Olds Dealers Now Ready to Bury the Brand

Oldsmobile Dealers Ready to Bury 'A Wonderful Memory,' Nation's Oldest Automobile Brand

LAS VEGAS February 1, 2004; John Porretto writing for the AP reported from the NADA convention that -- No one's wearing a sandwich board with an ominous message, but for hundreds of Oldsmobile dealers attending their industry's annual convention, there's no denying reality: The end is near.

"It's time to get on with the burial," said Gary Wight, who has sold Oldsmobiles, the oldest automotive brand name in U.S. history, for 30 years. "It's sad and it's done and it's not going to change. Oldsmobile is a wonderful memory, but there's nothing in the windshield. It's all in the rearview mirror."

General Motors Corp. announced in December 2000 it would end production of the struggling Oldsmobile line with the 2004 model year. The company already has stopped making the Intrigue, Aurora and, in the past week, the Bravada sport utility vehicle. That leaves only two models -- the Alero passenger car and Silhouette minivan.

Darwin Clark, GM's vice president of industry-dealer affairs, said a final date to end production has not been set, but business likely will continue through part of 2005.

Wight, a GM dealer in Rigby, Idaho, figures this weekend's gathering of Olds dealers at the National Automobile Dealers Association annual convention is the last.

Clark and other GM representatives have been working with Olds dealers for more than two years on separation arrangements. When the decision was made to scrap the brand, Olds counted 2,802 dealers in the United States. As of last week, all but 176 had signed settlement packages.

Of those 176, some deals are in the works. Others, however, are tied up in litigation, the result of dealers who aren't happy with terms of their proposed settlements.

GM has declined to discuss details of the settlements or pending lawsuits. When GM reported its earnings in January 2001, the company took a charge of $939 million for the Oldsmobile phaseout.

"This is a very tough situation, but the process seems to be working fairly well," said Bill Stacy, an Oldsmobile transition director. He said slightly more than 1,500 dealers already have chosen to exit the Olds business. Another 1,300 or so remain active.

Oldsmobile or not, many of the dealers remain in the car business because 94 percent of them sold another GM brand at the time of the 2001 announcement.

That's the case for Wight, who also sells Cadillacs, Chevrolets, Buicks and Pontiacs. He said 60 percent of his business is from repeat customers.

"We sell all of those brands, so it's probably easier for us to make the transition," Wight said. "If I were a stand-alone Oldsmobile dealer, it would have been devastating."

Oldsmobile was named for its founder, Ransom E. Olds, who started the Olds Motor Vehicle Co. in Lansing, Mich., in 1897. GM later absorbed the company, and Olds soon assumed its place as the middle-class car in GM's lineup -- more expensive than Chevrolet and Pontiac but a step or two below Buick and Cadillac.

Oldsmobile was among the pioneers in using chrome-plated trim and the mass production of automatic transmissions. It gave drivers the Eighty Eight series, the front-wheel-drive Toronado and the Cutlass.

The brand grew steadily over the years, and in 1977 it became the first GM division outside Chevrolet to sell more than 1 million cars. Its high point was 1985, when it built 1,168,982 vehicles.

But sales began to fall in the past decade and GM was unable to make a profit with the aging brand.

An ongoing endeavor for the automaker is trying to keep Oldsmobile customers in the GM fold.

In the past few years, GM mailed 722,000 coupons to existing Olds customers good for $1,500 toward the purchase of another Olds or $1,000 off another GM model. Stacy wasn't able to say how many had used the vouchers, which are good through mid-2005.

GM also has made an effort to assure Olds owners that parts and service will be available at other GM shops.

Lou Walsh, an Olds dealer in Carroll, Iowa, said the rebate offer and a complimentary 75,000-mile protection plan with the purchase of a new Oldsmobile has helped attract some business.

"They need to do a lot because historically a brand that goes out has not been worth a lot of money," said Walsh, who also sells Buick, Cadillac, Pontiac and Toyota models. "The resale value on that car will be difficult at best."

General Motors Corp.: http://www.gm.com

National Automobile Dealers Association: http://www.nada.org