The death of Oldsmobile
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So Starling was stunned when a reporter called him on Dec. 12, 2000, to tell him that General Motors had announced it was killing the brand.
"It's still a painful memory for me," says Starling, president of Starling Auto Group in Orlando, Fla. "GM is still a great company, but that was a huge mistake."
Oldsmobile, once GM's stalwart midmarket brand, had lost money and market share throughout the 1990s. GM invested considerable capital and engineering resources in Oldsmobile but could not reverse its decline, says Bill Stacy, GM's special projects director of dealer network planning and investments.
Refine GM channel
Company executives concluded that dropping Oldsmobile would help GM sharpen its marketing plans and brand focus, Stacy says.
When GM announced the brand's demise, there were 2,800 Oldsmobile dealerships in the United States. It took GM nearly five years to settle with those dealers and formally eliminate the brand. The process would generate lawsuits and persistent bad feelings between many dealers and the factory.
"Oldsmobile was the biggest shock in the auto industry in the last 25 years," says John Rogin, a Buick dealer in suburban Detroit. He did not have an Oldsmobile franchise.
"I had a conversation with the person who made that decision," says Rogin, who would not identify the GM executive. "He said, 'If I could do it again, I wouldn't do it.' "
Fewer than 300 Oldsmobile dealerships were stand-alone stores, Stacy says. The vast majority were dualed with another GM brand.
GM developed a transition package to help Oldsmobile dealers cope with financial, inventory and sales issues as the brand faded away. The company will not say what it spent overall to compensate dealers for the loss of their franchises. Individual dealers got amounts ranging from less than $10,000 to several million dollars.
"We did not buy dealerships," says GM's Stacy. "Most (dealers) did not want to sell their land and buildings.
"It was one of the more emotional things. It was change. Many of our dealers and consumers went through stages of grief."
'No baggage'
Oldsmobile's end cost GM a lot of awesome dealers, Rogin says. "There was no baggage in the Oldsmobile franchise system," he says.
Starling, a former president of the National Automobile Dealers Association, says Oldsmobile sales and service brought ample profits and customer loyalty to his Chevrolet-Oldsmobile dealership.
He now operates multiple franchises, for GM and other automakers. But Starling says he'd trade all his current stores just to have Oldsmobile back.
"I don't think (GM) executives ever understood that it gets down to relationships with people," Starling says. With the end of Oldsmobile, he says, "a lot of those relationships were damaged beyond recognition."
You may e-mail Jamie LaReau at jlareau@crain.com
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