Can't tell the Pontiacs from the Buicks? That's a problem
'Badge engineering' in the 1980s led to look-alike cars and disinterested shoppers
But it wasn't the message GM executives wanted their new A-body cars to send. Fortune's point? It was hard to tell the look-alike cars apart.
Programs such as the A-body cars, which went into production in 1982, helped make GM the industry's poster child for badge engineering in the last quarter of the 20th century.
The term — a derisive label suggesting that a manufacturer changes little more than a brand badge to set vehicles apart — still makes former GM executives bristle. At a time when GM was trying to tout what its leaders considered a radical Japanese-style manufacturing makeover, the Fortune cover shed light on one of the company's marketplace vulnerabilities.
"That cover really stung," says Chuck Jordan, GM's chief designer from 1986 to 1992. "It was kind of unfair, but it made things really clear."
Says Lloyd Reuss, GM's president from 1990 to 1992, about the cover: "It was sort of a wake-up call."
The Chevy Cadillac
But GM continued to sell badge-engineered cars. It got so out of hand in the 1980s that GM made a Cadillac out of a downmarket Chevy Cavalier and created the entire Geo lineup by rebadging vehicles designed by manufacturers such as Suzuki, Isuzu and Toyota.
It wasn't that GM didn't care about differentiating vehicles, says Lynn Myers, a retired Pontiac general manager and former corporate product planner. Brand teams set expectations for how a Pontiac or a Cadillac should look, sound and feel.
But resources proved scarce when the energy crisis forced GM to downsize vehicles quickly, develop new powertrains, tool up new plants and then feed copies of the new cars to each of its divisions.
"You ended up with products that shared more, and more products that were look-alike, and we lost a lot of the distinctiveness of the divisions' position trying to be everything to everyone," Myers says.
A zinger from Ford
As GM cars shared more, criticism mounted. Ford Motor Co. — no stranger to look-alike cars itself — even turned GM's growing reputation into a marketing opportunity.
In the fall of 1985, Ford unveiled a TV commercial dubbed "The Valet." The spot featured a posh couple leaving a club and becoming confused trying to identify their black Cadillac from a string of other GM cars. A calm man sauntered into the midst of the chaos and asked the valet for his Lincoln Town Car, which was delivered quickly.
The commercial's tag line? "There's nothing like a Lincoln."
The commercial — strongly backed by Lincoln Mercury executive and Ford family scion Edsel B. Ford II — made tempers flare at GM. But there was more embarrassment to come. According to Comeback: The Fall & Rise of the American Automobile Industry by Joseph B. White and Paul Ingrassia, the commercial replayed in real life at a fund-raising event that fall at Oakland University in suburban Detroit.
With a heavy rain falling as the event ended, students were sent out to fetch patrons' cars. When one student drove up and announced, "A black Cadillac," somebody in the crowd yelled back, "No, it's a Buick." Others shouted that it was an Oldsmobile or a Chevy. The crowd went into gales of laughter.
Not laughing were the GM executives in the audience, including Reuss. Soon after, GM CEO Roger Smith contacted Ford CEO Don Petersen and asked him to pull the Lincoln ad. Petersen agreed, White and Ingrassia reported in their book.
Reuss remembers the incident. Although he acknowledged that the Buicks, Cadillacs and Oldsmobiles in question shared too many components, he rejects the badge engineering label for them.
"Obviously, we didn't like" the commercial, Reuss says.
GM began sharing vehicles significantly back in the 1960s with cars such as the Buick Skylark and Pontiac Tempest. But it came off as smarter sharing in those earlier decades. Although underpinnings and some sheet metal were shared, those cars had more brand-based styling and engines made by their own divisions.
In 1977, GM landed in hot water when customers discovered the company no longer was sticking to its practice of division-specific engines. More than 200 lawsuits were filed against GM by state attorneys general and consumers for putting Chevrolet engines in Oldsmobiles, Buicks and Pontiacs. The company eventually settled the lawsuits in a deal estimated to cost at least $30 million.
By the late 1990s, the most egregious examples of badge engineering faded on the car side and picked up steam on the truck side. The SUV boom resulted in vehicles such as the first-generation Cadillac Escalade, introduced for the 1999 model year. It was little more than a top-of-the-line GMC Yukon Denali with a Cadillac logo and different grille.
Today, widespread sharing is still in vogue at GM and throughout the industry. But GM executives say their current approach more closely approximates that of the 1960s, where platforms and some components are duplicated but styling remains distinctive to each brand.
With eight brands to feed, though, there is still duplication. For instance, the Pontiac G5 is simply a reworked Chevy Cobalt coupe. The Pontiac Solstice and Saturn Sky roadsters are unmistakably siblings. And does GM really need four large crossovers — one each for Chevy, Buick, Saturn and GMC?
Chevy and GMC pickups also remain very similar. Retired GM CFO Mike Losh recalls in years past that "Chevrolet" would be stamped into a pickup's tailgate — only to be covered up by the GMC name.
"Some people would call that badge engineering," Losh said. "I would say, 'Well, that was pretty good distribution strategy.' "
You can reach Amy Wilson at firstname.lastname@example.org.