The Pontiac Problem: What Would Sloan Do?

by Joshua Davidson
Publisher, MyYearsWithGM.com and the GM Centennial AUDIOBOOK Edition of My Years with General Motors

Buick's revival as a global brand is a successful example of "acting on the facts," that would make Alfred Sloan proud. But can a similar effort save Pontiac?

THE PONTIAC: ALFRED SLOAN'S BABY The first Pontiac of 1926 is the starkest expression of the principles and practice that made GM the model for large enterprise. In a single stroke, it completed the GM product line as conceived in Sloan's 1921 Product Plan, demonstrated Sloan’s management concept of Decentralized Operations with Co-ordinated Control, leveraged the volume economies of Chevrolet upward to a higher price class, and took strategic advantage of an epic shift in car-buyers’ preferences for closed bodies.

The hugely popular 1926 Pontiac was just what the market wanted: a modestly-priced six-cylinder car with an attractive closed body. From GM’s perspective, it was an enhanced Chevrolet that completed GM's full-line market coverage and rapidly amortized the recent acquisition of Fisher Body Corporation. FOLLOWING THE FACTS Sloan's great pride in the General Motors he created was that it was a "fact-seeking organization" -- leadership pursued the facts, assessed them and acted logically upon them.

A commitment to the facts will ultimately force some tough decisions – now as then – unless compelling new facts can be imposed in the hope of affecting the opinion of the decision-makers. A concerted effort of highly competent people directing huge resources in support of some strong sentiment can invent these new facts in the hopes of counterbalancing the "natural" facts, which nevertheless remain incumbent.

Pontiac is creating notable new facts in the gorgeous Solstice Coupe and the raucus G8 sedan. Both are distinctive as products, but they don’t distinguish Pontiac as a brand, and thus fail to trump the 800-pound fact that GM has too many brands, and the circumstantial realities that constitute a terminal trifecta: Domestically, Pontiac is the muddle in the middle, it isn’t a global brand, and finally, it doesn't have a distinct brand character – "sporty" and "rebellious" are merely attributes, which were compelling in the more homogenous 60s and 70s, but are ubiquitous today.

WHAT WOULD SLOAN DO ABOUT TODAY'S PONTIAC?
Pontiac’s origin as a brilliant tactic crucial, at the time, in the execution of a broad strategy deprive it of the gravitas of Cadillac, Buick and Chevrolet, each of which Sloan at some point or other established and leaned on as a pillar of the corporation.

The facts of 1926 were a vulnerability in the GM line and GM's unique ability to fill the gap. Today's market facts are broad import competition and the empowered consumer. That's what Saturn is for, and that brand is finally getting the product it needs to do battle. If I had to assign a target to Pontiac, it would be Nissan-Acura's sport-sedan niche. But at the moment, that tactic isn't critical to the larger strategy of marching back to California with Chevrolet, Buick and Cadillac using all the ammo they can get in the battle with Scion, Toyota and Lexus. Maybe Pontiac will be crucial later, but at the moment, there is no later.

The Pontiac folks have made a remarkable effort – especially with the Solstice – but at last GM will have to follow the logic of the facts, and put the Pontiac resources to better use in pursuit of an effective global strategy. It’s not easy to inter a brand, and with Oldsmobile, GM did it more nobly than some other domestic manufacturers preparing to do with their own withering brands, but the facts remain.

If he were asked today, Alfred Sloan would objectively assess the circumstances to determine if the Pontiac revival effort has successfully abrogated the the facts of the broad market; he would look at the contribution or lack thereof that Pontiac could make toward the success of the whole GM line. Not as unemotional as portrayed, he would perhaps be sad, but in no way remorseful, to pull the plug on Pontiac.