GM Marketing Chief to Wrestle Auto Maker’s Negative Image

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North American Int’l Auto Show

DETROIT – General Motors Corp.’s vice president-North American sales, service and marketing, says the auto maker will push harder this year to polish an image tarnished by the yoke of bankruptcy and negative criticism from December’s Congressional hearings.

Mark LaNeve also admits it’s not the auto maker’s first trip down the image-building road. But last year’s battering in the headlines proved particularly damaging.

GM sales and marketing chief Mark LaNeve says last year’s headlines damaging.

The auto maker witnessed record-low sales; a string of deep, consecutive quarterly financial losses; and poor performance by captive lending-arm GMAC LLC, which suspended leasing and strangled lending to car buyers and dealers.

Additionally, testimony by GM Chairman and CEO Rick Wagoner before lawmakers in Washington for government loans nearly was torpedoed by a corporate-jet scandal.

“The negative news around GM, as a corporation, is a bit of a headwind,” LaNeve tells Ward’s during an interview at the North American International Auto Show here.

Unlike previous attempts to sway the nation’s negative opinion with self-promotion, GM will work this year against a highly public and more nonpartisan benchmark – conditions it must meet to receive taxpayer-funded loans to stay afloat.

The first test comes Feb. 17, when a plan outlining GM’s viability, with concessions from stakeholders such as the United Auto Workers union, comes due for submission to the Dept. of Treasury.

“We don’t think we fix (our image) through corporate advertising,” says LaNeve. “We fix it through better results, getting a plan to Washington that makes sense to people. Because other than that, it’s just words, right?

“We need to start executing against it and make our corporate image a tailwind, rather than a headwind. We’re making good progress on the fact we’re building great products now. It’s just that we keep getting caught up in market downturns and corporate financial results and GMAC and all this other stuff.”

GM’s U.S. sales fell 22.7% last year, according to Ward’s data, ahead of only Chrysler LLC among full-line auto makers. The overall industry tumbled 18%.

LaNeve still characterizes GM’s product momentum as palpable.

Building on its Car of the Year awards for the ’08 Chevy Malibu and ’07 Saturn Aura, as well as Truck of the Year for the ’07 Chevy Silverado, the auto maker gained market share in 2008 in the midsize car, fullsize pickup, fullsize SUV and midsize cross/utility vehicle segments.

Although GM lost share in the small-SUV and compact-car segments, LaNeve anticipates a swing back into the black with the launch this year of the extensively redesigned Chevy Equinox and all-new GMC Terrain, as well as next year’s arrival of the Chevy Cruze.

“We think we’ll do well bringing those to market,” he says.

GM plans to push its story more aggressively at the divisional level, as well, where LaNeve says public perception has changed. Key market drivers today are fuel economy, warranties and quality gains over top-rival Toyota Motor Corp.

“That’s primarily what we’ll do differently,” LaNeve says.

The auto maker also will continue cultivating its presence within the digital media. Although GM plans to keep its digital advertising budget flat with 2008, LaNeve says it will spend more smartly and efficiently. In short, he says, GM is learning which search engines and websites provide the greatest return on investment.

At the same time, the auto maker hopes to build further on the common architectures of its dealers’ websites, a market-advantage exclusive to GM (and Toyota’s Lexus luxury brand). GM finished commonizing the website for its 6,400 dealers in mid-2008.

“We can immediately deploy product messages, incentive messages, quality messages; we can post pricing,” LaNeve says. “The sites all look a little different, but the architecture is all the same.”

During the GM employee-pricing event last summer, for example, the auto maker used this to its advantage by making available to consumers both the manufacturer’s and employee pricing for every vehicle in its 800,000-unit inventory. “We’re the only ones who can do that,” he says.

Expect GM to continue trimming its dealer network this year. The auto maker tells Congress it wants to reduce its dealer body to 4,700 by 2012. It will place much of the focus on urban areas, where multiple dealers sell the same brands in close proximity.

However, LaNeve admits GM’s current financial position makes it prohibitive to buy out many dealers in 2009. The company, instead, will let market forces trim the ranks, either with larger dealers purchasing out smaller competitors or stores simply going under due to the recession.

“Longer term, we want our dealers’ throughput competitive – Chevy with Toyota and Cadillac with Mercedes,” he says, adding marketing support to individual dealers and local regions will remain on par with 2008.

LaNeve also expects a more predictable product mix in 2009, after last year’s dramatic swing away from trucks as gasoline prices soared, only to recover share later in the year when pump prices peeled back.

Truck mix likely will richen if gas continues to hover at $2 a gallon, he says, although the segment is not expected to regain its former market share long term.

“I just have to believe 2009 will be steadier,” says LaNeve. “We’ve just got to get some consumer confidence.”

That may not be easy, as the public remains pessimistic about the economy. Tuesday, the U.S. Conference Board, which analyzes the economy, predicted 2 million more non-farm job losses in 2009, to bring the 24-month total to 4.5 million.

Still, LaNeve remains confident the massive bailout of the banking industry will begin thawing a frozen lending market, while a new U.S. president should spur consumer confidence.

“We’ve got some pent-up demand, so I think the recovery will be strong,” he says. “I just don’t know when it will hit.