Does anyone miss Oldsmobile? Not what Oldsmobile was in its
heyday — but what it had become by the mid-late 1990s just before
GM pulled the plug?
Probably not.
Same goes for Plymouth.
Like Olds, it had a great history. Once upon a time, Plymouth
had been a great brand defined by an exciting lineup of standout
cars. But Plymouth faded into badge-engineered irrelevance —
re-selling the same basic cars sold under the Chrysler and Dodge
nameplates. Just like Olds. And just as irrelevant.
The same could be said today for Ford’s Mercury division — to
say nothing of several of GM’s divisions, whose continued existence
makes ever less sense for an automaker whose share of the pie has
dwindled from a high approaching nearly 60 percent of all vehicles
sold in North America circa 1979 to around 24 percent today.
GM keeps Buick and Pontiac mainly because it has no choice — or
faces choices as unappealing as ditching the brands themselves. It
has the unions, of course — and they seem determined to kick
themselves in the nether regions rather than do what’s in the
long-term interests of anyone who hopes to work for GM in the
future. As adamant as the president in his refusal to admit there
might be trouble with the “mission” in Iraq, union leaders refuse
to give GM any breathing room at all — which may just leave GM on
the floor not breathing at all. But they don’t seem to care about
that.
And then there are GM’s dealers. These are independent franchise
owners — not directly under GM’s control. So the company can’t
just close up unproductive dealerships (or limit the number of
dealers in a given geographic area, as Toyota does). And it is
legally bound to provide “product” (vehicles) even if those
vehicles aren’t selling well. If that sounds odd, bear in mind that
many dealers (perhaps most) don’t make the big bucks selling cars.
They make them servicing cars. So there’s not much incentive for a
dealer to close up shop — even if he is selling a brand that has
become an also-ran.
This leaves GM in the position of having to dig deep and make
generous buy-out offers (as it did with Olds). The money involved
is enormous. GM can’t afford to do it — but it can’t afford to
keep on pouring money into unproductive, duplicative brands,
either. Toyota is almost as big as GM in terms of worldwide sales
(and awash in cash while GM is awash in red ink) and it does this
with half the brands GM has (Toyota, Lexus and the new Scion small
car spin-off vs. GM’s six full-line divisions). Not one of the
major Japanese nameplates has more than three divisions, in fact.
Most have just two. A “standard” brand (Honda, Nissan, etc.) and a
“prestige” line (Acura, Infiniti).
That’s all — and it’s probably just enough.
GM’s in a bind — trying to eke profitability out of a structure
that’s too diffuse for the market it has — while Ford is dead in
the water and seems to have no clue what to do about Mercury, let
alone its struggling Lincoln luxury division. Bill Ford fled the
scene, abjectly conceding he was in way over his head. The “Way
Forward” appears to be a blind alley with a bricked-up wall at its
terminus. The company is riding on the fumes of its retro-themed
Mustang — one of the very few bright spots in an otherwise dismal
product portfolio. GM, at least, has managed to resuscitate its
Cadillac arm — but the union/over-capacity issues loom large,
waiting to crash over GM’s Renaissance Center HQ like a
mega-tsunami.
Of the “Big Three,” it is Chrysler — now an arm of German firm
Daimler AG — that seems most seaworthy now.
Could it be that DaimlerChrysler has trimmed down to just
Chrysler and Dodge? No one seems to miss Plymouth — and Chrysler
doesn’t appear to have lost anything for having bid the brand
adieu. There’s a “standard” line (Dodge) and a “prestige” line
(Chrysler) and that seems to be just about right.
The fast food industry may be the best example of how this works
— and why. Everyone knows the menu at McDonald’s. Taco Bell, too.
These joints focus hard on their core product — and try to avoid
being all things to all people. (Yes, there are now salads and so
on at McDonald’s, but this is a sop to political correctness and
the food police. People go to McDonald’s for burgers and fries and
shakes. Providing these staples of the American diet with amazing
efficiency and consistency is what McDonald’s and the fast food
industry in general have honed into an art form). The most
successful imports hew to the same philosophy — and that coherence
(along with good value and pleasing the customer) has made them
into the juggernauts they have become.
There are lots of very smart people at both GM and Ford who know
all this stuff — but their hands are tied by institutional
barriers, legal/contractual ukase and the same sort of lethal
inertia that kept the Titanic speeding toward the iceberg even
after the ship’s helm ordered hard to port. By then, of course, it
was already too late.
Not many of us miss Olds. Or Plymouth. At least, not what they
had become in their final decade. Ten years from now, another
generation may be saying the same thing about Mercury, Buick and
Pontiac.
Maybe even Ford and GM too.
