Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.misc From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Oldsmobile trimming the fat, vows not to vanish altogether Date: Fri, 13 Nov 92 15:11:15 EST Message-ID: \SE G;AUTO WEEKEND \SS (WS) \HD Oldsmobile trimming the fat, vows not to vanish altogether \BY ASSOCIATED PRESS \DT LANSING, Mich. LANSING, Mich. (AP) - Oldsmobile will halve the number of models it sells in trying to become the older brother of General Motors Corp.'s highly successful Saturn carmaker, Olds General Manager John Rock said recently. Mr. Rock wouldn't specify which models will go, a purge that began earlier this year with the elimination of the Toronado and the Custom Cruiser station wagon. Olds, the most venerable but weakest division of the GM lineup, eventually will offer a small, medium, near-luxury and luxury car with three trim levels each, a minivan and a sport-utility truck with one or two trim levels. It had 28 offerings in 1992, reduced to 23 for 1993. The moves are consistent with GM's overall plan to shrink its enormous size, eliminating redundancies among more than 100 models. "You talk about money to be saved," Mr. Rock said. "We've got all kinds of vehicles that are in the system. When they're in the system, it's like a horse. He might not win any races, or you might not even race him, but he eats while you sleep." Slashing costs is a crusade throughout GM, which earlier this month installed a new team of younger and internationally experienced managers to restore its cash-devouring North American operations to profitability. GM lost about $12 billion in North America in 1990-91 and probably will lose $3 billion to $4 billion this year. All of GM's car operations, including Saturn, bear some responsibility for the losses. But Olds is a major culprit. Its annual sales have dropped from more than 1 million in 1986 to a projected 400,000 this year. Its share of the U.S. car market has plummeted from nearly 10 percent to about 4.8 percent. Olds in recent years has lost its identity and much of its customer base. Older buyers have been wooed away by Buick, while younger buyers have favored such imports as Honda's Accord, Toyota's Camry, Nissan's Maxima and new luxury entries, such as the Lexus SC300 and Infiniti J30. The market erosion, a decision to seek a new advertising agency after 58 years with Leo Burnett USA, and snatches of information on Mr. Rock's plan to resuscitate Olds snowballed into rumors that GM was considering scrapping the 95-year-old nameplate. "How you get the product out to dealers, that's always under review, but when you say that the dealer and that sign goes, that does irreparable harm," Mr. Rock said. GM was so concerned about the speculation over Olds that Mr. Rock invited reporters to one of his satellite-broadcast addresses to dealers and employees two weeks ago. He angrily denied Olds was on its way out, a message newly installed GM Chief Executive Officer John F. Smith Jr. is trying to reinforce. In a letter last week to the chairman of the Oldsmobile National Dealer Council, Mr. Smith said: "On behalf of the GM board of directors, I would like to put these rumors to rest once and for all. General Motors is totally committed to the future of the Oldsmobile division." Mr. Rock said copies of the letter will be sent to Olds' 3,100 dealers to be enlarged and displayed in their stores. Meanwhile, he told employees and dealers more details of the plans to emulate Saturn. Among them: * Olds managers are spending a lot of time at Spring Hill, Tenn., under the tutelage of Saturn design teams. * A dealer governance group will help decide new models and marketing. * A new ad agency will be chosen by January or February. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM