The new GM will be lean, but will it be green?
Volt-style marketing the future of GMWhen GM debuted the Chevy Volt a few years ago, Bob Lutz told the automotive world that GM would handle Volt development in a new way. Volt progress, or problems, would be shared in an open and transparent manner.
Some have called this openness a marketing gimmick designed to create a Toyota Prius-like green halo around GM, without actually having to sell the vehicle. Like it or not, however, this openness is no longer going to be restricted to the Volt. Instead, this openness will be the driver of all GM products and plans according to CEO Fritz Henderson.
The new GM, according to Henderson, will be dedicated "to building on only the very best of our recent progress in fuel efficiency, world-class quality, green technology development and outstanding design." Moreover, it will begin by "engaging with you, our customers and critics, our partners and champions, who are interested in our progress."
This morning even President Obama claimed the new GM "will be full of promise".
Still, while GM should emerge from bankruptcy much leaner, will it really emerge much greener? Without doubt, green technologies are the auto industry's main buzzwords, but can GM truly derive profit from these green technologies? For instance, if the Volt isn't going to be profitable for at least another decade, what other green technologies will bring out the "promise" of the new GM?
Hopefully, if GM lives up to its new promise of openness, we'll soon learn just how GM plans to turn green technologies into a viable game plan for the future.
Labels: Chevy Volt electric vehicle concept, GM
posted by Dahcredyns at
7:24 AM
12 Comments:
It's interesting that GM wants a Volt-esque open development model. A lot of strategists I've read over the years have talked about the new power of socially connected consumers that have tipped the balance of power in the marketplace. If you don't tap into that readily available connection with potential customers, your competitor will. So, maybe GM is onto something.
On the other hand, Steve Jobs and Apple have a design philosophy of having zero focus group product testing. Zero design by committee. Intense secrecy until the product is ready for sale. The courage and flexibility to say No or cancel a project if the early design promise doesn't meet expectations. Seemingly the exact opposite of an open development model. In fact Steve Jobs talked exactly about the problem of pre-announcing products in the auto industry and even the problem of doing concept vehicles. Apple believes it is their job to have the talent to identify the future and create it, not ask their customers what they want today.
The problem with the auto industry according to Jobs is that designers have no authority to force their vision into reality. At Apple engineering, software, even manufacturing answer to designers, not the other way around. If current manufacturing processes can't support the 1 lb of weight reduction needed by the designers, then it is their job to design new manufacturing innovations.
Of course that 1 lb better be a key success factor, so you can't have idiot designers, just like you can't have a brilliant engineer compromising the success of your product by vetoing a key feature just because he doesn't think it can be done.
This is going to be an interesting debate. Open manufacturing has been a theoretical discussion until now. My gut tells me Apple has it right. While car manufacturing is a mature industry, battery drive trains are not. There is the potential for breakthrough innovation, and I would place greater faith in an Apple-esque organization to create a breakthrough design than an open design model. On the other hand, Apple is used to attacking proven but fractured markets with no clear leaders. GM is looking at an unproven market in Lithium battery powered cars, and Prius is a clear market leader for the proven NiMH portion of the market.
Im not that much into the theory of it all, but I have read up on hybrids. All appear to agree that there is a 'mini great deression' going on, with sales averaging half what all manufacturers had just years ago and most seem to agree that this economic model wont change much for 1-2 years. In the meantime the pent up demand for having to purchase a new car will increase despite the downturn.. I think HYBRIDS will lead the way as they will be the most bang for the buck. Whether from China, Japan or Korea, the hybrid values for 2010-11 will be outstanding. In another year or so I think the publics need to hang on to GM at ANY cost will have faded. They will once again become pragmatic, practical, with its attention solely primarily on pricing, value, quality, warranty and fun.....will that include GM ?
Can the Volt save GM ? Not when it cost almost 10k more than other outstanding hybrids.
anon-
i agree. the volt can be an important piece of gm's future, but it can't be their only marquee green product for the next decade.
perhaps gm's mild hybrid system, BAS coupled with lithium, can provide cost-effective hybrids to compete with the likes of the Insight, but I doubt they will compete with the prius.
it just seems like gm still has a few too many gaps in its product portfolio.
alatholic -
that's a really interesting way to look at this kind of marketing.
i have to be honest, i've been one of those thinking that GM's Volt marketing was a bit of a ploy. Since you don't have anything now, you hype up your future - despite the fact that the vehicle had not been proven, not even in a wind tunnel.
still, i think the volt was smart marketing, but is it a smart way to carry out auto manufacturing and development?
I don't know and i'm not sure that the Volt has 'managed' volt expectations well.
the one thing i really think about, in terms of apple, is how many apples come along in a lifetime? can that model be replicated?
moreover, there is a price cost created by apple's model. that can work for a certain percent of consumers, but can it become mainstream?
inevitably, however, i think gm needs to take this open approach. we, the taxpayers, own them. over the next few years they need to restore their image and consumer trust. this open approach is probably the best way to handle that sort of task.
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"inevitably, however, i think gm needs to take this open approach. we, the taxpayers, own them. over the next few years they need to restore their image and consumer trust. this open approach is probably the best way to handle that sort of task."
Good point about GM needing to build trust. I agree an open model has that and other advantages.
"the one thing i really think about, in terms of apple, is how many apples come along in a lifetime? can that model be replicated?"
Oh, yes, that model can definitely be replicated. It is clearly a superior model when it comes to consumer electronics that rely upon software. For example, Palm is releasing a new phone next week, the Palm Pre. It is designed by Jon Rubenstein who started working for Palm about two years about after having worked as Steve Jobs chief engineer for 15 years. Jon left Apple three years ago and recruited dozens of Apple engineers, including some from the iPod and iPhone teams, when he started at Palm. The Palm Pre will be Apple's best competition.
Another example, Microsoft effectively abandoned their Plays for Sure licensing model and developed the Zune under an Apple like model.
"moreover, there is a price cost created by apple's model. that can work for a certain percent of consumers, but can it become mainstream?"
Apple's model does not involve a price cost. The price cost only exists with Apple's Mac computers, which is a legacy, niche business developed before Steve Jobs returned. The new Apple products, the iPods and iPhones are and will be cost leaders in a quest for mainstream market share.
The Apple Model is:
--Own the software and hardware
--Own the key enabling technology (e.g. Li batteries)
--Corner the market for the key enabling technology, if possible
--Designers over engineers and manufacturing
--Be willing to say No to a hundred products so that your energy and best talent is focused on the very best opportunities
--Don't act like a huge company trying to takeover many small markets, act like a small company trying to takeover one huge market. Otherwise you become a Sony.
--Don't slow down innovations even if you have 80% marketshare, or a huge head start. Otherwise you become a Microsoft.
--Don't allow a price umbrella under your products for your competitors to sneak under
--Drive costs down relentlessly to grow market share while maintaining profit margins
--Have world class operations, days of inventory, cash flow, etc. Apple is better than Dell at the key metrics, but before Steve Jobs and Tim Cook, Apple was horrendous.
--Have world class marketing and PR, and invest in your distribution chain to have a world class customer purchase and service experience. The Apple Stores are considered a marketing/branding expense. They are not a desperate move to cut out middlemen margins.
Anyway, I've been informally studying Apple's business for 15 years and those are some of the key factors. GM can learn somethings, but mostly Apple is just executing fundamental business techniques. The first 6 on my list I think are key Apple contributions that apply to any engineering company. It's the reason I'm focused on Lithium batteries as a key strategic milestone in the auto industry.
Don't you think the Palm Pre was screwed up a little, in terms of its launch? in terms of manufacturing, it might have been a home run, in terms of marketing, it's been a bit of mistake. and, doesn't it launch a few days before the next gen iphone?
Of your top 6 keys to apple, GM has definitely made an effort to follow those top 4 keys. The latter two have been the real killer, but bankruptcy should give them a fresh chance to start over there.
bob lutz definitely brought a focus on design back to gm, and the volt has at least made gm think about enabling technologies.
still, gm is behind on enabling technologies, particularly the battery. certainly, they are aggressively trying to make up for lost time, and they might very well yet achieve domination at this angle.
nonetheless, i worry that gm went a bit too far with the volt, at least in the short-to-midterm. early on when GM first launched the Volt, a non-plug version was a possibility. in my opinion GM should now have a green product that move at least 100,000 units per year. yet, that probably won't happen with the Volt until some time after 2015. that's a long way out.
also, i wonder if better place isn't more realistic about the enabling technology. the volt is still thinking about the future of the auto in terms of today. by the time the volt is profitable, there might be better options.
Yeah, Palm does not have a marketing genius like Steve Jobs, so I would agree the launch is not very smooth.
Palm really needs to recruit a marketing superstar if the can convince one to join them. But unless the Pre is a success, and they have a compelling follow up product, I'm not sure if Palm will be able to recruit that talent.
But I respect Palm's decision to hold off on the launch until the product is completely ready, the manufacturing ramp has been thoroughly vetted, and they are assured of having enough supply.
Then again, Palm is desperately racing for survival. The products and software are already really good, hopefully the business will come. They are at least going in the right direction as a business.
You make a good point about GM and Better Place. But if you think about what Apple would do, when is the last time an iPod or iPhone had a removable battery? ;)
you're right. today, such a notion is ridiculous.
i don't take as fact that better place has the right idea, but i find their business model compelling.
still i have a macbook. it has a removable battery. i wouldn't have bought it if it didn't. nonetheless, i'm sure that removable batteries for macbooks might also become obsolete in the near future. of course i wouldn't buy one without a guarantee of 8 hours, minimally of battery life under the most extreme conditions.
for cars, the expectations are far higher.
still, apple has an interesting angel. a removable battery sort of begets new sales via an almost subscription-like formula. upgrades are everything, not the product, particularly if it only costs a few hundred. m&s on a good niche software program, for instance, can costs hundreds per year.
if the product is cheaper than the M&S, then why have M&S? Just replace the product. as products get more expensive, however, that's a more difficult business model.
regardless, i think you're point is very relevant. we don't know the future. things are wide open. that's why you have to have a long term view, but also an interim path to get you there.
that's why i've always believed the Hybrid Synergy Drive was so far ahead of the pack. It's an adaptable platform that scales all the way to fuel cell hybrid electric vehicles. it's forward thinking, yet methodically step-by-step in execution.
Amazing...if GM had even a little foresight and less greed, they'd have avoided this entire mess and would have helped save BILLIONS of gallons of fuel from not making their pieces of shit for the past 20 years or so
In the middle of difficulty faced by GM, is really very amazing if GM will be able to produce cars that are really energy efficient at the same time able to compete in a tight competition. GM design to produce a new hybrid car should be greeted with a positive attitude. Yes, we wait ...
noz,
you're right, but there is so much blame to go around. ultimately, our government's energy policy - which GM helped lobby for - has been out of touch for decades.
while gm deserves a good bit of blame, so does practically every politician that has served in Congress or the White House in the last few decades.
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