5 cars that tarnished General Motors’ reputation
For decades, General Motors defined and dominated the American car market with state-of-the-art automobiles. But the company’s dominance fed a corporate culture of overconfidence and self-absorption that led to such misfires as the Chevrolet Corvair and Vega.
As notorious as these products were, GM’s size ensured its continued supremacy. Even in 1980, the company’s U.S. market share stood at 46 percent. Yet 10 years later, it had slipped to 35 percent and was still falling. Today, it’s 17.7 percent.
What happened? Inept, shortsighted, and cynical choices made in the face of Japanese competition during the ’80s led to GM’s decline. Coming in quick succession, these well-intentioned but poorly executed products touched every division.
Here are five products that proved disastrous to GM’s reputation, its market share, and its bottom line.
1980 Chevrolet Citation
The oil embargo of the early 1970s led GM to convert its fleet to front-wheel drive in order to satisfy tightening federal fuel economy mandates. It started with the X-Cars, sold as the Chevrolet Citation, Pontiac Phoenix, Oldsmobile Omega, and Buick Skylark. The enormity of the task overwhelmed GM engineers and stylists, who had to design every system from scratch even though little extra time was given for development.
Nevertheless, the Citation proved popular, selling 811,540 units in its first model year. It was named Motor Trend magazine’s “Car of the Year” and was advertised as “the most thoroughly tested new car in Chevy history.” Perhaps. But the car’s too-short gestation led to a flood of recalls for brakes, fuel system, suspension, transmission, steering, seats, and vehicle structure problems. “I would say in today’s world, what we introduced back then is not good enough to overcome the competition,” GM President F. James McDonald admitted in 1981. By 1986 the Citation was gone—along with 4.9 percent of Chevrolet’s market share.
A small Cadillac seemed like an oxymoron in 1981, but Cadillac managers felt they needed to battle the increasingly popular BMW 3 Series. They looked to the front-wheel-drive compact car J-car platform, which would debut for 1982 as the Chevrolet Cavalier, Pontiac J2000, Oldsmobile Firenza, and Buick Skyhawk. Since Cadillac joined the program late, its car was scheduled to follow at a later date, allowing time to heavily re-engineer it to Cadillac standards, just as GM had successfully done when transforming the Chevrolet Nova into the Cadillac Seville in 1975.
However, Cadillac General Manager Edward Kennard wanted the car for 1982, even though GM President Pete Estes thought more time was needed. Kennard prevailed, and the Cimarron debuted as little more than a plebian Chevrolet Cavalier with leather seats and Cadillac badging. It even used the Chevy’s anemic four-cylinder engine. GM had shared body shells among its divisions since 1932, but now the cars were identical—except for their price.
Introduced as Pontiac’s bid to regain its performance mojo with a two-seat mid-engine sports car, the Fiero was sold to management as a fuel-efficient commuter car. Since it used unique, expensive space frame construction, engineers cobbled the rest of the car together from GM’s mediocre part bins, using Chevette front suspension, Citation rear suspension, and GM’s ancient 2.5-liter four-cylinder, which traced its lineage to 1955. When the engine proved too big, engineers shrunk the oil pan, meaning the engine always ran a quart low. Still, it was abysmal quality control that doomed this car. One example: engine fans were wired backwards, pulling hot air into the engine rather than cooling it. More troublesome were the engine’s defective connecting rods, which failed disastrously, ripping through the engine block and spewing oil onto hot exhaust pipes, which then ignited. By 1987, 20 Fieros a month were going up in flames. So were profits. By 1988, GM was losing $2000 per car. The Fiero was finished.
The 1979–85 Buick Riviera had been the most popular iteration ever, with sales topping 370,000. Looking to build on this, the 1986 Riviera was designed to be the most technologically sophisticated car on the market. In one respect this was true; it was the first car to be fitted with a touchscreen infotainment system. However, the technology sales pitch wasn’t enough to overcome the elephant in the room: the $19,831 Riviera looked nearly identical to the smaller $9425 Somerset Regal, despite being 7.2 inches longer, 5.1 inches wider, and 1.5 inches taller.
In addition, the car’s 3.8-liter V-6 engine had a habit of randomly stalling, even at highway speeds. The problem was traced to the engine’s fuel injection system, which cost GM $303 per car to fix. Sales plummeted to 22,138 units in 1986 from 64,236 the year before. Sales continued to fall, despite a 1988 refresh that added front and rear overhangs in an attempt to recapture the 1979–85’s magic. It didn’t work. By 1992, with sales at 12,234 units, GM pulled the plug until 1995.
1989 Oldsmobile Cutlass Supreme
GM had once dominated the mid-sized car market with the Cutlass Supreme, America’s most popular car in 1976. When redesigned as one of the front-wheel-drive GM-10 cars for 1989, it no longer looked like its corporate cousins. In fact, GM President Lloyd Reuss was so enamored of the new Cutlass’ design, he ordered two assembly plants to build it. Unfortunately, the car’s sedate styling lacked the flare of the Ford Taurus, which quickly became America’s favorite car.
Cutlass Supreme sales fell 47.3 percent, and what’s worse, it took Ford 20 hours to build a Taurus vs. 35 hours for a Cutlass Supreme, giving The Blue Oval a $300-per-car edge in labor costs alone. The new front-drive Cutlass cost GM $460 more to build than the rear-drive car it replaced, while providing $700 less in profit. Factor in the car’s weak sales, and it’s no surprise that GM continued to build the Cutlass Ciera, a car the 1989 Cutlass Supreme was meant to replace. Eventually, GM would go on to lose $1800 on every X-Car sold.