- The Washington Times - Sunday, December 31, 2000

The announcement that General Motors would be euthanizing the venerable Oldsmobile brand after some 103 years of continuous production and slashing its European work force by 10 percent may be akin to last-minute attempts to change the course of the ill-fated Titanic before it kissed the iceberg.

Further, increasingly necessary upheavals at America's largest automaker may be on the way far beyond the relatively small-potatoes closure of a single Vauxhall passenger car plant in Luton, England and the loss of some 2,500 jobs there. It will be an object lesson in free market economics and the pressures that act on even leviathans such as General Motors.

GM President Rick Wagoner said that the automaker will shortly be implementing additional plans to "lean operations" across its troubled European facilities, which have suffered lately as the European car market in general has declined. GM Europe lost $181 million in the third quarter of this year, according to Automotive News, an industry trade publication. GM market share, meanwhile, has declined steadily since 1990, by more than 7 percent overall. Fourth quarter profits were down to about $1.10-$1.20 per share from $1.70 prior to Mr. Wagoner's announcement.

Today, GM's seven divisions combined command a paltry 25.9 percent of the North American market (as of November) and Oldsmobile sales have dwindled to an alarming 262,759 units, or less than 2 percent of the U.S. market. Hyundai sells more cars than Oldsmobile today.

U.S. dealer lots are glutted with unsold vehicles that while not poorly built or engineered, seem to have little appeal to customers, who have abandoned the marquee for more coherently presented imports, or even other GM models.

Mr. Wagoner's decision to pull the plug on Oldsmobile thus surprised no one. What is surprising is that it took this long when it's been clear to everyone but the GM management team that major structural changes have been needed for a decade or more.

GM stock is down almost 35 percent from its spring high. The automaker has at least two other divisions (GMC and Saturn) that could be and arguably should be restructured or even eliminated. Cadillac's forthcoming, Evoq-based model lineup is sufficiently over-the-top aesthetically that it will either be a big hit or an ugly crash.

Oldsmobile may be history. But history might repeat itself at other GM divisions before too very long. "Bigness" is no grant of immunity from competition or the vagaries of the market.

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