General Motors' Branding Fiasco Part Four – Oldsmobile Pegs Out

Paul Niedermeyer
by Paul Niedermeyer

Of all of GM’s domestic brands, Oldsmobile most accurately represents everything that went wrong with GM’s divisional structure. Historically the most innovative GM division, its twilight years were spent pathetically proclaiming “This is not your father’s Oldsmobile.” Olds rode a roller-coaster in the sales charts, hitting glorious peaks before its final, fatal free-fall. But the tragedy of Olds is that it could have been the instrument of GM’s redemption.

Ransom E. Olds founded his eponymous automobile company in 1897. In 1901, the Curved Dash Oldsmobile was the world’s first mass-produced automobile. Although expensive in absolute terms, it was the lowest priced machine of its day.

But Olds wasn’t Ford. By the time GM bought Olds in 1908, the brand had moved upmarket. Two years later, Oldsmobile unveiled The Limited, a stunning but expensive ($4600) achievement.

When a Limited won a famous race with the Twentieth Century Limited locomotive, Oldsmobile found its marketing niche. From then on, glamour, power and speed defined Oldsmobile’s appeal.

As part of his brand ladder strategy, GM boss Alfred Sloan knocked Olds down a couple of pegs, placing it right between Pontiac and big brother Buick. While Chevrolet and Ford fought for supremacy at the bottom of the market, GM’s Buick, Olds and Pontiac (BOP) line-up proved a formidable formula. It gave The General a seemingly unassailable stranglehold on America’s automotive mid-market.

When GM’s price structure began to compress in the forties and fifties, Olds embarked on a course of safe, predictable and increasingly boring GM fluff. Although the brand earned its keep with several popular products (e.g. the Rocket-powered 88), as the middle child, Oldsmobile felt the pricing squeeze most acutely.

It wasn’t long before Oldsmobile fielded essentially identical line-ups with both Pontiac and Buick. Style became one of the few distinguishing factors. Olds faired relatively poorly in GM’s inter-divisional beauty contests; the ’58 models are particularly loathsome examples of garish Detroit baroque.

As Pontiac and Buick expanded into Olds’ once happy hunting grounds, the division struggled to make a living in brand limbo. Oldsmobile had to find something substantive to sell, independent of pricing and fashion.

Technical innovation was the answer. Building on a reputation for mechanical creativity– sealed with the Hydramatic Drive of 1940– Oldsmobile became GM’s “experimental division.”

The Rocket V8 of 1949 was a perfect example; it was the first popularly-priced high-compression V8. The engine turned the light-weight Oldsmobile 88 into the first modern performance car, and ushered in the horsepower race. Olds went on to pioneer front wheel-drive (Toronado, 1966), turbo-charging (Turbo Jetfire, 1962) and air bags (1974).

In the ‘70’s, Oldsmobile finally hit its stride. The success of the Cutlass helped Olds leapfrog Pontiac and Plymouth to become America’s third most popular automotive brand.

In 1977, Oldsmobile ran afoul of GM’s increasing predilection for parts sharing. A shortage of Rocket V8’s led to the substitution of Chevy engines instead— on the down low. GM’s response to the uproar was to add the label “GM cars are equipped with engines produced by various GM divisions”. It was another milestone in the terminal decline of divisional brand identity.

With GM’s BOP price strategy in tatters, with the last vestiges of inter-brand mechanical differentiation cast aside, with Oldsmobile dealers demanding (and receiving) badge engineered copies of the genre of the moment (minivan, SUV, compact, etc.), Oldsmobile was on autopilot to oblivion.

In the mid-late eighties, Olds crashed and burned, as America’s mid-market tastes shifted towards imports. The inadequately-developed Olds diesel V8 spewed more fuel on the flames of GM’s quality woes. Between 1985 and 1990, Oldsmobile sales plummeted by 60 percent.

In 1985, GM desperately needed innovative design, engineering, production, quality control and customer service. Oldsmobile coulda/shoulda been the home of plastic panels, or hybrid propulsion, or flexible manufacturing, or any number of potentially liberating technologies.

Instead, GM Chairman Roger Smith spent billions creating an entirely new domestic brand: Saturn. The upstart start-up replaced Oldsmobile as GM’s innovative, experimental division, effectively sealing Olds’ fate.

On April 29, 2004, GM produced its last Oldsmobile: a cherry-red Alero GL. While the model has its defenders, the badge-engineered Pontiac Grand Am was still an ignominious end for a 110-year-old brand, whose powerful and charismatic eight cylinder engine inspired the world’s first rock and roll song.

Oldsmobile’s death taught GM an important lesson: it couldn’t afford to shutter its other moribund divisions, restore order to its brand portfolio and rationalize its business. Strict state-enforced automobile dealer franchise laws punished GM for pulling the plug– to the tune of over a billion dollars. Olds’ death also demonstrated that shuttering one amorphous GM division does nothing whatsoever to help the remaining brand’s sales.

And now Saturn is in the same boat as Olds was during the eighties: competing with its corporate siblings with platform-engineered cars and fighting for limited development and marketing dollars. What’s so innovative about that?

Paul Niedermeyer
Paul Niedermeyer

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  • 98Regency 98Regency on Apr 21, 2009

    No brand is safe now and GM is indeed is in a mess. All the brands are damaged. Right now a car(CTS) truck and and suv are holding up Cadillac. It should not be this way. All of them lost sight of what their mission was in GM. You cannot have multiple platforms which cost you money and give every car to every division. That is competing against yourself. GM did not get in this mess overnight. This was 20 plus years of bad management, poor marketing, poor decisions and GM being insulated and isolated. It is also due to GM feeling since they were big and powerful, they could dictate to the public what we should buy. This is not so as they have found out. With that out of the way, I could name many things that went wrong besides poor interiors and styling, this is the GM I would think would work in todays market. Using what has happened, I will set GM up to that specification. I will use the GM of the 1960's and past successful days as a model when the brands were semi independent and had fewer models. They made more with less. GM must globalize. There must be platform sharing across the world. Chevrolet will not get every car and every platform. Let me make that clear up front. It does not matter what they are doing at GM Middle East or at Holden. Buick will do a complete 360 in image. It will be a risky gamble. Oldsmobile will return. Pontiac will live with fewer models. This new GM will cover every segment of the market and this GM will reach the different types of buyers with fewer models. This GM will have: A beginning entry level mainstream" American" brand: Chevrolet A perfomance brand with an emphasis on affordable performance: Pontiac A "American" styled brand with an emphasis on technology and "American" styled luxury" Oldsmobile A entry to midlevel import fighter luxury brand: Buick A full on ultra luxury brand: Cadillac A luxury/ commercial truck brand: GMC The dealerships will be interchangable. There will be no stand alone Oldsmobile, Buick, Pontiac or GMC dealers. They will be housed at Chevrolet or next to a Cadillac showroom or together. No dealerships will be added. The metro areas will have fewer dealerships. Some will be consolidated. The rural dealerships will have the brands housed in the same dealer. This automatically cuts down on the number of dealers. The platforms will be Epsilon( fwd) Alpha/Zeta( rwd) trucks Lambda( fwd and awd) Theta Delta Each platform can be lengthened, stretched, shortened or modified to ride according to market segment tastes. Each division will be marketed as they were in the past as a company owned by GM until the GM name can be rebuilt from its tarnished image. The Saturn approach will be used here. The dealership agreements will not be set up like Saturn. In order to get or maintain a GM franchise, certain criteria must be met. On to the divisions: Chevrolet: Mainstream and affordable entry level cars. The sports cars lead into Pontiac. Malibu( fwd sedan) Impala( fwd) ( large sedan)( no bench seat) Cruze Equinox Volt Beat/Spark Aveo(total overall make over) Silverado Tahoe Suburban Zafira Corvette Camaro Traverse Some of Saturn's models will end up at Chevrolet. The Chervolet dealers and everyone involved will be reeducated to a higher standard. No more thinking we are a bottom feeder and sell cheap cars. The dealerships must be given the same respect as a Buick dealer with less on the inside. Pontiac: Bonneville: rwd upper/premium midsized( will fill all the mission of all the old B and H bodies) Firebird/Trans Am: More features and options that Camaro and different styling. Grand Prix: rwd midsized coupe. Think BMW 6 Series and the old Grand Prix from the 1960's and 1970's. A GTO trim level can be spun off Grand Prix. No bench seats or cheap interiors. The beginning of the use of higher materials. Think of it as a cheap BMW like Bob Lutz said. If you cannot afford a performance Cadillac, this is the way to go. Oldsmobile: 98: rwd or fwd. Will fill the mission of all the old C Bodies( 98, Deville, Park Avenue) with a contemporary twist. GM's only traditional fullsized luxury sedan. Toronado: fullsized personal luxury coupe. Exactly what it was in 1966 and 1992. Cutlass/Ciera: The front wheel drive coupe. The only GM convertible other than sports cars will be here. Toronado and Cutlass will offer bucket seats as an option. If you make Cutlass rwd, it would be GM's only midsized rear drive mainstream sedan. If you make it fwd or rwd, it would be GM's only midsized coupe. A Custom Cruiser wagon is a possibility as well derived from Holden. This brand will be the only GM brand with bench seats and the use of the next level of higher grade materials and features. This division is GM's test bed for new technologies. It will be the one with the "traditional" American things like digital gauges and bench seats and velour fabrics and more. They will soak up the Lincoln Town Car buyers and Grand Marquis buyers as Ford is leaving the segment. They will also take Chrysler 300 and Toyota Avalon buyers as well. Toronado and 98 will share instrumentation panels like they did in the 1970's. I will not make the assumption Buick and hard line traditional Cadillac buyers will flock to Oldsmobile. Buick: Entry to midlevel import fighter. Returning to its roots as the up scale professionals car. Buick China will influence not dictate the American Buick. Insignia/Regal: Lexus ES fighter/Acura TL LaCrosse: As big as a Buick will get at a 197 inches. Acura RL Infiniti G35 clientele Saturn VUE/Opel Antara: Becomes Buick Rendevous. Loaded. Lead in to Enclave Holden Calais: A loaded rwd Buick aimed at the Lexus GS and Infiniti M Class. Astra: Entry level Buick for the budget conscious luxury buyer. No Buicks will have bench seats, be over a 197 inches, have less content, or come in multiple trim levels. They will come loaded with options that can be added. The tag line: Isn't it time you consider "Buick" Cadillac: Ultra Luxury Brand. No excuses, no cuts, all out standard of the world luxury FTS: Rolls Royce Bentley Fighter at a cheaper price DTS: BMW 7 Series and Mercedes S Class and Audi A8 fighter CTS: BMW 5 Series and Mercedes E Class fighter STS/ETC: two and four door ultra luxury cars. Low volume. Think the big coupe at Mercedes and the four passenger Chinese SLS BTS: BMW 3 Series fighter SRX: Cadillacs crossover. Escalade: Range Rover and other upper crust SUV's. Converj: the luxury Volt The CTS will have variations: coupe, sedan, and wagon. GMC: Luxury truck brand and commercial trucks. They will have to be brought up to a notch below Buick in terms of luxury and way ahead Chevrolet. Can be sold any any dealer except Chevrolet. The way it is set up now: fewer cars Chevrolet leads into Oldsmobile Pontiac leads into Cadillac: performance Buick: aimed directly at the heart of the luxury car market and connects with GMC. You have every segment covered by a fewer cars. Oldsmobile and Chevrolet will play up the "American" brand angle. Pontiac will play up the " stylish affordable" performance. Buick as I stated is: " Isn't It Time You Considered Buick". The Buick emblem will float with a black back ground. It will compare itself to the imports and leave many asking: "Was that a Buick?" Cadillac will go back to Cadillac Style that it used before but emphasis will be on the new definition of luxury. The end result is GM as Ford is Ford, Lincoln, Mercury and Toyota is Scion, Toyota and Lexus. It will be like when you go to the supermarket and you know Kellogg's cereal brands You know each Kellogg's cereal caters to a certain segment. There are variations on that brand. You know General Mills also has different cereal brands too. They compete against Kellogg's. The brands inside the company complement each other.

  • AllThumbs AllThumbs on Oct 30, 2013

    As an aside, I remember the Chevy-engine-in-Cutlasses debacle of the late 70s. I worked in a full-service gas station then (I was in high school), and checking the oil for a customer one day I noticed that the engine in her new Cutlass was wrong. I can't remember if it was the color it was painted, dipstick location, or what, but it was clearly not the normal Cutlass engine; in fact, it looked like it was a Chevy 350. I told the woman driving the car that it looked like she had a Chevy engine in her Cutlass. She didn't seem to care. I mentioned it to the other guys and we started noticing more and more (keep in mind that at that time-- at least in my part of Texas-- the Cutlass was probably the best-selling new car, so we saw a lot of them) and telling the drivers. Most were pretty annoyed. Some were very annoyed and told us later how they had complained to the dealership or whatever they had done. (We were a small town station with regular customers who were practically family-- leaving their credit cards with us so that all the family's vehicles could fill up, etc, so we were on intimate terms with many families' cars.) I moved on to college and didn't follow the story. And hadn't even thought of it until I read this fine article. In any case, I'm sure this extended episode didn't help Olds.

  • Akear Toyota wins once again, while GM has egg on its face.
  • Slavuta Why America needs school buses altogether? When I was in school, I rode on a regular city bus
  • Jeff Buy whatever works for you if you own an EV and are happy with it good, if you buy a hybrid or plug in hybrid and it works for you good, if neither and you like your ICE the way it is that is also good. I believe over time EVs will get better and have a larger segment of the market.
  • Tassos Jong-iL Is New Jersey better than Old Jersey?
  • Tassos Jong-iL Looking forward to buying 2 of these with all of those Rubles we have been earning lately.
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