Ewanick's Mandate at General Motors: Move That Metal

Ewanick's Mandate at General Motors: Move That Metal

By Michelle Krebs May 12, 2010

Since last summer General Motors has changed CEOs; launched a handful of highly acclaimed new products; shed four clunker brands; streamlined its dealer body; and even repaid a $6 billion chunk of its obligation to the U.S. taxpayer.

The biggest thing GM hasn't accomplished since its federal bailout, however, is the most important: selling as many vehicles as it wants. Its share of the U.S. market declined to 18.7 percent during the first four months of this year compared with 19.1 percent in the same period last year, despite a sales rise of 14 percent.

That's why CEO Ed Whitacre felt compelled to import Joel Ewanick, the reigning rock star of automotive marketing, as GM's new chief marketing officer for the United States.

Ewanick starts his gig later this month after staying at Nissan North America barely long enough for a cup of sake. Just as he was able to do in earlier stints at Porsche and, most visibly, at Hyundai, the 49-year-old Ewanick is being counted on to make an immediate and huge impact at his new employer. In return for unfettered reign over GM's marketing decisions, Ewanick is charged with moving the company's metal again -- and quickly.

"In his career, he's come up with really innovative ways of solving problems that other people have already taken a run at," said Jeff Goodby, co-chairman of Omnicom's Goodby, Silverstein & Partners, a San Francisco-based ad agency that handles the Hyundai USA account, and previously long-time steward of GM's Saturn advertising. "That's certainly what's in order here."

Reputation for Results

Whitacre has reason for confidence that he is handing Ewanick adequate raw material in the form of GM's surviving four U.S. brands -- Chevrolet, Buick, Cadillac and GMC -- and a handful of popular new products such as the Chevrolet Equinox, Buick LaCrosse and Cadillac SRX.

"The great thing that Ewanick has going for him is that GM hasn't gotten enough credit for great new products," said David Whiston, automotive analyst for Morningstar. "He just needs to fix the marketing stigma."

Getting results is what Ewanick has a reputation for doing. The linchpin of his career so far is a decision he made in late 2008, as the recently arrived CMO at Hyundai USA, to launch a program called Hyundai Assurance, under which the brand would pick up the loan payments of any customer who lost his or her job after buying a new Hyundai. Ewanick supervised creation and execution of the program in just 37 days.

Billboarded by its introduction during a commercial in the 2009 Super Bowl, Assurance immediately caught the fancy of Americans beleaguered by the Great Recession and uncertain about their own financial futures. Ewanick followed that coup by snatching up TV-advertising inventory abandoned by GM in spring 2009 for the Academy Awards broadcast, giving Hyundai another marquee perch.

Helped by those changes, Hyundai became the new darling of the U.S. automotive industry in 2009; the Korean brand's market share rose by about 40 percent, to 4.2 percent from just 3 percent in 2008, with a goal of 4.5 percent for this year.

And Ewanick became the industry's marketing superstar, was named Marketer of the Year by Advertising Age magazine, and jumped to the top of the short list of CMO candidates for every automaker that needed a fresh approach.

Hot Prospect

No wonder Nissan poached him from Hyundai earlier this year. The Japanese automaker had done a better job than some other OEMs in the U.S. market of beginning to recover from the recession, but Nissan's CMO job has been something of a revolving door.

And under Ewanick, Hyundai actually had been doing a good job of picking on Nissan per se. Hyundai has been snapping up fragments of the market from just about every rival over the last 18 months, but Ewanick figured Nissan, as the No. 3 Japanese-owned automaker in the U.S. market, was more vulnerable than Toyota and Honda to his long-term efforts to position Hyundai as "the next Toyota."

In fact, Nissan recently countered by taking out advertisements for its Altima sedan on Hyundai's own online pages.

Plus, Nissan was about to become the first mainstream automaker to introduce an all-electric vehicle to the U.S. marketplace, with its Leaf due out later this year, and top executives wanted a proven and creative hand to make the marketing launch go right.

At the same time, however, General Motors also was courting Ewanick.

Whitacre had made it crystal clear there were no sacred cows when it came to personnel at the company he was now running, having let Mark LaNeve depart as U.S. CMO in 2009. And LaNeve's successor, Susan Docherty, hadn't impressed Whitacre sufficiently in the few months she was on the job. A few weeks ago, he stripped Docherty of her initial dual responsibility for U.S. sales and marketing, leaving her with the marketing portfolio alone.

Reportedly, Ewanick's initial hang-up with GM was a lack of complete autonomy over its marketing, were he to come onboard. One source said Ewanick also came to believe quickly at Nissan North America that too many marketing decisions were committee-driven. Only now, apparently, has Whitacre promised Ewanick the free hand he was seeking; he has to report only to Mark Reuss, president of GM North America.

Question of Culture

Having built an infamously institutional and bureaucratized corporate culture over the last half-century, GM has not been known for creating messianic roles or expectations for its top executives -- especially those it brings from the outside.

Robert Lutz came close to that kind of status when he joined GM in 2001 to revitalize its new-product pipeline, and by the time he officially retired May 1, the charismatic, plain-spoken 78-year-old vice chairman largely had achieved his goal of completely overhauling the company's approach to developing cars.

And President Barack Obama, at least, has been counting on Whitacre to be a savior of sorts for GM since his administration hand-picked Whitacre, the former AT&T CEO, in 2009 to replace the final chief who represented the automaker's old guard, Frederick "Fritz" Henderson.

By comparison with Lutz and Whitacre, Ewanick could be regarded as a bit of a one-trick pony: Assurance.

But Ewanick did help build sales momentum as general manager of marketing for Porsche Cars North America, culminating a nine-year stay there, and has occupied marketing positions with Yamaha, with a yacht maker, and on the agency side. Some in the industry maintain Ewanick's savvy as an advertising whiz is far better proven than his credentials as the brand architect GM surely needs.

And it's clear that Hyundai's ascendance has had other authors in addition to Ewanick. That includes product-development chiefs and U.S. CEO John Krafcik, who have given the brand a steady stream of high-quality new and improved models, including the Genesis near-luxury sedan.

But Goodby, the ad-agency executive, differs with that perception. Ewanick "definitely was a brand architect when it came to Hyundai Assurance. It was an idea that was much deeper than just advertising."

Ewanick's Full Plate

In any event, Ewanick could cement a place in automotive history if he can turn around the slide in GM's market share. Here are the major challenges on his plate:

Turn down the heat on the front burner. It's unclear whether the recent lightning-rod TV ad starring Whitacre will continue to cause GM problems.

Many observers decried as disingenuous, at bes, the ad in which Whitacre boasted GM repaid government loans "five years ahead of schedule" -- without noting qualifiers such as there is still no prospect any time soon of the company repaying the other $52 billion in various considerations it received in the bailout.

A Washington-based think tank called the Competitive Enterprise Institute has asked the Federal Trade Commission to investigate the ad. And though gadfly groups are doing this sort of thing all the time, there may be fallout for Ewanick to deal with.

"[There are] people out there who are still angry about the bailout of GM but still want to buy American," Whiston said. "So their only option right now is Ford. That remains a problem for GM."

Refine GM's brand architecture. Arguably, figuring out the mission of each of GM's brands and how they interrelate got a lot easier once the company deep-sixed Saturn, Hummer, Pontiac and Saab. Previous CMOs were required to expend inordinate effort keeping the lines among eight brands cogent and clear, and GM never had or allocated enough resources to keep each vital simultaneously.

"Going with the four brands was the right move," said Whiston of Morningstar. "It hurts dealers, yes. But look at Toyota and Ford and Honda -- one reason they're successful is because they have fewer brands."

Ewanick faces some remaining challenges in that regard, though. For example, the identity of GMC remains murky because traditionally it has been a pickup-truck brand. But its newest and most popular products are family-style SUVs.

Take better advantage of great products. GM sales executives have been taking pains to point out how their newest vehicles are by far their most popular these days. That certainly bodes well for now and the future.

Yet there's a pervasive sense GM could do a much better job of using marketing to exploit the strengths and popularity of these new vehicles. Apparently, part of Docherty's demise in the role was disappointing sales of the now-expanding Cadillac CTS model range, Cadillac's suite of entry-level vehicles that have won great reviews but haven't caught fire with luxury-car buyers; she had reportedly offered to bet her tenure on how well the new CTS would do.

"The biggest challenge that I see for [Ewanick] is raising people's perceptions of the vehicles, because we have seen lots of improvements in the vehicles themselves," said Rebecca Lindland, director of automotive consulting for Boston-based IHS Global Insight.

Find the right hot-buttons. Although Hyundai's products and quality have been improving for the last several years, the genius of Assurance was it touted an attitude rather than products per se. Drafting and declaring the right overall tone for GM's marketing going forward is will be at least as important as how Ewanick promotes individual products and brands.

That's because GM remains at a sensitive stage -- many American car buyers, and taxpayers, remain wary and unconvinced the company and its employees deserve the grace they received last year. They're still looking for reasons to believe, and to invest in GM vehicles, some experts said.

"I think GM needs to take advantage of the fact that everyone is rooting for them," Goodby said. "It's not just a pricing or a model-selection thing. It's an emotional thing -- you've got to tap into those emotions. Joel is equipped to come up with stuff like that."

Do advertising that resonates. It's advertising that most communicates brands and products to consumers, and GM has continually been coming up short in that area as well.

"For him to succeed, Ewanick will have to develop marketing messages that not only say how GM vehicles are competitive but actually leap-frog the competition," said George Kang, vice president of strategy for Edmunds.com. "To get this message across effectively he will have to think of ways to show this, rather than simply stating this message in words."

Chevrolet got some traction in 2008 with a fuel-economy push behind its models to match $4-a-gallon gasoline, but since then the brand's message has drifted. Obviously, that was one major reason GM just ousted Chevy's longtime ad agency, Campbell-Ewald, which had created well-known slogans and brand identities for the marque, from "See the U.S.A. in your Chevrolet" to "Like a Rock."

But no one's exactly been overwhelmed by the first effort out of the chute for Chevy's new car and crossover agency, Publicis Groupe SA's Publicis Worldwide unit -- under the tag line "Excellence for All."

Similarly, Buick's brand identity has continued to drift. It was long confused with Oldsmobile, which GM finally jettisoned several years ago. For a few years Buick's identity was bolstered by its relationship with Tiger Woods; fortunately for GM the automaker ended that arrangement early last year, long before Woods' problems came to light.

"It's not like GM hasn't studied these problems before," Goodby said. "But it's probably time for some new perspectives on them, and one of the nice things about Joel is that he aggressively seeks out those perspectives. It's a good time for GM to have a guy like him." -- Contributing Writer Dale Buss
 

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.