- The Washington Times - Friday, March 2, 2001

Oldsmobile is going out of business and the fire sale has commenced.

The Dec. 12 announcement that General Motors would pull the plug on Oldsmobile its oldest division and the nation's oldest car company was sad news, especially for people who work for Oldsmobile and who sell Oldsmobiles.

There is a silver lining for savvy car shoppers looking for a good deal, however. Consumers will find great buys in Oldsmobile's inventory liquidation. Oldsmobile plans to shift all of its marketing dollars into clear-out promotions, which translates into hefty incentives, some of which amount to a few thousand dollars, for consumers.

In addition to any rebates offered, Oldsmobile owners receive an extra $1,500 discount on another Oldsmobile or $1,000 toward any GM vehicle. GM has also lengthened the warranty on Oldsmobile products from the typical three years/36,000 miles to four years/50,000 miles. When the local Oldsmobile dealer from whom the consumer buys the vehicle goes out of business, other GM dealers can perform warranty and service work on the Oldsmobile. New Oldsmobile buyers and current owners, however, should be wary, since the value of their vehicle will be low when they trade it in or sell it. It's best to buy the Olds and drive it until it falls apart.

GM executives say Oldsmobile will be phased out over the next three to five years. Indeed, it will probably take that long to negotiate buyout deals with its 2,800 Oldsmobile dealers. However, some dealers say they will close the doors within the next year to 18 months.

GM's decision to shut down Oldsmobile was hotly debated and, by all accounts, gut-wrenching. GM executives argue the automaker has too many brands, too much overlapping product and not enough engineering and marketing resources to support them all. GM's CEO Rick Wagoner said he takes full responsibility for the "tough call," made in December as GM faced investment in a number of new vehicles, including some proposed by Oldsmobile.

What happened? In the 1980s, Oldsmobile racked up sales of more than 1 million vehicles for three consecutive years until sales plummeted. Last year, Olds sold about a quarter of that.

Oldsmobile was on a roll while other GM divisions struggled and were forced to redefine themselves. By the time Oldsmobile sorted out its direction, GM's other divisions, including Saturn, had staked out their turf. Oldsmobile was assigned the tall order of seeking buyers leaning toward imports, like the Honda Accord and Toyota Camry.

Along the way, Oldsmobile made missteps. It confused buyers by slapping the formerly magical Cutlass name on seemingly everything. It struggled to come up with a winning entry-level model. It lacked critical truck-type vehicles. It eliminated all of its familiar names Cutlass, Eighty Eight, Ninety Eight. Oldsmobile dealers say the elimination of those models, as well as dropping bench seats from its models, pushed loyal buyers out of their cars and into the seats of Buicks. Familiar Oldsmobile names were replaced with unfamiliar, unusual ones Aurora, Intrigue and Alero. Buyers of the earlier Olds models headed to Buick to be replaced by too few of the new, younger buyers Olds sought.

Late in the game, Olds added a much-needed Silhouette minivan and the Bravada sport utility, redesigned for introduction this spring. Olds revamped its entire car line starting with the Aurora, whose second generation debuted last spring. In the end, Oldsmobile wound up with the best line of vehicles that it had ever had, and arguably the best in GM.

But no one knew it. Though GM executives say they put up a gallant effort, the automaker failed to pump adequate marketing dollars into alerting the public to Oldsmobile's shifting gears and making current Oldsmobile nameplates as familiar as Cutlass. Olds and its ad agency fell flat in creating advertising that captured buyers' attention and delivered a clear message of what Oldsmobile was. The misguided "this is not your father's Oldsmobile" campaign though started a dozen years ago haunts Oldsmobile even today.

Oldsmobile was moving in the right direction in terms of attracting buyers. In recent years, the average age of Oldsmobile buyers dropped to 49 years old from 61 only a few years ago, while the percentage of college-educated, higher-income, female and minority buyers increased. A quarter of its buyers were under age 35, an elusive audience for most automakers.

But in the end there were too few buyers, say GM executives, who insist their decision is final. They say they will eliminate Oldsmobile with a clear conscience. They gave it their best shot. As the fire sale ensues, GM will reallocate money that would have been spent on Oldsmobile and some of Oldsmobile's products to its other divisions.

MOTOR MATTERS

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