GM scraps Oldsmobile

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General Motors Corp., Detroit, announced today it will phase out its Oldsmobile Division over the next few years to focus on other brands and growth opportunities. Oldsmobile, more than 100 years old, is GM's oldest brand. Its products will be phased out as the cars and trucks reach the end of their lifecycles or as long as they remain economically viable. GM, which has been gradually but steadily losing market share in the U.S., will also eliminate roughly 9,000 jobs in this country and 5,000 positions in Europe. Oldsmobile "has been in the red for a fairly long time," said GM President-CEO G. Richard "Rick" Wagoner Jr. Sales of Oldsmobile are off 18.5% through November despite a complete overhaul of its model lineup over the past five years. Advertising was slashed in the first half of 2000 to $92 million; GM spent $330 million on the brand in calendar 1999, according to Competitive Media Reporting. The decision to kill Olds comes as the brand is in the midst of a shootout for a major branding project with general-market incumbent Leo Burnett USA, Chicago; African-American incumbent E. Morris Communications, Chicago; and McCann-Erickson, Troy, Mich.

Copyright December 2000, Crain Communications Inc.

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