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Olds Fades While Gm Buys And A Little Guy Fights

by Bob Hagin

June 4, 2001

As I get older, I enjoy simply watching the world roll by and this especially applies the automotive world. Things happen fast in it and it's hard to keep on top of it all. These are some of the interesting auto gyrations that have occurred recently:

OLDSMOBILE JUST FADES AWAY - There was a popular song many years ago that was titled "Old Soldiers Never Die" and went on to state that they just fade away. This analogy could be applied to Oldsmobile in its demise. The corporate ax fell some months ago with the announcement by GM head man Rick Wagoner that by 2006, the old Oldsmobile name (it's been around since 1896) will be gone and Oldsmobile dealers will have to find something else to sell. Now the word is that stand-alone Oldsmobile dealers won't have much to sell when that time comes. Its Intrigue passenger car will be out in 2003 while the Silhouette minivan and the Alero sedan will follow it in 2004. The successful Aurora (its engine recently powered the winning car in the Indy 500) will go down in 2005. That leaves only the high-class Bravada SUV, which will either be carried on under another GM brand name, or be dropped then too. Dealers who now handle Oldsmobile are understandably upset, since many of them believed former Olds head man, John Rock, when he when he told them to upgrade their facilities and good things would come. Now Rock is gone and his company will soon follow.

GENERAL MOTORS BUYS DAEWOO - But many thousands of miles to the east, General Motors officials have just announced that it will buy the Daewoo Motor Company. It's the third largest auto maker in Korea and was once considered a "comer" on the world market. But that was before its former chairman bought off Korean politicians (including the then- president) and then skipped out for parts unknown with an estimated $54 billion in his suitcase. The Korean government is going to approve the sale to what is considered a "foreign carpetbagger" to most of the citizenry and especially Korean auto union members, whose protests have been answered with police night-sticks and tear gas. GM plans to use Daewoo as a springboard to get into the burgeoning commercial vehicle market in China but part of the deal is that GM won't assume the Daewoo debt that amounts to almost $18 billion to parts suppliers and others.

CHRYSLER GOES TO REAR DRIVE - When Lee Iacocca rode to the rescue of Chrysler decades ago, his initial product "brag" was that he was going to jettison the old-folks image of big front-engined, rear-drive Banana Boats and switch the whole Chrysler lineup to front-drive. But that was then and now rear-drive on the big luxo-wagons is almost a requirement with Mercedes, Lincoln, BMW, Lexus and Infiniti who are using this "old" system and doing very well. Now Chrysler has come full-circle with the upcoming replacements for the Dodge Intrepid as well as the Chrysler Concorde and 300M, which will drive the rear wheels. Rumor has it that Chrysler Corporation won't have to reinvent the rear-drive system since its owner, Daimler-Benz, also owns Mercedes and now appears willing to share that technology with its red-ink-laden American satellite.

BUICK PONTIAC GMC COMBOS - There's other "restructuring" happenings in the General Motors boardrooms besides the axing of Oldsmobile and the Daewoo purchase. The other three middle-members of the American monolith are in for some changes, too. Pontiac and Buick mid-sized sedans overlap in almost everything but the logo on the hood, which is unfortunate since many GM dealers have both brands on showroom floors. The GM plan is to cut down on its mid-sized car lineup and have the remaining "linear" sedans sold through single dealerships. To round out their product line, GMC trucks and vans would be thrown into the mix. In major market areas, Chevy dealers will be stand-alones and so will the Cadillac retailers. In home-town America, General Motors dealers will be just that and will be able to market all five of the major GM brands.

MASERATI DEALER 'FORGOTTEN" IN MASSACHUSETTS - In this world of mega-mergers and multi-billion dollar buy-outs, it's easy for a little guy to slip through the cracks. When Maserati stopped sending new cars here in 1990, it was assumed that its dealerships ceased to exist. But nobody told the owner of Majestic Cars in Cohasset, Massachusetts. Owner Luigi Masciarelli kept buying parts from the factory to service the cars of his loyal customers. And the Italian firm didn't seem to mind. But now that GM owns a big part of Fiat of Italy who now owns Ferrari who now owns Maserati, things have changed. GM wants to return Maserati to the American market and Masciarelli says his franchise agreement is still in force since Maserati never "officially" dropped him. Ferrari representatives claim in court that Maserati S.p.A. "then" is not Maserati S.p.A. "now." It's going to be interesting to see if this feisty David can win one against the GM Goliath.

In the mean time, its comforting to know that as I keep rocking on the veranda, more automotive things will happen that are worth more than a passing glance.