GM Marketing Czar Turns Toward Efficiency

One day after the US government rejected GM’s turnaround plan, Mark LaNeve, the company’s vice president of sales, service, and marketing for North America, spoke with Eddie Alterman, editor-in-chief of Car and Driver magazine. The interview gives a direct glimpse into the company’s mindset as it goes back to the drawing board on its recovery.

Interview with Mark LaNeve, vice president of sales, service, and marketing for North America, on March 31, 2009.

For most of the discussion, LaNeve and Alterman talked about restoring consumer confidence and the future of GM brands. But in the final minutes of the 11-minute interview, the discussion turned toward fuel-efficiency and smaller cars. LaNeve said the company knows how to produce high-performance vehicles, but at this time emphasizing smaller efficient vehicles is “a better message to send to our key stakeholders, to our customers, and certainly to the government whose made that a requirement of our viability.”

Alterman asked: “How do you deal with a government that doesn’t have a solid energy or transportation policy? How do you design for a government that says build smaller cars, but we’re not going to step on the political third rail of a gas tax?”

LaNeve replied:

“It’s a big challenge. I won’t deny that. If we’re going to really be focused on a clean environment and on CO2 emissions, on becoming energy independent—to me that’s the most important thing, where we’re not relying on Mideast oil so that to some degree our fossil fuel dependency whether from motor vehicles or other [sources] has to be fixed, and that’s not going to happen overnight obviously—it’s going to take industry and the government working together.

“There’s just no other way that it can happen. You’re going to have to have investment spending. You’re going to be out in front of where the consumer really wants to be for a certain period of time. We know already that they’re not willing to pay for two powertrains in a vehicle. They’re willing to pay for one, and they do the math on hybrid technology, does it pay back and what have you?

“But I believe the government will set up the right parameters around that. If you think about it, that could be the next era of job creation in the United States, is around energy efficiency, alternative fuels, battery technology, wind- or turbine-generated electricity. In the 90s, we had a real good economy under Bill Clinton, it was all about integrating IT and the Internet into mainstream business. That was the big job-generator.

“I really believe in the next decade, it’s going to be all around a cleaner environment, energy efficiency, and energy technology. We believe GM is a leader, and can be an even better leader—once we really get our company fixed—in that area. ”

Based on LaNeve’s response, does GM have a sufficient commitment toward fuel-efficient technologies and to consumers eager for cutting-edge green vehicles?

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  • Honda owner

    I’m sorry but I don’t believe GM. Each time they have tried to produce a small efficient vehicle, they have failed. It’s not that they can’t make them, they can’t make them well. Compared to Honda or Toyota the reliability is far short. I have own GM products and will not again because of that.

  • David B

    We can not ask the person who shot the person, to go out and find the killer. He’ll just never find the killer. The oil companies control the the car companies. Why else is there no electric cars. Why else has MPG from cars, suvs, and truck been getting worst over the decades. WHO HAS BENEFITED ? Why doesn’t the oil companies bail out the car companies, haven’t they profited enough? Record braking profits year after year. How greedy are they.

  • 9691

    Somehow this gentleman is not very convincing. It’s all general talk.

  • Collin Burnell

    Wow! David B, you raise a good question! Why haven’t the oil companies been involved in reviving the automobile companies?

  • AP

    It’s shocking that GM does not make more of an effort to pull in the “green” market. After all, hybrids account for fully 3% of total US vehicle sales!

  • douglas

    how is high performance any different than efficiency?

    efficiency seeks to push the car as far as it can on a drop of fuel, high performance seeks to make it go as fast as it can on the same drop.

    efficiency is high performance, just a different definition of what performance is.

  • Samie

    David B & Collin Burnell

    That may not be a good question in blaming the oil companies but 10-15 years ago I would agree. For fuel mileage of traditional ICE and conventional hybrids I really don’t think that oil companies are involved in a mass conspiracy against the American public to keep mpgs down. It maybe just the opposite. Lets think about that if my product is being deteriorated at unpredictable rates and the price of my product fluctuates bring uncertain amount of projected/steady revenues, uncertainty about investments into new exploration and the great fear of a switch to another fuel source if say prices by dumb hedgers drive up the cost of gasoline. That could aid in the incentive to switch to electricity powered vehicles or r&d into developing better alts. to petroleum. So that is why they have launched PR in saying they want to conserve more and so should we, that should be no surprise as of the motives behind this magical great thing of oil companies drumming up conservation, in that the thinking is to extend the longevity of their products.

    Here’s where David B’s comments have relevance, if BP invests in battery product, EV companies/development rights, solar ect… they can control to a certain extent how other energy sectors grow compared to their main product of petroleum. Remember its not about fully developing alt. energies its more about controlling the rate of growth in these sectors. Eg Cosby batteries (was/is? funded by oil companies) to control the market for domestic battery production and to a certain extent control the amount of progress in production and r&d as well as profits for the battery sector. I think we should think of “Big Oil” in this type of framework and should be concerned if they are buying up huge shares in some of these alt. energy companies.

  • Samie

    Comments on the article/interview

    If GM is serous about fuel efficiency and wants to reduce performance platforms why don’t they get rid of Pontiac?
    Why have the G6 competing with the Malibu? There may be some advantage in the Pontiac model but why couldn’t they incorporate Pontiac styling or performance into SE additions of Chevy of Buick models?

    GM does lack good small car capabilities & I wonder if they truly intent to explore this area becasue recently they made a dumb decision in delaying production of the Chevy Cruze along with completing R&D into this vehicle but to be fair they had to cut costs due to the economy…

    Another problem GM has is the lack of full hybrid technology competing with car types like the Prius (Yaris Hybrid?), Insight, and Fusion. That problem may show up in the future if fuel efficiency plays a factor or consumer preferences continue to change.

  • Anonymous

    GMs only chance in the small car market is Opel. They recently said that they will be cutting their brands down to GM, chevy, buick, cadillac. They should axe buick and work very hard with Opel to bring a quality line of cars back to the US under the Opel brand. Many baby boomers have reasonably good memories of the Opels from the 1970s and young consumers are looking for something new. Its all about brand image. None of their other brands have any credibility in the small car market.

  • Lost Prius to wife

    douglas, high performance is not the same as efficiency. A high performance car is designed to maximize power output usage without necessarily any regard to the efficiency of the engine or engine size. An efficient engine maximizes the power or energy output for a specific quantity fuel input. I will grant you that increasing an engine’s efficiency can increase performance, but it does not necessarily go hand in hand. Efficiency is better defined as how completely the fuel is turned into power or energy while car performance deals with what one does with that power or energy once it is produced.

    Samie, no matter what anyone wants to believe, there is some truth in what you have said. Some young oil executives, and younger managers that will eventually replace older oil executives, realize that if they sell off their entire product (oil), they will have nothing to sell. What kind of job does one have if they have nothing to sell? This is also why oil companies are diversifying into other areas of energy. Not only do they want some control over it, they want it for a job.

  • David B

    GREAT POINTS, my wife has the Prius, too and I still need the bicycle (And my truck, unfortunately) BUT technology can and will chance the worlds’ carbon foot print to a more positive level. We grew it in the late 90’s. Computers and Cell phone growth is just one example, of what we can do, if WE put OUR minds to it. We need it quickly because the air we breath is getting worst. Weather patterns are changing and the fossils fuels are burning hotter and more, every second we breath. Sad but true. LET’s THINK GREEN every second (JUST FOR OUR KID’S KIDS AIR TO BREATH)
    The earth is still too beautiful. Let’s keep it that way.

  • veek

    If given a chance, and given their past history, I think GM would like to be able to build more fuel-efficient trucks, larger cars, and SUV’s. They are already building some good trucks that get 21 mpg. They may also give use some good relatively fuel-efficient high performance cars (the Corvette does get better mileage than most super high performance cars).
    Their past efforts at smaller vehicles have not done so well, and it does not appear good for the future either. Do we need such a company?

  • Green washing

    I think LaNeve answered your question clearly. His answer to your question is an astounding NO. His comments are that GM will rely on the government to drive sales of more efficient cars…they are “committed” as long as the government will drive the sales.

    His comments also illustrate the following point:

    Incompetence has over taken their market research.

    The indication that consumers are not willing to pay for a car with 2 powertrains really are derived from their failed attempts at hybrid. One is the mild hybrid which any half educated consumer will see as green washing. The other half don’t know what is a hybrid.

    The other failure is the hugely expensive dual mode that they hope will make people with deep pockets swoon and buy 2 at a time. They ignored the fact that people buy big cars fall into 2 categories. One is that they really need them for their utility. The others are the ones that “think” they need the utility. But when it comes down to it, none of those 2 types care much about being green. The key word is utility.

    Green, washing, that is…

    All generalizations are dangerous, even this one.
    -Alexandre Dumas

  • DrP

    Congress and past presidents are to blame. Raise the gas tax to the point where the consumer has an incentive to buy cars and trucks that get good gas mileage and the free market will dictate what kind of cars are produced. I pity the carmakers now because totally foolish government policies have made efficient planning impossible.

  • Anonymous

    Green washing, I don’t know where you’re coming from.

    You criticized LaNeve for saying that “GM will rely on the government to drive sales of more efficient cars…they are committed as long as the government will drive the sales.”

    Of course it’s up to the governnment to drive demand for small cars! They are the ones who are who set fuel taxes. If they are going to warp the market by demanding the manufacture of these cars, they are responsible to make sure people will want them, and pay a profitable price for them. You can’t have it both ways: mandating supply must come with mandating demand, meaning higher fuel taxes (Mr. Weiser, above, hit the nail on the head).

    LaNeve’s claim that consumers do not want to pay for two powertrains is also unchallenged. No mass market carmaker is currently charging enough extra to actually pay for their hybrid powertrain. Toyota claims they make money on the Prius, but no one in the industry believes that. Besides, in a corporation of their size, it is easy to “reapportion” the accounting to make an individual product look more (or less) profitable than it is. They probably have a good laugh now and then, discussing how easy it is to pull the wool over our eyes, mostly so we won’t so how their “low-cost magic” has come from an undervalued yen.

  • Green washing

    The government won’t have to do anything to drive the sale of small cars. They are already selling briskly. Why? Because we have seen where gas prices can go. It is only a matter of time before it goes up again. When the market recovers, you better be expecting to pay a lot more for gas. The key is to produce a small car that people wants to buy, that means at least a decent interior. That means good reliability. Why can’t GM commit to producing high quality small cars? No matter what the government dictates. Don’t get me wrong, I believe they are already producing quality small cars (Aveo). They just have to shrink the rest of their cars (SUVs in particular).

    And how is not charging enough for a hybrid powertrain or your speculation that Toyota is not making money on the Prius relevant in this discussion? My comments were directing at their incompetence in market research. Slapping a “hybrid” badge on a product that can’t match other hybrid performance (as in fuel economy and utility) out there and hope that it will generate sales is wishful thinking. My other point was that they also misjudged the high end SUV market sales. People don’t buy them to be green. They buy them because they need or think they need them.

  • sean t

    Where’s Bryce when GM needs him most?

  • fishinva

    I, for one, completely believe that GM is committed to bringing small, high quality efficient cars to the market. To think otherwise is ignoring the fact that GM, Toyota, Honda and all other car companies are just that–companies. The purpose of a company is to make money. Companies will try to produce what will sell the best and make them the most money. That’s why even “eco angel” Toyota still builds pickup trucks and gas guzzlers along side their Prius–it can make money that way. The reason GM hasn’t had competitive small/efficient vehicles in the past is because GM failed to predict rising gas prices. Was this a stupid oversight? Yes. But does that mean that GM just wants to build trucks now knowing full well that more and more people want efficient vehicles? No. To think that is simply ignorant. GM wants to build great cars now, because that is what will sell. GM doesn’t have some evil desire to put everyone in the world in a truck to bleed the earth dry of oil.

    So the answer to whether or not GM is committed to building efficient vehicles is a painfully simple one. In fact, it’s the exact same answer you would get if you asked whether Toyota or Honda were committed to building efficient cars–if efficient vehicles sell and make money, GM will do it’s best to make competitive ones to help their bottom line.

    The question that involves more opinion and speculation is whether or not GM will be able to accomplish that feat given their financial situation. I have never owned a GM vehicle myself (in fact, I own a Honda Civic). But if I were in the market for a new car, I would highly consider purchasing one of their newer vehicles slated to come out on the market. The newest incarnation of the Malibu is a really great car (one that I personally like much better than the Camry and Accord), and the 2011 Cruz looks like it will definitely be competitive in its segment (even though it will likely be priced higher than the Civic and Corolla due to the fact that GM states it’s really making an effort to beef up the quality of the car).

    I think that the Volt will also show that GM can make great, efficient cars. Call the Volt vaporware, a publicity stunt, or whatever makes you feel better, but the fact of the matter is that GM has put a lot of R&D into the development of this car (which again shows that GM really wants to build more efficient vehicles), and regardless of whether the marketplace is truly ready for a plug-in hybrid like this, the things GM has learned from building this vehicle should carry over into their other offerings. The Volt may fail (and if it does, I suspect it will because of the high manufacturing cost), but I predict that the car will show that GM can build great cars in the future.

    It’s truly a pity that GM has taken this long to dedicate substantial effort to making a quality small car, and it may have to pay for it’s mismanagement and poor decisions in bankruptcy. But if GM survives, there’s no reason to believe that with a little time it can’t be a major player in the small/green car segment.

  • veek

    Note to fishinva:
    I hope you are right, but the past 40+ years does not look terribly encouraging. Theoretically, GM and the UAW definitely should want to build small or efficient cars, but in reality, they always, always, always seem to fall back on large trucks/SUV’s and large cars. GM has known about the likelihood of eventually rising fuel costs since the ’73 oil crisis, but their efforts with the Vega, Citation, Saturn, Cavalier (and the failure to engineer a replacement for a decade), etc. have generated some dismal public relations (the source of many of their problems), even if they were not bad cars relative to what was available at the time. Even the Malibu, as nice as it is, does not really fall into the category of a truly efficient car. Although GM and the UAW did build relatively more efficient cars as time passed them by, they just seem to have a mindset that the general public will eventually keep demanding big vehicles (even the ones who do not really need them). It resembles the people in the aviation industry who never got the picture that biplanes were obsolete. I don’t know how they could keep hoping for a different result by making the same mistake time after time, again and again. The question is … do we really need such a company? Maybe they will succeed with a new business model and I wish them luck.

  • Solomon

    1991 EV1 (Electric Vehicle 1) Project of GM was produced but junked and forgotten by its stockholders over their sales of their oils…

    I have given facts on how was greedy people managed and rules the world inspite of its future results…

    May US government save the GM and kick those greedy stockholders inside GM!!!

  • sean t

    GM is like many CEOs, they work on the short term incentives, not for the long term future. The so-called Production Guru Bob Lutz had a very nearsighted vision, laughing at hybrids and he kept his position in the Company for a long long time. No wonder.
    The guys who sit at the top of GM think that cars will use ICE (alone) forever, oil will last forever. How naive.
    As veek said: Do we need such a company?

  • bill cosworth

    I just bought a new GM

    I love it . It was so much better than the same priced toyota.

    I think GM cars now are much better than toyota cars.

    The only problem is Toyota has a more money to give to Consumer Distorts.

    So I never read that magizine anymore. CR is a huge fraud.

  • Shines

    Bill you’re full of it. Let’s see… Consumer reports rates Ford, Honda and Nissan as manufacturers that produce better quality than GM. Are they all paying Consumer Reports to rate their cars better? Consumer reports does rate the new Malibu high and recommends it, does that mean GM is now paying Consumer Reports?
    Consumer Reports downgraded the 07 Camry V6. They dislike the Toyota FJ Cruiser and think there are better choices than the Yaris. That doesn’t sound like Toyota owns Consumer Reports.
    GM became large by cranking out descent cars for cheap. Lately American consumers have been demanding higher quality and more fuel efficient cars. GM has been behind in these two areas. That is why they may be filing for bankruptcy protection. I think the change in the economy will help GM (if it survives) in the long run as inflation will force the price of Japanese vehicles out of reach of most Americans.

  • Bill cosworth

    Buick is the highest quality car in the world

    Beats lexus but 5 points.

    So GM makes the best cars in the world.

    I dont see your point. Japanese make worse cars.

  • gnarlyswine

    GMs Marketing dept seem determined to hammer the nails into there own coffin.
    while their company is on the precipice of bankruptcy they are busy trying to sell us the Volt – a car that doesnt even exist yet. This is there idea of trying to tell us that all GMs arent all lumbering dinosaurs.
    Well heres an idea why not highlight a few of the more modern vehicles you already have like the CTS instead of something that likely will never appear.
    Ford have the right idea – have you seen the Ads for the Lincoln MKZ, they are promoting that they allready have modern technology. Its no surprise that they havent went cap in hand to the Government. Somebody fire the ad-men before its too late.

  • gnarlyswine

    great point you are trying to make bill – but below average we have:


    near the top for reliability or better than average (admittedly after Buick)

    You arent making a very good case for buying (pretend) American

  • nycsolar

    Don’t you guys get it? This came out on April 1… It’s a huge april fools joke.

  • jimmyveri

    great article.

  • JasminePreit

    The GM is the topmost brand in the automotive field and to maintain the position the continuous development should be done. Now a days the most considerable fact about the car is the fuel efficiency and GM don’t neglect it for the big market of fuel efficient cars.

  • treck

    Hybrid BMW’s are a good news for the forever fans of BMW. Not anyone can afford a BMW and that’s because BMW are strong heavy power cars with a relatively high fuel consumption. Let’s hope the fuel consumption part will soon change, that would make the