@niche: GM DOUBLES DOWN ON STUPID.003118

Editor’s Note: This week, Peter continues his dissection of GM’s serial incompetence with an explosive analysis of the current situation with marketing and advertising. If you missed last week’s Rant, check it out here. (Let’s just say 2024 is looking quite promising for The High-Octane Truth.) In On The Table, we have an update on the state of the once-vaunted Detroit Auto Show. We also feature news about the collaboration between Lamborghini and Italian leather goods purveyor Tod’s. And we’re re-running the preview of Honda’s new global EV series from CES, because, well, they’re just too awful to miss. Our AE Song of the Week is “From The Beginning” by Emerson, Lake & Palmer. In Fumes, Peter details two of the early race successes of the legendary competition Cobra. And finally, in The Line, we’re getting ready for the Roar before the Rolex 24. Enjoy! -WG

By Peter M. DeLorenzo 

Detroit. The rumors started rumbling two weeks ago, traveling all the way to the West Coast and back again (given the fact that the ad community is nothing but tight-knit, inter-connected and gossipy at all times, it’s no surprise): GM was about to upend its marketing and advertising operations in the interest of, you guessed it, drastically slashing costs. Now, the company won’t say anything even remotely like that, preferring to couch it in terms of “modernizing,” which is one of the key words being bandied about. You can add other “spin” terms like “streamlining” and “more customer focused” to the company’s marketing lexicon as well, but make no mistake, as GM CMO Norm de Greve is said to be up to his eyeballs in crafting a way forward for the company’s marketing operations, this marks a fundamental shift and, from my perspective, a giant bowl of Not Good. 

It’s important to understand the factors driving this fundamental transformation. Remember, this comes on the heels of the massive UAW contract that GM agreed to last year, which is said to add as much as $900 to the price of each vehicle (depending on the estimate you wish to believe), and which the company has already gone on record as saying that it would do everything possible not to pass those costs on to their customers. To make matters worse, CEO Mary Barra’s ill-fated over-commitment to GM’s EV play and its Cruise debacle has cost the company dearly, with the payoff from the company’s EV commitment pushed back years. 

An obvious place to start? Marketing and advertising. You have to understand something about GM’s tortured relationship with advertising and marketing. The company’s attitude about marketing and advertising ebbs and flows with the players involved. When a strong CMO is actively in play, the role of marketing and advertising takes its rightful place in the daily operations of the company. When things are good, image-wrangling is a consistent priority, and creative thought and memorable executions reach the public frequently. This is an ideal situation that the company and its advertising agencies have enjoyed only in fleeting moments.  

And this “fleeting moments” business is an important distinction. It’s common when things are going well for company operatives to wax eloquently about the true “partnerships” they have with their advertising agencies – two of which include Commonwealth/McCann for Chevrolet and Publicis Groupe’s Leo Burnett for Cadillac – and how wonderfully collaborative these relationships are. And that’s all well and good, until it isn’t. When things aren’t going so nicely, however – due to poor sales, poor product, overall poor market performance, piss-poor executive decisions and the ever-popular “sun spots” excuse, etc. – it’s common for corporate operatives to fall back on framing their relationships with ad agencies in “supplier” terms, which means the collaborative nature shifts to a (usually) belligerent “what have you done for us lately?” exploration of cost-cutting, or in dire circumstances, even the consideration of new ad agencies. 

In GM’s case, besides the UAW contract excuse and Barra’s highly-questionable calls on Cruise and EVs, the more dominant factor behind this push is that Barra has succumbed to certain members of the board – ex-Silicon Valley geniuses, just ask them – who have insisted from the get-go that GM’s relationship with marketing and advertising was all wrong, and that cost-savings and better engagement with consumers could be accomplished with fundamental changes. Barra devoting too much time listening to these Silicon Valley ex-pats was the reason that former CMO Deborah Wahl got bounced, which was a rash and reprehensible decision and which immediately changed the dynamic on that board. Instead of taking the directors’ input under advisement, Barra overreacted and jettisoned Wahl, which meant that all of a sudden, those ex-Silicon Valley brainiacs had real leverage. 

And the result of that leverage is what we’re seeing happening at GM right now. I’m hearing all kinds of ugliness emanating from GM of late – how the agencies are under scrutiny, how everything connected to marketing, advertising and media spending is under review, etc., etc. (GM spends around $4 billion a year on advertising by the way), and how de Greve will be presiding over the radical reconfiguration/transformation with the focused idea being radical cost cuts.  

But by far the most disturbing news with this Sturm und Drang going on at GM is the word that GM is considering bringing part of its agency operations in-house, which would trigger nothing short of an absolute disaster. There is no positive scenario that could come from this. None. Less than Zero, in fact. As I mentioned previously, GM already has a fleeting and at times highly-strained relationship with marketing and advertising to begin with, but bringing any creative functions in-house would kill the last shreds of creativity from ever seeing the light of day. The dumbing down of creative ideas would be immediate and devastating, and every single piece of advertising to come out of GM would resemble one of their tedious Tier 2 or Tier 3 ads. (Unfortunately, there’s a rabid faction within GM that would love to have this level of “control” over the advertising. And if they get their way, GM would become a retail-specific marketer, but just how many ways can you say “how much is that a month?”) 

Another thing to know about GM’s CEO is that she already has a piss-poor relationship with advertising and marketing. She’s never been comfortable with it, she frankly doesn’t get it at times, and now that she’s listening to the dulcet tones and dire thought balloons of ex-Silicon Valley “geniuses” who have infested GM’s board, she’s about to send GM into the Dark Ages at the very moment when the company can least afford any misfires in the image-wrangling disciplines.  

Don’t think so? GM has been on a negative roll with its EV imperative, which Barra has attempted to shove down not only the dealers’ throats, but consumer throats as well. Except that GM has convincingly demonstrated that it can’t build its promised array of EVs even remotely close to the cadence that it so desperately needs. And even when they do, software recalls or “stop sales” edicts bring the whole thing to a screeching halt. 

It’s no secret that Barra’s “fantasyland” mantra of “Zero Crashes, Zero Emissions, Zero Congestion” has been a notorious non-starter from the beginning. People don’t believe it because it’s simply not believable. At this critical moment, GM needs more, not less creative thinking. The company needs to return to giving customers a reason for considering a GM vehicle in the first place, and these marketing moves are in no way, shape or form the way to go about doing that. 

Crippling its marketing and advertising functions to generate cost cuts has disaster written all over it.  

Quite simply, GM is doubling down on stupid.  

And that’s the High-Octane Truth for this week.