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GM's PR Stuggle - Adam Brasel, Boston College

Jul 7, 2014|

GM's PR Stuggle - Adam Brasel, Boston College by Barry and Kim

Transcript - will not be 100% accurate

-- by Adam razzle he is an associate marketing professor at Boston college's Carroll school of management and out of thank you for joining us today. So let's let's dig into this GM recall issue a little bit because if we've run the numbers right. About 40% of all GM cars that are on the road -- now have been recalled at some point in the last year and half. What is exactly are they up against in terms of what this does to their brand. It's really kind of it's a staggering number of thank you -- about it. And Kim got a bit of a double it stored here -- that on the one hand is good for them to that looked like to being very proactive in recalling all of these cars. But at the same time as the number kind of continues to grow. It really become an almost on calculated sort of problem that we can't even. -- them how big this issue actually is so I think they're they're kind of an interesting crossroads right now but they're the most recent. Still numbers that just came out suggest that it didn't really seem to you very much to hurt them all when it came to selling cars. Yeah and that's really what I wanted -- figure out is it seems like people would see this and say OK we we no longer want to buy GM cars but why are people still flocking to them. Really in in in record numbers now. Yeah I think a lot of it has to do it apparently people coming in to actually get these repairs done. And then sort of trading up the third BP they have tons of financial incentives right now given what gives you complete right thing we'll give you whatever you need to. -- -- -- -- -- -- So a lot of these past few people voting you know with the checkbook because they've they're hoping the problem is in the past. And they're willing to kind of take a flyer on it given the cost of the new things are so cheap. I think that a lot of it have to do with sort of well it didn't happen to me therefore it's not that big a problem sort of this you don't share it happened to these other people in my car was fine. Maybe people are blown out of proportion and and we just have really short memories of consumers people all the you know scream to death of companies when he met that we think of Toyota's. Unintended acceleration issue in the pastor the Firestone tire thing from whatever that was ten years ago. You'll -- it helped -- come through these things just -- to consumer memory tends to be really short. -- it I guess that it it just baffles me that we've we've now gotten to the point where essentially we have cars that have killed people because of issues. And people are still not. -- -- they're still not leaving those manufacturers what would it take to get people to actually even manufacturer. In measurable numbers. -- -- question really interesting question I think especially with to some degree that might be an advantage is that GM matters should be kind of in particular is that the apprentice. So huge. And credit has such so strong strong -- the right word but have until long legacy behind the name of the brand and what not that that maybe this current issue justice. Sort of you know like throwing a rock and a mountain. Could be the -- so acute that we just can't change people's opinion on it anymore. Now here's -- guess kind of the flip side of this is you have all of these other car companies that must be looking at GM and kind of salivating over this but. They can't really advertise. Don't buy GM because they've all had recalls to correct. Yeah pretty much every you know Toyota can't capitalize and that they had these huge unintended acceleration -- years ago. He'll sport -- padded -- recall on they had huge recall recently all of these guys like. Competing brands would really want to capitalize in this but the kid can that would only highlight. Their own mistakes -- there would be no car manufacturers and has been here they're all kind of equally horrible. Where's this and and I don't know if you have any data on this but where does this type of recall stack up not not this particular woman when you add all of the -- is is this. Par for the course in terms of historical averages what what number of vehicles are typically were called actually. I think it's it's considerably less than that I think this has started this snowball. -- and I think one of the larger recall that we you know do research on the recalled in particular but I think if you compare to the side of the a lot of recent recall because to be isolated to one particular. Sort of platform over very limited number of of model years. And this one seems to be just considerably farther ranging and it has. Sort of the downside of it all put on some of the most popular car at the time so there's just -- the cobalt out there there's tons of these cars out there though. It is a really large recalled the skills and. And what are the major ships that we've seen in the last -- five to seven years now is that. Companies have really started marketing fuel economy is one of the majors things. 44. Cars -- for people to buy them it is their chance that we start to see a move back towards maybe safety and -- years is that not something that we're seeing yet. But interesting I think we might think I think all over the lot that particular is so their reason for existence forever. There might be that kind of balancing act between fuel economy and safety of the people need to. Kind of total life between I think when he area that would be really interesting you company go after that is being kind of the lower priced economy car. Market which is you know traditionally very very fuel economy focused. It is written dispute there could be a big success of a brand kind of going after yes this is an economy car that is by far the state just economy -- -- -- -- Now is there anything that GM or other brands are doing to prevent these problems now in the future what types of quality controls and things may UC implemented in order to. Prevent these types of issues and what that did something actually raise the prices of future cars as well as the is gonna be more costly to prevent this. And then I can't think very interesting question for GM moving forward and I think one of the key problem the people had. Without GM has addressed this issue is kind of the content aware of the new management team that was the old management team things are totally different now we don't. Actually see any evidence of well how are things different now you'll -- -- you're doing differently that would cause issues like this actually being. Boot up the management chain and have somebody take action on it and I think really much perfect -- Depicting the company can do -- parts are so complex. But there's all the -- these issues that can -- key thing is. Watching for example -- GM outlined and hopefully help us with the consumer. And of what internal systems they're going to start using moving forward. To cause errors when they -- to actually get the attention they deserve I think that's interesting questions. Last question Torre before we let you go Adam what do you think the pay -- that GM is making too. Family members. A look at the really like especially from a branding perspective it's a real double edged sword in that -- really had to do something and they really do want these issues to make it all the way to court. But at the same time. As somebody who's kind of not personally affected by -- or whatnot they can feel really mercenary sort of an execution of the L okay. We put a dollar value wanna -- now we know how much GM fuel polite to work so it's something they have to do if something really you know didn't really have a choice to do. But it it carries some potentially risky connotations down the road when you start and quantifying lives that way. All right what do they do again for coming on with us and this is definitely going to be something that we continue to follow especially if those recall numbers growth thank you again. Great rhetoric that was Adam Brazill associate marketing professor at Boston college's Carroll school of management -- to.