me.

Plus ça change, plus c'est la même chose
Hahaha, Yeah right. The only people they are listening to right now is the gov...
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      11-27-2009, 09:30 AM   #5
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Nice article, Jonathan! Very thought provoking and interesting.

It seems it is a much more complicated time for the auto industry in the US than it was back in the "ladders of success" days, with significantly more intense global competition in the industry. Sort of like the media industry and the "big three" networks, now they are competing on many more fronts and many more levels.

I enjoyed your article, and it compelled me to look into the basex website and read your article on information overload. I'm going to point out that measure to the administration at our university. Perhaps print a few days worth of information exchange to make the point!

Bravo.
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      11-27-2009, 09:45 AM   #6
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Nice article, Jonathan! Very thought provoking and interesting.

It seems it is a much more complicated time for the auto industry in the US than it was back in the "ladders of success" days, with significantly more intense global competition in the industry. Sort of like the media industry and the "big three" networks, now they are competing on many more fronts and many more levels.
Thanks Eddy. I agree that today things are more complicated but one thing that doesn´t change is the damage that occurs when a brand loses its soul and identity.

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I enjoyed your article, and it compelled me to look into the basex website and read your article on information overload. I'm going to point out that measure to the administration at our university. Perhaps print a few days worth of information exchange to make the point!

Bravo.
We have a vast amount of research available on the Information Overload problem and are in the process of launching a research program on the topic that will develop an Information Overload Index. We already have some academic involvement so if your institution wanted to get involved as well on some level, that would be great.
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      11-27-2009, 12:04 PM   #7
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With all due respect, the problems with the auto industry and particularly GM as discussed in the article go a bit beyond GM just loosing brand identity from changing the concept of the “ladder movement” up scale though brands.

The article seems to assume a static business, regulatory, social, and economic climate and that GM just abandoned its ladder strategy concept as a random management decision, which led to its downfall. The 1981 Cadillac Cimarron was the result of numerous business variables that occurred over the late 60's and 1970's which led GM to change its business model to one that it thought fit with the change in the automotive business climate. Variables such as Governmental environmental and safety regulations that affected the cost of both the design and manufacturing of automobiles, and a radical and rapid change in the cost and availability of gasoline, were just two of the major changes that were difficult hurdles for the American automobile manufacturers to deal with. Throw in union labor strife and an economic down turn in the mid 70's (capital and credit was difficult to come by) just to make even more fun.

All of these changes drastically affected the cost of designing and manufacturing automobiles, which led to decisions GM made such as dressing up a Chevy Cavalier as a Cadillac Cimarron.
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      11-27-2009, 12:09 PM   #8
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With all due respect, the problems with the auto industry and particularly GM as discussed in the article go a bit beyond GM just loosing brand identity from changing the concept of the “ladder movement” up scale though brands.

The article seems to assume a static business, regulatory, social, and economic climate and that GM just abandoned its ladder strategy concept as a random management decision, which led to its downfall. The 1981 Cadillac Cimarron was the result of numerous business variables that occurred over the late 60's and 1970's which led GM to change its business model to one that it thought fit with the change in the automotive business climate. Variables such as Governmental environmental and safety regulations that affected the cost of both the design and manufacturing of automobiles, and a radical and rapid change in the cost and availability of gasoline, were just two of the major changes that were difficult hurdles for the American automobile manufacturers to deal with. Throw in union labor strife and an economic down turn in the mid 70's (capital and credit was difficult to come by) just to make even more fun.

All of these changes drastically affected the cost of designing and manufacturing automobiles, which led to decisions GM made such as dressing up a Chevy Cavalier as a Cadillac Cimarron.

GM's decision to dress up (as you so aptly put it) the Cavalier as a Cadillac was widely denounced at the time as a foolish move. While I agree that there were many social and economic issues that impact the industry, I believe that GM's management was so out of touch with their customers that they were not able to understand why this was a bad idea.

Had they not strayed from the earlier brand strategy, they would have not (most likely) made such a foolish decision, which was just one of many.
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      11-27-2009, 12:37 PM   #9
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GM's decision to dress up (as you so aptly put it) the Cavalier as a Cadillac was widely denounced at the time as a foolish move. While I agree that there were many social and economic issues that impact the industry, I believe that GM's management was so out of touch with their customers that they were not able to understand why this was a bad idea.

Had they not strayed from the earlier brand strategy, they would have not (most likely) made such a foolish decision, which was just one of many.
And my point is that GM management was dealing with numerous issues related to a drastic change in the cost of making automobiles and a harmful drop in market share that led to such foolish decisions. It is quite clear that GM Management was not connected to its consumer base with the decision to sell the Cimarron; however the decisions were driven by economic factors rather than pure marketing considerations. GM was banking on Cadillac's reputation to sell a Chevy Cavalier at a Cadillac profit. I don’t think your article was clear on that point.
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      11-27-2009, 01:18 PM   #10
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GM´s problems in shedding brands are emblematic of the problems it had when it lost its focus and - at the same time - its brand differentiation.

Here is one take on the current situation - Breaking Up is Hard to Do.
"GM’s problems started in the 1960s, when it began to stray from Alfred P. Sloan’s brand and pricing structure that had made the company successful. From lowest to highest, the “ladder of success” as it was often called included Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. Under Sloan, these brands did not compete with one another and car purchasers could move up the ladder within the GM family as their economic status improved. Starting in the 1960s, the differences that made each brand distinct began to fade and the change was epitomized by the introduction of the 1981 Cadillac Cimarron, a rebadged compact Chevrolet.

Hopefully, GM will learn from its more recent experiences and will look to its history and restore and build upon the differences " -

Question: Do you think the double-whammy of increased Asian competition + fuel crisis of the 1970's is what really caused the slow decline? GM was forced to work hard at economies of scale (using same chassis/drivetrains across most model lines), and build better fuel efficient cars (all had to be smaller, with smaller engines). This caused their brands to devolve into nothing more than the sam car with but with marginally differing options.
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      11-27-2009, 02:26 PM   #11
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Some of GM's problems were brought out by Ross Perot after GM bought out EDS. Ross became the largest individual shareholder of GM stock and was made a board member. He gave the board such Hell, about how they ran the company and the pilfering of resources for the benefit of the few at the top of the heap, that they bought out his stock at a premium to silence his criticism.

Do a little research on Ross Perot. I did years ago just before EDS flew me to Dallas for a job interview. I was personally interviewed and hired by Ross and 36 years later it is still one of my fondest and most proud moments.
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