Saturday, January 14, 2012


Auto Industry May Want to Look at That Luxury-Car Plan Again


James Warren writes a column for The Chicago News Cooperative.
While shoveling out a Honda Civic on Friday morning, I was reminded of my utterly utilitarian perspective on cars. I want them to get from Point A to Point B efficiently. That’s it.
My thinking is one reason Howard Tullman says he believes the American auto industry is deluded, despite its current euphoria over increased sales.
“The thrust of Detroit’s thinking is that they are still speaking to people who have a personal, emotional connection to the vehicle they operate. It’s a complete miscalculation, certainly of any person under 35,” said Mr. Tullman, who has deep ties to the industry.
When I noted that General Motors was heralding expensive new luxury models in its Buick and Cadillac divisions at the Detroit auto show and forthcoming Chicago auto show, the man who has often advised auto’s hierarchy scoffed. “Rearranging the deck chairs on the Titanic,” he said.
Mr. Tullman, 66, is a lawyer turned serial entrepreneur, a driven, self-promoting and well-connected pragmatist. His Rolodex may match that of his chum Mayor Rahm Emanuel, who resided with Mr. Tullman during the election campaign while the candidate’s family was in Washington.
He is president of Tribeca Flashpoint Media Arts Academy, a profit-making private Chicago college focusing on digital arts and entertainment technologies. He started it as Flashpoint in 2007 and is now partnered with Tribeca Enterprises, the New York company founded by, among others, Robert De Niro.
Mr. Tullman is a sharp observer of rapid technological and cultural change. At a private dinner on Tuesday, he gave the audience a succinct overview of social media — and inadvertently piqued my curiosity about cars.
His presentation detailed four trends: hyperpersonalization, by which one can direct one-on-one messaging to millions of people; accountability in measurement, which allows advertisers to demand concrete metrics on their results; our being constantly tethered to other people and decision-making information, thus letting us walk through one store while pricing the same products at another on smartphones; and a significant lowering of barriers to starting a business.
“He has incredible value as a liaison between the digital generation and an older one,” said Jane Hanna, 30, the social media strategist for the Field Museum, who attended the dinner. “He’s a powerful voice to connect the two.”
Those under 35, he declared, don’t care much about privacy or accuracy as they give away personal information on Facebook and elsewhere.
Jack Fuller, an author and former president of the Tribune Publishing Company, was struck by “the radical democratization of judgments about accuracy and importance” that Mr. Tullman detailed, while the lawyer-author Scott Turow was not quite so sure people would surrender as much privacy once they realized what they were doing. But this was all after Mr. Tullman told me at dinner his views of Detroit, based on ample experience.
He founded CCC Information Services, which maintains databases on the value of used cars for insurers settling theft and total loss claims; was board chairman of Colbalt Group, which provides digital marketing and economic solutions to the industry; and founded Original Research II, which asked car buyers about sales and service satisfaction.
“When I see G.M. doubling up on luxury cars due to their profit model, I can’t help but think they’re missing the boat again,” he said.
A younger generation wants fuel-efficient, utilitarian vehicles, he said, if they want them at all. The calculation will change somewhat when they become parents and need a child’s car seat. But they will opt for smaller, safer and less expensive cars, he said.
Culturally, Mr. Tullman points to the disappearance of “grease monkeys.” We don’t learn how to repair a car anymore because it takes “a $250,000 computer diagnostic system to do it,” he said. “You don’t learn how to fix a carburetor in vocational ed class.” That’s gone, he said, and with it the realms of car enthusiasts who craved swanky or mechanically souped-up vehicles.
“The few exceptions are Hispanics — the last of the car cultures — and crazy Californians who obsessively paint their cars,” he said. A subgroup of remaining car fanatics is “big-city gangbangers and rap stars with their Escalades.”
Finally, he says he continues to be struck by the absence of women in upper management.  “If you don’t have a feminine, ecological, environmental side,” he said, “it will be very hard to address this new market.”

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