The behaviour of company leaders can have a profound effect on public and employee brand perceptions. From a public perspective the respective leaders of the Big Three, once sworn enemies in the marketplace, are now seen suitably humbled going cap in hand to Washington in a last ditch attempt to persuade the Democrats to take pity on them and rescue a US industry that is basically bankrupt. Here they are, desperate for a bailout, secure in the knowledge that no bank anywhere in the world will lend them money. Why the reluctance to bail them out? Because they have comprehensively proved themselves incapable of managing their companies and creating products that will sell. Yet the fact that so many employees are involved and such an infrastructure of suppliers are reliant on the Big Three surviving, will ensure a bail out happens. You wait and see. Hopefully it will come with conditions attached and hopefully with an external management group in control, preferably Japanese, Korean or even Indian. Sadly all auto manufacturers will now be treated with extra caution by the banks, which will only make life harder for everyone.
Oh how the Japanese and Koreans must be excited at the prospect of damaged or failed US competitors. The M&A guys must also be excited by the potential opportunities, though the challenge of trying to make something out of such a monumental mess is probably too daunting for them.
The Big Three leaders impressed no-one on the day by flying to Washington in their private jets. Are they so arrogant that they didn’t realise how this may turn public opinion against them? Maybe they just don’t care. Where were their spin doctors?
No one in their right minds would ever believe that US$25 billion split three ways will rescue the three biggest US car manufacturers. No way will it turn around management attitudes, never mind magically produce new, smaller and greener cars and new production lines to make them. And who will bail out the dealerships? Chances are that if the $25 billion bail out magically happens, there will be no dealerships left to sell the ‘new’ cars.
Management were ill prepared to recognise and respond to change. Is it a case that the industry is a dinosaur that needs to die in order for a new and leaner one to replace it, one more appropriate to the needs of customers and the environment? What do the Japanese, German and Korean brands think of all this? How will they respond? Is this the big chance of all time to strengthen their brands and take the US market by storm? You bet.
What has not been considered so far is the damage inflicted on the Ford, GM and Chrysler brands. Let’s face it, the brands are forever tarnished, except in the eyes of the fanatical brand loyalists, whose numbers will inevitably decline. Those people who were at the point of purchasing one of their cars before the crisis set in are hardly likely to do so in the near future. Would you? Who wants to buy a car from a bankrupt car manufacturer with an uncertain future?
There is one hell of a job in the offering for a brand turnaround specialist. The most likely scenario, and this is only my view, is the emergence in the US of a new generation of smaller, leaner, smarter start-up auto brands with a focus on small, fuel efficient cars and trucks. Perhaps they may even be bought out and badged Ford, GM and Chrysler. Or are they more likely to be badged Toyota, Hyundai or BMW? Coming soon to a dealership near you...
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work on www.heywood.com.au
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