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On the Point

Stop the Blame Game

‘Da Man’ reflects on his biggest inspiration and issues a heartfelt request to the man in charge of General Motors.

September 17, 2012

Of all of the automotive trainers who have achieved national recognition, Jackie B. Cooper, in my opinion, was the best of us all. In fact, I still watch his videos on YouTube, and they still move me like the first time I met the man who, for three years, averaged 52 units per month in a town of 5,000 people.

Jackie was my friend. We didn’t drink together or stay at each other’s homes, but we did talk on many occasions. He was a major inspiration for me and my business. I’ll never forget this one time I saw Jackie speak. He put the microphone right up against his lips and said: “If it is to be, it’s up to me.”

That line inspired and motivated me. The meaning was clear: Stop blame-shifting and making excuses. Take Responsibility!

Think Like Jackie
I really wish Dan Akerson, chairman and CEO of General Motors, would have known Jackie. I say that because I feel like I’m watching a rerun of the failed Rick Wagoner era at GM, and this time it’s in slow motion. It’s sort of like the movie “Groundhog Day,” where the same old crap keeps happening over and over again.  Nothing’s changed. The same bad management philosophy still exists, just different players.

General Motors had no problem congratulating itself when its market share and profits soared a few years ago, even though the company claimed victory when Toyota and Honda were suffering through recalls and natural disasters.

I’ll give GM this: In the second quarter of 2012, the company, despite the European crisis dragging profits down 28 percent, was able to post a nearly $2 billion operating profit in North America and a $1.5 billion profit as a corporation. That’s all great, but everyone seems to forget how well the company has done compared to the rest of the market. Industry sales in the U.S. market were up 14.8 percent in the first half, but GM’s sales were up just 4.3 percent.

What’s distracting everyone from that reality is the fact that GM seems to be firing someone every week. It’s sort of like the stage magician distracting you with his left hand so you don’t pay attention to what the right hand is doing.

The way I see it, Akerson is running amok like the Queen of Hearts, screaming “Off with their heads.” Meanwhile, Toyota and Honda are back. They’re kicking butt and taking names as their market share skyrockets off the charts. Akerson, however, continues full speed ahead toward that iceberg.

Truthfully, General Motors has some of the best looking and best quality products in the history of the company. Its dealer base is world class. So, if it’s not the product or the dealers, who can we blame the company’s lackluster performance on if top management isn’t willing to accept responsibility?

Oh, that’s right. It’s that damn Joel Ewanick’s fault. General Motors’ entire situation is due to bad marketing, and because Ewanick isn’t a team player. So, off with his head. Ewanick was unceremoniously fired/resigned (what’s the difference) on July 29. Then GM came out and trashed him publicly after it let him go. In an official statement, GM “spokesmannequin” Greg Martin said, “He failed to meet the expectations the company has for its employees.”

They made a lot of noise about the deal he put together with British soccer team Manchester United. Evidently, they felt his disclosure and vetting was a little on the light side. Even so, GM continued with the deal after Ewanick’s departure and committed to $559 million over the next five years. The company even put together another Chevrolet sponsorship deal with Liverpool Football Club, Manchester’s ­archrival.

I will say that losses in Europe and South America are not necessarily management’s fault, although Opel is an albatross GM should have sold off long ago. There aren’t enough soccer sponsorships in the world to make that pig fly. But no, GM thinks it can cost-cut its way to profitability, and hang in there until the European economy rebounds.

In the meantime, Akerson is firing away. His latest victim being the head of Opel, Karl-Friedrich Stracke. He was let go after the numbers came out. Akerson then went through two more guys in about a week and a half, with the third guy gone before he even started.

Ewanick was, from what I’ve heard, a moody and opinionated prima donna. Still, his work at Hyundai was genius. That’s why Nissan hired him before GM snagged him. What was it about the GM culture that killed him off?

Ewanick’s replacement? Alan Batey. I’m not sure about this guy. He might be competent, but, personally, I think he might be a major part of the distraction. My good friend Pete Gerosa, former vice president of General Motors, assures me Batey is a wonderful man and a visionary. OK Pete, I’ll take another look at this guy before I write anything else. But so far, I’m not impressed

It’s Your Call
I just can’t get Jackie’s words out of my head when I think about Akerson. First of all, Akerson was personally appointed by Barack Obama. I’ll leave it up to you to guess how much credibility that scores with me.

How many people can this guy fire before the spotlight turns on him? These chickens will come home to roost. Wagoner danced and burned through GM’s $32 billion war chest before the company filed for bankruptcy. Is it déjà vu all over again?

Hey, when I work with dealer management and a manager continually complains about the conduct of his or her salespeople, I ask, “Who’s their supervisor?”

As for GM, the company’s market share is headed south, earnings are in a freefall and the company’s stock is at an all-time low. The U.S. government, in the meantime, is holding 500 million shares of virtual toilet paper. Personally, I was and still am a supporter of the $82 billion bailout. But, from what I’m reading, we won’t break even until the stock hits $53 a share. As of late August, it was hovering around $20 per share.

They’re on a Tear
Honda, Toyota and Nissan are showing huge increases in sales and are revising estimates upward. Most notably, Honda posted a 45.3 percent sales increase in July, while Toyota and Nissan sales were up 26.1 and 16.2 percent, respectively.

Toyota’s profits, now at their highest level since 2007, are up 400 percent year over year. As for Honda, there was nowhere for the company to go but up after what it went through last year. And from what I’ve seen, it’s the last Japanese automaker to recover from the earthquake and tsunami, but no one could have predicted the incredible market share and sales increases we’re seeing this year.

I am firmly convinced that Honda’s success this year has to do with more than product; it’s the management and the mindset of these Japanese companies that is causing them to roar back. Truthfully, I believe they are taking some of it away from Chrysler et al and Hyundai/Kia, which tells me — and remember you heard it here first  —  that an end-of-year incentive war is brewing.

Mark LaNeve Is Back
Remember Mark LaNeve? The former vice president of marketing for General Motors left the industry to become vice president and chief marketing officer for Allstate Insurance Corporation. He is a very good friend of mine and I was saddened to see him leave automotive. Well, he’s back as the COO of Team Detroit, which is Ford Motor Co’s advertising agency.

I called Mark as soon as I heard the news and we spoke for a half hour. For Ford, it’s a brilliant move adding Mark to the advertising team. After all, he was instrumental in reviving Cadillac with those incredible campaigns last decade.

LaNeve brings a car guy perspective and a successful resume at managing a luxury brand. Ford is now committed to making the Lincoln brand a major player in the luxury sector, and I think LaNeve is the right guy for the job.

Playing the Race Card
I view the United Auto Workers (UAW) as a patient in intensive care. It’s on the respirator and it’s struggling to establish some semblance of relevancy as it attempts to unionize non-union manufacturing plants in the South.

The UAW’s tactics are desperate. It’s even resorted to picketing dealerships that sell international brands that manufacture here in the United States. Right now the UAW is taking on Nissan in Mississippi, which is the poorest state in the United States. So, when Japanese automakers and casino gambling came into the state, the economic future of many became brighter.

The UAW has not been successful in busting up these Japanese companies, because, truthfully, they really treat their employees extremely well. Well, at the Nissan Plant in Canton, Miss. — where 70 percent of its workforce is black — the UAW is comparing unionization to the civil rights movement.

Here’s what Gary Casteel, UAW leader in the South, told Reuters: “The civil rights experience was fought on that very ground. We’ve been saying that worker rights is the civil rights battle of the 21st century.”

To me, that’s inflammatory and divisive, promoting disharmony and bad feelings. It’s totally inappropriate and desperate. The UAW has lost every time it’s tried to organize Nissan, and they will most likely lose this time. The question is, how much damage will the UAW’s tactics cause?

Brady Departs
I received a call July 30 from Phil Brady, president of the National Automobile Dealers Association. I was one of a few people from outside the NADA to hear from Brady before the association officially announced that he was leaving. I was honored and saddened.

According to the association’s press release, Brady is leaving to accept a position with Phillips 66 to head up its government relations division. His departure comes on the heels of the most well-attended NADA conference ever.

Brady did some wonderful things for me when he took over the post in 2001 after the death of Frank McCarthy. He reached out to me when the NADA and I were at odds regarding some of my articles that were critical of the association. He was never subjected to any “bad ink” on my part, but that’s because there was never a need. He weathered some storms and was in a no-win situation when some of the manufacturers, backed by the U.S. government, started cutting ­dealers.

I was critical of those cuts, but I was respectful. I simply felt the association didn’t do enough. And Brady didn’t mind me telling him that. In fact, my relationship with Brady was a lot like the relationships I have with Ford’s Alan Mulally, Mark Fields and Jim Farley. I might not always say what they want to hear, but there is a genuine friendship there and we communicate with each other.

Brady had his allies and his detractors, but I believe he was a sincere and effective leader. I wish him all of the best. I can only hope my relationship with the NADA continues. Because I will always be a dealer advocate, I’m pretty sure I’ll ruffle some feathers sooner or later.

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Author Bio

Jim Ziegler

President & CEO of Ziegler SuperSystems

Jim 'Da Man' Ziegler joined the magazine in 2011 to deliver his On-the-Point message about the car business to dealer principals and store managers. He'll offer strategy advice on everything from sales and F&I to marketing in the digital age. Catch him every month at www.fi-magazine.com.

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