Years of speculation, rumors and guesswork finally ended last month when General Motors executives announced they would phase out the Oldsmobile brand after more than 100 years as an auto industry nameplate. The move effects 2,801 dealers, 63 of which are Olds exclusives.
The phase out is expected to take about three years, which is when the cycle of the division's current product lineup ends. The 2002 Bravada SUV will be Oldsmobile's last new product.
Olds retailers around the country, as expected, reacted strongly to the plan.
Gary Labadie, owner of Labadie Cadillac-Oldsmobile-GMC in Bay City, MI, was one of the first Olds dealers to renovate his facility for the GM 2000 program. He deplores the brand's death sentence, asserting that "Buick should have been shelved if one had to go," he says. "They have no van or SUV, while we have an excellent '01 Aurora and the new restyled Bravada."
Contending that GM has been planning to sack Olds "for a long time," West Virginia dealer James F. Love III forecasts that the nearly 8 million loyal Olds owners would now not switch to Buick or Pontiac but "go outside GM altogether for high-line cars," he says.
"They gave all our 88 and 98 models to Buick," says Mr. Love, of C&D Motors in St. Albans, WV. "And they dropped the famous Olds names like Cutlass that go back 40 or 50 years. Someone at the top of GM was sweeter on Buick and triggered this Olds fadeout plan despite our great reputation."
One of Oldsmobile's 63 remaining exclusive dealers, Bill Lee Oldsmobile in Clinton Township, MI, has an approved succession plan in place and more than four decades of continuous operation under its 76-year-old owner. Mr. Lee expresses bitterness, pointing out that the brand still is selling about 300,000 new cars a year, "more than a lot of other upscale lines," he says.
"Our glory days, when we sold a million cars a year for three years in a row in the mid-1980s, are part of a great tradition," says Mr. Lee. "The previous GM top management, up to former Chairman Bob Stempel, who started his career in Lansing, knew the value of Olds to GM."
Despite that history, the division's sales dropped 18.5% in the first 11 months of 2000.
For Indianapolis-based multi-franchise dealer Ray Skillman, "having Olds since 1979 made it possible for me to land Mitsubishi, GMC, Kia, Daewoo and Ford. Olds was - and is - a great product. They didn't know how to market it, or position it.
"It's like you're in the dark and the pretty girl you want to dance with doesn't know you're at the ball," says Mr. Skillman. "It hurts my feelings and breaks my heart."
Another Oldsmobile exclusive, Buffalo's E. Roger Tunmore, president of Tunmore Oldsmobile, says, "the handwriting had been on the wall as far back as 1992, but we've been having good years so the phase-out announcement still came as a surprise."
Mr. Tunmore's father, Edward, founded the dealership in 1931, and the son recalls "a lot of Olds and GM history that makes this difficult to take. So many great GM leaders came out of Olds, and the products they created were tops."
Mr. Tunmore, says he will continue the franchise "as usual" until the last of the present models phase out and wait to see what GM offers.
"We will work together with our Oldsmobile dealers to provide for a smooth and orderly business transaction," says Ron Zarella, executive vice president and president of GM North America. "It's almost an individual situation. It depends on how each dealer is positioned with other GM brands, where they're located and where they stand in the market."
"There are 2,801 Oldsmobile dealers in the U.S. and their welfare is our top concern. It is imperative that GM treat all Oldsmobile dealers fairly and that they be properly compensated," says NADA Chairman Harold Wells. "We must remember that there are a whole lot of very good people - dealers, employees, their families and customers alike - who have remained loyal to this GM brand for many, many years. A decision like this is crushing to them. GM needs to move quickly to take into account the millions of dollars that dealers have invested in facilities, equipment, personnel and training. They deserve nothing less than fair compensation."
A call center has been established to address dealer questions and capture dealer concerns for resolution and a transition team will be located in each of the company's five regions to address dealer concerns and inquiries.