Does Fritz Henderson Understand Rebadging?

While I know the catalyst for this topic occurred a couple of months ago now, this has been nagging at the back of my mind since then. Now that I have a forum where I can vent my own opinion, I thought I would get this out in the open. The question at hand: does Fritz Henderson (CEO of GM) know what rebadging is? This is in light of his comment (which I read in AutoObserver), where Mr. Henderson said he was “not a fan of rebadging”, specifically related to the idea of taking the Pontiac G8 and making it a Chevrolet Caprice. Depending on the definition of rebadging, this act (making the G8 into a Caprice) may or may not be rebadging.

The conventional definition in the auto industry is that a “rebadge” is simply a model that is available in another line within the same family of manufacturers. The only difference between the models being something as simple as the badging, although it typically also means some differences in sheetmetal and visual design. A current example of rebadging is the Ford Fusion and Mercury Milan: both have identical powertrains, feature content and virtually the same price. They are made in the same factory, on the same line, by the same people. The only difference is the name, the badging and some visual cues. GM was particularly egregious in this behavior over the years. A recent example is the Chevy Traverse/GMC Acadia/Buick Enclave/Saturn Outlook. All 4 models are nearly identical with only minor differences in options and pricing, but nearly identical in all of the substantial details. In the past, a lot of GM product was available in 2, 3 or even 4 different car lines within the GM family. Today, GM has an entire brand (GMC) that consists of what would be termed “rebadged” models under the conventional definition. To be fair, GM is not the only manufacturer guilty of this. Ford, Honda, Toyota and Nissan have also done this, and still do this today. GM, having the most brands under one roof, was the most visible in this regard.

If you take the strictest interpretation of the word “re-badge”, as in to take a badge off of one car and put it on the other, then moving the G8 from Pontiac and making it a Caprice under Chevrolet could be “re-badging”. This is particularly in light of the fact that Pontiac and the G8 will no longer exist (as of a few days ago, there were apparently only about 15, 000 Pontiacs left on dealer lots, and that’s all there will ever be). So, taking a model from a dead brand and putting it in an existing one is not, according to the conventional definition, “rebadging”. It could be interpreted that way in the strictest meaning of the word, that is, to remove the badge from one model and put it on another.

This leads me back to Mr. Henderson and his comment. He says he isn’t a fan of rebadging, but has an entire division that consists of nothing but rebadged vehicles. Instead, he is using this as the reason why he doesn’t want to keep the G8 platform alive in the North America. This leads me to 2 possible explanations.

The first explanation is that he doesn’t really care about rebadging, and it was a convenient excuse to kill the model. I would bet money on this as being the real explanation. The G8 didn’t do well as a product. However, it wasn’t marketed very well (or very aggressively). It was a very capable car, and stood up well against its European and Asian rivals, but no one was buying it. If he really did care about avoiding rebadging, he would not have agreed to keep GMC around, and would take the Enclave away from Buick, leaving it with just sedans. He also wouldn’t have greenlighted the proposed Buick crossover based on the Equinox/Traverse. It was ultimately killed when it was universally panned by automotive journalists during a product preview session, but someone who isn’t a fan of the practice would not have approved it in the first place.

An alternative hypothesis is that he doesn’t really know what rebadging means to the rest of us. This one is possible, but unlikely, given how long he has been in and around the car business. That, however, may be a bad assumption on my part. It is entirely possible that the man, who spent the bulk of his career in GM, doesn’t really understand the car business. He wouldn’t be the first senior GM executive to suffer from this problem (see Roger Smith as a good example of this phenomenon, and GM’s current plight as evidence this has been going on for a while). Under this definition (the strict interpretation of the word), then the G8-to-Caprice could be rebadging in his mind, and GMC is not a rebadge but some other definition where 2 products are the same in all but the name and the visual appearance.

Ultimately, I think this was a case of Mr. Henderson trying to project the image that GM has changed. By putting down a practice that was common in GM going back decades, it presents the appearance that things are different inside the company. However, actions speak louder than words. The fact that a substantial amount of rebadging still exists in a GM that has gone from 8 brands to 4 in less than 12 months, does not reflect well on the company or its future. I hope GM can make a go of it for the long haul, but I am not optimistic about their chances. This “rebadging” episode may be small in the grander scheme of things, but it seems to be an indicator that substantial change still eludes GM. Without substantial change, “more of the same” will not enhance their chance at long term success.