General Motors' second chance

GM's recent efforts to transform are encouraging, but we've seen the automaker's other revivals falter.

By Alex Taylor III, senior editor

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NEW YORK (Fortune) -- The other day, General Motors did two things it has never done before:

It showed outsiders full-scale mockups of new models, some of which won't be introduced until the 2012 model year. And...

Its CEO and other top executives talked directly to customers.

Shorn of big chunks of debt, underperforming brands, and excess dealers, General Motors is determined to show the world that, post-bankruptcy, it really is a new company with a new attitude.

With that in mind, it invited more than 100 public citizens to a behind-the-scenes tour of GM's design center, followed by the opportunity to drive new models at GM's 4,000-acre proving ground.

Because this is the new GM, the event was widely communicated through webcasts, blogs, and tweets. GM is even encouraging the pubic to offer unfiltered opinions about GM car designs through an online platform called the Lab.

Whether or not the average citizen can actually contribute anything of value to a process that involves divining customer preferences as much as eight years in the future is another question.

My own experience is that amateur car buffs are too opinionated to offer constructive advice, while the vast majority of consumers simply have no experience or training in looking that far ahead.

Of course, the whole idea of talking to customers isn't a new one. Twenty-five years ago, Toyota engineers actually moved to Southern California so they could live with customers while they conceived the new Lexus.

GM has listened to customers before, too, but usually through the one-way glass of a focus group. The company amassed loads of consumer research but either didn't disseminate it properly or filtered it through the ideas of its middle-aged engineers, who wanted to do things their own way. Sales and marketing, which was responsible for making sure the new models hit their volume targets, was often the last to be involved.

To the customers and later to the media, GM showed off a dozen or so upcoming models that were developed by the old GM (presumably the one that didn't talk to consumers) but will be sold by the new one.

The biggest revelation was provided by Buick, which is getting a new lease on life. While most observers were consigning Buick to oblivion in the post-bankruptcy GM, product planners had other ideas in mind.

The brand, which is more popular in China than it is in the U.S., is getting two new smaller sedans and two new small crossover vehicles. That will effectively triple Buick's product line, which today consists only of the LaCrosse sedan, Enclave crossover, and soon-to-be discontinued Lucerne.

The new emphasis on Buick is a logical one, given the aging of the U.S. population. But GM has underinvested in Buick for years and -- despite its endorsement deal with Tiger Woods, which was discontinued a year early in 2008 -- the brand sorely needs revitalization.

GM needs to follow the example of Hyundai. Despite the poor reputation of the cars it sold during its early years in the U.S., it has built a new name for itself based on, of all things, its superior quality. It did so by listening carefully to what its customers wanted, then exceeding their expectations.

GM will have to do the same thing. Its recent efforts are encouraging, but we've seen other revivals at GM that never gained traction. As CEO Fritz Henderson likes to remind us, the automaker has been granted a second chance and won't be getting a third one. To top of page

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