Get Adobe Flash Player to see this content.

About This Video

Restructuring GM's Image

Title:

Restructuring GM's Image

Published: Mon, 8 Jun 2009

Description: VCU Brand Center Executive Director Kelly O'Keefe on whether GM can re-brand itself to turn a profit.

-

Automatically Generated Transcript (may not be 100% accurate)

" Or -- got to be one of the hardest jobs in America about being a marketing executive at General Motors. -- faced a difficult job of convincing a skeptical or even angry American public to buying a GM car truck. And letting -- done. Kelly O'Keefe is executive director for the BC brand center and a professor at Virginia Commonwealth University. -- welcome to Fox Business thank you for joining us. Is there any how do you approach -- approach it as a as just that you do you continue on the value theme do you say we're still here. How does GM go about marketing its cars and trucks right now."

" Well the first thing they have to remember is the building brands isn't just about advertising so they've got to get the product right. And the lineup right. And GM has done a terrible job of that in the past they had eight different car models that they were marketing last year. Confusing the customer -- lots of different business lines. And they do need to simplified they're working to do that they really need to simplify the product line simplify the brands and that's a starting place. Well marketing right he's emotional in part and there's a lot of emotion around GM a lot of negative emotion. Do they addressed that in their advertisements. I I don't know that I would head on address the negative emotion what I would do had on. Is to communicate to the American public that they're going to be a different kind of car company in new car company. General Motors 50% of their sales and shouted. So. Let's really face reality Chevrolet. Is the biggest brands in their portfolio it's ten times bigger than any other brand in their portfolio it's a hundred times bigger and sales than Hummer. So there's a lot of Chevrolet customers out there. Millions and millions of customers have -- General Motors products over the past few years and they do need to reach out to those customers and say hey. We're going to be a new kind of car company we value as a customer we're going to treat you right and we're gonna pay attention to the stuff that we ought to pay attention to. Like making great cars. And marketing them in simple. Ways through a great dealer experience. But the American other guy humor back for the simple base let the American consumer though is smart and and I hear your point about the new kind of car company. But we also know even the average American knows it takes years to develop cars do you think they'll be able to successfully convey that message. That they've changed because. It takes time it takes a long time to change at that type of a massive. Organizational level. Well I think that's right and -- said you know it's a leap of faith that the American public have to take that they will away. For GM to get it right. But I'll say this they don't have a lot of time to change. You know years ago twenty years ago Ross Perot left GM's board saying that the company was like -- shadow -- They got into aerospace with Hughes they got is that technology with the EDS acquisition they've got at the finance with Jimmy say. They forgot that they were car company. If there was ever time not to take years to change. The direction this company it's after you've gone bankrupt because all bets are off it's time to fix the company very quickly. To simplify. And to tell the consumer. Not just with words but with actions. The General Motors is committed to being in long term player that's going to provide you great cars and great service for very long time to come. -- Kelly O'Keefe of BC you tell it was a pleasure thank you coming on Fox Business. Thanks a -- Brian."

More Videos From FOX Business
FOXBusiness.com LIVE: GM Bankruptcy Possible

FOXBusiness.com LIVE: GM Bankruptcy Possible

GM may be on the brink of bankruptcy, but what does that mean for the market? Check out the full hour FOXBusiness.com LIVE today.

Video|Thu, 28 May 2009|More from Web Exclusive
|general motorsfound at0:02, 1:16, 4:34, 6:59, 15:27

Gee you know GM issued the official you know it's kind of like the old Soviet era Politburo line we are very good life as well essentially what they said is the deal that they announced this morning. We it's 20% of the -- as we should put out seem to be on board -- But the deal they announced they've said that this will give General Motors a chance to emerge with a healthy balance sheet and -- they suppose that they said long term viability the problem. Is that the government was always leave requiring 90% of the bondholders. To be on board and he could still have some of these you know people will hold General Motors dead. Try to create some kind of litigation once a General Motors is in bankruptcy you know they're expected to file on Monday. And try and slow down this whole process is that going to be a much bigger bankruptcy filing that we saw with Chrysler and although we keep hearing the government talk about that. 363 sale an expedited sale of General Motors quality assets to some kind of new company gets a new Coke that's Chrysler. You we need to come up maybe -- have a contest for a new name for General Motors . It might be a little bit different than what we're seeing in the Chrysler but right now everyone seems to be excited
Isn't Seattle not the least of which would be General Motors -- spent a lot of time talking about in the next hour with the ideal now in place. -- with the bondholders the General Motors bankruptcy can move forward in what the hope is at least will be quicker. And fashion than it would have that it would have been if that deal was not a place -- all the metrics about what that deal or and or agreement means. For the bondholders and for its customers -- General Motors and everything else were actually -- dealer which is always great to to get that kind of perspective from out. In Detroit matters here is that Detroit that the GM headquarters in all that's coming up next.
of property right here our top stories of the day of course General Motors . I think you're exactly right so. All the -- GM obviously -- top story economic wise and for the for the nation as all of it certainly you know that's. It jumps out may not be the biggest market moving story but clearly yet General Motors site and we've been expecting -- things to get heated as we got down the wire and certainly it has been an
and beyond that deaths. As part part of the consolidated debt that GM -- the new GM would emerge from bankruptcy on 17000000008 billion of that to the treasury nine billion in preferred stock treasure would have two and a half billion shares of this preferred stock which would reap dividends. As a repayment. And be good for the bondholders potentially they actually. Read statements right right that that's retired at the sweetened deal for them but they wouldn't be able to -- 15%. And act actually of common stock is -- get the dividend and it's well third or if GM declared a dividend right now. Yeah we don't know what that news -- that new General Motors and look like in a lot of ways but not least of which is the investment. He called that General Motors is which is the point of that the current stock price will be worthless because those shares was go away -- here
the markets -- great to have you on impressions on the whole General Motors talk in this deal getting done. With the bondholders anything that you know surprise due to an extent all of us. Well it's it's funny yesterday -- GM came out and there was an announcement that there'd be no. Renegotiation. And no change in the terms of the of the
idea will be added this is the idea if Mari whether it's General Motors or whether it's you know a lot of the bank bailout program is an exit strategy in all of this mean how
couple things to do Detroit's argument on -- out of headquarters for General Motors today --
which I guess well. If any -- that speaks to the situation General Motors and if if nothing else that your production before but the the idea now that did deals in place supposedly with the
things up you know I I'm not so sure it does. Look General Motors going to probably file bankruptcy that's no secret everybody expects that to happen the question is how quickly can -- and it's not as if GM going to emerge from bankruptcy some new form of General Motors is what's going to emerge. Kind of like in that the movie alien with a creature comes out of the stomach. You
there. Jeff that I heard -- for madam when news reporting from. General Motors headquarters and people dealing in reality here you can I think the words are just use we didn't have a choice and
found -- we retired in our board -- were even talking about General Motors is an investment. Talk about its common stock and but you know this could be as soon as and you know some bond investment whatever the case may be what would you take into account. Coming out of this when it you know assuming General Motors will be publicly traded company again it'll be new shares issued is most likely the way it'll play out and and people you know that company will most likely issued debt and what what would you take into account when considering. The investment in in General Motors .
this as a very safe investment Jenna went through some statistics about General Motors market share in the 1950s and what have you. And now if you save rebuilding that trust in General Motors as a corporation. Wow and how long it'll take.
that to have proceeded and -- that same thing happen here for General Motors .
the possible investment of up to forty billion dollars in the restructured. General Motors again reporting of Peter -- down in Washington today okay. Let's get the Fred and make the third out in Denver Fred is seven is dealer he owns. And the Chevrolet -- folks wagon third generation dealer so we've stuck in the third Fred because analysis of family business it's been here for. For a long time give me your thoughts mean and guy Chevy dealership out there and now we have. All but certainly in the General Motors bankruptcy filing albeit one that seems to have agreements from a lot of the parties that are in place what's the future
starts pressuring me. Well I understand the government screws every 2% a General Motors if they do they want -- know that. Absolutely so -- and and you're saying consumers essentially wants something for nothing what
in this economy. Even with what you see going on with a General Motors today even with the government intervention. But dot com I actually have to wrap it up right now because I know that
members there's represented and Jeff gets into some of those. Plans for General Motors but if you know anybody that -- said. What it is auto plants down south that is from foreign automakers be great
about that we were you were mentioning earlier about the difference in General Motors . Market share between 1950 right today and we have a -- guys we should put this chart up that our good friend Charlie grace and out on the board and the minute. About the difference in GM's market cap. In the last ten years it really it is absolutely staggering to think about General Motors -- sixteen billion dollar company just in the year 2060. Billion. And worth 700 million as we're talking to you today seven
April the auto task force put forward this idea of a good GM bad GM and 363. A bankruptcy filing would we knew that idea yeah and it seems like the administration is getting -- used to the idea that an iconic brands like General Motors would file for bankruptcy the question I have for everybody out there is. What do you make of it now that it's actually here. Did you get used to the idea and now well was pretty good marketing and branding campaign we knew it was coming you were expecting it now reality comes -- we're not as emotionally involved. The American public kind of sick of it in the news once again it out of it or are you actually still has affected today as he works six weeks ago -- feel about the General Motors -- today because a big part of the argument to -- General Motors in business and use taxpayer money has been. The -- the public feels about it so that's why. I'd like to hear
putting up you know thirty to fifty billion dollars in loans to General Motors to help bail them out right in return for that they're paying off their loans.
and told us that Pepsi's market cap is now a hundred times General Motors still try to get an idea of exactly what all of this means and on your point -- we talked about government intervention in trying to make a smart investment -- duties gays and Sheila -- is is commenting that -- DIC chair. That they're having trouble in the banking sector because that game still keeps on shifting so. What is the message coming from the government now that we would know that the treasury has 70%. The new General Motors is it that you really want to be a bond holder that you you don't want to own common share of any
there's only one S&P 500 company with a smaller market -- General Motors .
to spend on it today as -- who would've liked as a General Motors would. What's going on here and what do you make it. Yet they just -- I mean.
FOXBusiness.com LIVE: GM Goes Under

FOXBusiness.com LIVE: GM Goes Under

GM filed for Chapter 11 bankruptcy. What does this mean for the U.S. auto industry? Check out the full hour of FOXBusiness.com LIVE today.

Video|Tue, 2 Jun 2009|More from FOX Business
|Dow Jones Industrial Averagefound at0:26, 1:19, 42:03, 42:23, 44:11

being for -- doing breaking news on Marino about General Motors and everything else but anyway that -- it out for you. -- will not want them in a historic day for the Dow Jones Industrial Average General Motors gone from the Dow now as well as Citigroup's they did on the same day. Obviously big news there and at putting
valued at more than its former parent so huge day for the Dow Jones Industrial Average and then of course there. The big news General Motors filing for bankruptcy that's that's the huge story of the day and and -- century had ever.
guys that's obviously a big day for the markets out there and General Motors filing for bankruptcy Chrysler closing its deal. Lots of other news rolling in especially. A couple addition and subtraction. Changing of the guards if you well. The Dow Jones Industrial Average of big rally but sit down to to call police at the New York Stock Exchange to -- it going on on
here on Wall Street. This and historic day certainly as we're watching General Motors filing for bankruptcy Dow Jones coming out and saying General Motors . How of the Dow Jones Industrial Average also -- on there any NYSE saying that General Motors they're looking to delist GM and some of its related companies here on the floor of the New York Stock Exchange. They no longer. Reached the requirements that are needed to trade here on the for the mere -- exchange. GM had been all over the place this morning it was down 30% now off almost 20% it's trading around 88 cents a share right now this as we obviously know that it is coming out of the Dow Jones Industrial Average next Monday morning. GM and that he will be out. Traveler and this felt. We'll go into the Dow Jones Industrial Average very ironic because travelers obviously was spun off from city group. Back in 2002 but Dow Jones saying that. Travelers really represent. The financial arm had that they are meant staying within the Dow Jones Industrial Average memorable and AIG was taken out right remember what -- was nationalized it take out AIG date -- in there. But really
without great -- we were -- three months of growth for the Dow Jones Industrial Average . But as you walk this morning that's traders about this icon General Motors they're sad their -- can't believe that. You know you say they look big companies -- we believe I'm actually went bankrupt
GM CFO on the 'New General Motors'

GM CFO on the 'New General Motors'

GM CFO Ray Young on life after bankruptcy.

Video|Thu, 4 Jun 2009|More from FOX Business
|general motorsfound at0:00, 0:28, 1:12, 2:06, 3:28

indicated. Now from my perspective we're very much focused on the new General Motors . My mom my focus my attention right now after the filing. Is insured that the new General Motors is going to be Bible can be prosperous. Very much focus on executing the plan that would lead -- last month. Very much focus in terms of getting our cost structure down to a level where we can make money even on a weak US industry. And very much focus and making sure that we launch the products that we've indicated. In our product put forward over the next couple years including this year you know we've got -- a new products were bringing into the market in 2009. Such as the Chevrolet Camaro .
A -- General Motors continuing on its road to recovery and joining me now with an update on the automaker's plans is the chief financial officer idea. Ray young ray is ready to be here. The GM filed for bankruptcy on Monday how is your job different how is it changed in recent days in recent weeks.
you get rid of most senior debt but. What what's just keep General Motors down the road from saying cutting car prices a thousand bucks and get back to square one.
Well the American taxpayers are paying funding -- General Motors in bankruptcy and reorganize and about 60% of the company. But do you think the failing that lawmakers. You're trying to make GM viable but lawmakers may be are getting in the way of that. Again given you a little headway and on cutting dealer
streets want to know in what way do too many dealers for general motors' cost the company money. How does it hurt you in terms of just act quantify forming.
obtain low cost funding in or support its operations. And hence support General Motors Corp. With suspected GM we first need to emerge from the bankruptcy process. We need to get our balance should be capitalized with the help of
still owning at that time. And what investors would wanna invest in General Motors if they have to invest alongside the federal government that might mean making. That the big decisions about the future --
not want to get involved and it did to day operations of General Motors . There will be a reconstituted general -- board of directors comprised of a combination of new directors in some of her existing directors. He'll be giving us oversight they'll be overseeing the management team in terms of us making decisions that are in the best interest of the new General Motors . And I believe it's the new government's the government's intent is to sell down their shares on an orderly basis. In order
is in what bankruptcy is not. And and we're reassuring customers that General Motors is open for business. We nail file for chapter eleven but our and our operations are normal and were building cars were