Today in trust and vulnerability as a strength: the automotive edition!

General Motors recently delivered a “master class in disclosure and transparency.” In an industry not known for being forthcoming, open communication stands out—and can push the competition.

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Like most of the economy, the auto industry is reeling from the pandemic. In Q1, BMW sold 15% fewer cars year over year. Nissan lost 30%. Subaru lost 17%. But GM is doing far better in comparison: they lost 7% on the quarter YoY. Good communication gets some of the credit. (2/6)

After giving Wall Street a “detailed and articulate” overview of the impact of the coronavirus pandemic on business, the stock rose. Analysts at Deutsche Bank upgraded GM after previously downgrading the stock. 3/

“At the end of the day, these are still assumptions. But the framework allows [GM] investors to understand the business and effectively make their own judgments,” analyst Joseph Spak of RBC Capital continues.

The right volume of detail empowers and builds trust among listeners.

In contrast, opaque messaging from Elon Musk about Tesla’s stock being “too high” fit his history of vague, troublesome communication. Remember how he hinted at going private in 2018? The SEC hit him with $20MM securities fraud and mandated Tesla oversee his social media use. 5/

GM spoke more clearly. Their earnings call laid out the impact of COVID-19 on production and cash burn. If global production drops 60% – 70% in Q2, GM will lose $7BB – $9BB. Because they started restructuring early, they stemmed greater losses, compared to their competitors. 6/

Just as analysts responded well to the detail GM shared, investors did too. The stock climbed 4% the day after the call.

That volume of detail and vulnerability might be risky to brands less comfortable with transparency, but respect pays off. Trust is a two-way street. /thread

Addendum: analyst quotes came from https://www.marketwatch.com/story/gms-master-class-in-disclosure-wins-over-wall-street-2020-05-07