The History Behind General Motors’ Branding Fiasco

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  1. TriShield

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    General Motors’ Branding Fiasco: Sloan’s Vision Betrayed

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    Louis Chevrolet

    By Paul Niedermeyer
    May 21, 2007

    Imagine a different GM from today’s confused and embattled automaker. A General Motors where each division has a clear and coherent brand, universally known and recognized by automotive consumers. Where each division’s image and related price range is unique, without overlap. Where each division is the dominant brand– or at least highly competitive– in its respective market segment. Welcome to General Motors circa 1930.

    In its original incarnation, General Motors was a collection of semi-autonomous automobile manufacturers assembled by Billy Durant. As the industry matured, Durant’s management skills didn’t. Alfred P. Sloan, who entered the GM labyrinth after selling his ball bearing business to The General, spent five years analyzing GM’s dealings. In 1923, he proposed a plan that put him in the President’s seat.

    Sloan could rightfully be called the father of the modern corporation. The MIT grad struck an ideal balance between a rigid corporate hierarchy and entrepreneurial divisions. GM’s centralized bureaucracy supported each division’s success (e.g. advanced engineering and the first true styling studio), without stifling their creativity and individuality.

    At the heart of Sloan’s re-organization: his dictum “a car for every pocketbook.” Each of GM’s five divisions was charged with occupying a clearly differentiated price-stratum of the car market. Aspirations of upward mobility– within the GM family– were encouraged. Today’s Chevy driver was tomorrow’s Pontiac buyer, whose college-educated progeny aspired to a Buick, and so forth.

    By 1930, Sloan’s efforts came to full fruition: a line-up of brands that reflected (and appealed to) the income demographics of the times, whilst avoiding potentially deadly internal competition. With this formula in place, GM was on its way to becoming the world’s largest and most profitable corporation.

    A closer look at GM’s 1930 pricing and product structure reveals GM’s “secret sauce,” and offers a tantalizing glimpse of what GM would look like today had it not lost its way. [All prices adjusted to 2007 dollars.]

    Chevrolet was GM’s low-priced, highest-value, stylish, entry level division (today’s Fit/Yaris/Civic/Corolla). Chevy’s were priced at 33 to 46 percent of MHI (Median Household Income): $12k to $22k.

    Pontiac was The General’s high-value, somewhat larger, higher performance, more comfort-oriented lineup (Camcord class). Pontiacs were priced at 45 – 56 percent of MHI: $22k to $28k.

    Oldsmobiles were GM’s comfortable, larger, medium prestige autos (Buick, Infinity). Oldsmobiles were priced at 60 – 80 percent of MHI: $30k to $40k.

    Buick was GM’s premium prestige, performance and luxury brand (low to mid-range BMW, Lexus, Mercedes). Buicks were priced at 85 – 125 percent of MHI: $40k to $65k.

    Cadillac was GM’s ultra-premium, world-class luxury, prestige and performance brand, with V8, V12 and V16 engines (Mercedes S-class through Rolls-Royce, Bentley & Maybach). Caddies were priced at 165 – 650 percent of MHI: $80k to $300k.

    The Depression and the subsequent progressive era (with its sky-high taxes) compressed the late ‘20’s broad income distribution. GM eventually followed suit, compressing the pricing range of all its products.

    In 1930, a median priced Caddy sold for a 1200 percent premium over a median Chevy. That differential dropped like a stone. In 1940, it sank to 500 percent. In 1950, it was down to 120 percent. By 1960, the differential fell to 90 percent.

    Sloan successfully guided GM into the changed realities of the 1950’s. In 1955, GM became the first corporation in the world to make a profit over one billion dollars ($7.5 billion inflation adjusted). He retired as Chairman in 1956 and died in 1966– just as income-distribution demographics started on a 180 degree turn.

    Stimulated by JFK’s tax cuts and a booming economy, income distribution in the sixties began a Silly-Putty stretch that hasn’t stopped yet. Accelerated by Reagan and Bush’s tax cuts, wealth distribution today is looking a lot like the late twenties all over again. But GM totally missed the boat. Instead of realigning its brands with income realities, the corporation kept compressing and blurring brand identities.

    In 1951, the cheapest Buick cost 30 percent more than a Chevy DeLuxe. By 1961, the differential for the LeSabre over the Impala was 17 percent. By 1971, it was three percent. After 1961, compacts created even more confusion. A thrifty Buick Special could be had for $2384; a nicely-optioned Impala ran $3500.

    Mercedes and BMW sales took off in the seventies, and exploded in the eighties. Meanwhile, Buick, Olds and Cadillac were desperately peddling nearly-identical and strangely-shrunken “full-size” cars (not to mention compact abominations like the Cimarron). And Chevy was happily selling the larger (and more elegant) rear wheel-drive Impala/Caprice.

    By the ‘80’s, GM’s price compression and brand confusion was complete. Irrelevant Olds would soon be gone. By GM’s own admission, Buick and Pontiac became “damaged brands.” And Cadillac is now desperately fighting for a slice at the low end of the now enormous global luxury car market. Alfred Sloan’s vision is dead.

    Chevrolet

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    During the American car industry’s formative years, entrepreneurs started car companies left and right, jostling for quick profits and market share. Flint Rock native William Durant had a meta vision: agglomerate the best of the new automakers to create an empire called General Motors. This he did, through endless charm and clever financing. But Durant gambled too much too often, and lost control of his brainchild. The Chevrolet brand was born out of wedlock, to fund Billy Durant’s comeback.

    Durant convinced Swiss-born race car driver Louis Chevrolet to lend his name and engineering talents to the start-up. Chevy launched its first car in 1912. The success of the “Classic Six” five-passenger sedan– complete with a windshield, electric lights and a folding top– fulfilled Durant’s ambitions; paving the way for a brief return to GM’s helm.

    More to the point, Chevy’s branding identity was born: value for money.

    In 1915, Chevy underlined the point with the 490, named for its $490 price. The model was a direct challenge to Ford’s Model T. By 1927, Chevrolet’s production numbers crested 1m, sailing by Ford. (For 51 of the next 55 years, the Bowtie outsold the Blue Oval.)

    In 1929, Durant successor Alfred Sloan green lighted a new six cylinder model. Chevrolet’s “six for the price of a four” jibed perfectly with the brand’s basic selling proposition, and paid off in spades.

    Ford’s 1932 V8 tried to up the ante. Even though the flat-head V8 became a hot-rod legend, Chevy’s smoother, more powerful and efficient six remained the people’s choice.

    In ’50, Chevy introduced the Powerglide transmission, welcoming American mass market motorists to the world of the automatic gearbox. In ’54, Chevy customers could enjoy power brakes, windows and seats.

    In ’55, Chevy brought V8 power to the people. Although pistonheads tend to focus on the model’s 162hp small-block engine– which unseated the Ford flathead as the hot-rodders weapon of choice– the car’s size, price (around $1700) and performance hit the sweet spot. The ’55 - ’57 Chevys were also [relatively] well constructed and more stylish than comparable Fords and Plymouths.

    If only Chevy hadn’t followed its competitor’s footsteps during the ‘58 - ‘60 maximum barge era. But they did, with a vengeance, losing both their reputation for right-priced mechanical innovation and their focus on bottom-rung-of-the-ownership-ladder positioning.

    Chevy super-sized their cars, and kept on growing. The ‘58 Impala was specifically designed to give Chevrolets a “big car look.” Though immediately successful, the trend towards full-size Chevys was a big mistake. Literally. It began the process of blurring the brand’s carefully nurtured entry-level identity with that of Pontiac, Buick and Cadillac.

    By the early ‘70’s, Chevy’s passenger cars had become leviathans that shared a lot more with their brother brands than just their size and the dubious “GM Mark of Excellence” badge. GM’s relentless badge-engineering– sharing mechanical bits between divisions– removed many key distinctions between brands. With the debut of the pumped-up and plushed-out the ’71 Caprice, the gap between Chevy and Caddy products narrowed to a minuscule 25 percent.

    Of course, Chevrolet hadn’t abandoned small cars; it just seemed that way. From an engineering, style and price point-of-view, the ’60 Corvair was about as good as it got. It was an ambitious and influential model in keeping with the brand’s promise of inexpensive innovation. But the final design was flawed, hamstrung by beancounteritis, and then buried by Ralph Nader.

    Chevrolet tried again with the ’62 Chevy II. The parts bin special soon morphed into their new mid-market template; it porked-up and changed its name to Nova, leaving the compact market wide open for the imports. The ’71 Vega and ’76 Chevette were another doomed salvo in the brand’s ongoing, miserable and futile attempts to counter the small import tsunami.

    Meanwhile, the downsized and evergreen Impala/Caprice (’77 - ’90), Citation and Malibu marked a welcome return to the “classic” Chevrolet mid-sized, bargain-priced formula. Both models were neglected to death.

    Chevy stuck with the Cavalier for 24 years. While the Japanese competition refreshed its competing products every four or five years, Chevrolet kept building essentially the same car. Alas, evolutionary– or revolutionary– engineering was no longer the GM way.

    The Corvette and Chevy’s trucks were the exception the proved the rule. Unfortunately, the former has nothing to do with Chevy branding and the latter’s success distracted Chevrolet from its declining passenger car fortunes– to the point where a Korean-built compact is now the entry point to a decidedly lackluster, fleet-oriented passenger car lineup.

    The Aveo points to Chevy’s future: cheap compacts from Korea, China and India. And not just for us. GM’s small “world cars” now carry the moribund dreams of the bowtie badge’s creators. It’s an ambitious effort that will ensure GM’s global survival. Or not.

    Oakland-Pontiac

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    Grand Prix, GTO, Firebird, LeMans, Catalina 2+2, Bonneville. The names evoke automotive magic— provided you were an enthusiast between six and sixty during the ‘60’s. For today’s pistonheads, these storied names; indeed, the entire Pontiac brand has lost its adrenal association. Even the drop-dead gorgeous Solstice can’t rescue a marque now known for budget-priced, badge-engineered mediocrity. Pontiac’s fall from grace may not be the worst (best?) example of GM’s branding cataclysm, but it’s one of the most emotive.

    GM created Pontiac in 1926, naming it after a local Indian chief who led a failed rebellion against the British. The company’s first car was an inexpensive six-cylinder “companion” to the Oakland brand’s pricier machine. Pontiac waxed while Oakland waned. The Depression killed Oakland; Pontiac barely survived.

    To reduce production costs, GM President Alfred P. Sloan and Executive Vice President William S. Knudsen decreed that Pontiacs should share major components with Chevrolet. In 1933, a last minute “big car” restyle and a new engine helped Pontiac’s “Economy Straight Eight” revive the brand’s fortunes.

    In Sloan’s “a car for every pocketbook” dictum, Pontiac’s prices slotted in exactly between the most expensive Chevy and the cheapest Oldsmobile. The positioning defined the brand; a Pontiac was a realistic step up the ownership ladder for the Chevy driver of the thirties. Ironically, Pontiacs were aimed at customers who cared more about economy and comfort than performance and handling.

    As the Depression eased, Pontiac stayed in the sweet spot, introducing its resolutely conservative, middle class customers to industry-firsts like the column-mounted gear shift and engine options. In the last years before WWII, Frank Hershey led Pontiac’s design studio to new heights.

    Pontiac’s post-War years were profitable, but the pricing and styling demarcations that protected Pontiac from cannibalism were under attack from below (Chevrolet) and above (Oldsmobile). By ’56, the division was once again in trouble, struggling to distinguish itself from its more successful brother brands.

    The division had been feeding their V8 a high-oats diet. By ’59, Pontiac’s tri-power (three two-barrel carburetors) 389 was churning out 345 horsepower. That same year, out of the blue, Pontiac introduced “wide track” styling.

    Although the marque had gone racing several years earlier, the new models’ purposeful stance and stylish sheetmetal instantly redefined Pontiac as a performance brand.

    Their timing couldn’t have been better. Increasingly affluent and unflaggingly optimistic Americans were ready to fully embrace a car brand offering youthfulness, style, and most of all, excitement. From ‘62 to ‘70, Pontiac was America’s third most popular automotive brand.

    The first of Pontiac’s high-water marks: the 1963 Grand Prix coupe. A Bill Mitchell styling masterpiece, the GP conveyed the exclusiveness and formal elegance of the Buick Riviera coupe, at about three-fourths the price. AND it was sportier and more youthful; the killer date car of the times.

    The 1964 GTO was THE seminal performance car of the era. By dropping the big 389 engine into the light, mid-size Tempest (along with suspension, tire, appearance and interior upgrades), the American enthusiast car reached its zenith. As did Pontiac.

    In this pre-German/Japanese invasion era of fossilized British roadsters, the GTO (and its many imitators) offered the best overall bang-for-the-buck equation. Pontiac was BMW before BMW was cool (or available).

    Except for the Firebird, the seventies were not kind to Pontiac. Performance was (mostly) out, styling become blobby and quality problems were notorious. Pontiac tumbled out of the coveted number three spot. It returned to its pre-sixties roots: a mostly boring, lost-in-the-shuffle GM division, saddled with an endless curse of badge-engineered small Chevys: Phoenix, Astre, Sunbird, J-2000, T-1000, etc.

    Having lost its authentic performance and styling “cool,” Pontiac began an endless series of self-conscious attempts to capture BMW-like cachet (e.g. the original 1973 Grand Am).

    The mid-late eighties witnessed a brief sales resurgence. These were smallish cars, like the later front wheel-drive Grand Am. But these sales came straight out of ailing Olds’ and Buick’s hide, not the booming imports.

    The more avidly Pontiac tried to “Build Excitement” in the eighties and nineties, the more pathetic the results: GM clones sporting way too many spoilers and garish body cladding. Pontiac had become the Wal-Mart BMW.

    Could Pontiac have become a legitimate American BMW? Perhaps. A return to the brand’s original re-positioning would have required an unwavering commitment to performance. The resources were certainly there. GM continued building formidable rear wheel-drive sedans in Europe and Australia. These should have been Pontiac’s specialty decades ago, long before the recent GTO and future G8.

    Instead, GM positioned Pontiac as a “full-line” automaker, forcing it to compete with its GM siblings with idiotic versions of identical products.

    Pontiac is a dead brand. Lacking any presence outside of North America, it has no relevance to GM’s global future. Excitement is a fleeting phenomenon, as was Pontiac’s heyday.

    Oldsmobile-Saturn

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    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?

    Buick

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    Buick was the special child in the GM family: the beautiful and temperamental second-oldest daughter that somehow always got the most attention from Daddy. Sure, oldest daughter Caddy got to wear the family jewels and formal gowns, but Buick was lavished with style. Whether it was Harley Earl or Bill Mitchell, GM’s top stylists always blessed Buick with their best efforts. For decades, Buick was maintained in the style to which she had become accustomed, and remained America’s fashion-conscious upscale buyers’ wheels of choice. And then, not.

    Scotsman David Dunbar Buick founded his eponymous automobile company in 1903. The following year, the inventor of the overhead valve engine sold the struggling concern to James Whiting, an ambitious wagon builder. Whiting turned to William Durant to help jump start Buick.

    With an excellent product to sell (the Model C), Durant’s energy, affability and marketing genius ensured Buick’s ascension to profit and glory. Durant used Buick’s revenues to acquire dozens of other automakers and form General Motors.

    Right from the get-go, Buick was GM’s anchor brand. Durant capitalized on the company’s engineering excellence and reputation to expand sales around the globe. In 1926, Buick sold a then-staggering 260k cars.

    The Great Depression hit the brakes but good; annual Buick sales plummeted below 40k. GM President and future CEO Alfred Sloan used the downturn to rationalize GM’s brand portfolio. He slotted the consummate “doctor’s car” between affordable Oldsmobile and unapproachable Cadillac.

    Priced at around $40k to $65k in today’s dollars, pre-war Buicks were the Lexi of their time: refined, smooth, powerful, elegant and built to last. They were the consummate “doctor’s car.”

    By the late thirties, GM’s inter-brand demarcations had begun their inexorable erosion. Buick’s product line overlapped a significant portion of Olds’ and Pontiac’s price range. As internal competition intensified, Buick cultivated two selling points to stay ahead: performance and style.

    Throughout the ‘30’s and into the ‘40’s, Buick espoused its General Manager’s “more speed for less money” maxim. In 1936, Buick had a brand-new 320-cid 120hp straight-eight, designed for the large and heavy Series 80/90. When the company shoehorned the big eight into the smaller and lighter Series 40, it was dubbed Century, for its readily attained top speed. Thus the first factory production “hot-rod” was born.

    When Harley Earl joined GM in 1927, he created the Arts and Color Section: the car world’s prototype styling studio. Earl used the Buick brand to showcase his most significant creative output.

    Earl’s Buick Y-Job of 1938 was the world’s first dream-car. Unlike the European salon specials sold to exclusive buyers, the Y-Job’s was created to build excitement for future GM products, and showcase their styling direction. The Y-Job succeeded brilliantly; it solidified GM’s global styling leadership. And Buick’s.

    The 1951 Buick LeSabre and XP-300 dream cars initiated the GM Motorama era, a grand traveling carnival of GM-think. Until 1961, Motoramas showed Americans a tempting glimpse of the (ever better) good life to come, from cars to kitchen appliances. And GMAC would finance the dream.

    The consumer era was now in high gear, and Buick style led the way.

    Buick enjoyed its greatest market-share success in the mid-fifties. From 1954 through 1956, Buick was America’s third most popular automotive brand. During those heady days, models like the Century, Super, Roadmaster and Special defined affordable American automotive luxury, class and power.

    In ’57, Plymouth’s radical models pushed Buick back to number four. But it was Buick’s horrendously overwrought ’58 models that really hurt. Renaming 1959’s Buick entire line-up (LeSabre, Invicta and Electra) didn’t help. By 1960, Buick’s market position had tumbled to ninth.

    Buick desperately needed a new make-up artist, and found it in Bill Mitchell. The 1963 Riviera coupe was Mitchell's tour-de-force: one of the most beautiful American cars of the post-war era. It had the class, cachet and authenticity of a Mercedes CL or Bentley Continental. The Riviera’s halo effect worked; by 1965, Buick was back to fifth place.

    Fast forward a decade, and Buick’s hot new coupe is the execrable Skyhawk, a clone of Chevy’s Vega-based Monza. Alternatively, Buick intenders could contemplate the Skylark, a padded landau-roofed version of Chevy’s Nova.

    The preceding and ensuing string of badge-engineered disasters were unleashed at the exact moment when Buick needed to strengthen its roots– style, performance and quality. Up-scale import competition from Mercedes, BMW, Audi and later, Lexus, stole traditional Buick customers by the tens of thousands.

    Buick’s subsequent decline is too painful to describe in detail, especially during the mid to late eighties. After that, it was either too little too late, or another kick in the groin, like the Rendezvous.

    No wonder Buick packed her bags and slipped away to China, where she’s once again adored and idolized. All she left behind moldering in American showrooms are ghosts, pale shadows of her former stylish self. And plenty of beautiful memories.

    Cadillac

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    There is no greater symbol of GM’s branding woes than Cadillac. During its formative years, the marque’s products stood at the pinnacle of automotive excellence. As The Grateful Dead would say, what a long strange trip it’s been: from coachbuilder to maharajahs to supplier of Chevrolet clones to America’s mid-market motorists. In a world of $30k Rolex watches and $500 wine, Cadillac no longer deserves to be called a luxury brand. Its failure epitomizes all that went wrong with GM’s branding.

    Cadillac was formed from the ashes of the first Ford Motor Company. When Henry’s early backers asked Engineer Henry Leyland to appraise the failed business’ assets, the Vermont native convinced them to resume operations using his 10hp one-cylinder engine. In 1902, Cadillac was born.

    Leyland applied his experience as a gun maker to spectacular effect. The company’s fanatical attention to parts quality and interchangeability created an extraordinarily reliable vehicle. When three model K Cadillacs aced a series of English reliability tests (including scrambling key components from three cars and then rebuilding them), Cadillac earned its reputation as the “Standard of the World.”

    GM bought the innovative automaker in 1909. From the start of the century into the roaring twenties, Cadillac pushed the engineering envelope. The automaker introduced the first electric starter, safety glass, V8 power, synchronized transmission and more.

    When Alfred Sloan reorganized GM according to his principle “a car for every pocketbook,” Cadillac occupied the top berth, above Buick. Sloan then pushed the brand into the auto-stratosphere.

    Caddy’s 1930 portfolio included the LaSalle, V8, V12 and the V16 (fully the equal of the Rolls Royce, Duesenberg, Packard and other coach-built cars of the Classic era). Prices ranged from $3295 to $9700– roughly $80k to $300k in today’s money.

    The Depression killed the V16, and almost took the brand with it. In 1932, GM contemplated shuttering the division. Cadillac’s president Nicholas Dreystadt presented an alternative: sell the brand's less stratospherically-priced products to America’s nascent African American upper class.

    Opening its doors to this neglected market saved Cadillac from oblivion, but subjected the brand to a new threat. As Sloan’s once-sacred pricing structure eroded, Cadillac’s top-of-the-pile price premium shrank. In 1940, the cheapest Cadillac was 150 percent more expensive than the most expensive Chevy. By 1950, it was 65 percent. By 1960, it was just 30 percent.

    The fifties and early sixties were Cadillac’s second golden era. America’s income distribution was the most compressed it had ever been; a brashly styled Caddy was a commonly-shared icon representing the American dream.

    While Caddy’s prices continued to fall in this era, their models were still a fantasy for the typical working-class family. Factory workers were known to pool resources to buy a Cadillac on a time-share basis.

    During the ‘60’s, America experienced an explosive growth of Median Household Income (MHI). Cadillac chased the booming mid-market, losing touch with its rapidly fading luxury remit. In 1960, a basic Cadillac cost 87 percent of MHI; by 1970, it was down to 64 percent. In 1971, the Calais cost only 25 percent more than a Caprice.

    GM singularly failed to do the right thing: take Cadillac back up-market to cater to the rapidly growing ranks of wealthy and near-wealthy, and enhance Buick and Oldsmobile to take Cadillac’s place in the lower-premium market.

    Product wasn’t the problem. In a 1965 Car & Driver luxury car comparo, Cadillac finished a close second (just behind the three-times more expensive Mercedes 600) and handily beat Roll-Royce, Lincoln, Imperial and Jaguar.

    C&D hit the nail on the head: “Among enthusiasts, the Cadillac is probably the most underrated car in the world, although in some ways, it equals or excels the Mercedes 600. In our estimation, Cadillac’s great sales success is all that hurts its ‘image’ as a prestige luxury car.”

    Cadillac’s fit, finish and build quality went downhill from there, as the high-volume, low price strategy meant cheaper materials and rushed assembly. In 1964, nobody would have confused an Impala for a DeVille. By 1971, the Caprice and DeVille were precariously similar in both style and build quality.

    GM’s destruction transformation of a globally-respected, technologically-superior luxury brand into a tarted-up Chevrolet for middle class buyers was complete.

    America's upper-income classes abandoned Cadillac for Mercedes, whose sales began a long expansive period around 1970. In 1973, Cadillac sales enjoyed a brief explosion (stealing from Chevrolet?). Sales exceeded 300k in 1973, peaking at 350k in 1978. And then Cadillac began its near-terminal decline.

    Today’s Cadillacs have established a precarious foothold where Buick once lived: at the top end of the ‘near luxury’ automotive market. Talk of a new V16 to reposition Cadillac higher up in the food chain has faded, leaving the brand with the prospect of more mediocrity. Badge-engineered SUV’s, price-conscious sedans and an uncompetitive roadster portend a bleak future for Cadillac, and GM.

    http://www.thetruthaboutcars.com/?cat=2
     
    Last edited: May 28, 2007
  2. Mjolnir

    Mjolnir WHM6D > *

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    The quotes underneath the article got me. The first or second guy advocated following Ford's example because GM couldn't re-create the past.

    Does anybody else feel GM would be well served to follow the pricing model instituted by Sloan?
     
  3. That is a very good article. My only problem is that he didn't explain WHY GM did what it did. In the late 50s and through the 60s GM started mixing its brands because it saved them money. Rather than having totally separate divisions, they could share chassis, and later engines. For a while it worked, as imports were uncommon and people would keep buying GM cars. In the 70s it all fell apart, and GM never changed its business model. I'm glad they're finally getting their act together. They may be the only one of the "big three" who will survive intact.
     
  4. brownbear

    brownbear OT Supporter

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    allthatshitbyyou.jpg
     
  5. TriShield

    TriShield Super Moderator® Super Moderator

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  6. terrist

    terrist Cowboy President > All other World Leaders

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    you can't say that to trishield:noes:
     
  7. Sticky Sock Puppet

    Sticky Sock Puppet Covered in semen

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    so chevy has to compete with other GM brands?
     
  8. MCohen

    MCohen #NotMyPresident #AmericaIsAlreadyGreat #GoSolar OT Supporter

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    Thats a good read :cool:
     
  9. Y2kAccord

    Y2kAccord Everything happens for reasons I just dont know

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    GM has horrible brand recognition and loves to bastardize its history by taking classic names and turning them to shit (ala Malibu and SS on any shitbox with a 4 banger)

    and no I didnt read all that shit
     
  10. brownbear

    brownbear OT Supporter

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    :hs:
     
  11. CrosseyeLion

    CrosseyeLion delight in our youth...

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    With every other sentence in bold I minus whale read the whole damn thing :o
     
  12. Boosted_AWD_

    Boosted_AWD_ 10,000 Watts RMS

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  13. ImpalaSS

    ImpalaSS OT Supporter

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    And when GM finally gets a car or truck right...they kill it.

    1994-1996 Impala SS
    1991-1996 Caprice - especially fleet cars. PDs loved them more then the Crown Vics.
    Pontiac Fiero

    lemme think of more
     
  14. borborygmus

    borborygmus Guest

    I am thankful that you bolded the important parts
     
  15. Boosted_AWD_

    Boosted_AWD_ 10,000 Watts RMS

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    worst first post evar
     
  16. Boosted_AWD_

    Boosted_AWD_ 10,000 Watts RMS

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    hey Trishield do you work in the industry?
     
  17. Crossett

    Crossett New Member

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    cliffs, GM sucks
     
  18. Y2kAccord

    Y2kAccord Everything happens for reasons I just dont know

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    Yeah his constant humpin motion on the GM execs legs keeps them warm in the winter
     
  19. KNYTE

    KNYTE I'm Not Kidding.

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    "lol @ GM" is really all that could be said.
     
  20. TriShield

    TriShield Super Moderator® Super Moderator

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    This piece is very flattering to GM. :mamoru:
     
  21. Hezkezl

    Hezkezl Rawr! OT Supporter

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    In for reading the novel later :o
     
  22. Dr. Zoidberg

    Dr. Zoidberg the lovable tramp

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    doesn't this exact article get written every 4 months?
     
  23. IslanderOffRoad

    IslanderOffRoad Do you even lift kit? OT Supporter

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    This is not news
     
  24. Scream_Phoenix

    Scream_Phoenix Handsome Boy Model

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    read the whole thing. very interesting to get the events that turned GM into such a shithouse :cool:
     
  25. herpes

    herpes OT Supporter

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    ill read this later
     

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