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Buick Sales Epitomize GM's Woes

The company ignored warnings 20 years ago that changes were needed. Is it too late?

April 02, 2006|John O'Dell | Times Staff Writer

Buick was the seed from which General Motors Corp. sprouted. And for generations, the luxury car line was one of GM's most bountiful divisions.

The Buick brand filled a crucial niche for the auto giant, attracting well-heeled consumers who wanted more than an Oldsmobile but weren't comfortable with the flash of a Cadillac.

Now as GM faces the threat of bankruptcy, Buick has emerged as an emblem of the auto giant's broader woes. GM sold nearly a million Buicks in the U.S. in 1984. By last year, sales had sputtered to 282,288, a 70% decline over two decades, the biggest of any major auto brand.

Buick has broken down in U.S. showrooms for the same reasons that Americans deserted GM brands such as Chevrolet, Pontiac and Olds in favor of Toyota, Honda and Nissan.

For The Record
Los Angeles Times Thursday April 06, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 33 words Type of Material: Correction
Buick's decline: A front-page article Sunday on Buick and parent General Motors Corp. said the automotive brand was founded in 1903 by William Durant. Buick's founder was David Dunbar Buick. Durant formed GM.

Buick offered bland designs and ignored consumer demand for pickups, minivans and SUVs. Buyers' shift toward snappier styling, snazzier features and -- most of all -- higher-quality cars left Buick vulnerable in the late 1980s when Lexus, Infiniti and other foreign luxury models invaded its home turf. Even using golf superstar Tiger Woods as pitchman hasn't helped Buick.

Warnings that GM's luxury car stronghold was about to collapse went unheeded as the automaker clung to the conviction that Americans really would rather have a Buick.

"I remember being told by a GM executive ... that they'd never worried about Buick because as people got older and richer, their asses would get fatter and they would always buy Buicks to sit 'em in," said Dan Gorrell, vice president of San Diego market research firm Strategic Vision, which has done consumer studies for GM.

In the mid-1980s, a Burbank market research firm hired by the automaker warned that European and Japanese rivals were revving up to leave GM in the slow lane.

"The sounds of heavy armor can be heard in the suburbs, in what may be the final assault on General Motors' long-time stronghold, the luxury car market," the report from Vista Group said. If GM didn't satisfy car buyers' tastes for smoother handling, sleeker designs and fewer but more luxurious options, Buick would start losing customers to the new competitors. The Vista report proved prescient.

The failure of Buick and its sister brands has thrown GM into a tailspin.

After losing $10.6 billion last year and with its U.S. market share at an 80-year-low, GM's chief executive, Rick Wagoner, recently offered buyouts to 125,000 hourly workers.

Many Wall Street analysts are increasingly concerned about GM's finances. Some believe the world's largest automaker might file for bankruptcy protection, a move that -- because of GM's size -- could convulse the entire U.S. economy.

In the end, analysts say, GM's corporate hubris led to Buick's descent.

"They had this arrogant belief that when baby boomers turn 50, 'they belong to us,' and that just didn't happen," Gorrell said.

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GM executives insist that Buick is still a "relevant" brand.

"I'm convinced Buick's turnaround has already begun," said Bob Lutz, GM's 74-year-old vice chairman for product development. "We are now focusing on its original role as an affordable near-luxury car that isn't just a Chevy or a Pontiac with a different name badge."

To succeed, GM would have to win over consumers like Myron Wozniak. That could prove difficult.

Wozniak, 46, a Northrop Grumman engineer in El Segundo, has owned three Buicks and an Oldsmobile. "I was raised in a 'buy American' family," he said.

But Wozniak and his wife harbor unpleasant memories of replacing the alternator in their Buick Skylark; the alternator, several electronic ignition controllers and the air conditioning compressor and anti-lock brake system controller in their LeSabre; and the entire automatic transmission in their Oldsmobile Intrigue.

That was enough to drive the Wozniaks into the foreign camp. Their last three purchases have been a Honda Accord, a Toyota pickup and a Lexus sport coupe.

"All we've had to do with them is change oil," he said. "My next new car sure won't be an American car, I don't care what kind of incentives they offer."

Last year, Lexus -- the luxury division of Toyota Motor Corp. -- gave Buick the final push off its perch, outselling it for the first time.

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Buick was founded in 1903 by a marketing genius named William Durant, who gobbled up the competition. Five years later, he formed GM. His successor, Alfred P. Sloan, crafted the strategy of offering a car brand "for every purse and purpose."

"Buick was known for decades as 'the doctor car,' " said Jeff Taylor, curator of the Alfred P. Sloan Museum in Flint, Mich. "It was for professionals who just weren't comfortable with the flashiness of a Cadillac."

Buick prospered by building big cars with powerful engines and often stunning styling. They scored hits with the sporty 1953 Skylark convertible and the knife-edged 1963 Riviera.

But Buick seemed to have lost its way during the 1970s gas crunch and the demands in the '80s to meet new safety standards.

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