Sunday, February 11, 2007

GM, Ford reputations take a hit

Thursday, February 01, 2007
GM, Ford reputations take a hit
David Shepardson / Detroit News Washington Bureau

WASHINGTON -- The reputations of General Motors Corp. and Ford Motor Co. plummeted last year as the companies were buffeted by bad news about job cuts, factory closings and financial problems.

Once among the most admired U.S. companies, GM and Ford now have among the worst reputations in corporate America.

How bad is it?

Of the 60 best-known U.S. companies rated in the eighth annual Wall Street Journal/Harris Interactive Poll, released Wednesday, GM ranked 57th, down from 38th in 2005, while Ford dropped to 55th from 37th. GM and Ford dropped the most of any companies.

"It's all about negative PR. It comes down to job losses, layoffs, plant closings, declining market share," said Scott Upham, a senior vice president at Harris Interactive who previously worked in purchasing for Ford.

The reputation issues are a major concern as the companies restructure their operations and improve vehicle quality and design. Both companies have talked recently about trying to close a "perception gap" that keeps some consumers from considering Detroit-made vehicles.

"They certainly have a lot of work to do to improve their overall brand image," Upham said.

GM finished ahead of only cable giant Comcast Corp., oil company ExxonMobil and energy services provider Halliburton.

Tobacco and food products giant Altria ranked between Ford and GM at No. 56.

Comcast has suffered from complaints of poor customer service. ExxonMobil has been slammed by some for earning exorbitant profits. Halliburton Co. has been accused of war profiteering in Iraq.

GM and Ford have lost more than $25 billion since 2006, while cutting more than 55,000 hourly jobs and thousands of salaried jobs. GM wants to close nine plants by 2008, while Ford is in the process of shuttering 14 factories by 2012. GM's accounting is the subject of an SEC probe.

While the Chrysler Group plans to announce its own restructuring Feb. 14, parent DaimlerChrysler AG saw its numerical score improve slightly even though its ranking dropped from 44th to 49th.

"It's not terribly surprising, given the state of the domestic industry and what we've been saddled with," Chrysler spokesman Mike Aberlich said Wednesday. "As time goes on, we'll move back up."

Japan's Honda Motor Co. and Toyota Motor Corp. each dropped two spots in the rankings, to 14th and ninth, respectively, despite improving their overall scores. Several firms joined the list, including and Whole Foods.

GM spokesman Tom Wilkinson acknowledged that the carmaker has received "a lot of mixed publicity. "It takes time to close the gap between perception and reality."

Wilkinson said the Toyota and Honda ratings weren't undeserved. "They have great reputations. You can't take that away from them."

Ford spokesman Oscar Suris said the automaker is hard at work to fix itself "so it can be a profitable, viable company. Part of that process is headlines about job cuts and plant closings and perhaps that's what you're seeing here," he said. "What is going to drive our reputation is going to be our products. We've got great products in the showroom, and we're working on having even more great products."

Ford and GM have lamented the fact that many car buyers simply don't consider them anymore. GM has conducted focus groups that show its vehicles get much higher marks when their Chevy or Pontiac nameplate is replaced by a Toyota badge.

In research Ford conducted in 2005, every survey group polled said the automaker was falling behind its competitors.

GM and Ford are emphasizing their commitment to advanced technologies as they try to win back consumer confidence.

GM introduced a concept plug-in electric hybrid Chevy Volt in January in a bid to reclaim the technology mantle from Toyota and Honda. Last week, Ford unveiled a plug-in fuel cell vehicle, the Hy-series hybrid Edge, and last fall gave a hybrid vehicle to former President Clinton to use.

Both companies also have played up their American heritage in advertising and speeches.

More than 22,000 survey participants were asked to rate companies in six key areas: products and services, financial performance, workplace environment, social responsibility, vision and leadership and emotional appeal.

Microsoft Corp. knocked off Johnson & Johnson from the top spot that it held for seven straight years. 3M was third, while Google and Coca-Cola rounded out the top five.

In recent years, Detroit's Big Three have finished in the middle of the pack. Ford's ranking this year is even lower than it was in 2001 in the wake of the Firestone-Explorer rollover crisis.

"These are grades that are understandable and I say deserved," said Gerald Meyers, a University of Michigan business professor and former chairman of American Motors. "We're in the third year of a domestic automotive decline and no sign of anything happening to pull out of it."

You can reach David Shepardson at (202) 662-8735 or

© Copyright 2007 The Detroit News. All rights reserved.


Post a Comment

<< Home