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GM Europe now ranks fifth in its share of the highly competitive European market, behind Volkswagen (15.1%), Fiat (14.4%), PeugeotCitroen (12.7%) and Ford (11.6%). But at its current rate, GM Europe may soon move up a notch or two. The company, which makes cars in West Germany, England, Spain and Belgium, is considered the most nimble pan-European competitor at the moment. "If I were the rest of the Europeans, I'd be scared to death of GM," says James Harbour, an automotive consultant in Troy, Mich.
The two sides of GM do have their similarities. Both companies are run by American managers raised in the GM system. Both manufacturers suffered large financial losses earlier in the decade and then underwent massive reorganizations. The fork in the road goes back to those restructurings in the mid-1980s, which had an impact that can be seen clearly in the fate of two high-volume products: GM Europe's VectraCavalier and the domestic company's Oldsmobile Cutlass Supreme. The Olds, which posted sales of 334,000 in 1984, plummeted to 99,898 by last year.
What happened to the domestic cars? In the view of a GM executive now on the European side, Opel chairman Louis Hughes, the rapid pace of change at the U.S. company came at a price. Says he: "We changed all of our cars. We downsized them twice, changed from rear-wheel drive to front-wheel drive, changed all the systems of the company, changed all the factories, then told almost every employee in North America, 'You've got a new job.' "
The most damaging change in GM's 1984 reorganization was probably the dismantling of its two huge, parochial divisions, Fisher Body and GM Assembly. GM created in their place two integrated divisions, now called Buick- Oldsmobile-Cadillac (BOC) and Chevrolet-Pontiac-GM of Canada (CPC). The move may have made financial sense, but it diminished what automakers call brand character by centralizing design and engineering operations.
In GM's classic structure, Oldsmobile designed, built and marketed autos that were distinct from the other car divisions' products. Now Oldsmobile no longer builds its own cars and contributes little to the design and engineering. For all practical purposes, Oldsmobile is only a marketing division whose purpose is to sell cars made by BOC. "The responsibility for manufacturing a car is about as far from the people who sell it as you can possibly get," says Manhattan auto analyst Maryann Keller. "One of the most poignant things lost in the reorganization was the loyalty of individuals to brands. People missed being part of Olds and Buick, and it shows."
Under the reorganization, the Cutlass Supreme was subsumed into the $5 billion GM-10 project, which also developed versions of the Buick Regal and the Pontiac Grand Prix, all of which shared components with one another. In spite of GM's huge investment in retooling and reorganization, the result was a car line that has failed to excite consumers. Further weakened by a slumping U.S. auto market, the Olds Cutlass has turned into a money loser.