Has GM started to turn the corner? The automotive giant posted a 47% jump in sales in June -- its highest level in 19 years -- fueled by its employee-discount-
for-everyone promotion (that recently was extended until August 1). And while Main Street may not be happy, Wall Street was not upset with GM's announced plans to cut 25,000
factory jobs, a move that reportedly will save the automaker $2.5 billion a year. From a 52-week high of nearly $45, GM's stock price sunk to $25 in April before starting a
gradual climb to around $35 in mid-July.
Still, GM is hardly out of the woods. For the last several months, gallons of bad ink have been spilled about GM, ranging from it having a stagnant product line and its
subsequent inability to hold onto shrinking market share to an (ongoing) advertising boycott of the Los Angeles Times due to what GM called "factual errors" in the Times'
editorial coverage to soaring health-care costs for retirees.
Gary Grates, VP of corporate communications at GM, who reports to GM CEO Richard Wagoner Jr., says, "PR has to have a seat at the table to catalyze" an action plan when
companies face a severe crisis.He adds, "We're managing this challenge from the 'inside out.' We can't change what the media say...As you go through the process, you must
calibrate your communications in a way that people discover what you're saying rather than trying to sell it. It takes a lot longer than selling, and it requires a lot of
discipline, but it's the most effective way to turn around a reputation."
Grates is steering a four-point recovery plan that addresses GM's many woes. With contributions from three senior PR pros, PR News presents its own formula for how GM should
right its own ship.
Peter Himler
516.729.6461
[email protected]
http://theflack.blogspot.com
Newton's third law - 'For every action, there is an equal and opposite reaction' -- applies to public relations. Consider General Motors. In the last several years, the
automotive giant has taken a beating in the reputation department. Some attribute GM's woes to rising employee health-care costs, the end of America's love affair with SUVs,
and/or the lack of quality or sexiness in the automaker's product line. The recent Standard & Poor's downgrade of the company's stock to junk status certainly revved up
the media's reverse engine.
Whatever the reasons, the business press has jumped on the GM-bashing bandwagon with headlines like: 'Can GM Survive?' 'Why GM's Plan Won't Work' and 'The Lost Years -- General
Motors.' It's enough to force the head of corporate communications into a roadside ditch.
Still, the PR pendulum almost always swings back. My sense is that the nation's biggest automaker is poised for an upswing, catalyzed by the success of its employee discount
program for consumers that produced 42% and 47% sales increases in May and June, respectively, from a year earlier.
And as Newton predicted, the media took notice with headlines like: 'GM Takes Step in Right Direction,' 'GM Sales Surge,' 'Selling the Sizzle' and 'GM's Next General.' Just
last week, the pendulum was turbo-charged with the announcement of the Toyota/GM collaboration on fuel-cell technology.
Can PR accelerate the pendulum? Yes, but if not handled well, it can also slow the pendulum, as we observed when Martha Stewart publicly griped about her ankle bracelet and
flaunted her situation in an ill-timed Vanity Fair cover story.
GM's communications team has a window to capitalize on the momentum it currently (but perhaps tenuously) enjoys. Here's what it can do:
- Step up the flow of positive 'news' from the company, e.g., the Toyota deal
- Continue to avail key executives to key media to keep GM's myriad challenges in perspective
- Establish regular and ongoing two-way communications with all of the company's key constituencies, e.g., employees, dealers, consumers, regulators and the Street
Finally, management should view its communications staff less as a channel to disseminate pronouncements from above and more for its instincts on how management decisions
impact the company's reputation. Companies in turn-around, whose communications officers are the fourth 'C' in the C-Suite, are less apt to hit the reputational potholes on the
road to redemption.
(Himler, a 20+ PR veteran, is president of the Publicity Club of NY, and he is active with the Center for Communication. He was named the 2004 PR Executive/Media Relations
Executive of the Year by PR News in October 2004.)
JB King
Senior VP, Financial & Professional Services
Makovsky & Company
212.508.9628
[email protected]
GM is a classic example of why bigger isn't necessarily better. The largest U.S. carmaker has some 80 models in its current lineup, yet the average person is hard-pressed to
name even two or three. One reason its cars are so forgettable is that they suffer from 'sameness.' In trying to appeal to the masses, GM has created bland cars no one wants to
drive.
CEO Rick Wagoner could do worse than to study the lessons of Nissan. A few years ago, when the Japanese automaker faced flagging performance, Nissan revamped its lineup
with feature-rich models marked by bold, distinctive styling and marketed at competitive prices, including the Murano, the Z350 and, most notably, the Altima. Originally designed
to compete against the entry-level Toyota Corolla and the Honda Civic, the Altima appears to be successfully challenging the popular, higher-price-point Camry and Accord.
Nissan, whose reward has been renewed financial footing, reported record sales in both May and June of this year -- a clear signal that these are cars people want to own.
Compounding GM's woes is the uncertainty around its pension plan and health-care benefits for retirees. By establishing formal channels for communicating with employees and
retirees, feeding the information chain and offering support where benefits may be reduced or eliminated, GM can curb negativity and demonstrate it genuinely cares.
GM's advertising boycott of the Los Angeles Times, due to unhappiness with its editorial coverage, is not only ineffective, but it makes GM look like the playground
bully. A better strategy for a company with GM's clout would be to launch a constructive, national dialogue about the future of U.S. manufacturing jobs.
Allan Steinmetz
CEO
Inward Strategic Consulting Inc.
617.558.9770
[email protected]
GM ought to undertake an inside/out mass-marketing campaign directed to all employees, venders, dealer staff, and unions and their families, telling them what GM stands for,
what is at stake, and how they need to perform their jobs to live up to GM's image in the marketplace. Here are some specifics:
- Bring together all its corporate and divisional marketing & communications staff and its ad/PR agencies for a retreat facilitated by outsiders to help shape unique and
distinguished brand-value propositions for each division and the over-arching GM brand. - With the help of internal organizational-development professionals, the same team needs to identify behavior needed within GM to provide customer value to support the brands,
e.g., how to talk about the brand, and how brands differ from each other and the competition. - Next, the team would prepare a communications brief for an all-out internal and external communications launch that simplifies what GM means to employees/dealers/vendors and
to end customers.
(Steinmetz worked for 17 years in automotive marketing/advertising for Ford and GM.)