After long slide, Olds died in '04

The lesson: Brands that lose identity and don't stay fresh are living on borrowed time

The redesigned 1988 Cutlass Supreme was launched with what became a controversial tag line: "This is not your father's Oldsmobile." Neither generation was very impressed.
More than a thousand antique and nearly antique Oldsmobiles snaked through downtown Lansing, Mich. The parade marking Oldsmobile's 100th anniversary drew thousands of enthusiasts on that hot, sunny August day in 1997.

Rolling slowly down the street were Curved Dash models from the beginning of the last century, touring models and sedans from the 1920s and 1930s and the more familiar Ninety Eights, Starfires, F-85s, Toronados and Cutlass Supremes.

But nothing could hide the fact that Oldsmobile was in trouble. Sales for 1996 totaled just 331,287 vehicles, a far cry from the million-plus years of 1984, 1985 and 1986. Many of Oldsmobile's former buyers now drove Japanese imports.

Oldsmobile was still trying to shake off the effects of a 1992 Washington Post story that reported General Motors had been giving serious consideration that year to killing the brand. GM and Oldsmobile denied the story vigorously, but the seed of doubt had been planted in buyers' minds.

But that was just one issue that hurt the Oldsmobile brand.

"There were a lot of little elements. If you take a look at them and add them all up, it made the road back to success for Oldsmobile pretty difficult," said Gus Buenz, Oldsmobile's director of communications from 1987 until 2003.

A century of Oldsmobile
1897: Ransom Olds built his first car.
1908: Billy Durant bought Oldsmobile for GM.
1939: Olds was first with automatic transmission.

1966: Front-drive Toronado introduced.
1967: The first Cutlass Supreme went on sale.
1983-86: Annual sales topped 1 million.
2000: GM decided to kill Olds.
2004: The curtain fell.

A fateful day

Jan. 10, 1984, was a fateful day for Oldsmobile and GM's other vehicle divisions. Chairman Roger Smith announced a wide-ranging reorganization of GM's vehicle development process. In place of independent divisions, GM was reorganized into two vehicle development groups: Chevrolet, Pontiac and Canada, known as C-P-C; and Buick, Oldsmobile and Cadillac, known as B-O-C.

In January 1985, Bill Lane was named Oldsmobile general manager. Under Smith's reorganization, the job of general manager at Oldsmobile and the other vehicle divisions had little resemblance to the previous position. Lane and the other general managers were merely heading a marketing and sales organization.

"Oldsmobile had been so self-contained" before the GM reorganization, James Rucker, a former assistant controller, said in an interview for the book Setting the Pace: Oldsmobile's First 100 Years. "Oldsmobile built its reputation on being a complete car company — our engine, our body, our Oldsmobile. With B-O-C, Olds had to depend on (others) to engineer products, to make products."

The result was a cookie-cutter approach to vehicle development in order to reduce GM's costs. Additionally, Oldsmobile engineers wrestled with product teams that ignored their input.

"The corporation viewed us as sort of the conservative family car (so you) don't need to change anything. That was a misconception," said Ted Louckes, a former Oldsmobile chief engineer who was interviewed for Setting the Pace. "If you go back and look at studies that said we were going to have this problem, they were fulfilled because nobody reacted."

The ad that failed

In 1986, Oldsmobile sold 1,059,390 cars — vehicles essentially developed when Olds was a separate division. It had no trucks.

In 1991, Oldsmobile sold 458,124 vehicles — including the Bravada, essentially a rebadged GMC Jimmy, and the odd-looking Silhouette minivan, essentially a rebadged Chevrolet Lumina APV.

There were other missteps.

To introduce the redesigned, front-wheel-drive 1988 Cutlass Supreme coupe and shake up the brand's stogy image, Oldsmobile launched an ad campaign with the slogan, "This is not your father's Oldsmobile."

"They were trying to communicate that Olds was building a different kind of car," said Buenz. Instead, sales slid.

"It totally misread the loyalty of our buyers," Buenz said. "Oldsmobile had a very loyal customer base, obviously getting older, but very loyal. So that upset our customers."

Additionally, it is true that the fwd Cutlass Supreme "was a different type of Oldsmobile, but the rest of the product line was still your father's Oldsmobile," Buenz said. Sales dropped to 602,159 in 1989 from 715,270 the previous year.

Mike Losh replaced Lane as general manager in June 1989. Sales continued to slide, ending 1992 with 416,126. In April of that year, John Rock succeeded Losh as Oldsmobile general manager.

The Oldsmobile Intrigue debuted in 1997, sold well and then lost momentum after a 1998 strike.

The Centennial Plan

Six months after Rock arrived, a bomb fell. GM was wrestling with serious financial problems in 1992. The company denied reports that it would file for Chapter 11 reorganization. Speculation was escalating about whether Oldsmobile would be the casualty of a smaller GM, one of several measures to make the company profitable.

In October 1992, a GM insider told The Washington Post that the board of directors was reviewing a proposal to drop Oldsmobile. GM denied the story. But in the eyes of buyers, Oldsmobile now was damaged property.

Rock quickly responded to the story and tried to establish a sense of continuity and purpose to the Oldsmobile organization. He reassured employees and dealers that the brand was here to stay.

Next, Rock coordinated development of a new product and business plan that would reinvent Olds' image. It became known as the Centennial Plan, and it set a new course for Oldsmobile's products and business methods through 2005. Essentially, the plan included adopting much of Saturn's customer care and business practices.

The new model lineup targeted younger buyers who preferred Japanese imports. The change would be dramatic.

"The way they had (previously) positioned Olds, it was really almost Buick. Buick was almost Olds," said Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. Buyers cross-shopped the two brands.

The Aurora sedan was already in the pipeline, approved by Losh and scheduled for sale in 1994. It became the flagship. Rock approved a new fwd mid-sized car, the Intrigue, which would arrive in 1997. A smaller car, the fwd Alero, was approved to debut in 1998. A redesigned Bravada would arrive for the 2002 model year.

Strike snuffed Intrigue

In 1997, Darwin Clark replaced Rock as general manager. The Intrigue and Alero boosted Oldsmobile's overall sales to 329,742 in 1998, up 8.2 percent over 1997.

But just as Oldsmobile seemed to have momentum, one of those "little elements" that contributed to Oldsmobile's demise surfaced: a strike.

"We launched the Intrigue in the spring of 1997, and it was selling well," said Buenz. "But we had a 54-day strike in 1998, and that took the gas right out of it. It never recovered."

Oldsmobile expected to sell 100,000 Intrigues annually. It never happened.

Karen Francis became Oldsmobile's general manager in 1999. A 400,000-unit target was set. Oldsmobile expected to sell 140,000 Aleros in 1999. Neither happened.

Francis left Oldsmobile in early 2000, replaced by Debra Kelly-Ennis. Oldsmobile sales dropped 17.9 percent in 2000, the year the ax fell on the brand.

Olds ended the year with just 289,172 deliveries. That compared with 416,126 in 1992, when Rock announced the Oldsmobile Centennial Plan.

Dealers blamed GM management for Oldsmobile's failure. Management blamed dealers.

In a November 2000 Automotive News story, just a month before Oldsmobile's doom was announced, the ambitious Centennial Plan was summed up by Jim M'Lady, an Oldsmobile dealer in Crystal Lake, Ill. Despite the replacement of every car and a major effort to reinvent Olds' image, car buyers still thought of Oldsmobile as "an older person's car."

New ads? Never mind

On a night in December 2000, General Manager Kelly-Ennis, communications director Buenz and the Oldsmobile dealer council had just finished the final review of new advertising campaigns presented by Leo Burnett, Oldsmobile's ad agency, and McCann-Erickson Worldwide, which wanted the account.

"I went back to the office before I went home," Buenz said. "Debra came in the office, shut the door and told me" that GM was killing Oldsmobile. "She was very upset. It was a shot out of the blue."

The news was made public a week later. The 2004 model year would be Olds' last.

In a January 2001 interview, CEO Rick Wagoner admitted that he made the decision to ax Oldsmobile. Said Wagoner: "Coming off the strongest year the U.S industry has had and the fact that we couldn't make much money off that lineup led us to the view that it was probably a bridge too far. If we reallocated (Oldsmobile's) funds to stronger brands, would it be better for the enterprise? The answer was yes. "

Former GM executive Bill Lovejoy said dealers share the blame for the brand's demise. Lovejoy had been GM's group vice president of vehicle sales, service and marketing.

"Unfortunately, a number of Oldsmobile dealers paired up with some non-GM makes and were losing focus on the (Oldsmobile) channel," Lovejoy said in an April interview.

Said John Middlebrook, former GM vice president of global sales, service and marketing: "We did not have the capital to put a full product line in place for Oldsmobile and to keep the individual dealers really healthy. It was just something that had to go.

"We learned a lot from it," said Middlebrook, who was interviewed in April. "We learned how expensive it is to eliminate a brand and how difficult and gut-wrenching it is, and I think it helped us focus on what it takes to keep brands healthy and alive and got us to the place we are now in the U.S. at least."

0

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters