The weakened U.S. economy is hurting many, including General Motors (NYSE: GM) who announced a long list of cost cutting measures the company is taking to stay afloat. Last month, I wrote a post on my branding blog about the shifting GM brand focus and GM plant closings. Looks like that was just the beginning based on today's GM announcement.
GM plans to cut white collar jobs, eliminate health benefits for retirees over 65, cut truck production by 150,000 trucks this year and next, sell more assets, and cut quarterly dividends. GM will also be reviewing sponsorships such as motor sports events to determine where additional cuts can be made. On top of all that, GM plans to cut its core advertising and marketing budgets just when they're needed most.
GM has to change consumers' perceptions of its brand away from offering big, gas-guzzling trucks and SUVs, and it needs to compete with foreign brands like Toyota who aren't hurting when it comes to investing in advertising and marketing. How will GM move dealer showroom traffic from Toyota and Honda dealerships if it can't get advertising and marketing messages out to consumers that convince them that GM is no longer just about big trucks and SUVs. And I should mention, GM has 8 brands that need advertising and marketing support to help get that message out.
It appears drastic times call for drastic measures, but how can GM compete with brands that have stronger reputations for making quality, smaller cars with an advertising and marketing budget that keeps shrinking? Looks like GM is in a very tough spot. I guess the bigger question is whether or not GM will come out of this intact?
What do you think?
Comment Preview