According the the folks over at AutoblogGreen, Land Rover's new Indian ownership, the Tata Conglomerate, has no idea how to handle the luxury automotive marquee they've added to their stable of car companies. Tata, in a fit of true boobery, plans to re-invent Land Rover as the new green machine. This has "retarded" graffiti-ed all over it. The only thing that should be green about a Land Rover is the classic English green-paint heavily associated with the brand's heritage and the hope that someone can figure out how to turn the company profitable. Land Rover's are about taming, traversing, and conquering exotic and hazardous environments with class, elegance, and English sophistication. Nowhere does this brand even remotely align with the meek and faux-sensitivity hyped by urban-dwelling effete liberals who pride themselves on pretending to care by over-paying for a crappy car to impress their shallow friends outside the yoga studio. The Japanese have already gifted the American consumer with the Toyota Prius, Honda Insight, and forthcoming Nissan Leaf. The American tax-payer is picking up the bill for the doomed Chevrolet Volt on this front. Cutting costs, improving efficiencies, and leveraging technology can all be smart and strategic business moves, if executed in the proper context. However, turning a brand upside down and negating its heritage is a messy way of committing business seppuku. Is Tata looking to build a successful car business or just ruin a great British brand?
The irony was not lost of the werewolf, when the former colonial subjects acquired two jewels of the British automotive industry. However, the double-irony truly rests in the fact that Britain's alpha colonial progeny, the United States, punted Jaguar and Land Rover to the more backwards and confused colonial offspring in India. Land Rover and Jaguar's have been dregs for years, not on account of style or design, but on account of crappy reliability ratings. The answer is so simple, if Tata, or any automotive giant was serious about re-igniting these brands, just building a car that works on a regular basis would do wonders. Somehow, that simple message seems to be lost on everyone who ends up owning these brands. It looks like Land Rover and Jaguar will end like the British Empire, with a weak yelp, as opposed to a glorious roar.
Showing posts with label auto industry. Show all posts
Showing posts with label auto industry. Show all posts
Monday, September 13, 2010
Tuesday, February 9, 2010
Recall U.S. Interests In Auto Industry
Sometimes stating the obvious is tough and readily apparent evidence is thin. Over at Forbes, George Pieler and Jens Laurson take the aforementioned circumstances and author a solid article addressing the issue as it relates to the concerns over government ownership of large swaths of the US auto industry. They also speak well to Toyota's raft of problems independent of U.S. government's conflict of interest. Can a regulator who owns the competition truly be objective? Who gets screwed by this lack of objectivity?
"In a way, this is business as usual and reflected in the drop of Toyota's share prices. What is not business as usual is that Toyota's competitors include not just other car companies but also the U.S. government, due to its effective ownership of GM. Whether foul play is involved, it's a bad idea for government to run a car company and regulate all competing car companies at the same time. The conflict of interest is obvious, but the government--certainly not at La Hood's initiative--didn't recuse itself. Did he suggest that "Toyota thinks they know how to fix the problem" to cast doubt on its actual ability? What would otherwise be an innocuous statement arouses suspicions under such circumstances.
The charge of bias can't be proved or dismissed. The accusation of pro-GM mercantilism will always be raised when its competitors are targeted. Genuine protectionism in favor of GM and Chrysler (as well as Ford) would be very bad for American consumers and American autoworkers employed by Toyota. But even the credible appearance of it is bad enough. If the public has to second-guess every one of La Hood's pro-safety actions and pronouncements on the ground he may be tilting the table for GM, it's not only Toyota or U.S.-Japan relations that suffer. The credibility of U.S. policies on automotive safety will be harmed most, which means that for public safety reasons alone the U.S. should discharge its ownership positions in GM and Chrysler as soon as possible and let them swim free."
There is another conflict of interest that the werewolf believes is getting short shrift. The relationship that unions have with domestic vs. foreign automakers. Although not universal, the vast majority of foreign automakers who have established manufacturing operations in the United States have located their plants in "right to work" states. The automakers include Honda, Toyota, Nissan, Hyundai, BMW, and Mercedes-Benz and some of the states domiciling these operations include Alabama, Georgia, Kentucky, Mississippi, Texas, South Carolina, and Tennessee.
Despite the recent contraction in credit, lower sales volumes, and poor macro-economic conditions a spectrum of reports suggest that these plants are more efficient, breed happier workers, and have a generally less adversarial relationship with management. Given that the current administration is beholden to the labor unions that contributed handsomely to their election coffers and that the unions hold profound contempt for the foreign operations of competitors being sourced domestically under non-union negotiated labor contracts, and that since the government owns the companies that employ large segments of union membership that there is an inherent conflict of interest at work? The answer seems painfully obvious to the werewolf, but then again he doesn't want to be accused of chasing mice in his mind. Still the implications of such decisions impact stakeholders from consumers, workers, lenders, suppliers, and tax-payers that it would behoove us all if more attention was paid to the issue.
"In a way, this is business as usual and reflected in the drop of Toyota's share prices. What is not business as usual is that Toyota's competitors include not just other car companies but also the U.S. government, due to its effective ownership of GM. Whether foul play is involved, it's a bad idea for government to run a car company and regulate all competing car companies at the same time. The conflict of interest is obvious, but the government--certainly not at La Hood's initiative--didn't recuse itself. Did he suggest that "Toyota thinks they know how to fix the problem" to cast doubt on its actual ability? What would otherwise be an innocuous statement arouses suspicions under such circumstances.
The charge of bias can't be proved or dismissed. The accusation of pro-GM mercantilism will always be raised when its competitors are targeted. Genuine protectionism in favor of GM and Chrysler (as well as Ford) would be very bad for American consumers and American autoworkers employed by Toyota. But even the credible appearance of it is bad enough. If the public has to second-guess every one of La Hood's pro-safety actions and pronouncements on the ground he may be tilting the table for GM, it's not only Toyota or U.S.-Japan relations that suffer. The credibility of U.S. policies on automotive safety will be harmed most, which means that for public safety reasons alone the U.S. should discharge its ownership positions in GM and Chrysler as soon as possible and let them swim free."
There is another conflict of interest that the werewolf believes is getting short shrift. The relationship that unions have with domestic vs. foreign automakers. Although not universal, the vast majority of foreign automakers who have established manufacturing operations in the United States have located their plants in "right to work" states. The automakers include Honda, Toyota, Nissan, Hyundai, BMW, and Mercedes-Benz and some of the states domiciling these operations include Alabama, Georgia, Kentucky, Mississippi, Texas, South Carolina, and Tennessee.
Despite the recent contraction in credit, lower sales volumes, and poor macro-economic conditions a spectrum of reports suggest that these plants are more efficient, breed happier workers, and have a generally less adversarial relationship with management. Given that the current administration is beholden to the labor unions that contributed handsomely to their election coffers and that the unions hold profound contempt for the foreign operations of competitors being sourced domestically under non-union negotiated labor contracts, and that since the government owns the companies that employ large segments of union membership that there is an inherent conflict of interest at work? The answer seems painfully obvious to the werewolf, but then again he doesn't want to be accused of chasing mice in his mind. Still the implications of such decisions impact stakeholders from consumers, workers, lenders, suppliers, and tax-payers that it would behoove us all if more attention was paid to the issue.
Friday, February 5, 2010
Toyota Totaled?
Despite the tragic implications for a few very dead individuals, watching the national drama unfold around Toyota's deadly brake pedal flaw has been fascinating. The National Post has an interesting op-ed by Terence Corcoran covering the details of what is happening to Toyota from a skeptic's perspective. He downplays Toyota's culpability, and focuses on the domestic reaction from both a governmental and business perspective. There is no questioning that the Obama administration and certain congressional democrats have behaved like buffoons, that Detroit is giddy with joy, and that Toyota itself has tripped pretty severely on the public relations front. Given the multiple forces at work, this business drama has the makings of great business school case study.
First things first, Toyota screwed the pooch. One of the hallmarks of Toyota's brand image was quality. That association is a core component of what distinguishes Toyota from it's American rivals in the minds of consumers. Every large scale auto-manufacturer will have a recall at some-point or a design flaw, especially if they are volume players. Managing these moments is what determines a company's brand image in the minds of consumers. Remember the famous Tylenol Recall of 1982 that did wonders for Johnson & Johnson. Getting ahead of the issue, preempting any fears from consumers by letting them know that they are a priority, and exceeding crisis management expectations are essential from a brand image preservation perspective. The werewolf is dismayed that Toyota didn't have some massive contingency drawn-up just in case a disaster like this occurred. It's risk management 101 for a company like Toyota. Toyota's management clearly seemed a little slow to respond, was skeptical of consumer fears, and allowed the issue to explode into a North American market drama that the werewolf thinks has adversely impacted their brand for the short and potentially medium term. Given Toyota's discipline as a company, their weak response and poor brand management is the most shocking element of this tale at work.
Granted, Toyota has long been the arch-rival of GM and Ford ever since their arrival on these shores four decades ago started eroding Detroit's dominance in it's home market. Toyota built better cars leveraging more operational efficiencies, their cars lasted longer and developed a perception of quality, and they avoided detrimental union obligations. Most importantly Toyota offered the consumers what they wanted instead of boring automotive bureaucratic abominations pushed by Detroit. Detroit's resentment of Toyota is not unlike the blood-feud between the Hatfield's and McCoy's. In today's day and age, conflicts of interest abound. The US Government has a large ownership stake in both Chrysler and GM, those dastardly unions heavily financed and supported the current occupant of the White House, plus this administration has displayed a tendency to be protectionist and anti-free trade. It doesn't take a genius to see the potential problems at play working against Toyota from a governmental standpoint. However, these problems aren't insurmountable, they just need to be noted and Toyota needs to integrate them into their communications strategy as they launch a recovery.As much as Detroit seems to be enjoying this meltdown at Toyota, they seem to be missing the message the credibility isn't going to be sourced in a nasty web of conflicts of interest and lame rhetoric. Good management and valuing consumers will do that just fine.
Brand image and commitment to that image are what lead to credibility. Credibility fuels consumer purchasing and loyalty. At the moment, credibility seems to be wanting in all sectors of this drama. What do you all think?
First things first, Toyota screwed the pooch. One of the hallmarks of Toyota's brand image was quality. That association is a core component of what distinguishes Toyota from it's American rivals in the minds of consumers. Every large scale auto-manufacturer will have a recall at some-point or a design flaw, especially if they are volume players. Managing these moments is what determines a company's brand image in the minds of consumers. Remember the famous Tylenol Recall of 1982 that did wonders for Johnson & Johnson. Getting ahead of the issue, preempting any fears from consumers by letting them know that they are a priority, and exceeding crisis management expectations are essential from a brand image preservation perspective. The werewolf is dismayed that Toyota didn't have some massive contingency drawn-up just in case a disaster like this occurred. It's risk management 101 for a company like Toyota. Toyota's management clearly seemed a little slow to respond, was skeptical of consumer fears, and allowed the issue to explode into a North American market drama that the werewolf thinks has adversely impacted their brand for the short and potentially medium term. Given Toyota's discipline as a company, their weak response and poor brand management is the most shocking element of this tale at work.
Granted, Toyota has long been the arch-rival of GM and Ford ever since their arrival on these shores four decades ago started eroding Detroit's dominance in it's home market. Toyota built better cars leveraging more operational efficiencies, their cars lasted longer and developed a perception of quality, and they avoided detrimental union obligations. Most importantly Toyota offered the consumers what they wanted instead of boring automotive bureaucratic abominations pushed by Detroit. Detroit's resentment of Toyota is not unlike the blood-feud between the Hatfield's and McCoy's. In today's day and age, conflicts of interest abound. The US Government has a large ownership stake in both Chrysler and GM, those dastardly unions heavily financed and supported the current occupant of the White House, plus this administration has displayed a tendency to be protectionist and anti-free trade. It doesn't take a genius to see the potential problems at play working against Toyota from a governmental standpoint. However, these problems aren't insurmountable, they just need to be noted and Toyota needs to integrate them into their communications strategy as they launch a recovery.As much as Detroit seems to be enjoying this meltdown at Toyota, they seem to be missing the message the credibility isn't going to be sourced in a nasty web of conflicts of interest and lame rhetoric. Good management and valuing consumers will do that just fine.
Brand image and commitment to that image are what lead to credibility. Credibility fuels consumer purchasing and loyalty. At the moment, credibility seems to be wanting in all sectors of this drama. What do you all think?
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