Detroit Paralysis Cure

With all of the major announcements coming from Detroit on union deals, new marketing campaigns and exciting new product introductions, you have to look inside each domestic car maker to examine whether their ultra-conservative DNA has truly changed.

During my discussions with mid-level OEM insiders, the fear of change combined with pervasive job insecurity has resulted in a severe mid-management paralysis. With all of the auto CEO's claiming a new direction/path, it will only work if everyone in the organization is on-board and pulling in the same direction, this includes mid-management.

Stepping out into a new direction -- cutting-edge designs, innovative advertising campaigns or advanced consumer research -- is politely discussed and then discarded as being too risky. This risk aversion has 100-years of roots and is deep seeded into the corporate culture of these companies.

Former GM top executive Ron Zarella was chided by old-school automotive industry veterans for his treatment of cars and trucks as household brands that required professional brand management. He brought several great minds to GM from the consumer products and consumer packaged goods industries only to meet mediocre success. Why did this new initiative fail? The conservative mid-management has hampered its full implementation.

Is the tide turning? A little. The domestic auto makers rarely change their advertising agencies due to this risk aversion. Very few exceptions occur but one notable one is GM's turning to funky Modernista http://www.modernista.com/ for their Hummer and Cadillac division's advertising. With Lutz-inspired designs, GM is also turning the corner on the design front.

With Ford, true change has been challenging. Using the same advertising and market research agencies since....well....forever and continual bland designs, Ford's market share has been slipping over the past fifteen years. Having worked at Ford many years ago (1989-1991), I can tell you very little has changed in terms of risk aversion.

When I worked in NAAO prototype purchasing during those years, I saw some striking prototypes and concept cars. One of the more notable ones that I saw was a Mark VIII with funky Coral or Forest Green interiors, new LED lighting and extensive chrome interior accents. Of course, these features and color schemes never made it to production. Unfortunately, the toning down of great, new ideas is legendary.

Some radical suggestions for conservative car makers....

* Replace the existing vehicle designers with the best "product" designers in the world. Make sure they do not have restrictions in terms of their creativity or expression of new designs. Hire people from Apple, Rolex and the best fashion houses in the world. Ban design reviews with mid-level executives and let the product communicate to the market directly without being watered down.

* Replace your advertising and market research agencies with small, funky boutique agencies. Prohibit these supplier companies from hiring active or retired employees from within their company. Burn all paper surveys, old studies and bar focus groups, send your researchers on the road to listen to real live American consumers. Researchers don't need to sit in cubicles under fluorescent lights, they need to assimilate themselves into the market and truly understand their brand's core audience.

If your market share has been slipping, radical change is the only cure. The status quo ain't working folks!

Dealerships -- Key to Industry Change

According to several research studies that I have seen over the years, people love going to car dealers and haggling for the "best" deal. Quite frankly, I don't know who these studies were surveying but it wasn't anybody I know. Dealership visits can be very stressful and leave many consumers wondering "did I really get a good deal or did I get ripped off?" Women often complain of being ill-treated during dealer visits.

Some of the better dealerships that I have visited have sales consultants that receive no commission on selling vehicles but are salaried employees of the dealership. This takes away the "game" aspect of price negotiation.

Another pet peeve of mine is local dealership advertising. A local Jeep dealer here in Rochester, NY openly states that "our products are German engineered and American-made, the best of both worlds." An untrue statement given that Jeep's have always been engineered in the U.S. and do not share common designs with their former Mercedes product siblings. I wonder what this dealer is going to say now that Chrysler/Jeep is now independent of Mercedes/Daimler?

Yet another dealer (Fuccillo Hyundai) in Upstate NY, has the absolute worst TV and radio commercials that I have seen in 20+ years in the automotive industry. Click here to see an example: http://www.youtube.com/watch?v=pQO0v_HEGU0. It is very apparent that this guy likes to hear himself talk and see himself on TV, meanwhile insulting and alienating every possible car buyer in a 50 mile radius.

ugh.....