Oldsmobile Faces Financial Crisis

Oldsmobile's fortunes in the 1980s were decidedly mixed. Lansing had sold a record 1.14 million cars for '77 and nearly as many for '78 and '79. With the second energy crisis that began in late '79 came a deep national recession that held division sales well below the one-million mark through 1983.

But then Olds bounced back to set another record: a smashing 1.17 million for 1985. In the yearly production derby the division continued to run its usual third, just ahead of Buick, but it also managed to beat Ford for second spot in 1983 and '85.

Yet by 1987, Olds was down below 671,000, its worst total since the mid-'70s, and Pontiac had regained third. The decline continued, Olds averaging but 534,000 for 1988-89, then dipping under half a million for 1990.

1977 Oldsmobile Delta 88
Oldsmobiles in the 1970s such as this 1977 Delta 88 Royale
couldn't help Oldsmobile's declining sales.

What happened? One problem was that Oldsmobile's role and image became confused with Buick's -- no surprise given similar model lines that had evolved pretty much in lockstep since the mid-'70s at least.

Another problem was Pontiac, which in the early '80s began offering the kind of performance-oriented machinery that had served it so well in the '60s. By that point, Oldsmobile's one real marketing asset seemed to be the Cutlass name, and even that had lost much of its appeal by being indiscriminately tacked onto too many models.

Olds also suffered from GM's policies of "identicar" styling and ­divisional duplicates of most every platform in the corporate stable.

Then, too, there was the wholesale corporate reorganization hatched by chairman Roger Smith in 1984. This was a well-intentioned attempt at addressing many ills, including blurred divisional identities, but it only squandered valuable time and untold employee morale.

Compounding this confusion was Smith's headlong rush to buy Hughes Electronics and the Electronic Data Systems company of one H. Ross Perot, in the mistaken belief that expensive computerized-manufacturing systems would increase both productivity and profitability.

Instead, the acquisitions only sapped funds that might have been more wisely spent on much-needed new models. Meantime, the hastily installed automation only worsened the build quality of existing products.

Symbolic of the near-chaos that then reigned was the highly touted "Poletown" plant opened in the mid-'80s in Hamtramck, near Detroit, where robots painted each other instead of cars and driverless parts carts scurried around aimlessly.

A final problem, and perhaps the most telling, was the inability -- or was it the refusal? -- of top GM managers to see they had any problems at all. Of course, some executives were quite insulated by GM's size, and their "business-as-usual" attitude was not harmful as long as the market remained healthy.

But when the market turned weak in 1990, GM began hemorrhaging cash like it hadn't done even in its earliest days. Huge losses continued to pile up over the next three years. By that point, rumors were circulating that Oldsmobile -- then about to celebrate its 95th anniversary -- might have to be sacrificed as part of saving the corporation.

With all the problems of the times, the 1980s was not one of Oldsmobile's happiest decades. For a while, Lansing tried swapping roles with Flint, emphasizing sporty luxury as a sort of "American BMW" while Buick reasserted its traditional blend of substantial size and smooth-riding softness in what it now called "premium American motorcars." But this game plan worked only for Buick.

By decade's end, Olds seemed hopelessly lost and increasingly unnecessary, squeezed by an aggressive Pontiac from below and a resurgent Buick from above. It was all eerily reminiscent of what happened to DeSoto in the late '50s -- and, come to that, the Edsel.

The cars that carried Olds to this uncertain state of affairs were workaday intermediates and full-size models. Surprisingly perhaps, given the difficult early-'80s market, the big rear-drive Delta 88 and Ninety-Eight took over as the division's top-sellers through mid-decade. Together, they attracted a quarter-million buyers a year through 1982 and more than 340,000 in 1983 and '84.

Both soon moved to smaller front-drive platforms (except, as noted, the Custom Cruiser wagon) as part of a second-wave GM downsizing program. The 1985 Ninety-Eight was thus put on a new C-body, shared with Buick's Electra; the 88 was similarly transformed for '86 on the related new H-body also used for the Buick LeSabre and Pontiac Bonneville.

Like the first-wave '77s, these smaller big cars sold just as well as their pre­decessors. But aside from styling and equipment details, all these Oldsmobiles, rear-drive and front-drive, differed little from counterpart Buicks.

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