Can Olds Hitch Its Wagon To Saturn's Star?Kathleen Kerwin
John D. Rock, general manager of Oldsmobile, calls himself an angry cowboy. How come? "Somebody out there is trying to shoot my horse," he complained publicly on Oct. 22 as he tried to rope in speculation that General Motors Corp. planned to eliminate his division.
It isn't hard to see why some thought the 95-year-old Oldsmobile brand was bound for the glue factory, however. Even though Olds's Cutlass Supreme was once the country's best-selling car, overall Olds sales have skidded badly since the mid-'80s. In the 1992 model year, the division's sales were down 8.4%, to 436,000. Selling fewer than half the cars it sold in the mid-'80s, Olds is the sickest of GM's ailing divisions.
GM's new top brass has told Olds's 3,100 dealers that GM's fourth-largest division, with $8 billion in sales, won't be scrapped. But reviving it will be tough. Rock, 56, who arrived at Olds in April after stints at Buick and GMC Truck, has mapped out a sweeping plan to reposition Oldsmobile as the next step up for buyers of Saturns, the popular small cars from GM's upstart Saturn Corp.
He also plans to "Saturnize" Olds itself--a bold experiment that's long overdue. Part of GM's rationale for its$5 billion Saturn investment in the 1980s was to create a successful prototype its other divisions could copy. But so far, Saturn's success has fostered more resentment from other GM nameplates than imitation. Rock's plan for Olds is the first attempt to adopt Saturn methods wholesale at another GM operation.
One of Rock's first steps has been to infuse some of Saturn's entrepreneurial spirit into Olds's traditional management style. He has ordered executive pilgrimages to Saturn's Tennessee plant. He has also encouraged more openness at Olds's Lansing (Mich.) headquarters by holding special "cowboy" days when employees can sound off to bosses with impunity.
Copying another Saturn innovation, Rock is forming a "governance board" of select dealers, advertising staff, blue-collar workers, and Olds managers who will help guide it through the tough times ahead. Initially, the board will help ax weak dealerships. It will even consider scrapping the Oldsmobile name.
Eventually, the board will pass judgment on new models, a critical step if Olds is to survive. Already, Rock plans to halve Olds's product line to about 15 spruced-up models. Among the likely cuts is the Cutlass Ciera. Olds's biggest-seller in 1992, the Ciera is a victim of GM's decision to trim its midsize car offerings at the end of the '96 model year. "Nothing's sacred," Rock vows.
Rock admits, however, that Saturn's success will be hard to duplicate. Saturn was created from scratch with a state-of-the-art plant, hand-picked workers, an elite circle of 225 dealers--and a clean slate with consumers. By contrast, Olds has to live with its existing plants. And the division's recent efforts to shed its dowdy image with consumers have flopped. The "This is not your father's Oldsmobile" campaign, fashioned by Olds's longtime ad agency, Leo Burnett Co., reminded younger drivers that the average Oldsmobile buyer, at 57, is identified with the Geritol set. The typical Saturn buyer is a mere 38.
NEW DEAL. There are a few bright spots, however. Quality at Olds has been on an upswing. Determined to make consumers see its cars in a new light, Olds put its ad account up for review in October. And Rock, the son of a South Dakota Olds dealer, is actively seeking crucial dealer support for his reforms. So far, the dealers, who have been given the cold shoulder by Olds in the past, are willing to give Rock a chance. Says Steven L. Moskowitz, an Oldsmobile dealer in Merrillville, Ind.: "John is trying to get us involved, right from the plant to each salesman who works on the floor."
Even when the transformation is complete, Olds won't be out of the woods. Its model lineup is concentrated in midsize family sedans--exactly where its Japanese rivals are strong. Still, the compact Achieva, launched last December, has made a respectable showing, and both the Achieva and the Cutlass Supreme will be restyled in 1997. In the meantime, Olds is hoping that the Aurora, a luxury sedan coming in the spring of 1994, will steal customers from Lexus and Infiniti.
With that lineup, Rock believes Olds has a fighting chance in the near term. "Don't count us out," he declares. And longer term, after following Saturn's trail, this riled-up cowboy believes Olds can ride tall in the saddle again.