TOP 100 RACING SITES
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| Wagoner's ouster is the right move General Motors Chairman and CEO Rick Wagoner is out. Treasury Department officials confirm that he was asked to step down and he accepted. And it is the right thing to do. As I have written before, Wagoner was dealt an incredibly difficult hand, one that almost no CEO in corporate America would want. But GM is a company plagued by decades of mistakes and a culture always thought there was a tomorrow no matter how bad things got. GM needed someone to remake the company. Wagoner was a measured incrementalist who didn’t have the chops to overhaul one of the largest and most entrenched companies in the world. Given the circumstances, it's hard to know who could have made the drastic changes to fix GM. But it's now clear that Wagoner's pace of change made him the wrong man for the job. There are the easy mistakes to pick at. He and predecessor Jack Smith spent $2.4 billion for a 20% stake in Fiat, which got them a couple diesel engines and some shared parts. Then they spent $2 billion to get out without having to buy the entire company and its problems. Wagoner killed the EV1 electric car, thus ceding the technology race to Toyota. While union wages, work rules and retiree costs were sapping GM’s ability to develop cars, new technology and market them, Wagoner never confronted a union that didn’t want to face a reality that GM could command the volume or pricing to pay what the contracts said they would pay. While union obstinacy was something Wagoner didn’t challenge with much success, his organization never wanted to face how bad things were. At various points, GM sold 25% or more of its cars to rental fleets. As much as 10% were sold at deep discounts to employees or their friends and families. Throughout the decade, GM would push market share back toward 28%, where it started in 2000, if it spent thousands a car on incentives. Whenever the company pulled back on rebates and cheap finance deals, market share plummeted. Despite such poor quality of sales, Wagoner and his staff always figured that they could hold or even grow market share. That almost never happened. In fact, the company for years made most of its profits from writing loans as opposed to making cars. Its forecasts for sales became a joke among the parts makers who had to tool up to make components for GM’s cars. He does get credit for bringing in Bob Lutz to spruce up the cars, and Lutz’s hand has helped GM make some impressive new models. But there, too, Wagoner needed prodding. His board pushed him to find a car guy. And it was former GM CFO John Devine (Who was not Wagoner’s first choice for the finance job. He picked a GM insider first and was turned down) who helped bring Lutz in. Wagoner didn’t create the entire mess (though he certainly owns plenty of it) but he wasn’t the man to unwind it. In 2005, GM’s problems were obvious and required a real change agent to fix them. BusinessWeek detailed them in a May, 9, 2005 cover story. Wagoner didn’t really start tearing at some of those problems until the company lost more than $10 billion that year and he didn’t get into the rest of them until GM was technically insolvent late in 2008. In the final analysis, many chief executives going back Frederic Donner, Roger Smith, Robert Stempel, Jack Smith and now Wagoner own this mess. Wagoner just happened to be there when years of mistakes and a dreadful economy broke the company’s back. Now someone else has to fix it. And what a job it will be. rss.businessweek.com |
Vermeulen reflects on Mugello Exclusive: Australian MotoGP rider Chris Vermeulen talks to foxsports.com.au about his up-and-down performance at the Italian Grand Prix and looks ahead to the next round. foxsports.com.au |
Emotional Hamlin fills 50-race void with Pocono victory After fighting off Juan Pablo Montoya in the final laps of the Sunoco Red Cross Pennsylvania 500, Denny Hamlin fought back tears. ... rssfeeds.usatoday.com |
Cadillac Seeking New Ad Agency To Deliver GM has put its Cadillac ad account in review. I wonder what Mad Men’s Don Draper would do?As a fan of AMC’s "Mad Men", show, I would love to see the agency get involved in a full-scale pitch for a car account. How about Cadillac for next season? Maybe GM can persuade Caddy to take out a flock of ads in exchange for the story placement.The story. Yes, just what is Cadillac’s story these days? That is the issue confronting GM and the agencies pitching the business must sort out.As my colleague David Welch pointed out recently in an article, "GM Must fashion Another Cadillac Renaissance,” the brand is on a “knife edge,” as BMW’s U.S. chief James O’Donnell stated in the article. GM’’s bankruptcy and its pull-back on leasing this year has seriously hurt Caddy’s business.Ad Age reported that current agency Modernista!, Boston, which has handled the business for a few years, is being cut (the agency declined to participate in the review) for financial reasons. An independent agency, Modernista! is said to charge higher fees than GM’s Interpublic Group and Publicis Agencies.I don’t buy that as the biggest reason. To keep a car account, I’m willing to bet Modernista! Could have reorganized its compensation to fit the new GM. The agency was handpicked without a review by former Cadillac marketing chief Liz Vanzura. And GM’s departing head of sales Mark LaNeve, who lost his marketing duties in August, was a big supporter. Modernista! lost its boosters in Detroit. It happens.Cadillac has some terrific vehicles. The CTS is as good as any competitor in its class I have driven. The new CTS wagon and SRX crossover---first rate. Top Drawer. The giant Escalade SUV, if that’s the kind of vehicle you want, is also terrific. Best in class.Caddy still has a brand hangover from years of selling flabby Sevilles, Devilles and Fleetwoods. Modernista! Actually did a nice job of vaulting Caddy forward with some distinctive looking ads and messages.Take this spot featuring actress Kate Walsh:This ad and others like it were memorable and well targeted.Less successful, I thought, was this recent ad. It shows the newest Cadillacs screaming across a desert as if they are space-rockets being shot across the desert by NASA mission control.The trouble with this spot is that it looks too much like advertising. We are very much in a post-advertising marketing climate. The idea of showing off four hot new cars, which are the heart of the new Cadillac, is a good idea. I’m just not sure yet another space-related idea was the way to go. Lincoln has been playing in this area. Saab before that. Trite.Caddy needs entirely new ideas to change the conversation about the brand, not a new ad campaign.GM is fighting for its life and survival. Cadillac is critical, along with Chevrolet, to make that future happen.It’s as good a time as any to see what resources are out there that know how to operate in the new world. Cadillac doesn’t just need a new ad agency, it needs a new thought process; a partner to redefine the problem and the solution.In the movie "Tin Men," aluminum siding salesmen think of their Cadillacs as the badge of their success. Every one of them has a Caddy, all of them with tail-fins. But the salesman/character played by Richard Dreyfus realizes by the end of the film, as he sees a Volkswagen Beetle drive by, that the era of the tail-finned Caddy and the cheap Tin Man is over. He starts thinking about getting himself a Volkswagen franchise.I don’t think Caddy’s time is over. The product is too good. But we are seeing Saturn go to the automotive brand museum despite one of its models, the Aura, capture North American Car of the Year award three years ago. Great product isn’t enough. Smart management and a big idea is necessary too.I’d look for GM to engage The Martin Agency, Fallon Worldwide and possibly Deutsch and Wieden & Kennedy to be their new idea factory. Let the pitches begin. Paging Don Draper! rss.businessweek.com |
NASCAR benches Waltrip for excessive bumps at Talladega NASCAR pulled Michael Waltrip off the track Friday for aggressive driving at Talladega Superspeedway. Waltrip was warned to give ... rssfeeds.usatoday.com |