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Cadillac Apologizes to Lincoln for Inflating Sales Numbers

Autos: GM luxury-car maker 'overstated' volume by 4,773 vehicles. Revision gives Ford unit sales crown for '98.

May 06, 1999|JOHN O'DELL | TIMES STAFF WRITER

In an unprecedented move, Cadillac has apologized to archrival Lincoln for fudging December sales numbers to maintain its coveted crown as the best-selling luxury brand for 1998.

Historic segment leader Cadillac, skillfully zigging its way around the "L" word, said Wednesday that an internal audit showed that it "overstated" December sales by 4,773 vehicles.

Initially, Cadillac had claimed the sales title by a scant 222 vehicles. But the revised numbers put Lincoln firmly ahead, with 187,121 sales last year to Cadillac's 182,570.

Beyond the embarrassment of its public admission of wrongdoing, the relegation of the General Motors Corp. unit to second place in the luxury-car wars adds another blemish to a GM image already bruised by sluggish sales at a time of record industrywide results.

At Irvine-based Lincoln Mercury, where officials have scoffed at Cadillac's December sales claims since they were published, the mood was one of quiet satisfaction.

"I don't think we ever felt we hadn't won," said Mark Hutchins, president of the Ford Motor Co. division. "We've got a lot of things working in 1999, and that's what we're focused on. But you do like to congratulate people who worked hard, so that's why I read the letter from Cadillac to our people this morning. Then we all went back to work."

Sales numbers are reported monthly by the auto makers and are used by economists, industry analysts and the media as a key indicator of the health of the U.S. and global economies. The companies use them to brag about the popularity of their vehicles--when they outsell the competition.

But the figures are self-reported: There is no official third-party entity that audits and verifies the auto makers' reports.

"We regret that the inflated delivery report caused the media to believe that Cadillac dealers had indeed sold more vehicles in December, and thus for the entire 1998 calendar year, than Lincoln," Roy Roberts, vice president and group executive for GM's North American sales, service and marketing unit, said in a public apology that stunned longtime industry watchers.

"Nobody around here has ever heard of one car maker apologizing to another over something like this," said Jim Hall, a Detroit-based industry analyst with AutoPacific Inc.

"Of course, it wasn't that long ago that all [auto makers] routinely stretched the truth about their sales," he said, "and we didn't believe any of them."

Embarrassment aside, Cadillac isn't likely to lose any business, analysts said.

"By and large, people just don't punish companies for behaving badly," said Tom Healey, who studies auto company image issues for J.D. Power & Associates in Agoura Hills. This business-to-business hardball is important to people in the industry, but it just doesn't have much impact on the public."

GM's apology--for what it says was not the result of corporate policy but instead the actions of "overzealous" lower-level employees--should get the company off the hook with most consumers, said David Cole, director of the University of Michigan's Office for the Study of Automotive Transportation.

Cadillac spokesman Jim Farmer said the December numbers were inflated by personnel at the factory. They counted as actual sales 4,773 vehicles that had been ordered by dealers but had not been shipped--and thus were still the unsold property of GM.

Hutchins said Cadillac "showed a great deal of integrity" in issuing a public apology.

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