End of the Road for the Olds

The manicured green pastures and white fence posts stretch over the gentle hills of Kentucky’s horse country all the way to Donny Ethington’s tidy car dealership with its fleet of new Aleros, Auroras and Intrigues.

It’s not exactly bustling these days on the showroom floor alongside U.S. Highway 60. Ethington manages to sell only one new car about every two weeks.

The problem is largely the brand. Ethington is selling the last of the Oldsmobiles, the 105-year-old nameplate that General Motors Corp. has put on death row after an unsuccessful effort to make it a viable alternative to imports such as Honda, Volvo and Audi.

“We don’t do a lot of volume out here,” Ethington says, chuckling wearily.

It wasn’t always that way. For decades, Olds was known for innovative cars, such as the 1949 Rocket 88 that inspired a blues song by Ike Turner. But more recently, such models as the Omega and the Achieva became odes to mediocrity.

Oldsmobile is the most visible casualty yet in the intensifying 30-year battle waged against American brands by imports. While the Olds brand fades out and sales drop through the floor, dealers such as Ethington are left stranded, faced with one of the toughest selling jobs in the world.

Ethington represents the antithesis of the stereotypical car dealer--the sweet-talking, crafty and deal-hungry salesman, the perpetual bottom-dweller of surveys that measure consumer trust. Ethington is a soft-spoken Southern gentleman, with wavy gray hair and a brown vest, something of a father figure to his 30 or so employees.

The atmosphere at the dealership more resembles a living room than a high-pressure sales office. Two teenage girls, Ethington’s nieces, are in a nonstop gabfest as they answer phones, chatter with friends and keep a buzz going. A friend stops in to smoke a cigarette. Salesmen shuffle around in the background, waiting--and waiting--for a prospect.

“It’s tough,” Ethington says in his windowless office above the showroom, worried about his extended family supported by the Olds dealership in Shelbyville, population 10,085. Across the country, sales of Oldsmobile’s current models fell 36% over the first five months of the year.

Many upscale buyers wouldn’t be caught dead in an Olds.

The most loyal customers and the biggest market these days are in Flint, Mich., the grimy GM factory town that has fallen on hard times as the company has retrenched. By contrast, Los Angeles ranks among the places a buyer would least covet the brand.

The last Olds is due to roll off the assembly line sometime in 2004. As the brand travels down the highway to oblivion, the days have grown darker at Ethington Oldsmobile, where Olds is the only new-car brand the dealership carries. Resale prices of the five models--the Alero compact, the Intrigue mid-size, the Aurora full-size sedan, the Silhouette minivan and the Bravada sport utility vehicle--have fallen significantly. “I’ve never seen them so cheap,” Ethington says.

It’s not even worth it to Ethington to spend money on advertising Olds; he relies on the national ads that GM puts out. Members of the extended Ethington family nonetheless keep busy throughout the dealership.

Sixty-year-old Donny has been in the car business since 1960 and now owns the dealership with his brothers Jake, 52, and Jimmy, 44. Donny’s son Tim, 35, works full time in the financing department, and a cousin, Hubert, 67, is a salesman. A niece works in finance and insurance, and a nephew in wholesale. Jake’s and Jimmy’s 16-year-old daughters, Casey and Jamie, work the desk at the showroom part time.

With the economic crunch, things were difficult anyway. But GM’s decision in December 2000 to kill the Oldsmobile division pulled the livelihood out from under dozens of new-car dealers who will have no other brands to sell, or just one other brand that would have difficulty sustaining a business on its own, such as low-volume GMC or Cadillac.

The Ethington brothers grew up in Shelbyville, where their father was a tobacco farmer. They started out selling used cars; business was good, but they wanted a new-car franchise. In 1985 Oldsmobile had a banner year, selling nearly 1.1 million cars. The next year the Ethingtons invested in their own dealership, a modest, stand-alone Oldsmobile shop a quarter of a mile down the road from a Chrysler dealer and across the street from a small local restaurant.

Ethington’s not sure what will become of his family’s dealership. There isn’t another car brand the family can take on to replace Olds. All the others are represented in town except Cadillac, and the brothers aren’t likely to rope in Caddy.

“We have a Cadillac dealer 17 miles one way and another 20 miles the other way,” Donny says.

Other Olds dealers are in the same boat, wondering what will fill the void left by Olds.

“How can I make up the volume? That’s a prime question,” says Alan Starling, an Oldsmobile-Chevrolet dealer in St. Cloud, Fla. “GM expects me to reduce overhead and my expense structure. So, how can I increase revenue? Work with Chevy and used cars, I guess. I need to find a business or legal solution.”

The hard feelings are a sorry end to Oldsmobile, founded by Ransom E. Olds in 1897 and taken over by investors in 1904 when Olds left and formed the REO auto company.

The legendary Billy Durant bought Oldsmobile in 1908, combining it with Buick, which he already owned, thus forming General Motors, today the world’s largest auto maker.

Olds put out some legendary cars in its time. The 1904 Curved Dash was the first mass-produced vehicle in America, preceding the Model T. It was powered by a one-cylinder, four-horsepower engine, weighed 650 pounds and cost $650--$1 per pound.

In 1949 the Rocket 88 became a hit with the industry’s first high-compression V-8 engine. The car won six out of nine NASCAR Grand National races in 1949, and more than a third of all Olds sales that year were 88s.

Then in 1951, Ike Turner penned the song “Rocket 88” for singer Jackie Brenston: “You women have heard of jalopies / You’ve heard the noise they make / Well let me introduce my new Rocket 88.... V8 motor and this modern design, / Black convertible top and the gals don’t mind.”

Then came the 4-4-2 in 1964, named for its four-barrel carburetor, four-speed transmission and dual exhaust. The 1966 Toronado was the first modern-day front-wheel-drive vehicle and had sleek, new styling.

But there were duds too, especially from the ‘70s to the ‘90s. The Firenze, Calais and Cutlass Ciera were part of a long slide down. The 1977 Delta 88 spurred a class-action lawsuit because it came with a Chevy engine, not the Rocket 350. Later the Achieva became a staple of rental car lots.

“There were some really dreadful cars put out by Oldsmobile back then,” says Jim Hossack, vice president of consulting firm AutoPacific Inc.

GM had spent billions updating the Oldsmobile fleet but not modernizing its image. In the last several years, Oldsmobile tried to reposition the brand as an import fighter that would appeal to younger buyers, with sleeker designs and catchy marketing such as tie-ins with Olympic beach volleyball and rock concerts as well as the “This is not your father’s Oldsmobile” ad campaign. It also invested in Internet advertising. The idea was to get the “old” out of Oldsmobile.

But GM didn’t give the made-over Oldsmobile a chance to catch on with consumers, says Jos Ferguson, who founded the Web site www.saveoldsmobile.org, which has accounted for about half the 2,000 e-mails that GM has received lamenting the brand’s demise.

All of Ferguson’s family bought Oldsmobiles. He gushes about the 1998 Intrigue he had, noting that it didn’t have the word Oldsmobile on the outside, and most of his friends thought it was an Acura.

“We finally found a way for us to buy American and find dealer service we like. Then they yanked it,” says Ferguson, a 30-year-old who works for an Internet company in Portland, Ore.

Ethington agrees that GM improved the Olds line. He drives a 2001 Aurora, which he says “is a lot more car than the Cadillac Catera.”

But one of the Aurora’s problems is its price, $30,000 to 35,000, where it’s outclassed by competitors such as the Lexus ES 300 and the Acura TL. Olds also missed the truck boom, only in the last several years offering an SUV, basically re-badged from Chevrolet.

As imports won over more American buyers, Oldsmobile sales sank quickly to 500,000 in 1990 and then 289,000 in 2000 when the plug was finally pulled, despite the company’s having completely redone the product lineup to generally good reviews.

GM’s marketing effort was showing some results: The average age of the Oldsmobile customer fell from 60 in 1996 to 49 in 2000, and 25% of buyers were 35 or younger. But the momentum fell short. Basically, “they still catered to the older market,” Ethington says. “It’s still the 60-, 65-year-olds who come to shop.”

And Olds’ efforts gained little notice outside the Midwest. Besides Flint, Olds’ top markets are Saginaw and Bay City, along with seven other cities in Michigan or Ohio, according to the market research firm R.L. Polk.

The chief of Oldsmobile is general manager Debra Kelly-Ennis, who works at GM headquarters in downtown Detroit. A former marketing whiz at Procter & Gamble Co., she describes GM’s withdrawal of Olds as something being done with “grace and dignity”--evoking images of President Nixon’s speeches about the end of Vietnam.

It’s “certainly an unprecedented challenge,” Kelly-Ennis says. “People are sad, and you can’t minimize that.”

Oldsmobile’s marketing staff has been slimmed to just 16 from about 50 when the announcement was made, though no assembly workers have lost their jobs at plants in Michigan, Kansas, Georgia and Ohio.

About 60% of the Oldsmobile dealers have signed or have agreed to sign separation agreements that provide compensation based on a complex formula involving factors such as dealers’ volume, product mix and investments in renovation.

But many are dissatisfied, even bitter, at GM’s attempts to settle and move on.

“I think it’s absolutely criminal. It’s like you killed my dog and left $20 on the porch,” says Leo Jerome, who owns two large dealerships in Lansing, Mich.

For the Ethingtons, GM’s settlement offer isn’t much. “It’s very little money, around $125,000,” says Donny, who hasn’t done any remodeling in the last five years that would increase what is in effect severance pay. “They want you to keep the parts. But I don’t think I need all those parts,” he says of the $60,000 worth of motor and transmission components, alternators, spark plugs and assorted body parts he has in stock. “It would be kind of foolish for me to keep the parts if I’m not an Olds dealer anymore.”

The Ethingtons are trying to boost their used-car business. Jake roams car auctions several days a week, traveling from St. Louis and Indianapolis to Atlanta and Harrisonburg, Pa.; they also sell used cars wholesale to dealers in Kentucky, Tennessee, Indiana and Ohio.

But it’s hard to swallow after hoisting the Oldsmobile flag for 17 years.

Muses Donny, still incredulous: “How could a manufacturer screw it up so bad it had to discontinue them?”