Sic Transit Gloria

Ford kicked off the auto show festivities Monday morning with a triumph all their own.  Their presentation of both the company’s resolve and the new Focus (the car as well as well as the attitude) was a public relations tour de force.  It was one of those “you had to be there” moments, as Ford skillfully used both the backdrop and the large floor of Cobo Arena for compelling images outlining their teamwork, mission and commitment to the customer.  Alan Mulally handed off to his direct reports, who handed off to Ford team members, who returned the baton to Bill Ford, who put the coda on whole presentation.  The vehicle introduced in this swirl of message meets imaging was the new Focus model, to be made locally in Wayne, Michigan.  

Having endured hundreds of auto show pitches, Ford’s manipulation of the media of presentation was masterful and magical.  People were actually standing on their presentation material, the horizontal portion, while the vertical backdrop went with complementary images and messages.  The melding of product, people, message and image was powerful and impressive.  All this hoopla would have been lost if the product itself had been lackluster.  But the new Focus presents itself very well, and will be the building block for many other derivatives, including hybrid and electric versions to be built at Wayne.  More so, Ford not only had this display for the press, but for employees and suppliers as well.  Restoring the relationship with these constituencies was part of the Cobo Arena pitch.  It was a show of confidence and strength, and contributed strongly to the optimism of the crowd.

Unfortunately, the follow-up GM presentation, starting off with Mark Reuss and Susan Docherty bantering with each other, fell flat, especially in comparison to what we had just witnessed with Ford.  After the initial, and staid, intro a few GMC and Buick concepts were unveiled.  A GMC “urban utility” concept was presented called the “Granite”, essentially an Aveo with a big GMC grille and suicide rear doors.  Of interest from Buick was a Regal GS, that featured a turbocharged four cylinder engine and a six-speed manual transmission, a sort of four door Turbo T-bird for the 21st century.  Which makes one wonder is anyone at Ford was scribbling down notes?

Of course, GM later recovered with some other unveilings, such as the new Cadillac DTS and STS replacement, the “XTS”.  (Can’t anyone NAME a car anymore?)  This is a competent piece that presents a finally handsome Cadillac after years of Klingon-derived “Art and Science” origami designs.  Chevrolet unveiled the new Cavalier/Cobalt replacement, the “Cruze”, which has an exterior that doesn’t offend.  I understand the interior works very well.

Mark Reuss returned to the spotlight on the first night of the Automotive News World Congress on Tuesday.  In his speech, he made a heartfelt appeal to mend the many fences GM had damaged with suppliers, dealers, and employees.  He hit an emotive note when he told of showing his son the ruins of Buick City in Flint, were Lloyd Reuss had once been divisional manager.  To his son’s question, “How did this happen?”  Mark choked back tears when he said, “We just didn’t compete.”

As sincere as Mark’s commitment plainly is, will the new GM be able to compete?  I hear that with union concessions, a clean balance sheet with minimal debt, and suppliers scrambling for orders, the company now has a cost advantage over the international competition.  The products are clearly getting closer to the market target, too.  But then in only a twelve million-unit market, will GM attract enough interest away from Ford, VW, Hyundai, Kia, Toyota, Honda, and Subaru, all of whom have their own tail winds behind them?  When time comes to float GM’s IPO, will GM’s share of overcapacity be valued higher than everyone else’s?

Chrysler, oddly, had no press conference at the show.  Instead Sergio Marchionne made a speech (interrupted by protests) at the Automotive News World Congress.  Once things settled down, he made an impassioned plea, in an intellectual way, for permanent change in the world wide auto industry.  He also answered the Detroit media’s most pressing question.  He owns more than one black sweater, in fact, he orders them in bulk on the internet.

Much more seriously, he pointed out that the current “crisis did not cause the weakness of the industry, but rather laid it bare.”  He accurately described an industry with business models that had “destroyed billions of value for years”, and upon economic recoveries only to “retreat into denial”.  His message was one to embrace market driven change, and to forsake the sorts of crutches that subsidies and value-consuming incentives had become.

Mr. Marchionne did admit that in extreme cases, such as the Chrysler bailout, government intervention might be necessary.  On the other hand, be pointed out that no German auto plant has been closed since before World War II (the efforts of the RAF and Eighth Air Force not withstanding).  His strongest point may have been in reminding the audience of industry leaders (and a few hangers on) that we are “not in the commodity business.  No one ever made a TV commercial for pork bellies.”  He stressed building sales on Quality, Brand Equity and Buying Experience.

How that all squares with Chrysler is a bit of a puzzle.  But at least Sergio’s heart and mind are in the right place as he eschewed the U.S. OEMs’ penchant for dealing with “temporary problems with temporary answers” and reminding the audience that “no one had an inherent right to exist.”  He closed with a quote from philosopher Karl Popper who said that, “We need to be architects of our own destiny”.  Even if to build that destiny means structural change.

Business stories are rife with sports and warfare analogies.  Take my Roman general lead-in, for example.  In the end, the analogy breaks down in that business is a war that never ends and a sport without a final buzzer.  Thus, even more than war and sport, our accomplishments are fleeting and momentary.

While a few OEMs can take heart in a good performance from 2009, and many more can look forward to a better 2010, there is a lot of work to do.  The Ford Focus and Chevy Cruze have yet to find out which one is retail and which one is rental.  The Detroit Three’s best efforts will be met by hungry and diligent people from Toyota, Honda, Hyundai, VW and so many others.

It is too early to celebrate any triumph, only to raise a glass to a new hope for a new beginning.  The business world is a tough slog, and may be best thought of through yet another Latin phrase.  Victor Muller of Spyker spoke well of his company, as he couldn’t reveal anything of yet of his efforts to buy Saab from GM.  But he did share the Dutch company’s motto, “Nulla Tenaci Invia est Via”, For the Tenacious, no Road is Impassable.