GirlDriver, USA at the New York Auto Show
|Alan Batey, General Motors Executive Vice President and President North America|
We talked to Alan Batey about brands and bankruptcy and GM today.
Looking back, was it a good move to close brands? You don’t see more cars by closing brands, right?
Look, we now have four brands in different swim lanes. We don’t have brands sitting on top of each other now in terms of positioning and pricing competing for the same customers. We’re more focused. The strategy makes more sense. To your point around Saturn, there were some critical learnings at Saturn around customer care and we’re really tried to make that part of what we do at Chevrolet. We worked with the Disney Institute about four years ago and that with the learnings from Saturn we brought together as part of the Chevrolet experience. In the latest J.D. Power survey, Chevrolet, Buick and GMC were among the top five brands. We learned a lot from Saturn and we’re really trying to transfer those learnings and drive our attention to other brands.
How does a global company keep on top of so many different types of problems around the world?
You need to leverage a global scale and make sure that your brands are resonating on a global level. But at the same you need to make sure that you have strong organizations who really understand the market and the differences at a local level. So we have five regions of the world. We used to have four but China has become so big we got that as a stand alone region now. Those regions are responsible for the go to market and for the execution of the sales strategy and the building of the brand. What we do at a global level is we lay out the portfolio and the positioning and make sure we’re leveraging our scale but the real work of selling and servicing customers is done at a local level and that provides the right level of balance that we need between local and global we call it GLOCAL abut that’s basically our approach.
The bankruptcy made GM a better company in some ways. Post bankruptcy, what are the big challenges?
What we’ve seen is that the company has grown. Our U.S. business has rebounded. We’re seeing really solid growth. We’re seeing transaction prices increase. We’re seeing our brands slowly start to gain more momentum but its a long term journey. You don’t turn around a brand overnight.
We don’t have so much of a challenge in the U.S. as opportunity. The Malibu is a great example of that. Here’s a segment which is the biggest car segment in the U.S. We’ve clearly been underperforming but we’ve executed an incredibly great car and you know our rallying call around it is larger lighter best in class fuel economy and stunning design. So I think this is a great demonstration of our capability and we’ve got five new vehicle launches this year—at Chevy and you know know its coming on the back of very successful Colorado launch—Colorado midsize segment. We’re growing that segment now. And it is the fastest turning pick up in the U.S. The Trax is a segment that we created with the Buick Encore. We’ve gone fast to market with the Trax. It’s doing really really well so we feel good about our ability to really redefine our future with a really laser like focus on new segments and great products.
People forget is that the U.S. was the only part of GM that went through the bankruptcy The rest of General Motors did not go through bankruptcy and so here we are five years after the U.S. Chapter 11 we’re still restructuring a lot around the world, not through the bankruptcy courts but through our commercial activities.
We’ve seen a lot of growth in China, which has become our second biggest market. What you are also seeing is these markets all need to meet emission requirements which are being governed by different countries. You are no longer able to sell perhaps legacy products that is amortized at lower prices. There’s a big movement underway because we’re going to need affordable, modern technology across the world.
We’re still doing some restructuring in other countries and you know we have challenges like Russia where we’ve had to make a decision that we’re going to somewhat muffle our business there because its losing a lot of money and right now it doesn’t make any sense so we need to slow it down and to conserve cash and see what happens as the economic situation becomes a little bit clearer.
Does anyone at GM believe that social media is going to sell cars?
I believe that social media is the new word of mouth. It’s a powerful medium when it comes to reputation management. You know customers going on line, getting their service rating the dealership that gets five stars or whatever. They go online and they can see instantly what people are saying about them on social media. That’s very important to building that brand, building that reputation and driving retention.
So it’s really it’s really a word of mouth. We had an incident that happened around the World Series whereby in the final game of the world series we were giving away a Colorado to the MVP. The gentleman that was doing that on our behalf who was our zone manager this was late at night as you can imagine across the nation um he’s a big gentleman and they changed the location so he’s down on the pitch side and they wanted to do it in the studio. So he literally has to run. He gets there. The interview—I don’t know if you ever saw it—the interview didn’t go well and he you wouldn’t know whether he was hyperventilating because he was nervous and that’s what most people picked up. Anyway it went really badly. There was this, “Oh my God, did you see that? I can’t believe that just happened.” Then this sympathy thing came in—“Hey you leave the Chevy guy alone. If you ever had to do this can you imagine how nervous he was?”, etc. We have people that monitor this 24-7 so we were able to see it going off. We were able to hashtag Chevy Colorado and tech because he said something like you know the car’s full of technology and stuff so we hash tagged “technology and stuff”. Anyway over a 24-hour period we were the #1 in social media.
It was crazy. But we were able to join the conversation and then we went out with some more traditional ads like print ads that said “Introducing the all new Colorado with all that technology and stuff.” So we joined the discussion and we did it in a way that made us very human and we had our VP of sales go out and say hey just so you know he’s our guy, he’s a fantastic employee. We stand behind him and then we got this whole barrage of “good on Chevy that’s what you need to do is support your employees.” So here’s an example of a social media event. If we’d have just sat it out we would have looked stupid but because we engaged and became part of the discussion we created amazing awareness for Colorado which is our new vehicle. We created a very human touch to our brand and our employees and it was just huge for us. We estimated that in 24-hours it was over $5 million of free media. It allows a two way conversation, social media, rather than us putting out an ad that’s sterile this allows us to talk to our customers.
You can see people that say I had a bad experience and we can now engage those people and turn that into a wow experience. All of a sudden we go in and we say we saw that you posted this. We’d like to help you. Then you can turn it around.
We’ve launched something called Shop Click Drive that blends together the digital world and the bricks and mortar world. We know there are a lot of millennials who don’t feel comfortable transacting in the dealership environment. They feel much more comfortable buying and searching online so what we’ve done with this product is create an environment where in fact you can go through the whole process online and then we introduce you to the bricks and mortar so that you know where you get your vehicle serviced and that part of it.
Our business isn’t transactional. What I mean by that is when we sell a car it’s the start of the relationship. When you buy a tin of beans once you’ve bought it its the end of the relationship until you buy another tin of beans. So we need to make sure that you know it’s the second biggest purchase in people’s lives many people have a trade in. We have to be able to have the ability to accept trade ins and put people into new vehicles. Most people need financing. We have to meet their financing requirements.
What do you think the smartest move GM has made recently and how did sales prove it out?
I would say redefining the mid-size pick up segment that used to be worth a million vehicles a year, dropped down to about a quarter of a million. We looked at all the customer verbatims, the reason customers weren’t in the segment and they said there was no choice. There were only two old vehicles that were available. There’s was old technology, not good fuel economy, no technology in the vehicle so we went in. We introduced the Colorado and Canyon with 4G LTE. We’re going to introduce a diesel engine later this year which will be best in class fuel economy, stunning design and its been a huge home run for us. Colorado is number two in the segment.