442much

I've heard this before

Olds64

Interesting. It really is too bad that GM got rid of Olds. I'm just glad Olds didn't have to suffer through the government bail-out GM needed.

rocketraider

A new breed of managers? Yeah, who thought you could make and market cars the same way you did toothpaste and dish detergent...

If it hadn't been so obvious what the General was doing to Oldsmobile, especially after the Division MADE them money which they had to spend on Cadillac to keep it from going under because of the mess they'd made with it, it could be forgiven. Never overlooked, but forgiven. All that mess from the 80s-90s should be textbook reading for MBA's on how NOT to operate a car or other heavy manufacturing company.

Trouble was, the damn MBA's are who created the mess. They will never learn from mistakes. They, along with their college instructors, should have been held financially and legally accountable for what they did to American manufacturing.

I'll stick with my old GM cars, but for a new vehicle, the hell with them. I'll buy a Ford.

jaunty75

Well, the "expert" who answered the question went on a lot longer than was necessary to answer the question. We don't know who the answerer is and what his connection is or was to GM or Oldsmobile, if any, or whether or not he was just a guy with an axe to grind. His is one opinion of what happened to Oldsmobile. It's not necessarily the facts.

oldzy

Can't recall where I found this pic (here perhaps)

jaunty75

This issue has been debated many times, here and lots of other places. Many things contributed to the death of Oldsmobile. Some were internal to GM, including bad decisions about marketing, product choice, design, and who knows what else. But some things were outside of GM's control. Their market share overall had been shrinking for many years. It's one thing to offer five main brands (Chevy, Pontiac, Olds, Buick, Cadillac) when you control 60% of the market, as GM did in the 1950s. It's another thing altogether to support that many brands when you control half that market share.

I think it is kind of weird the brands that GM ended up with. Chevy, Buick, Cadillac, and GMC. To my mind, Buick was always the "step below a Cadillac" division, with Olds below that, then Pontiac, and then Chevy. The only purpose GMC served was to give the non-Chevy brands trucks to sell since pretty much every Chevy truck model was matched by an identical GMC truck model to the point that BOTH used the name "Suburban" for their long-wheelbase SUV.

So I always thought it would have made more sense to keep Chevy, as the low-end, everyman brand, Olds as the mid-level brand, and Cadillac as the luxury brand. Instead, they kept the low-level brand and the two luxury brands.

wmachine

That's a common misconception of where the failure was. It may seem obvious, but that's not the case.
The failure was not in the multiple branding but bringing the multiple branding under one *direct* management. The successes were when they were independently (virtually) managed. The competition even among the divisions kept them sharp and continually advancing. This is what went away when the divisions were pulled together under the direct MBA management of GM. And they've been in disarray ever since the bean counters took over and decided on the consolidation.
Arguing about what should be consolidated is like putting the cows back in the barn without closing the door.

jaunty75

But even this is only partly true. After all, if this is what killed Olds, it should have killed Buick and Cadillac, too.

Buick, Olds, and Cadillac were brought under one management structure (the "BOC" group). If doing so was the cause of Oldsmobile's death, why didn't Buick and Cadillac also suffer from the same lack of competition amongst the various division managements and end up dying, too? Obviously there were other factors at work besides the single management structure that affected Olds but didn't affect the other two, or at least didn't affect them to a large-enough degree to kill them off.

wmachine

I didn't say that the consolidation killed them. That's absurd. I said it wasn't the lack of consolidation that killed them, it was the management *period* that caused the fall of GM. Its not like one division prospered while others failed. They *all* failed. There's nothing partly about that.

jaunty75

OK, now you're confusing even me.

This is what you said:

If "bringing the multiple brands under one direct management" isn't the same as "consolidation," then what the hell does it mean?


They all failed in a global sense if by this you mean GM needed bailing out last year. But certainly they didn't all fail to the same degree. Oldsmobile is gone. Buick and Cadillac are still here. Pontiac is gone. Chevrolet is still here. Whatever the events of the last 25 years, they affected these five GM brands differently.


There's no doubt that bad management contributed to Oldsmobile's demise. But that doesn't mean that the consolidation of brands that occurred back in the mid-80s when GM went to the combined brand marketing groups was THE bad management decision that did them in. As I said, Buick and Cadillac operated under this same management structure, and they survived. Either OTHER management decisions unique to Olds contributed OR Olds was in a weaker position to begin with than Buick and Cadillac at the time the new management structure was put in place.

jaunty75

I also read once that the decision at one point came down to "do we keep Oldsmobile" or "do we keep Buick." In one sense, Oldsmobile was a victim of its own past success. Oldsmobile was larger than Buick and therefore needed to sell more cars than Buick did to be profitable.

When Oldsmobile's sales fell from the million-car-per-year level of the late '70s and mid-'80s to the 300,000 level in the mid-90s, it was no longer profitable. Buick, which sold roughly the same number of cars, was, because its infrastructure (plant capacity, personnel, etc.) was smaller. So what was easier? Eliminate the profitable Buick and try to resurrect Oldsmobile, which was no sure thing? Or eliminate the unprofitable Oldsmobile and try to have Buick capture some of the market segment Oldsmobile would be vacating? When you look at it this way, the decision is obvious.

Everyone always derides the "bean counters." Well, if there weren't somebody somewhere in the company counting the beans, there wouldn't be a company to count them in.

wmachine

It means you're doing a textbook job of literally taking what I say out of context and that is the end of the discussion with me.

jaunty75

No need to get mad.

This discussion about the death of Oldsmobile has been had on this forum before, and you seem to have this peculiar notion that there is a single, easily defined, obvious-to-anyone-who-will-look reason why Oldsmobile died, and that you know what that answer is, and when you state it, that's the end of the discussion. No one, apparently, is allowed to have an opinion that differs from yours.

I'm sorry, but it doesn't work that way. You may know some things about decoding body cowl tags, but after that you're just another guy on here with an opinion. Welcome to the club.

People will be debating for the next 100 years what, exactly, happened in the latter part of the 20th century that caused the near death of the once mighty American automobile industry. It will be the subject of business school textbooks for many years. The end of Oldsmobile was just one small part of this entire, much larger story.

Some will argue, as you have, and it's a reasonable argument, that the change in GM's organizational structure and brand management in the mid-80s was the cause. But it can't be the only cause because other GM brands, which survived, were subject to that same organizational structure.

Others could argue that the seeds of Oldsmobile's and GM's downfall were sown earlier than that. Go back to the late '70s and early '80s and the onslaught of the imports, which at the time were largely ignored by the Big Three.

Or go back to the 1971 GM strike, which disrupted their 1971 and 1972 model year plans, and which I'm sure GM vowed would never be allowed to happen again. This meant a much more conciliatory approach to labor which resulted in overly generous contracts that couldn't be sustained as GM's market share fell.

Others would point to other reasons, such as failures on GM's part to recognize changes in the marketplace and the demographics of its customer base that were working against it.

We can debate this forever. That's part of the fun. There is no one answer.

Oldsguy

I'm kind of sad that Olds died off, for whatever reason, but I look at the silver lining. Now every Olds that any of us own will be just that little bit more rare because of it.

jensenracing77

it is hard to sell the same product with differant names and each brand show a big profit. like the Pontiac Montana, Olds Silhouette, and Chevy venture. they had little competition other than each brands history. the vehicle was the same basic thing with differant trim. i got a Silhouette because i wanted an oldsmobile emblem on it, had nothing to do with the fact that the Olds was better because it was the same as the other two.

rocketraider

Cadillac was hemorrhaging in the mid 80s after the Cimarron, V8-6-4, HT4100 et al. GM was not about to let their flagship go under and a vast majority of the money Oldsmobile made was being redirected to Cadillac to keep that from happening. It should have been put back into R&D for Oldsmobile, and had the Divisions been autonomous as they were in GM's glory years, it would have been. Of course, had the Divisions kept their autonomy, Cadillac would never have rushed those ideas into production as they did. They would have been proven faultless before ever being released to the public.

What tainted Oldsmobile in the Corporation's eyes was that after several years of million-plus sales, they retreated to their customary 300-500,000 annual sales, much as they had up till the Cutlass explosion in the mid 70s. They were profitable then, why not later? It wasn't profitability, it was that they were no longer meeting the Corporation's ambitious sales goals for the Division and the corporate managers were too damn stupid to realise that. So what did they do? They cut Oldsmobile R&D money even further. If you are not reinvesting in your product to continuously improve and innovate it, well, everyone sees what that got them.

I think they got what they had coming, and not only because of what they did to Oldsmobile Division.

Brand management indeed.

OLD SKL 69

From what I read, in GM press releases and from magazines like Motor Trend, is that GM decided that only the Cadillac division could compete on the world level as a top luxury brand. So that brand was not going to go under. Buick was saved because of that brand's success in China. It is revered over there as one of the top luxury brands.

I guess it left Olds as the odd division out, without a purpose in their eyes. I thought that their last offerings (Aurora, Intrigue, and Alero) were all very good cars and competed well in their respective classes.

And now, regardless of the multitude of reasons Olds went out of business, we've lost Pontiac too. Who's next?

jaunty75

I think the shedding of brands will stop now. The ditching of Pontiac and Mercury follow on the heels of the loss of Plymouth and Oldsmobile. Ford toyed with getting rid of Mercury a few years ago, so its final demise was probably inevitable. Pontiac was probably kept too long too, shrinking to just a few models by the end.

Saturn never turned a profit in its entire history, and I never understood why GM created it, or at least why GM ran it the way it did. The original plan for Saturn was that it would make ONLY small, entry-level cars. Dealers soon found that when their buyers were ready to trade up to a larger, more expensive car as their purchasing power increased, they (the dealers) had nothing to offer, so the buyers went to other brands. Why GM thought this kind of business model would work I don't know. Perhaps GM thought that those buyers would migrate to other GM brands, but that didn't necessarily happen, and even if it did, it wasn't of much help to Saturn dealers.

Eventually, GM did allow Saturn to make larger, more luxurious cars, but then it just became another GM division, at least in the eyes of the public.

Companies have shrunk to the size appropriate for the percentage of the market they have. Having all those brands made sense when the only choices were Ford, GM, or Chrysler. But now we have so many more choices that that business model became unsustainable.

Ford and Chrysler now each have an every-man brand and a luxury brand (although Chrysler is peeling off Dodge's trucks to create the "Ram" brand). GM has an everyman brand and TWO luxury brands. It also has a seemingly unnecessary second truck brand, but apparently GMC is profitable. Also, having the separate truck division gives Cadillac and Buick dealers a line of trucks to sell along with their luxury cars.

I think that, if another brand is to disappear, it could be Buick, but as you've noted, Buick is very popular elsewhere in the world, and that could keep it alive.

wmachine

Right, but bear in mind that you are talking about the "later version" of GM after the divisions essentially lost their relative independence.
It was not like that before. There is a *huge* and very pivotal difference. We somehow want to forget that *with competition* GM grew that way! The significance of this is apparently lost on the casual observer.

hialeah56

What I don't get is why did they cut not only Olds but the b-bodies,and f-bodies? The b-body 9C1 was a guaranteed sell to law enforcement, the Impala was way better off as a b-body compared to the malibu we know have(could you imagine a LS1 big body Impala from factory). F-bodies being cut was giving away sales to ford(just look at how many Mustangs you see on the road). It seems like they're afraid of sucess, Pontiac just started doing good with their GTO they cut it, their G8 was the talk of the town, they cut it.

Olds64

Here is a perfect example of GM's lameness!

http://news.yahoo.com/s/nm/20100916/bs_nm/us_gm

I'm just glad Oldsmobile didn't have to experience this.

jensenracing77

i'm not good with words but that is what i mean by the fact that i got a silhouette over the others. it was because of Oldsmobile's history of when they were more of there own company that made me want there name on it. i think when GM made 3 brands with the same van it just did not make since and was a bad idea. at that point it would make sense to get rid of two brands and just go with one. (because of the lack of competition)

Ford and GM would never have teamed up to make one van with different trim for Ford and differant trim for GM. so in my opinion why would they think it would work for the differant brands of GM.

rocketraider

For the same reason detergent and toothpaste companies think you'll buy the same product under a different name with a different perfume or flavoring. E.G., why does anyone need five or more varieties of Crest or Colgate toothpaste? or five or more different scents of Downy fabric softener? Take the perfume or flavoring away and you have the same basic product. Hey, it works for household products, it'll work for cars!


Yah right.

jaunty75

Yah right is right.

The idea of multiple brand marketing by the same company goes back a long ways and works very well. It even used to work for GM, although GM's actual approach was to have a "hierarchy" of models, so that, as a buyer increased his station in life from bank teller to loan manager to branch manager to bank vice-president to bank president, he could go from Chevy to Pontiac to Olds to Buick to Cadillac, always staying with the SAME company. It was a very successful marketing strategy copied by the other major manufacturers, and it served GM well for most of its history.

Getting back to consumer goods, consumers like the idea that they have a choice, even though underneath, the choice might not be much of one. Procter and Gamble makes 2 kinds of baby diapers, and 3 or 4 kinds of laundry detergent, dishwasher detergent, bath soap, toothpaste, shampoo, the list goes on. They have a much larger share of any of these markets with multiple brands than they ever would with just one.

rocketraider

The difference when GM adhered to the Sloan Hierarchy was that the five Divisions were pretty much autonomous, sharing little besides basic Fisher body structures and glass. Each Division had its own Engineering, Sales and Marketing, and R&D staffs. Sure, there were plants like Linden, Arlington and Southgate that built all Divisions' except Cadillac products, but they had to keep things separated so that a Buick wouldn't go out the door with a Chevy engine or transmission in it. Not saying that didn't happen...

After GM abandoned Mr. Sloan's eminently successful idea, they started badge engineering the same cars with exactly the same equipment under different names, and there was certainly not enough difference in a Cavalier and a Cimarron to justify the Cimarron being called a Cadillac. It was anything but a Cadillac, even though it wore the ducks crest. Presenting garbage like that finally caught up with GM.

At least when Ford and Chrysler did it, they upfronted that the cars were essentially identical and products of Ford Motor Company or Chrysler Corporation. GM had been essentially five different car companies for so long that people soon saw thru the ruse and realised that the Caddy or Buick they were buying was nothing but a Chevrolet in drag and could be bought cheaper down the street at the Chevy store.

They did it to themselves.

And today I read that the UAW is already planning to try to regain concessions that were made when the Fed bailed out GM. Talk about biting the hand that feeds.

toro68

You are so right!
Heck back in the 1980s Oldsmobile fans were buying Fords for their daliy drivers, over 20 years ago. I have been very happy with my 1995 F-150 4x4 (until late 2008 when it would not take a sticker, thanks to Maine Tinworms (RUST)).
From what I read in "Musclecar Confidental", by Joe Oldham, the former Presdient of AMC was his own worst enemy.
In 1971 Mr Oldham slamms "then new" 1971 AMC Javiln AMX because of poor qulity (loose grille, right rear wheel comes off). Mr Oldham gets holy Hell from the presdient of AMC. In the 1980s AMC is gone and the former AMC presdient is now teaching buiness, in Michigan.
In March of 1995, the axle broke, in my 1983 AMC Eagle wagon, while I was travleing 55 miles per hour , in Gorham ,Maine, and folks wonder why I dislike AMC products!

toro68

Some people never learn!

toro68

Matter of fact I'll be getting a 1999 Esort Zx2 as my new daliy driver.
Backin 2007-08 I really wanted to keep my very clean , green 1995 Aurora, but is was going to cost $4000 (or better) to get it back on the road. Too many tranny and eletical issues.

toro68

A very good friend of mine worked for Oldsmobiles for 32 years in the Fisher Body Plant. He told me the beinning of the end started in 1985.

Diego

Has the market stayed the same the whole time?

So why should we only blame GM's quasi-Proctor and Gamble methods? It remains to be seen whether GM could sustain so many brands in a changing market. My money's on them having to cut off a limb or two anyway.

On another note, I really don't get the hatred for GM or Chrysler today. Buy what you want and what suits your needs. When you get a bad meal, do you blame the waiter or the cook?

rocketraider

Rosenberg, do you understand the concept of lopsided free trade agreements? As in the US government allows manufactured goods from other countries to be sold here with few if any tariffs or regulations. US-made goods are heavily taxed in those countries we supposedly have free trade agreements with. Offshore manufacturers are allowed to set up plants here and avoid even more import tax/tariff/duty, as well as enjoy tax breaks and perks American manufacturers cannot hope to be given. That is why the market changed drastically when foreign vehicle manufacturers were allowed to flood the market.

Was American manufacturing prepared for it? Obviously not. Was GM prepared for it? Hell no. And in their typical lumbering top-heavy fashion, their knee-jerk reaction came too late to do any good.

Diego

Oh, that's right - let's blame the government for this one.

Of course, those tariffs from the 1970s did no good when they decided to build plants in the US, right?

rocketraider

Believe it or not, the United States government, in its never ending quest for equality for all (except for its own citizens of course) has done as much as anyone to destroy the American manufacturing base. Service economy? Of course. The elites WANT the rest of us to be servants and subservient, and dependent on their whims and dog treats. Liberal or conservative, they're all the same.

Everyone is equal. Just some are more equal than others.

What I can't understand about you is that you're obviously educated and intelligent, but you can't/won't see past the liberal pabulum you've been fed. Not that the right-wingers and their crap are any better, but when government power was more limited and there wasn't a giveaway program paid for by the regular working guy for everything, the country operated better.

Let me guess- you can't wait for E15 to be mandated either. I may have to permanently retire my old cars if that comes to pass; E10 is bad enough on them. But I imagine that's part of the plan too, to force anything that can't run on it off the roads- in the name of the environment and the children of course. In the long term, I think ethanol fuels will be proven to be as harmful as everything else environmental destruction has been blamed on.

Diego

Mr. Rocketraider, are you always so presumptuous?

It's better to look at GM's problems through objective eyes rather than agenda-driven subjectivity.

toro68

Dr Oldsmobile (new to this form) can weigh on this subject.
he worked form Oldsmobile for 32 years

toro68

I second that!

442much

I can't see GM doing an "Oldsmobile Classic" offering. However a "Diet Oldsmobile" may not be that far-fetched.

jaunty75

Very interesting analysis. Thank you.

Two comments:

1. I don't think the engine swapping episode, which occurred for the first time and which got all the fanfare in 1977, had much to do with Olds's demise. Olds still sold over a million cars per year in several of those late '70s years, and then went on to sell record numbers of cars for several years during the mid-80s as well and which was after the diesel engine fiasco, too. So neither of these embarrassing episodes was enough to do them in.

2. I don't think the "price first" mentality contributed to Olds's end. I think it's the other way around. Once buyers realized that the GM brands were all the same under the hood and thus that there was no reason to pay more for the higher-priced marque if you were just going to get a Chevy with the Oldsmobile (or Cadillac) name on it, they moved to more of a price-first approach to buying. Give me a reason to pay more for an Oldsmobile, and I'll do it. If I don't see a reason to pay more, I won't.

wmachine

Of course it was not "a" particular thing that did them in, it was cumulative. I don't think we can point to any one event and say that was the beginning. There are negative things that happen to all the automakers at times. So to pick one and say that was the beginning is more speculative than anything else. But to say that the engine swap was *not* a factor is ignoring the cumulative effect that the negative influences have. It is impossible to say the say the sales figures, no matter how good, were not affected in subsequent years from just that one incident. But adding more problems downstream is where the real impact is anyway.

Seems to me your last statement totally disproves your first one.

442much

Kurt, I think toro68 is quoted here. In 1985 Oldsmobile set their all time selling record.