Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.
Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US. Most recent sense check, Entry #332.
The past few entries have been a break from the craziness in Washington. In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2. Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.
There are two sides to the EV1 story — product and non-product. The product side has been reasonably well documented. In my view, the non-product side of the story is far from complete, and what’s been told so far is misleading. The next few entries — I actually do not know how many — will attempt to provide addition insight. Stick around. The series will be a good diversion from the madness in Washington and offer a good lesson or two, I hope. (If you have not read Entries #346 and #347, suggest you do so before reading this entry.)
In-house development of GM EV-1 begins. At the 1990 Los Angeles Auto Show Roger Smith, then GM chairman, introduced the first modern electric vehicle (EV-1) and proclaimed GM would produce it. As described in Entry #347, the concept car introduced in LA had been developed in secret by a company with no affiliation to GM. Formal development and production were to be inside GM.
Soon after the announcement in LA, the program kicked-off inside GM. The program manager was selected and then initial staff members recruited from different divisions. Additional staff was added as the program progressed. The EV-1 program was headquartered in the Advanced Engineering Building at the GM Tech Center. Being housed in the Advanced Engineering Building reinforced the impression, both inside and outside GM, that an Innovative product was being developed.
Another decision was to not assign the EV-1 to an operating division — Chevrolet, Oldsmobile, etc. On the plus side, not selecting the operating division helped avoid the EV1 being pushed aside by the designated division and having EV1 resources diverted for near-term marketing activities. On the negative side, not selecting a “division home” for EV1 reinforced the perception among many operating division executives that the EV-1 was part of Smith’s portfolio of projects that diverted cash from critical product development and marketing programs, which in turn, caused GM to lose market share.
One of the benefits of hindsight is the opportunity to ask, “What went wrong during the EV-1 program?” And then ask, “What did I do or not do that might have contributed to what went wrong?”
Over the past 20 years or so, I’ve been asked to discuss various aspects of the EV1 in different forums — public presentations, media interviews, guest lecturer at a university, even a movie. With each one of these “events,” I’ve tried to assess how different decisions might have affected the outcome of the program, both positively and negatively.
This series of entries, of which this is the third, attempts to analyze the “non-product” side of different activities. I have stated repeatedly in the various forums that I believe the technical limitations of the EV-1– limited range, 2-passenger seating capacity, e.g. — were not the underlying causes for GM pulling the plug on the EV1. Some of the technical limitations have been used as excuses, but were not really the causes.
What were the causes? Before pointing fingers at others, it’s always a good idea to first look in the mirror. Most of my role at EV-1 the project was to help manage a team that focused on educating groups outside GM. The groups ranged from utilities to fire-and-rescue organizations to Federal and state-government officials to the media to the general public. While most of the efforts were in the US, we also met with officials in Europe.
The efforts of the team were incredibly successful. Even though our marketing and promotion budget was a mere fraction of the budget for the operating divisions, the team’s efforts, as measured by the amount of media coverage, resulted in a significant increase in the public’s awareness of electric vehicles and a significant increase in positive perception of General Motors.
If memory serves correctly, over a roughly three-year period, the EV-1 program generated more positive publicity for GM than the rest of the company combined. (As we’ll discuss in a future entry, all that goodwill and more was lost when GM decided to kill the program and crush all but a few EV-1’s.)
So with such a positive track record, what could have been done differently? Frankly, what did not occur to me at the time, and I don’t recall anyone else discussing this either, was the need to present to the operating divisions — Chevrolet, Buick, etc. — the same type of educational program about the EV-1 as we presented to outside groups.
While many staffers on the EV-1 program had been in the divisions that suffered because of cash diversions to fund Smith’s projects, I’m not sure any of us fully appreciated how negatively our former colleagues at the operating divisions viewed the EV-1 program. We were all enamored with the idea of an electric vehicle and assumed everyone else inside GM was equally excited.
Clearly not everyone was. An example was a return to my former division, Buick. After working many years helping position Buick for the future, I thought the EV-1 would be a perfect fit for Buick and its dealers, many of whom I knew personally. My thinking was the EV-1 could attract younger buyers to Buick, give dealers a sporty model in the showroom to attract new floor traffic and allow Buick to leverage interest in EV-1 among younger people to help build long-term brand loyalty. My rationale, however, when presented to the Buick general manager, fell on deaf ears. Buick was not interested in any association with the EV-1.
Buick and the other operating divisions were not alone in poo-pooing the EV-1. Somehow, we managed to get on the “Do Not Call List” for a number of staffs. Part of the conflict stemmed from assigned responsibilities. For example, EV-1 was the only group outside of the corporate staff whose responsibility included “government relations”. While our dealings with the government were restricted to topics associated with electric vehicles, we were allowed to approach legislators, government agencies and staff without first seeking approval of the corporate “government-relations” staff.
To me the limited scope of our government-relations activities made perfect sense. If a goal of the EV-1 program was for those in government to understand requirements for a successful introduction of electric vehicles, then the group charged with the introduction should be making contacts with various government entities. In my view we were judicious in our approach and diligent about keeping the corporate staff informed of our activities.
Were we successful? Like the group’s efforts in educating the public about electric vehicles, I think we did a good job educating legislators, legislative staff and a number of agencies. We also worked with other auto companies to ensure there was a consistent message to government about how it could help support the development and introduction of electric vehicles.
So what could go wrong? Let’s start with the relationship with the corporate government relations staff. I can state categorically there was no intent on our part to have the relationship go sideways…but it did.
Scene: Executive dining room at the GM Tech Center. Table for two. At the table are GM’s chief environmental lobbyist and me. Part way through lunch the other GM executive (I’m withholding the name intentionally) leans over the table and says, “Dabels, you’re my worst enemy.” My response, “How can that be? We work for the same company.” His retort, “You’re my worst enemy because my job is to convince Federal and state legislators there’s no demand for electric vehicles and you’re out there proving me wrong.”
The conversation continued, rather politely, but without resolution. The lack of resolution stemmed from our instructions. He was to promote a corporate policy that was in direct conflict with the policy the GM EV-1 group was to promote. We finished lunch and then left to carry out our respective instructions.
Inconsistent internal policies within GM were not uncommon. Another rift, which will be discussed in the next entry, was how the financial staff viewed the EV-1 as a cost center, and not a marketing opportunity. Focusing only on cost created an environment where the financial staff placed no value on improved corporate image, no value on increased future buyer potential, no value on brand loyalty, and no value on myriad other non-product attributes that often differentiate one brand from another and can lead to higher market share and earnings.
My view? Supporters of the cost-center perspective ended up killing the program. The next entry will also provide some insight about what happened during the meeting the day the EV-1 music really died.