Who’s In Charge of GM’s Brands?

Commentary

Back when General Motors was great, it was a holding company that owned some of the best car companies in the U.S. GM’s genius chairman, Alfred Sloan, constantly fought the very system he built to keep those companies autonomous and decentralized. He would be horrified to see how they are run today.

In less than a decade after Sloan retired from the board in 1956, his successors slowly but surely consolidated operations, all in the name of “efficiency.”

First they started combining manufacturing operations. Later they began sharing powertrains and platforms. After that, they put all engineering operations into one group. Finally, they merged everything.

These once proud car companies (Chevrolet, Pontiac, Buick, Oldsmobile and Cadillac) first were turned into divisions, then downgraded to marketing operations, and now they don’t exist at all. The brand names exist (except for Olds and Pontiac), but they no longer are their own operations. Worse still, no one is in charge of them.

Let me say that again. No executive is in charge of Chevrolet, Buick, Cadillac or GMC, because they no longer exist. They are merely names on badges that are affixed to GM vehicles.

Call me old fashioned, but I believe you need an executive in charge of a car company. I don’t mean a marketing manager or a sales manager. I’m not talking about someone who is a liaison between design and engineering. I mean an honest-to-goodness boss who only cares about his or her company. Someone who pounds the table, fights the system and protects the sanctity of their brand.

The danger in GM’s current setup is its executives will become ever more loyal to their functional departments, not their brands. They will end up making compromises and concessions that make sense for the greater good of GM, but which result in homogenized brands that fail to enthrall customers.

Sloan knew this. Even so, during the Great Depression, when sales dropped off a cliff and revenues plunged precipitously, he was persuaded to consolidate the sales and manufacturing operations of Buick, Oldsmobile and Pontiac in order to achieve “efficiencies.”

GM shrank from five divisions to three, and it cut costs.

But Sloan was so worried about the detrimental effects of centralization that a year and a half later, even though the Depression was still raging and GM was operating at less than 30% capacity, and despite the fact restoring the five divisions would raise costs, he went back to having decentralized divisions.

The GM of today is very different from what Sloan knew. Even so, I have no doubt he would want to see executives in charge of those brands; people who can call their own shots.

I’ll go out on a limb and make a prediction: In the next two years, GM will announce another reorganization. And that’s when it will name the new executives in charge of Chevrolet, Buick, Cadillac and GMC.

John McElroy is editorial director of Blue Sky Productions and producer of “Autoline” for WTVS-Channel 56, Detroit and “Autoline Daily,” the online video newscast.