Neal Boudette has been the acting bureau chief for the Wall Street Journal’s global auto industry group in Detroit since 2004. His coverage focuses on the European automotive industry, as well as Chrysler and other suppliers. As a bureau chief for the world’s leading business publication, Boudette coordinates overall coverage for the reporters. Neal is a panelist at the upcoming The World at Your Fingertips event, produced by Lois Paul & Partners. The first 2 people to post a thoughtful comment to this blog entry will win a free pass to the event.
Q. We tend to have a very US-centric view of American auto manufacturers. Can you catch us up on what the auto companies are doing globally? Any unexpected pockets of success?
It increasingly looks like the global auto industry is in a slump, not just the US market. European auto sales are now declining sharply and the Japanese market is stagnant. For the last few years auto makers have been able to soften the blow of weaker sales in the mature markets by racking up rapid growth in huge emerging markets like China, India., Russia and Brazil. But in China higher gas prices and government curbs on the economy, to keep it from overheating, are now slowing growth. Chinese auto sales in August actually declined – the first monthly decline in 2 years.
At this point no auto maker is immune. BMW, Toyota and Mercedes are all hurting right now, and Hyundai, Renault and Nissan are struggling, although they are still much better off than the Big Three. Honda and Volkswagen seem to be the exceptions to the misery right now.
Q. How are the auto makers tuning their communications for the global marketplace these days?
I think a number of auto makers could be doing much better in terms of PR. The Big Three are reeling and often employ a kind of defend-and-deny strategy. GM for example just created a gmfactsandfiction.com web site, where they dispel “myths” about the company. I’m very dubious about its effectiveness. One of the “myths” is that GM isn’t moving fast enough. The company claims that’s wrong, this it is moving rapidly. But the reality doesn’t match up. They just lost $15.5 billion in the second quarter. Any knowledgeable person is likely to dismiss the web site as pure spin. Chrysler is in a similar position. The company keeps saying it is hitting its financial targets, but their sales have plummeted (down 34.5% in August, a staggering drop for a car company). So it’s very hard to imagine them hitting targets unless the targets are very low.
Q. Are things that bad in the US auto industry, or do they just need some better PR?
Both. The industry is in the midst of wrenching permanent change. This is not just a down cycle from which it will bounce back as it has in the past. There’s a very real chance at least one of the Detroit auto makers will not be an independent company in a few years. If the US economy goes into a recession, all three will face more serious trouble. This is not a challenge that PR can spin or manage. I think the best approach would be to own up to the facts – admit you’re in a life and death struggle, acknowledge you’ve made mistakes. I think that would win respect from the media. But there’s a disconnect when a company says it’s making great progress on its turnaround but then goes to the government for billions in loans. Which is it? Either you’re on the road to recovery or you need government help.
And complaining about negative coverage and claiming things are actually going pretty well when you’re losing billions of dollars only fuels the skepticism of reporters.
Q. What is your top piece of advice for an Austin-based emerging technology company to consider when crafting their global communications plan?
Be honest. Don’t tell people your technology will change the world if really won’t. You can be passionate about your company or technology, but don’t inflate your story, don’t over sell it. In the same sense, think of your company and how it fits into the big, broad trends that are re-shaping the US economy as we know it. The biggest mistake PR people make is they suggest I or my reporters do a story about their company, or their CEO or their product. We rarely do stories like that unless it’s Apple or the iPhone or Steve Jobs.
If you pitch your company or product to reporters as a piece of a bigger trend, a reflection of something playing out on a bigger stage, you’ll have a better shot at success.
The underlying cause of the Big Three’s problems is not bad PR but bad products. For decades, while foreign car manufacturers have been steadily gaining market share by launching superior products, the Big Three have been launching uncompetitive products while simultaneously blaming everyone but themselves for their woes. Recently, the Big Three have finally launched some truly world-class cars, but the public’s perception of these companies and their vehicles has been so decimated over time that now it may not matter. This is why GM launched GMfactsandfiction.com, but Neal is right that consumers are probably savvy enough to ignore the hype. The ONLY way to convince consumers to buy the Big Three’s cars is to do what the leaders do: keep turning out better and better cars.
Nobody is immune from quality recalls anymore and everybody has the engineering talent to create excellent and reliable products. With Chrysler’ recent EV announcement, the Volt’s development, and Toyota’s EV plans it will be very interesting to see who will be the first to get their EV marketing right. Or at least who will survive long enough to see that happen.
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