Cadillac Execs Reportedly Canned; Signs of a "New" GM?

By Michelle Krebs March 5, 2010

Doubts abound whether a "new General Motors" truly is emerging from the old GM with its Cadillac logo - 171.JPGold, stodgy and coddling culture, but the reported ouster of a trio of marketing executives associated with struggling Cadillac may be a sign that, in fact, the times are a-changing.

Quoting eight unnamed sources familiar with the situation, trade journal Automotive News reported last week that GM had terminated Steve Shannon, John Howell and Jay Spenchian, all associated with Cadillac.

Being fired by the old GM was almost unheard of. One had to be stealing from the company, sexually harassing co-workers or doing something so outrageously obvious that it couldn't be overlooked. Underperforming or playing a key role at an underperforming operation was rarely grounds for dismissal, it seemed.

Cadillac Performance

In GM's downsizing from eight to four brands following its emergence from bankruptcy last summer, Cadillac plays a more crucial role than ever. Along with Chevrolet, Cadillac is GM's only other global brand. Buick, except for its dominance in China, and GMC are mostly domestic brands.

But, Cadillac has had its struggles. Its sales declined 32 percent in the U.S., the steepest of any of GM's four core brands and more than the 28 percent decline for the four core brands combined. Like the European luxury brands, Cadillac is recovering some this year, with year-over-year sales up 14 percent, almost entirely on the strength of its new SRX crossover.

Still, Cadillac, once the best-selling luxury brand in the U.S., significantly lags BMW and Mercedes-Benz. In February, Cadillac sold 9,273 vehicles to BMW's 15,100 and Mercedes' 14,870. Toyota's Lexus, the most recent best-selling U.S. brand, has been clobbered by the parent company's woes.

Changing the Guard

Early last week, GM confirmed Bryan Nesbitt was being replaced as head of Cadillac by Don Butler, a long-time GM employee who had left the company in early February.

Nesbitt, a designer known for the PT Cruiser at Chrysler and the HHR at Chevrolet, had been named just last summer by former chief GM marketer Bob Lutz to head Cadillac, which is essentially a marketing arm only these days. Nesbitt is going back to design, where he belongs. Nesbitt is often mentioned as one of the potential replacements for GM design chief Ed Welburn whenever he chooses to retire. Meantime, Lutz was relieved of his marketing duties in the December 2009 reorg and now has announced his May 1 retirement.

Subsequent to Nesbitt's announced transfer, word leaked out that a trio of Cadillac executives would leave. John Howell had long been in charge of Cadillac's product planning. Steve Shannon, who had headed Buick and then Saab, had been moved to Cadillac as it looked like Saab was going to be eliminated; GM since has found a buyer. Jay Spenchian was one of the last remaining marketers brought into GM by Ron Zarrella, who had been recruited by then board member and Proctor & Gamble exec John Smale to give GM some outside marketing savvy -- an effort that failed. Spenchian had done a couple stints with Cadillac and also had headed Saab.   

Most recently, the three Cadillac execs were part of the team that picked Publicis Groupe-backed BBH (Bartle Bogle Hegarty) in January as Cadillac's new ad agency, replacing previous agency Modernista that opted last fall not to pursue the account when the brand went shopping for a new one.

Insanity Redefined

If GM is going to change and is going to succeed, it must change people -- putting them into roles for which they are best suited, holding them accountable and dismissing underperformers.

Albert Einstein's famous quote that doing the same thing over and over while expecting a different result is insane needs amendment. Doing the same thing over and over again with the same people in the same positions and expecting a different result is equally insane. -- Michelle Krebs, Senior Analyst and Editor at Large

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LEAVE A COMMENT

mkaresh says: 7:08 AM, 03.10.10

The people aren't usually the problem. Or at least replacing them won't fix it. The organization has a way of making people act a certain way.

Putting different people in the same organization and expecting a different result is insane.

What really must change: the way the organization is structured and the way it operates. And maybe this is changing, but with the focus on personnel changes it's hard to say.

The suggestions I offered to GM nearly a decade ago:

http://www.truedelta.com/execsum.php

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