Obvious Advice: GM CEO, Don’t Insult the Customer

GM CEO Insults Customer. Say what?

Here’s some obvious advice: Don’t Insult the Customer. That’s good advice for everybody in a company, but that is great advice especially for the CEO. It can clearly impact customer retention as well as customer acquisition. While it’s common sense, it looks like Daniel Akerson, the CEO of General Motors (GM) hasn’t heard that advice before.

In a recent speech, he said the following about the customers who have bought the Toyota Prius:

We commonly refer to the geek-mobile as the Prius. And I wouldn’t be caught dead in a Prius.

Denigrating a competitor is one thing, but calling the competitor’s customers “geeky”, while not a huge insult, gives us a glimpse into his worldview that might go something like this:

1. If you bought a Toyota Prius, you are geeky.
2. Daniel Akerson would never be caught dead in a Toyota Prius.
3. Therefore, Daniel Akerson is not Geeky.

The upshot of the Daniel Akerson’s awkward logic might be this:

• If you are a person who is not like Daniel Akerson, you are inferior.

I don’t think that last statement is a logical leap – he clearly has something against geeks and makes a strong point that he’s not a geek.

Weird.

How To Treat the Customer

As I said, fighting words against a competitor is fine, but against the competitor’s customers is not wise. Moreover, I’d venture to guess that many of customers that own a Toyota probably also own a General Motors vehicle.

While “geek” is not a massive insult, it is a form of judgment. And, public judgment coming from the mouth of a CEO is not prudent or wise. If he can be like that in public, how are people treated inside the walls of GM?

And, no, what he said is not opinion – it is judgment. Opinion is usually supported by facts and feelings. What Daniel Akerson said is a form of judgment because he, in effect, is demonizing the customers that have bought a Toyota Prius by putting them in a convenient bucket and labeling them a “geeky”.

General Motors (GM) Bailout

Let’s revisit the history of GM, including the GM Bailout. Below is a rough top-level summary (source: http://goo.gl/PCQqx):

• GM is still Government Motors.
• The US Government converted $45.3 billion in loans to a 70% ownership position.
• The Canadian Government converted an $8.1 billion stake into 12% ownership.
• GM lost $3.4 billion in the 4th quarter of 2009.
• GM still has $15 billion in debt.
• GM has $27 billion in unfunded pension liabilities.

Now here is a more comprehensive timeline, from the same source as above:

• $12 billion: The amount of money General Motors (GM) requested in a loan plan submitted to U.S. Treasury Department on Dec. 2, 2008, according to CNN. Ten days later, GM submitted an updated version of the plan requesting $22.5 billion in funding.
• $50 billion: The amount of total bailout money GM has received from American taxpayers since 2008, according to CBS News.
• $7.4 billion: The amount of money, including interest and dividends, the government has recovered from GM thus far, according to The New York Times.
• $34: The initial public offering for GM shares this afternoon. Forbes predicted the IPO would be “likely to wind up as the largest initial public offering in history Wednesday and for the U.S. Treasury.”
• $23.1 billion: The amount of money raised by the IPO, according to The New York Times.
• 1.6, 1.7 and 1.8 percent: The percentage rise today in the Dow Jones industrial average, the S&P 500 and the Nasdaq composite, respectively.
• 1.4 million: The number of jobs saved by the government bailout of General Motors, Chrysler and other car companies, according to the Center for Automotive Research in Ann Arbor, Mich.
• “Several years”: The amount of time GM CEO Dan Akerson said it would take for the company to pay back taxpayers.
• $1.7 million: Akerson’s yearly salary. He also receives $5.3 million in GM stock.
• $12,200: The cost, per car, of the GM bailout to taxpayers, according to a report by the National Taxpayer’s Union.
• 3.8: The number of retired workers or dependents for every active worker at GM, according to the Heritage Foundation. In comparison, there are two dependents at Chrysler and 1.6 at Ford. This means GM dependents face a higher burden than those at other companies.
• $2,000: The cost of features that American companies need to cut from their cars to compete with foreign companies, according to Mitt Romney’s estimate in 2008.

As you can see above, GM is not out of the woods yet; for a company that is largely still owned by the US Government, why is the CEO of General Motors, Daniel Akerson, actiing so haughty? The truth is, he can’t afford to treat any customer poorly.

Lesson Learned: Don’t Insult the Customer.