GM’s Green Gambit, Decoded

The Playmaker’s Standard, a Washington, DC-based communications firm, released an analysis on Friday of the General Motors chess-like strategy for trying to gain a footing in the hybrid car market. The Playmaker’s Standard used its “classification framework of 25 irreducibly unique stratagems or plays” to map GM’s high-stakes tit-for-tat match against critics, including skeptical environmental groups, financial analysts, and industry watchers.

The principal findings of the study show GM using a classic gambit move: the company takes a risky step about a green initiative, waits for criticism, and then allows a company executive, most notably product chief Bob Lutz, to “freely admit failure and fault.” Critics are unaccustomed to GM admitting fault and are somewhat neutralized as the company returns to claims about green car programs that could take several years to produce results.

Playmaker’s Standard uses colorful-sounding names to describe various specific moves—such as the Disco, Bear Hug, and Lantern. But they are all ultimately designed to help “the car giant buy time in the hybrid electric market and re-earn the public’s trust,” according to the summary of the Playmaker’s Standard “Play Action Strategy Map.” Highlights include:

February 2006

GM’s Move – “Screen and Partner”

GM debuts its “Live Green, Go Yellow” campaign to promote the use of homegrown biofuels and its commitment to manufacturing flex-fuel vehicles. GM partners with Chevron to expand distribution of E85 ethanol in the US.

Critics Response – “Call Out”

Environmental groups question the benefits of corn-based ethanol, and The Sierra Club calls the “Live Green” campaign an “unmitigated, total fraud,” stating the only reason GM is making flex-fuel vehicles is because of the government fuel efficiency credits it receives.

GM’s Countermove – “Disco and FIAT”

GM admits that fuel credits have been an important driver of its flex-fuel car production in the past, but insists that the company is willing to make the ethanol-burning cars without them.

January 2007

GM’s Move – “Preempt and Peacock”

At the North American International Auto Show, GM debuts the Chevrolet Volt concept car, a plug-in hybrid that delivers 40 miles of all-electric range with an E85-based engine to extend the range up to 640 miles.

Critics Response – “Bear Hug and Challenge”

Auto analysts commend GM for starting the “Great Plug-In Car Race of 2007,” but question its ability to manufacture the car. Analysts challenge GM to issue a production timetable. Wired magazine reports that industry experts doubt the underlying required battery technology. [Note: reported the same doubts about batteries and plug-in hybrids.]

GM’s countermove – “Lantern”

Bob Lutz, GM product chief, says, “There is still a 10 percent chance the Volt could fail.” CEO Rick Wagoner says the Volt may not be ready by 2010.

August 2008

Critics Move – “Mirror and Ping”

CNBC airs hour-long feature titled “Saving GM” and suggests that GM needs a smash hit vehicle to restore the GM brand and make more people consider GM cars.

GM’s response – “Bear Hug”

Lutz embraces CNBC’s quality of reporting and repeats challenges GM faces as a company.

Critics Move – “Ping and Call Out”

Volt supporters begin to worry that the cars’ style is veering away from original concept design, and is starting to look like the Chevy Malibu.

GM’s countermove – “Deflect”

Bob Boniface, director of design for the Volt, says stylistic changes will improve the car’s fuel range. One month later, in a “Call out and Preempt,” Lutz calls the Volt program “nothing less than the first step in the reinvention of the automobile.”

Buying Time, But Enough?

If the purpose of the cat and mouse game is to buy time for GM to catch up on hybrids, as Playmaker’s Standard asserts, then it may be case of too little and too late. GM’s cash reserves stand right around $20 billion—and the company is burning through about $1 billion per month.

In recent days, reports have emerged that GM may be trying to merge with Chrysler to more directly and literally buy more time. Unfortunately, many industry experts say there is little to be gained, because Chrysler sales have fallen further than any other carmaker and its most popular vehicles are pickups, minivans and SUVs—the same segments that GM is having a hard time selling.

If GM losses continue—$18 billion so far this year—then the company will be out of cash before the time that the Chevy Volt is scheduled to hit the market. At that point, the description of GM communiqués as peacocks, callouts, lanterns, and bear hugs—as poetic as it may be—will seem misplaced. The more accurate metaphor will be rearranging deck chairs on the Titanic.

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  • tw8s

    Unfortunately, Charley Wilson’s famous line in the 1950’s: “As GM goes, so goes the Nation”, is proving to be too true. Might Tata make an offer to buy up recent US motor production as scrap steel to build their trucks to move the goods in burgeoning development in SouthEast Asia?

  • Will S

    The ongoing GM/Chrysler merger talks are pointless to GM: all Chrysler can bring to the table are SUVs, PUs, minivans, Charger, Challenger, PT Cruiser, Prowler, Viper, etc; all gashogs with the lone exception of the 23-27mpg combined Caliper, which is next to useless as GM as similar models. Unless Chrysler has something up their sleeve like a producible ESX-III, they would be a boat anchor in the coming GM restructuring.

  • Shines

    I read this article and then notice the GM advertising in the upper right. This is a news story about GM’s marketing?!? It sounds more like a marketing tactic to continue keeping GMs efforts in the news. An effort to garner public support for the needed government ‘loan’ and incentives to help sell the Volt? Boy, talk about stretching the limit of marketing stalling tactics. A marketing ploy about their marketing ploys.

  • Boom Boom

    I know that GM does the lions share of advertising on this website, but on a whole, this site does a pretty fair job of covering the industry without bias. The article does a good job of pointing out GMs efforts, but also talking about the problems with their efforts. I’m not out to defend GMs empty marketing, but I think this website deserves credit for fairness and depth in reporting.

  • SteveC

    GM’s biggest mistake is keeping Bob Lutz. Back in 2004 he dismissed hybrids as a fad. He’s always selling smoke and mirrors.
    If I was a shareholder I’d point the finger at him for GM’s slide.
    But he’s still there so my opinion does not matter. I’m not going to buy any GM product anytime soon. I left them 15 years ago after getting tired of the constant repairs on my GM vehicles. They can go under for all I care. I think they are deceitful and would rather play smoke and mirrors than just make a good car.
    My $.02

  • Shines

    Hi Boom Boom,
    No, I wasn’t intending to criticize Hybrid Cars. After all they’re reporting on what Playmakers Standard said. Still, you don’t bite the hand that feeds you. If I worked for Hybrid Cars I’d look for the same type of article – it is about GM but not directly promoting it. I find it amusing that it presents itself as a marketing piece about marketing. As Steve C. indirectly points out, GM would have been much better off improving product reliability than the marketing they do…

  • Sue

    Typical American Ignorance in the article and the comments vis a vis Science- or in other words, the Real World.
    GM does face some real technical challenges, which aren’t serious but doubtlessly feel daunting to that marketing/lobbying organization that laid off most of its engineers long ago.
    Even if the science and manufacturing works, there is economic uncertainty. They have to warrentee those batteries for 10 years- and buy insurance to back the warentee. Is AIG going to back a new battery that has only existed 1 year? That’s called real uncertainty.
    There is more to it than posturing for marketing.
    That being said, I agree that Lutz (“Global warming isn’t real but is a marketing oppty”) should get the boot!
    And the Volt is clearly intended to make Congress care whether GM lives or dies. But I say if we are going to pay an automaker to make PHEV’s, we should choose one with good management like Toyota. These are all global companies, and Toyota is more American than GM. I consider incompetence un-American.

  • Boom Boom

    Agreed. GM isn’t doing itself any favors by adding hype to it hybrids and building junk (i.e. the GM hybrids that are currently on the market). A contrary example is Hyundai, which has spent the last ten years improving its cars and increasing market share. It has shed its reputation for cheap cars and their cars have better resale than most GMs. They didn’t do this by advertising, they did this by building better cars.

  • Samie

    As Steve C said “mistake is keeping Bob Lutz.” Somewhat agree with that Mr Lutz not bad but he represents the old tactical ways of the auto business. He should still work with GM but not on public relations, he sends the wrong messages to people who have doubts about GM I think sometimes he likes to be in the in the spotlight so he can massage his own ego. So for GM please don’t allow Mr Lutz to do any more interviews.

    The marketing idea is to keep GM in the spotlight but at the same time lower expectations to deliver on promises. Risky game if you ask me but at the same time you want excitement about your new products but you don’t want to be put in a box.

    Here’s another problem, that is forward thinking and its not just GM that suffers with this but even Toyota trying to capture almost every market that the domestics have enjoyed in the past. The mindset is awful car companies love to talk about being green but push the larger less fuel efficient vehicles when they see a opening. Don’t believe me, even in a weak economy the car companies in the last few weeks with lower gasoline prices have been pushing more trucks and Suv’s in ads w/c they did rarely when gas prices where high in late spring-summer. That may not work if consumers can’t get credit to buy those vehicles. Also when it comes to regulations or mandates they kick and scream about offering newer greener vehicles, even if the regulations are not fully mandated for another 20 some years. This may change in the near future but I see car companies still fixated on those larger more profitable standard vehicles and gimmicks like E85, which does very little in the long run for fuel efficiency, land issues, and environmental issues.

    Cash problems, labor issues, consumer demands all add up and we should look at what GM does in the next 5-7 years before casting them off.

  • Will S

    What’s missing from this list of “strategms”:

    – 1992: GM unveils the Ultralite, an 80 mpg 4 seat family car. Used only as greenwash.

    – 2000: GM unveils the Precept, an 80 mpg 5 seat family car. Since they are overpromoting SUVS, minivans, and Hummers, GM asks the DoE to kill the Partnership for a New Generation of Vehicle program. The Bush adminstration obliges.

    – 1990-2008: The automative industry invests $131,095,296 in lobbying and campaign contributions to buy influence. The same amount of money could have paid for 50 engineers working full time for that same 18 year timespan.

  • Doug Korthof

    The VOLT is a HOAX.

    If GM were serious, it would first admit that past Electric cars, such as the EV1, RAV4-EV and HondaEV, were successful and worked well, were beloved by their drivers, and didn’t have any problem with “RANGE” or “RECHARGE”. In fact, there were no problems with the EV1 or any other Electric car except the fact that the Auto Alliance members were unwilling to sell them to willing buyers.

    Secondly, IF GM were serious and the VOLT were not a HOAX, GM would look to past experience: instead of waiting for the perfect battery, past EVs were started with the batteries that existed, and later upgraded to better batteries.

    The EV1 — The original team, including Alan Cocconi, used lead-acid battteries, later upgraded to NiMH. For years, until 1999, former GM employees who created the T-zero and sold the technology to Tesla insisted on using lead-acid batteries. Issue it first with lead, then upgrade.

    RAV4-EV and HondaEV: the first versions had lead-acid batteries, later upgraded to NiMH and then improved.

    S10E: This Chevy electric truck first came out using lead, then was upgraded to NiMH.

    RangerEV: Ford’s electric pickup came out using lead, then upgraded to NiMH.

    If the VOLT were not a HOAX, GM would issue it with LEAD batteries, which is all you need for 100 miles all-electric range, and which are very cheap (as proven by the 1997 and 1999 lead-version EV1, which got over 100 miles range on the PSB EV-EC 1260 lead-acid battery).

    But the VOLT, is a HOAX, for these exact reasons. GM is supposedly waiting for a battery that does not exist; they are just delaying until the price of gas comes down.

  • ACAGal

    GM put $75,000,000 into varied research through QTWW, but failed to follow up on the progress that company had been making.

    My guess is that if GM had not asleep at the switch, a Volt could have been in production about now. The first production extended range EV from Friskar (with Quantum drive) will be at the Detroit Auto Show. The range, speed and power of this car is supposed to be more than the Volt, with speeds close to the Tesla.

    These new products and technologies are interesting. It looks like GM has made some bad missteps. I hope these mistakes can become objective lessons for the future and the auto industry in the USA can recover. I wish I could afford the first Fiskars, or Teslas, both cars are hunky, sporty, beauties. Maybe I will have enough for the planned family cars, a few years in the future.

  • Bubba Nicholson

    GM can offer to make parts for Fisker, Tesla, Aptera, surely? Those assembly lines should be useful for somebody. The low-tech steels and plastics should be scrapped in favor of carbon fiber asap.

    GM prefers to waste precious gasoline on non-aerodynamic ‘muscular styling’ and race car engines for (adrenaline) drug addicts who love to drive (often drunk) dangerously fast on public roads. Putting governors on cars and trucks preventing speeds above 80 mph and telephone software prohibiting calls or texting while vehicles are in motion are ideas anathema to an industry more self-absorbed than intelligent. Manufacturing inertia will keep GM from ditching old technologies as ‘sunk costs’ until it slips beneath the waves of time, thankfully not too far off now.

  • hybridman2

    Here’s a groundbreaking strategy for GM -Just MAKE one that competes with present technology already!
    Quit trying all the “good old boy” approach and pussyfooting around.

    People want action not the same hot air we get from all the politicians. If they want to regain a foothold – offer as good a car as we can make (which BETTER be as good if not better than our competitors) at a reasonable price.

    But if you are 3 or 4 years behind all the , you’ll never catch up.


    Increase Gas Mileage-Use Water 4 Fuel

  • ACAGal

    Unfortunately GM was holding onto its production lines when Frisker was looking for a production site. The four door/four passenger Karma is being produced in Finland. As far as I know, Karma is using carbon, but you should check that out, as my memory can fail. I believe the first Karma deliveries are scheduled for late 2009 – early 2010.

    Hopefully the Tesla can use some currently vacant US operating systems. I do not know the Aptera. I have ridden in the Phoenix truck, and I was quite happy with that. I’m easy to please if the vehicle handles well, has a good turning radius, can get me into and out of freeway traffic safely, doesn’t stink or burn my throat and eyes with the exhaust, is easy to refuel, is crash reliable, etc.

    The electric vehicles seem to use speed governors at the upper speed ranges, not for protection from stupidity, but to extend range. The faster one drives, the faster one burns watts/volts.

  • Sefa

    Yes, the time has come for the United States car manufacturer to switch to economical cars and fuel Hybrid car. Do not continue to research the development of car-truck with a big engine. American car will move forward again if more focus on developing economical car, because US manufacturer have a good quality product!

  • D.W.McDonald

    There was a time in my youth when I was in love with American made cars, they were stylish, fast and powerful. They were affordable, like a 1975 Trans Am costed about $5,500.00 with monthly payments of about $130.00 for 36 months. What happened? Now a cheap new car cost more than most people yearly salary, monthly payments for 72 months (6 years). Malfuntions by the ton before the car is two years old, parts and labor, well you get the idea. Toyota and Honda are more reliable and get better mileage. Why won’t American Car manufactutors produce modern 21st century cars? Greed! thats why! they say if they go out of business that we the people will hurt. Heck we have been hurting from them for over 30 years. It’s like being abused for years and the abuser tells you how much they love and care for you. Well it’s time for a divorce, lets them all go down the drain, that is the only way they will wake up! They don’t belive that we will let them go. Well, I for one have heard enough of their lies.