The death of a Giant

After a long string of negotiations with Sichuan Tengzhong, GM is finally throwing in the towel on its Hummer brand. Probably. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said John Smith, GM vice president of corporate planning and alliances.

The end of this particular GM brand is more significant, I think, then the death of Pontiac and Saturn. I don’t think a single person shed a tear when Saturn quietly passed away, and although Pontiac has a lot of important history (the GTO, anyone?) it has been defunct of innovation for what seems like 30 years.

Hummer, however, seems to mean much more considering its substantial military service, and its association with American bravado and testosterone. At least, it was associated with such until moms found all the roomy cargo space in the back could be used to carry kids instead of guns and ammo.

Despite its relatively recent transition to what I refer to as the “urban princess warrior mobile,” for most people “Hummer” still conjures up images of a camo-skinned-half-jeep-half-tank-baby. It represented a “stop at nothing” attitude, the idea that anything could be conquered with enough torque and big enough wheels.

So perhaps this particular company's demise is indication of greater system changes. Poor management aside, Sichuan Tengzhong was only offering GM $150 million for its failing brand. How is Amurica’s most iconic symbol equal in value to a single Jackson Pollack?

Well, perhaps Hummer no longer echoes American sentiment. Americans today, after all, are more aware of the environment and much more budget conscious then one year ago. The over-priced, over-sized gas-guzzler is

no longer what Americans look to for an indication of success.

Over the top luxury is on its way out. Conscious, informed spending is the new trend. Just look at the success of Tesla Motors. Or the introduction of Audi’s upcoming E-tron. According to this WSJ article, the Luxury Institute, a New York research firm, found that younger and more-affluent consumers seek information about corporate social responsibility more actively than their older and less well-off counterparts.

In no way am I claiming that America has been castrated by the green trend. I think rather the opposite, in fact. An increase of informed consumers indicates an increase in education across the country as a whole. If we are educated and conscious of what is happening around us, maybe the world will listen next time we begin talking about something. It certainly a much friendlier image then that of the “stop for no-one” hummer. So the death of Hummer, though tragic, might actually lead to a stronger tomorrow.

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Toyota’s Crisis Management

From the perspective of a young man who is marginally obsessed with cars, the name Toyota has always conjured images of utilitarian vehicles whose primary demographic was people looking for a machine that will last a long time for a little amount of money. Toyota’s brand never achieved the exciting racing connotations associated with its competitors Honda and Nissan. This, I suspect, is probably due to their lack of success as a Formula one race team, and their focus on fuel economy rather then engine power.

Despite not placing high on the “dream car” list of a young car enthusiast, Toyota is undoubtedly one of the most recognized and respected brand names in America. As of 2006, it ranked the highest in return customers for any US car manufacturer, with its luxury brand Lexus taking a close second place. It seemed like it was the Golden Child of auto makers. At least, it was…

Due to its recent recall, the Japanese auto-giant is experiencing a bit of a brand crisis. The one solid concept the company was known for (reliability) has been put into major jeopardy. Nearly 4.8 million vehicles of both the Toyota and Lexus brand have been recalled due to functionality issues with floor mats and accelerator pedals.

So what has Toyota done to make amends with angry customers? Well, if you watched the Super Bowl you might have seen this Toyota public announcement:

This heartfelt ad might seem like a good idea at first. But if you examine the response to the video on YouTube you will see that the internet crowd does not buy it, especially after information came out to suggest that Toyota stalled recalling faulty vehicles for almost a whole year. One commenter says:

“If they have no respect for me why should I respect them???”

This Bay City News article asks readers to respond to Toyota’s campaign, and received some of the same kind of outrage:

“NOTHING BUT PURE GARBAGE...AN INSULT TO ANYONE WITH A DIMES WORTH OF SENSE.”

Despite the backlash, these ads might be the best way for Toyota to go about repairing their image. The Big 3 US auto makers has long faced quality issues with their vehicles, and some claim that their slip into obscurity may be due to their lack of honesty with their consumers, and their perceived stubbornness in changing practices to ensure higher quality. Also, the responses on the internet aren’t necessarily the views of American consumers as a whole.

I am not one to be easily influenced by a sappy TV ad, and I think most educated American’s are in the same boat. Though it might be difficult to translate into a marketing campaign, the best way to show quality is through a good track record and word of mouth. In my opinion, the only way for Toyota to reclaim its former days of glory is to actually learn from their mistake: admit quality problems immediately when they are recognized and make sure your 2011 models are spotlessly reliable.

The fact that Toyota has shut down some of its manufacturing plants to deal with problems in current models might be a pragmatic business solution, but its marketing implications might not be as good. Stopping production implies that there are deeper problems in the company then just floor mats and accelerator pads… to me, this doesn’t seem like a good thing to be putting in commercials for the public to see.

Despite its recall, Toyota still enjoys a decent reputation among the American public. According to this NYT article, it is still ranked 3rd in reliability, and Consumer Reports describes their vehicles as, “extremely good, reliable cars.”

So, Mr. Akio Toyoda, my advice to you is to wait out the storm. Lay low and let the product speak for itself. If your commitment to learning from your mistakes is true, the consumer will recognize this as a snafu. If not, you might as well begin reissuing the Ford Pinto with a Toyota insignia on its hood.