GM's confession to customers.

[MagicRat]

GM has started running ads where they confess of their market failures......
(see below)

In marketing, there are times when admitting failures right from the start is a good thing. A classic example is the 1982 Tylenol tampering case. Prompt action in response saved the brand.

An example of what NOT to do is the Audi 5000 'sudden acceleration' debacle of the 1980's. Inexperienced drivers were stepping on the gas pedal instead of the brake because Audi's pedals were in a slightly different orientation, compared with most other cars.

Audi could have admitted the problem at the start of the bad publicity and fixed it (as they eventually did). However, Audi steadfastly blamed their customers for not knowing how to drive their cars. While this may have been true, it made for dreadful customer relations..... Audi's US sales plummeted and the company almost left the US market.

So what do you think of GM's confession? I do not think it can hurt the company at this point, but I think it's too late for this technique to work effectively.
GM's failings are already well known, hence their 25 year-long market share slide. It will not appeal to many new buyers who, at this point in time would never consider a GM car.


GM says it "disappointed" and "betrayed" consumers

DETROIT (Reuters) - General Motors Corp on Monday unveiled an unusually frank advertisement acknowledging it had "disappointed" and sometimes even "betrayed" American consumers as it lobbies to clinch the federal aid it needs to stay afloat into next month.
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The print advertisement marked a sharp break from GM's public stance of just several weeks ago when it sought to justify its bid for a U.S. government on the grounds that the credit crisis had undermined its business in ways executives could never have foreseen.

It also came as Chief Executive Rick Wagoner, who has led the automaker since 2000, faces new pressure to step aside as GM seeks up to $18 billion in federal funding.

"While we're still the U.S. sales leader, we acknowledge we have disappointed you," the ad said. "At times we violated your trust by letting our quality fall below industry standards and our designs became lackluster."

The unsigned open letter, entitled "GM's Commitment to the American People" ran in the trade journal Automotive News, which is widely read by industry executives, lobbyists and other insiders.

In the ad, GM admits to other strategic missteps analysts and critics have said hastened its recent decline.

"We have proliferated our brands and dealer network to the point where we lost adequate focus on the core U.S. market," the ad said. "We also biased our product mix toward pick-up trucks and SUVs."

But GM also says in the ad that it was hit by forces beyond its control as it tried to complete a restructuring earlier this year.

"Despite moving quickly to reduce our planned spending by over $20 billion, GM finds itself precariously and frighteningly close to running out of cash," the ad says.

A failure of GM would deepen the current recession and put "millions of job at risk," according to the ad, which also highlights the automaker's pledged restructuring and intention to begin repaying taxpayers in 2011.

GM spokesman Greg Martin said the ad was an attempt by the automaker to present "a pledge directly to the public."

"We believe we need to deliver this commitment unfiltered since quite a bit of media commentary has not kept pace with our actual progress to transform the company," Martin said.

Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut who is central to the effort to craft an auto bailout bill, on Sunday said GM should replace Wagoner.

GM says Wagoner has the support of the company's board.

[03cavPA]

Originally Posted by MagicRat

So what do you think of GM's confession? I do not think it can hurt the company at this point, but I think it's too late for this technique to work effectively.
GM's failings are already well known, hence their 25 year-long market share slide. It will not appeal to many new buyers who, at this point in time would never consider a GM car.

It's pretty much a confession under duress. It's just a page out of the congressional playbook for public consumption.

[Gohan Ryu]

Funny how humble they are now that they have to beg for money. Why do they have to nearly go bankrupt before they realize they let their "quality fall below industry standards" and their "designs became lackluster." That's a simple fact that us "ricers" have known for years.
If they really can make a better car why didn't they do that years ago? Should we gamble billions that their quality will improve? Who loses if they continue to make crap? And if they do improve what promise other than their "pledge" do we have that they will pay it all back, instead of having their lawyer/sharks think of an excuse to avoid paying any of it back.
Let them sink. Suddenly finding humility doesn't mean suddenly finding good management skills, and it shouldn't cost us taxpayers billions of dollars to find that out.

[03cavPA]

As much as the whole thing really pisses me off, I'm not sure I can say that we need to let them sink. The vacuum they'll create when they go under will suck a lot of businesses down with them.

To me, this smacks of economic blackmail, knowing how much of the economy will suffer along with them, so congress will probably bail them out. They'll just do a lot of grandstanding and bluff and bluster before they do.

[Gohan Ryu]

I agree that it wouldn't be in our best interest to let them sink. It just feels right to say "let them sink".

Economic blackmail is right. We're damned if we do and damned if we don't.

[YogsVR4]

We'll be damned a whole lot more if we do.

If their plans are so damn good that the taxpayers should be on the hook, why isn't the UAW lining up with their cash reserves to take a piece of GM? They're just like the management, they only want to risk someone elses money.

[03cavPA]

Unfortunately, the precedent was set when they tossed a boatload of cash to the banks.

There again, it was pure blackmail, knowing damn well the havoc it would unleash if the government let them fail. And the hits just keep coming, since the cash didn't do a whole lot of good and they have no way of knowing how much more it will take. AND you have asshats like Reid and Franks shooting their damn mouths off, talking smack, every chance they get.

I agree, I really do want to say, "f--- the automakers and let them rot." What then happens if we do?

[ericn1300]

Originally Posted by YogsVR4

If their plans are so damn good that the taxpayers should be on the hook, why isn't the UAW lining up with their cash reserves to take a piece of GM? They're just like the management, they only want to risk someone elses money.

I was thinking along the same lines but rather than asking the union peons to put their money on the line, why not ask the rich bastards that came up with the bailout plan to put their money where there mouth is. All of the CEO's should be asked to put up 80% of their personal wealth at risk alongside the taxpayer money they desire. If they refuse, how much belief do they, or we, have in their plans and how much dedication do they have in actually pulling off the restructuring?

Got to put in some restrictions so they can't take the loan, pay themselves and then just run off.

[fredjacksonsan]

Originally Posted by ericn1300

I was thinking along the same lines but rather than asking the union peons to put their money on the line, why not ask the rich bastards that came up with the bailout plan to put their money where there mouth is. All of the CEO's should be asked to put up 80% of their personal wealth at risk alongside the taxpayer money they desire. If they refuse, how much belief do they, or we, have in their plans and how much dedication do they have in actually pulling off the restructuring?

Got to put in some restrictions so they can't take the loan, pay themselves and then just run off.

Sweet idea! Let them put their money where their mouth is.

I agree that in the bigger picture, numerous other industries would be savagely hurt if GM went out of the picture.

However I still want them to go under....any business that's so mismanaged for so long deserves to fail.

If Congress sets a precedent of bailing out these failing, mismanaged businesses then maybe I'll start one, run it into the ground, and expect a bailout from the government.

[VR43000GT]

I am in complete agreement with you fredjacksonsan. I do not want to see GM or any of the others go under but it is so difficult to justify keeping them afloat. My family used to only buy GM's but after fixing them all the time and having numerous problems they decided to get Subaru's...haven't had a problem with them yet. The straw that broke the camel's back for us though was my mom's van that had just about everything that could possibly go wrong, went wrong. To bail these companies out just seems like everything we go agianst. If we did bail them out, whatever happend to capitalism and free markets? As what was said before, if we do bail them out, they will have blackmail on us.