Over 100 years, you can't avoid some flops

The Aztek, Cimarron and Caprice were among recent-day turkeys

Consider the 2001 Pontiac Aztek. Or the 1982 Cadillac Cimarron. How about the 1991 Chevrolet Caprice? Don't forget the 1990 Chevrolet Lumina APV, General Motors' early stab at a front-drive minivan.

What do those vehicles have in common? They quickly earned widespread derision from automotive critics and buyers alike.

In 2001, present-day GM product boss Bob Lutz, who then was CEO of Exide Technologies, coined the term "angry kitchen appliances" to refer to the Aztek and similar designs emerging at that time. The Cimarron was a transparent rebadge of a bare-bones Chevy Cavalier.

The Caprice, described as bloated and bathtub-shaped, flopped when the market shifted to smaller, fwd cars. And the pointy-nosed Lumina APV earned one of the industry's most entertaining car nicknames when consumers began calling it the "Dustbuster."

On the flip side, there was the Pontiac Fiero. Buyers loved the hot-looking two-seat roadster when it debuted in 1983, but the Fiero quickly proved too hot. Crippling quality problems — including an engine prone to catching fire — torpedoed the car.

The Fiero, Cimarron and Aztek are among the most memorable flops in GM's past 30 years. But they weren't the only misses.

During the 1980s and 1990s, GM's failures on styling and quality and in recognizing hot new segments sent the world's largest automaker into a market share tailspin from which it has not recovered. In short, GM lost touch with what car buyers wanted.

Japanese competitors Toyota and Honda snapped up much of that lost market share. GM executives had treated those challengers lightly, recalled former CFO F. Alan Smith.

"We looked up one day and said, 'These guys have eaten our lunch,' " said Smith, who retired in 1992. "They had good cars, good products, at a good price. They beat us the old-fashioned way, with true lower cost."

Downward spiral

GM's domestic brands peaked at 51.1 percent of the U.S. market in 1962. Even as its product lineup became less competitive, GM held on to 45 percent heading into the 1980s. That plunged to less than 30 percent by 1998 and to 23.5 percent in 2007 — GM's lowest share since 1925.

After once controlling half of the U.S. market, just how did GM's dominance collapse so absolutely? The reasons were many, former executives recounted:

-- An underestimation of the competition.

-- A rush to revamp the product lineup in the wake of higher fuel prices, leading to some bad decisions.

-- Pressure on the product budget because of profit downturns and outright losses.

-- Too many brands to feed.

-- Bland or weird styling and too many look-alike cars.

-- An inability to capitalize on strong new vehicle segments.

-- Poor quality that alienated customers.

-- The loss of strong product leaders in GM's divisions when the company reorganized.

Smith said the last point was a departure from GM history.

"We had a lot of Lutz-like thinking in those old car divisions," he said. He praised the product strides GM has made since Lutz rejoined the company as product chief in 2001.

Lutz himself puts it simply. GM executives lost sight of the most important criteria driving vehicle development.

"People want a beautiful car," he said. "They have to fall in love with it the first time they see it."

To Lutz, that means perfect sheet metal and gorgeous interiors with rich materials and great fit and finish — qualities that had been missing in many GM products.

Flubs and flops

"Hey, did GM make some product mistakes? Did I personally make some product mistakes? Absolutely," said former CFO Mike Losh, who retired in 2000. During his GM career, Losh headed both Pontiac and Oldsmobile.

He remembers a version of the Pontiac Grand Prix "that embarrasses me to this day." And a "bustle back" Cadillac from the early 1980s was "horrible."

There were many missed opportunities. GM was a wallflower at the start of the SUV party. The Jeep Cherokee and Ford Explorer outperformed early GM SUVs that were little more than pickups with a cap on the back.

Misreading the front-drive minivan might be the most striking missed opportunity.

But it didn't have to be. At one point in the planning stage of GM's X-body program (Chevrolet Citation, et al.), in the 1970s, a minivanlike model was in the mix, Losh said.

If GM hadn't scrapped the design, the company would have beaten Chrysler to market with the first fwd minivan, he said. GM's X-body cars went on sale in 1979, well before the Chrysler minivans showed up in 1983.

Since 1985, GM had trucklike rear-drive minivans, the Chevrolet Astro and GMC Safari. But by the time GM's first fwd minivans — the Dustbusters — arrived in late 1989, Chrysler commanded the minivan segment, and no GM entry ever gained traction.

GM had another opportunity to make a killing on an emerging segment. The 2001 Pontiac Aztek was one of the first crossovers, an SUV-like vehicle on a car platform. But instead of accolades and market share gains, the Aztek earned jeers.

Lynn Myers, then Pontiac's general manager, called the Aztek an attempt to break away from GM's risk-averse record.

"It was very controversial. It was risky," Myers said. "The bottom line is we took it too close to the edge, and maybe over the edge."

The problem, said then-GM design chief Wayne Cherry, came in transforming the well-regarded Aztek concept into a production model. Compromises made for cost or production reasons — smaller wheels, for instance — left the production Aztek "proportionally challenged."

The public — the only voice that counts — judged it a flop.

Broken system

When Lutz arrived a year after the Aztek's debut, he quickly deemed GM's product development system broken. Pressure to make internal timing targets or to reuse parts to save money resulted in compromised vehicles that sold poorly.

GM's poorly run consumer clinics produced unreliable feedback, Lutz said. And with a few exceptions, vehicle programs were run by marketing and engineering executives "who weren't car people."

Head designer Cherry "was essentially disenfranchised by the system," Lutz said. Consequently, a portfolio of upcoming products that Lutz reviewed with Cherry before officially starting work in September 2001 was "awful."

Lutz gave three examples: one that made it to the marketplace and two that didn't.

He killed a seven-passenger version of the Saturn Vue "that was absolutely grotesque." It was the result of a company edict that all crossovers and SUVs have three-row versions. The reason for that edict? The seven-passenger Dodge Durango had taken sales from the Chevy Blazer and "absolutely traumatized" GM executives.

Lutz also ordered a redesign of a coming Cadillac STS after being told the reason for the flat-roofed, slab-sided shape was that GM could save money by reusing the sunroof from the old model. Lutz ordered the team to borrow the smaller sunroof from the Cadillac CTS so designers could move the windshield back and give the roof a sleeker line.

But Lutz said he let himself be talked into approving the GMC Envoy XUV against his instinct. GM planners predicted the sliding-roof version of the SUV would sell tens of thousands more than the 13,000 heavily discounted units eventually sold, Lutz said.

Lutz had lot of ground to make up. After the product disasters of the 1980s and 1990s, GM needed someone to keep the vehicle teams focused on what consumers wanted.

Car executives can sometimes "mesmerize" themselves, said Chuck Jordan, a former GM design chief who retired in 1992.

"That bathtub Caprice, I loved it," Jordan said. "But we covered up the wheels and put them inboard, and people didn't go for it."

Sometimes it takes only simple changes to salvage such a program. By opening up the skirted rear wheel wells, using bigger tires and pushing them outboard and painting the car black, GM had a hit on its hands with the 1994 Chevy Impala SS.

While GM will be hard-pressed to regain much of the market share it lost during the past 30 years, the mistakes of that period can serve as lessons for today's executives.

The ghost of the Cavalier-based Cadillac Cimarron lives on as one such reminder. Current Cadillac product director John Howell has a picture of that rebadged Chevy on the wall of his office, within eyeshot of his computer monitor.

The caption? "Lest we forget." n

You can reach Amy Wilson at awilson@crain.com.