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LIVE FROM THE HEADLINES

General Motors Admits Past Mistakes

Aired May 29, 2003 - 19:34   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, HOST, LIVE FROM THE HEADLINES: Well, General Motors is trying to make new lemonade from old lemons, you might say. It started an advertising campaign admitting some of its past products weren't up to par. They say confession is good for the soul. But is it good for sales?
Jeff Flock has that report.

(BEGIN VIDEOTAPE)

JEFF FLOCK, CNN CORRESPONDENT (voice-over): Remember the Olds Omega, the Pontiac Phoenix, Chevy Citation? How about the classic Chevette? Most people didn't think they were the best of cars, and now the company that made them agrees.

UNIDENTIFIED MALE: Okay. We do admit that 20 years ago we weren't where we should be.

FLOCK: And that's from GM's own video press release to announce a new ad campaign called "The Road to Redemption." The message -- we admit we made some bad-quality cars in the past, but we learned and we're doing much better now.

FLOCK (on camera): Is this a smart thing?

STEVE BROWN, VICE PRESIDENT, WAYNE STATE UNIVERSITY, AND ADVERTISING EXECUTIVE: I actually think it's a very smart thing.

FLOCK (voice-over): Wayne State University V.P. and longtime ad exec Steve Brown says the unorthodox campaign is a breath of fresh air.

FLOCK (on camera): But to say we were bad, we admit it.

BROWN: I also think that in today's era where you've got the Enrons and everything else, it's good for a big corporation like General Motors to say, "You know what? We did, in fact, make mistakes."

FLOCK: Partly because of quality, many consumers dismissed GM out of hand. The company's own research says a full 40 percent of U.S. car buyers won't even consider a GM product.

(voice-over): To get their attention, the company's pushing the latest J.D. Power survey, which ranked GM number one among domestic carmakers in initial quality -- fewest new vehicle problems on average, and this Cadillac assembly plant in Michigan and a Chevy plant in Canada were rated North America's highest-quality plants.

UNIDENTIFIED MALE: Over the past decade, GM has made substantial and generally consistent improvements in initial quality.

FLOCK: The company is now even offering, in a big national TV ad campaign, to let consumers sleep on their decision about buying a new GM -- allowing them to keep a car overnight. It may be working.

UNIDENTIFIED MALE: And in the '80s, they kind of took a nose dive.

FLOCK: Bill Brown just bought a new GM car at this dealership in Chamblee, Georgia. Salesman Al Kanty (ph), who's been selling GM cars for 34 years, says telling the truth is a good thing, especially now.

UNIDENTIFIED MALE: It's night and day. They're so much better than what they used to be.

FLOCK: The trick is making people believe it. I'm Jeff Flock, CNN, in Detroit.

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