GM's downward spiral: A timeline

[steinravnik]

GM's downward spiral: A timeline

The Detroit automaker's whopping $15.5 billion quarterly loss Friday wasn't a record, but it's the latest chapter in a steady slide that began more than 20 years ago.

1984



In the face of faster-to-market competitors gaining momentum, Chairman Roger Smith creates three centralized organizations - Buick-Oldsmobile-Cadillac, Chevrolet-Pontiac-Canada, and Truck & Bus - to manage large cars, small cars and light trucks, respectively. The two car organizations end up with responsibility for cars of all sizes, but they share almost no processes, and the new separate entities require huge increases in personnel. Quality suffers, and GM's market share drops to 37% in 1987 from 43% in 1985. By May 2008 it will slip to 19%.

http://money.cnn.com/galleries/2008/...une/index.html

[ksr]

I remember reading an opinion a number of years ago that GM's midsize car replacements in 1988, the Regal, Cutlass Supreme, Grand Prix, and Lumina, were the greatest industrial disaster in American history.

Hard to argue that. The four models they replaced typically were among the ten best-selling cars in the U.S. None of the replacements came close to that level.

GM misread the market, which turned away from coupes big time by 1988. All four were launched (maybe except the Lumina) as coupes only, with sedans following a year or two later.

They really weren't bad cars. Mostly well-received by the press, which just about unanimously believed they were better cars than their predecessors. Grand Prix was MT's COTY, and the Cutlass finished a close second. But people just didn't want them.

Combine this disaster with the total collapse in sales of the '86 launch of the replacements for the Eldorado, Toronado, and Riviera, and you can see how GM's market shared dropped from 43% in '85 to about 35% by 1988.

[steinravnik]

Originally Posted by ksr

GM misread the market, which turned away from coupes big time by 1988. All four were launched (maybe except the Lumina) as coupes only, with sedans following a year or two later.

You're right, they debuted as coupes. The Lumina came out in 1990, when the other sedans debuted. I always liked the coupes. I thought they were pretty sporty and sleek looking in their day with the flush mounted door handles and all. I had a friend that had a 1995 Grand Prix sedan and used to ride in it a lot. I never thought it was a particularly bad car.

[MCGARRETT]

I remember reading an opinion a number of years ago that GM's midsize car replacements in 1988, the Regal, Cutlass Supreme, Grand Prix, and Lumina, were the greatest industrial disaster in American history.

Really, that bad huh? Worse than the Union Carbide thing in India?



Was this an editorial in MAD or Cracked?

[steinravnik]

Originally Posted by MCGARRETT

Really, that bad huh? Worse than the Union Carbide thing in India?



Was this an editorial in MAD or Cracked?

I've heard similar things, something about the development budget being blown, cost of assembly, insufficient sales, etc. These cars are more famously called the GM-10 cars. I'm sure there is someone else here that is more an expert on this than I. I was just a wee little kid when these cars came out.

[F14CRAZY]

and I hate to bring it up again but Saturn needs to be canned NOW

[F14CRAZY]

Countless people that have worked at GM and currently do need to be SLAPPED. FWD is NOT "better" than RWD! No fuel economy gains! 20 years later they still don't get it. So much from learning from your mistakes.

[Buick Riviera]

Last time I checked all Gm car's aren't and won't be FWD.

[ksr]

Originally Posted by MCGARRETT

Really, that bad huh? Worse than the Union Carbide thing in India?



Was this an editorial in MAD or Cracked?

The author was talking about purely financial terms, not about disaster as in the Union Carbide debacle that killed people.

Financially, the GM-10 program would be hard to top. When you consider the tens of thousands, heck, hunreds of thousands of sales per year that GM lost. They've never recoved their position in the midsize car market to this day. (The Cutlass Supreme went from over 500,000 sales in '79 to under 90,000 sales in 1991.)

That's one heck of a financial impact, perhaps the most significant milestone in GM's still-unchecked downward spiral. And as GM may possibly never recover, yeah, I think you could say it the biggest disaster, if that's the right word, in the history of American industry.

[ksr]

Here's a little stub from Wikipedia...

GM10
From Wikipedia, the free encyclopedia

The GM10 platform is the original basis for the W-body automobile platform from General Motors which underpins mid-size cars with front-wheel drive. The platform began in 1982 under Chairman Roger B. Smith and debuted in 1988 with the Pontiac Grand Prix, the Buick Regal, and the Oldsmobile Cutlass Supreme coupés. Sedans followed for 1990. GM10 has been called "The biggest catastrophe in American industrial history". The platform cost $7 billion to develop and was to replace all midsize cars produced by Chevrolet, Pontiac, Oldsmobile, and Buick. The plan was huge in scope, calling for seven plants that would each assemble 250,000 of the cars, or 21% of the total U.S. car market [1]. It was badly executed from the start, but GM’s 1984 reorganization, combined with changing market dynamics wrought havoc on the program and it never recovered. By 1989, the year before the last of the original GM10's were launched, GM was losing $2000 on every one of the cars it produced [2]. The later revision of this platform was known as the MS2000 or simply the W2-Car. Early versions used a fiberglass monoleaf spring in the rear, while second generation cars and the 1995 and up Lumina use a fully independent suspension front and rear with coil springs.



This is also a very interesting article:

http://www.ragm.com/books/corp_gov/cases/cs_gm.html

[Uzzy]

Originally Posted by steinravnik

You're right, they debuted as coupes. The Lumina came out in 1990, when the other sedans debuted. I always liked the coupes. I thought they were pretty sporty and sleek looking in their day with the flush mounted door handles and all. I had a friend that had a 1995 Grand Prix sedan and used to ride in it a lot. I never thought it was a particularly bad car.

Right, they were coupes and replaced cars that has been coupes for their entire lifetime. GM had other mid-size sedans at the time. I thought the GM-10 were good cars overall and I saw a lot of them around here.

[2002 Caddy]

Originally Posted by Uzzy

I thought the GM-10 were good cars overall and I saw a lot of them around here.

The GM 10 cars were definitely major POS cars... They were the beginning of the end for GM... The 1980's "X" car had everyone scratching there heads and these cars were the final straw. They were slow, under powered, unreliable, had mediocre V6's, and they all looked funny. And to make things worse... they cost SIGNIFICANTLY more then the cars they replaced.

You forget that the 79-88 Cutlass was the best selling GM at the time (ever?) and the 87 Buick GN was a major hit and an instant classic... Everyone knew that only one year later and these cars were a JOKE and these brand names were DEAD. Very sad.

Where I live on the west coast you STILL see more "G-Body's" on the road then GM-10's (W-bodies)

[Tone]

My recollection of the GM-10s was they were probably the right idea, but the competition got so intense in this space that they weren't the leaders GM intended them to be.

Yes, GM sold a whack of Cutlasses in the late 70s; I know, my family owned two of them. But, by the mid-80s, the market was shifting away from traditional BOF coupes and towards the kind of mid-sized car that dominates the market today: FWD, 4 and 6 cylinder engines ... think Accord, Camry and today's Malibu.

GM was actually ahead of the curve on this (Imagine that!). But, when Ford launched the successful Taurus, GM's mid-sized offerings (Celebrity, 6000 et all) suddenly became yesterday's news. The GM-10s were supposed to launch GM back into the head of this expanding FWD, mid size pack.

Trouble was, Honda and Toyota were upsizing their compacts .. and quickly improving them. So, the GM-10s came to market to compete not only with the Taurus (which became America's best selling car in the late 1980s), but also the small mid-sized Accord and greatly improving Camry. The GM-10 cars were good, but they weren't the market leaders GM had planned for (and invested in based on the expectation of great sales).

GM has literally played catch up in this market and has arguabally only caught the market leaders again with the launch of the Malibu. That's nearly 20 years to regain dominance in a market that GM literally owned from the mid 1960s to the mid 1980s.

Hopefully, GM is hard at work to take their next mid-sized cars to the next level ... to clear dominance rather than running with the head of the pack. With Honda, Ford and Toyota seemingly floundering with their mid sized cars, the opportunity is there for a company to innovate ... and dominate.

[wescoent]

There's a Wharton case study on GM about their plan back in 1975 to spend 40 billion over the next 10 years to blow the competition into the weeds by modernizing their entire lineup with better cars that cost less with more advanced features.

The GM-10/W-Body was a part of that plan.

[fp115]

Originally Posted by F14CRAZY

Countless people that have worked at GM and currently do need to be SLAPPED. FWD is NOT "better" than RWD! No fuel economy gains! 20 years later they still don't get it. So much from learning from your mistakes.

RWD is heavier, has costly R&D, loss of power in driveshaft, less interior room,... Yeah you are right RWD is just that much better to the majority of customers