Deja Vu

February 18, 2009

We Are (Alas) Driving Excitement

Tags:

automotive,

captains of industry,

Detroit,

Pontiac

“A Painful Departure for G.M. Brands,” The New York Times, Feb. 17, 2009.

DETROIT — The brand that was once hailed as an important part of the future of General Motors now will be part of its past.

G.M. said Tuesday that it would phase out its Saturn brand by 2012. It does not plan to develop any more new vehicles for Saturn, which began 19 years ago as an effort to attract owners of small Japanese cars.

G.M. also said it was considering its options for the Pontiac division. The Pontiac name, part of the car business since 1932, could remain on some models, but may no longer be a separate division. G.M. said Pontiac would be a “focused brand” with fewer models.

The disclosures by G.M., contained in a viability plan submitted to the government, means that G.M. plans to cut its brands in half, to four: Chevrolet, Cadillac, Buick and GMC.

My Years with General Motors (excerpt), by Alfred P. Sloan, 1964.
Alfred P. Sloan became president of GM in 1923 and was named Chairman of the Board in 1937. He retired in 1956 and died in 1966, having donated millions to, among other institutions, the Alfred P. Sloan School of Management at M.I.T. and the Memorial Sloan-Kettering Cancer Center in New York.

In the Executive Committee meeting of September 30, 1925, I reported confidently: “. . . when the ‘Pontiac’ car comes out in December it will give us everything for which we have been working, namely, the lowest priced 6-cylinder car that is possible, constructed with Chevrolet parts.”

At the Executive Committee meeting of October 21, 1925, I reported on the over-all situation of growing tension in the market. From the minutes of the meeting I glean the following: “Attention was called to the fact that the Essex is attacking the Chevrolet market from the top while the Ford company (whose policy now seems to be that of improving the quality of its car rather than reducing the price) is a strong competitor on the other side.”

The Pontiac went on the market on schedule for the model year 1926 with the coach priced at $825, that is, about halfway between the Chevrolet coach, priced at $645, and the Olds coach, priced at $950; and the gap in our car line was closed.

That event settled General Motors’ basic car positions for many years. The Cadillac and the Buick were first and second from the top of the price pyramid. Chevrolet was always the base of the pyramid. The Oakland organization, which produced the Pontiac car, later became the Pontiac Division, and the manufacture of Oakland cars was discontinued. The Pontiac became a distinctive car in its own right while maintaining its original economies. That put Olds between Pontiac and Buick, making the basic price line: Chevrolet, Pontiac, Olds, Buick, and Cadillac, more or less as it is today.

I shall not deal here with the evolution of all the cars in the line in the 1920s. I observe only that Olds and Oakland were not very lively lines. Buick, though always basically strong, had its ups and downs. Cadillac, as always, was strong in its price class, though it was superseded as sales leader for a time, beginning in 1925. I pass over the interesting record of these divisions to concentrate upon the most important changes that took place in that period, namely, those in the low-price, high-volume area where we were seeking a position against Ford.

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