Is GM's Strategy Flawed?

This is a dirty job but somebody has to do it. You want to know why General Motors' market share is falling? You want a solution? Here goes.

Consider the company's key committee, the NAO (North American Operations) Strategy Board. These are the people who decide or approve the company's strategy in this market. The problem is: This board doesn't seem to understand auto strategy for the North American market. This is why market share is dropping and will continue to decline.

Sure, the numbers looked better in March. When you throw rebates and cut-rate financing out there like the competition, you get results. But is it a long-term solution?

This is the board that decided (or approved the strategy) that luxury sport/utility vehicles (SUVs) had no place in the company's own luxury division showrooms, thereby going about as far as anyone could to destroy Cadillac.

This board is taking seven years to get Saturn a second car, thereby leaving its most warm and fuzzy division to wallow in a small-car depression. Instead of investing in success, this board starved it.

This is the board that seems about to shut a Quebec plant and kill the car made there, the Camaro. That should take a good part of the excitement from Chevrolet.

What will be next? The Cavalier is slow: Kill it and close Lordstown? This board does not seem to realize that the art of the auto business is in building desirable vehicles, not in killing models and closing plants.

This is the board that completely missed consumers' gradual shift to car-based all-wheel-drive vehicles, such as the Lexus RX300 and the smaller Honda CR-V. How many more years will it be before GM is in this rapidly growing segment? Three years? Four years?

This is the board that is spending $2 billion to $3 billion to bring out a new pickup truck that won't have four doors at introduction, so they'll be two years behind Dodge Ram and a year behind Ford and Toyota.

How could anyone make this decision with the Ford Windstar mistake right in front of them?

This should be enough. We won't even go into the decision to run two doors, not four doors, as the initial production run for the new Pontiac Grand Am, or the millions of dollars thrown away on the EV-1. How many mistakes does a strategy board have to make before everyone can see they don't understand strategy.

What to do?

GM likes to talk about the voice of the customer. The problem is the base of their customers keeps shrinking. They need to listen to the other guy's customers, too. Then they need to get some outside voices of people who understand what makes a car or truck passionate.

Just add four new members. These four should not be working for GM. They should be voting members. They should not be shy. They must be well paid, say $100,000 a year; otherwise other GM people will ignore them.

I have the four. Understand, I didn't ask them. They are just my choice.

First nomination: Bill Hoglund, a retired executive vice president of GM. He's not even an outsider. But he turned around Pontiac with the "We Build Excitement" theme and gave it the product to back it up. He also ran the Buick-Olds-Cadillac super division, and what is now Delphi Automotive Systems. Bill was the best all-around GM leader that I saw in 20 years.

Second Nomination: Lee Iacocca. Lee forgot more about auto strategy than everyone else in Detroit ever knew. He is the best marketer in the second half of the 20th century, with a keen sense of product. Remember Mustang, minivan and Jeep. Sure, he makes mistakes, but he saves companies, too. He's not that busy now, either.

Third: Maryann Keller, the financial analyst and author, incredibly brainy and articulate. Her candor is needed.

Fourth: Ken Gross, journalist and the head of the Petersen auto museum in Los Angeles. Ken has a fine feel for the business, and knows product.

I suspect the situation is more serious than the present committee understands. If GM market share slips beneath 30% for this year, look for another 2 point loss in 1999.

With these new members, the strategy board is likely to ask: What happened to GM design? This company invented auto design.

Is the person who picks names like "Alero" still on the payroll?

Does anyone have the power to do anything? I'm not sure that even a division general manager, a vice president, can strip off a single piece of chrome from one of his own division's cars.

I'm sure my four new Strategy Board members will raise even better issues.

You think this is dumb? Look friend, I'm trying to keep GM from becoming the world's third-largest vehicle manufacturer in 2005. If you've got a better idea, let me know.