(EXPANDED FROM 1/19/2022)
In a discussion about market segmentation a few years ago, DECG50 asked a good question: Would General Motors have been more disciplined if Alfred Sloan still headed the automaker in the 1960s?
“From what I understand, Sloan viewed GM corporate as essentially a merchant bank for the divisions,” DECG50 wrote. “They had to make the case for an investment from corporate, and that would either be granted or not based on the expected return.” Under that system, “corporate would simply not have supported compacts/intermediates among 4 divisions,” DECG50 speculated. And under this scenario, “Olds might not have had the Cutlass cannibalize the 88 as evidently happened. And one doubts Buick would have bothered with intermediates either.”
Even more provocatively, DECG50 suggested that “when smaller cars became a necessity for the more senior divisions after 1973, they would have been properly engineered as luxury models instead of ending up as badge engineered Novas.”
Sloan stepped down as CEO of General Motors in 1946 and died in 1966 at the age of 90 (Wikipedia, 2021). Thus, the most realistic counterfactual would be that he mentored a series of successors who doggedly continued his “hierarchy-of-brands” strategy. Through the 1970s, six men served as CEO after Sloan (Los Angeles Times, 2022).
GM struggled to replace size/price hierarchy
One of the most obvious ways that GM had differentiated its brands was with size. In general, the larger the car, the higher it was in the automaker’s price — and prestige — hierarchy. That hierarchy began to erode once U.S. automakers began to offer cars that were smaller than “standard” size.
The four-seater Ford Thunderbird was arguably the first crack in the wall. In 1960 it upturned conventional wisdom by outselling similarly priced models from Buick as well as Oldsmobile (go here for further discussion).
Then GM undercut its own hierarchy by giving four out of five of its car divisions compacts in the early-60s. The brands initially tried to maintain their pecking order primarily through engineering advancements.
As Geeber noted, one problem with this approach was that “the unique technology used by each version raised costs and decreased profitability (without having any real demonstrable positive effect on sales). The 1964 A-bodies addressed that issue – and sold far better than their predecessors.”
A-body further undercut hierarchy of brands
You could still see echoes of the past in how GM differentiated its first A-body mid-sized cars. The 1964 Chevrolet Chevelle was the shortest at 194 inches in length. The Pontiac Tempest, Oldsmobile F-85 and Buick Special were all roughly nine inches longer. This equated with their somewhat higher list prices.
This posed three problems. First, although each A-body entry had unique sheetmetal, unlike with GM’s big cars you didn’t get extra interior room as you moved up the price ladder. That was because all A-body models had the same wheelbase. A lone except was the wagons, where high-end Oldsmobile and Buick models had a longer wheelbase and taller greenhouse.
Also see ‘1965-68 GM big cars: The end of different strokes’
The second problem, as Geeber noted, was that “one could buy a Buick Special that was smaller and cheaper than a Chevrolet Impala.” This was “after decades of GM hammering home that increased size and price equated to increased prestige.”
The graph below shows how the list prices of all four of GM’s mid-sized cars overlapped with those of the full-sized Chevrolet. This stood in contrast to GM’s big cars, where Pontiac, Oldsmobile and Buick had greater price differences with Chevrolet.
GM’s pricing hierarchy became even more confusing in the mid-70s. This was when Buick and Oldsmobile’s top-end, mid-sized personal coupes were priced lower than their corporate siblings, the Chevrolet Monte Carlo and Pontiac Grand Prix. And as we have discussed here, by the end of the 1970s the price points for these halo models became strikingly similar. Why then the need for four entries, particularly as the personal-coupe market declined?
Would Sloanism have better differentiated brands?
Let’s come back to DECG50’s argument that a GM still managed by Sloanist principles would have been more disciplined in its product-proliferation decisions. Might Buick and/or Oldsmobile have been denied smaller cars until the early-70s?
Potentially, although in the late-50s GM executives would have had to withstand pressure from dealers who were panicked about the dramatic decline of the premium-priced, big-car market (go here for further discussion). That pressure would undoubtedly have increased due to the early success of Mercury’s compact Comet.
Then, in the early-70s, could GM have done a better job of giving its premium brands smaller cars that were distinctive? I suspect that this would have required executive management to better anticipate major increases in gas prices. With the collapse of big-car sales in the wake of the oil embargo of 1973-74, dealers quite rightly clamored for smaller cars — and quickly! GM responded by giving its premium brands a variety of badge-engineered compacts and subcompacts. This may have been expedient in the short run, but it established a bad habit that GM failed to break in subsequent years.
A big reason why may have been that the high cost of downsizing the automaker’s vast lineup of cars inevitably led to greater parts sharing. Even so, GM could have drawn more upon its foreign subsidiaries to give at least one of its U.S. brands more distinctive products. For example, Pontiac could have been reconfigured as GM’s import-fighter that offered U.S.-produced versions of German Opel, British Vauxhall and/or Australian Holden models.
Did GM allow itself to get stretched too thin?
Of course, bringing to the U.S. a foreign design would have been more costly than badge engineering a Chevrolet. Thus, it is understandable that GM was ginger about drawing from its foreign arms.
That said, it is hard to see how else GM could have otherwise maintained an adequate level of brand differentiation. GM may have had deeper pockets than its domestic rivals, but it still clearly struggled in the 1970s and 1980s to fill out its lineup.
Even with that step, GM would have still had to display much more discipline in maintaining a hierarchy of brands than what occurred. But as Kim Margosein notes in the comments below, this may have been politically difficult given the power of the dealers to insist on new product as market conditions changed.
GM needed to give individual dealers a broader range of products than were offered by one brand. How else could each brand have focused more narrowly focus on specific niches?
NOTES:
This story was originally posted on Jan. 10, 2022 and expanded on Sept. 15, 2025. Product specifications and poduction figures were calculated from data published by the auto editors of Consumer Guide (1993, 2006) and Gunnell (2002).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Auto editors of Consumer Guide; 1993, 2006. Encyclopedia of American Cars. Publications International, Lincolnwood, IL.
- Gunnell, John; 2002. Standard Catalog of American Cars, 1946-1975. Revised 4th Ed. Krause Publications, Iola, WI.
- Los Angeles Times; 2022. “GM’s history of CEOs.” Accessed Jan. 19.
- Wikipedia; 2021. “Alfred P. Sloan.” Page last modified Dec. 8.
ADVERTISING & BROCHURES:
- oldcaradvertising.com: General Motors (1956)
- oldcarbrochures.org: Buick Electra (1960); Buick Skylark (1964, 1980); Chevrolet Chevelle(1964); Chevrolet Citation (1980); Ford Thunderbird (1960); Holden (1978) Oldsmobile F-85 (1964); Oldsmobile Omega (1980); Pontiac LeMans (1964); Pontiac Phoenix (1980)
A lot of this becomes clearer when you understand that GM’s customers are dealers, rather than consumers. As far as the local Pontiac dealer is concerned, if his sales are cannibalized from Olds or Chevy, that’s just fine with him. Although there was some platform sharing, especially among the BOP divisions, it made no real sense for each division to build engines within a few cubic inches of each other. This is economics 101.
Also, this may be a chicken/egg situation, but the dealerships grew massively in size during this era. I am old enough to remember when some dealerships were little more than storefronts. There was one such dealership like that where my father bought a new 1961 Corvair. I remember going through the area 30 years later, and I think you could see the dealership from space.
Well put. Pontiac went from annual sales of around 400,000 units in 1960 to over 900,000 in 1968 — and hovered in that realm multiple times during the next decade. That required quite a bit more dealer capacity. Those dealers had breakeven points, so if their sales fell too low — such as during the first oil embargo — they could lose their shirts. So whether they had distinctive compacts or subcompacts may have mattered less than having SOMETHING on their lots to sell.
Note that Pontiac’s dramatic growth during the 1960s was primarily driven by cars smaller than full sized. Oldsmobile’s situation wasn’t quite as extreme, but between 1962 and 1971 big cars saw their proportion of total division output drop from roughly 80 percent to only 50 percent.
Only with Buick did full-sized cars represent a steady majority of the brand’s sales throughout the 1960s (go here for further discussion). So Buick would have been the best candidate to not dabble in compacts or mid-sized cars. However, the division still generated only 60 percent of its sales from big cars.
Could Buick have made it through the 1960s by focusing exclusively on full-sized cars? If so, it would likely have had meaningfully lower sales and/or cannibalized the big-car sales of GM’s other premium-priced brands. Which may have penciled out best in the long run, but it would have required pretty different corporate thinking.
While reading Kim’s comment, I immediately thought of the post you referenced – “1965-68 GM big cars: The end of different strokes” and how increasing the size of the cars didn’t necessarily involve a corresponding increase of interior or trunk volume. Longer, lower, wider meant sitting in more reclined seats (ironically without adjustable backrests) while trying to navigate for parking spaces across far longer hoods and fenders. I love GM big car styling from this period and think it was second-to-none, but were cars of this size necessary? No.
GMs first gen mid-size cars did not need to get bigger, only more differentiated to avoid the overlap that eventually befell the corporation. As you pointed out, however, GM answered to dealers first, buyer’s second. Hence, you got cars like the Cadillac Cimarron. I doubt US that dealers would have done anything different had a Sloanian-style management system remained in place. They would instead have found reason to complain about being forced to sell products they didn’t want (as opposed to selling products the public didn’t want).
Here in Canada, where GM’s dealer network was basically structured as Chevrolet-Oldsmobile and Pontiac-Buick-GMC franchises (due to our smaller population), it made little sense to retail both a base Chevelle and an F-85 out of the same showroom, unless in 1964-65, you really wanted a V6, which was only available in the Oldsmobile. In 1966, F-85s came standard with the inline Chevy 6. Canadians didn’t get the mid-70s Vega/Monza-based Oldsmobile Starfire because it was redundant. Later on, however, they did sell the J-Car Oldsmobile Firenza (a name with a horrible history in Canada, btw) alongside Chevrolet Cavaliers. To me, that made no sense. There was virtually nothing to differentiate the latter vehicles and with brand loyalty fading fast, how would you expect a buyer in that market segment to justify spending more money on a Cava-Firenza? GM just didn’t get it, on either side of the border.
When Chevrolet debuted the Chevelle, they declared it ideally-sized, comparing it without irony to the popular ’55 Chevy, which it approximated in a number of dimensions. So, why the need for ever larger American cars when it was obvious as the 60s progressed that more and more sales were going to mid-size and smaller cars? A Sloanian system of management would also, I believe, needed to have permanently curbed that quest to build increasingly massive cars. As we can see though, even in 2022, trucks and SUVs continue to get larger and heavier; the upcoming electrification of American vehicles is only perpetuating the whole bigger is better syndrome. Where and when does it end?
We had the same dealer arrangement you describe in rural areas of Wisconsin back then. Cadillac dealers were rare, and usually partnered with Chevy/Olds.
Steve, thanks for furthering the discussion and for the data dive.
I accept that the Buick and/or Olds dealers would likely have pressured GM corporate for intermediates in the 1960s had GM corporate not approved them, but I don’t agree dealer pressure would necessarily have won the day. Let’s not forget that GM corporate successfully deprived the dealers of Viking, Oakland, Marquette and LaSalle cars during the Sloan era as market conditions dictated a reduction of model proliferation.
Also let’s recognize that lower volume doesn’t necessarily mean lower profitability for dealers. A Lexus dealership isn’t necessarily less profitable than a Toyota dealership even on lower volumes and a model range that covers fewer segments of the market. It’s a question of whether margin on sales gets traded for volume, which is the same issue as was facing GM corporate.
My read of the history is that what drove Donner and the McKinsey consultants he brought in to advise him was that return on invested capital had been declining across the industry, and this was affecting GM more than Ford and Chrysler because its more decentralized organization dictated higher capital investment per unit of output. So it seemed logical to them to force the divisions to pool engineering resources, to each maximize unit output, and ultimately to fold manufacturing into GMAD.
This was all logical, but with the benefit of hindsight we can see it was the wrong course. It isn’t possible to sustain 5 distinct brands with this setup, and in fact with this model you can probably only successfully sustain one mainstream brand and one luxury brand, something that Roger Smith publicly acknowledged early on in his tenure as CEO. With the benefit of hindsight, the right solution to the declining return on invested capital problem would have been to raise prices. After all, the 1960s was not only a decade of rising prosperity but also declining taxes on high earners’ income (the top marginal rate having been cut from 91% to 65% in 1964).
So much for the 1960s. I agree that the 1970s presents a greater challenge, but my thesis is that a better managed GM corporate would have invested in better engineered true luxury compacts, not because it would have been clairvoyant about the 1973 oil embargo and the energy issues later in the decade, but because the growth in Mercedes-Benz sales in the late 1960s would have provided upper divisions the business case for investment in such a car. There was a market for a smaller luxury car that was there to be exploited (particularly among women it was eventually recognized when the K body was approved).
The central problem with allowing the A bodies to cannibalize full-size sales from my point of view is the erosion of brand equity. You see that in the rapid compression of pricing differences among the B bodies during the 1970s. It simply became impossible for a Buick dealer to command more for a LeSabre than a Chevy dealer could command for a Caprice.
One item that keeping Sloan concept through the period should have resulted in was the supremacy of the divisional general managers. They had direct accountability for their brands performance. Instead what happened was the growth of a corporate level where direct accountability became more nebulous.
For the question you pose at the end of this revised article I offer this alternative: They should have built an Opel plant in North America and told all BOP dealers who wanted a smaller car that they needed to carry Opel. This would have avoided the Fisher Body blockage of using Opel platforms for domestic production and centered small car engineering in the division most suited to it.
That sounds like it would have been a good approach. It would have been interesting to see how well the Opel brand would have done as time went on, particularly in the 1990s and beyond. I could see it becoming one of the biggest-selling GM brands in the U.S. while Buick and Oldsmobile shrunk to becoming mini-brands.
This is a fascinating study because GM was so huge and was starting to build lot of overlapping cars which of course was anathema to ”Sloanism ”It started in the early 60’s with the introduction of the BOPetts. And the Chevy compacts. Too dang many of them! Then again – with Falcon/Comet out and about – many GM panicked. GM introduced a siesmic line of cars- the 1966 and up midsizers – Gm eventually crashed thier own Full size market. Gm managed it all Ok until the redundancy problems multiplied at the mid size level. Who needed a Impala 2 door – a Malibu 2 door and a Montecarlo 2 door? And so on up the line. Surely by 1971 the Pontiac full size was expendable – and have the Grand Prix take over – perhaps what DE Lorian wanted. The 1977 downsize was handled all wrong. Just throwing everything into the shrink machine solved nothing – and at tremendous expense and trouble – the reduncancy remained. The downsizing if Sloain was alive – wouldve been gradual. Chevy Pontiac full size 1st cut – along with Olds 98. Keep Buick and Cadillac largely as is. PRune out the redundant models. Next year – downsize Olds 88 Buick le sabre and a deVille. Restyle Seville and make it a lower priced ”popular car ” for younger buyers. Drop Fleetwood – restyle Electra and call it Fleetwood. I think Sloan would approve. 1978 midsize downsize – same basic plan.
‘As Geeber noted, one problem with this approach was that “the unique technology used by each version raised costs and decreased profitability (without having any real demonstrable positive effect on sales).” True. However that was the unique selling point. Each non-Cadillac division had pretty much its own I6 and small block and big block V8s. I remember, it was during one downsizing or another that some guy sued GM because his Olds came with a Chevy small block insted of an Olds Rocket V-8. Apparently back in the day GM could afford it. However, high priced gas came along, which begat CAFE, along with the snowplow bumpers crashworthiness, and the Clean Air Act. Development costs went sky high and any hope of differentiation went out the window. It finally dawned on the suits that at the heart the only difference was bling. Now all these changes were forced on them from the outside and the Big 3 had to had to change a lot and change fast. In all cases they dragged their heels until they could drag no more and then they threw something together. Now GM did try with the first generation compacts giving each a different technology. For some reason this was not continued. Buick sold Opels for about 15 years or so. For some reason they dropped it. Pontiac (?) tried Vauxhall for a couple years and it didn’t work out. Thinking too far out of the box? BTW, how much clout DID the dealers have?
When Opel sold cars in the US it never was a big seller. Maybe it would have done better if sold in a different division than Buick. It was very much a sideline car in the dealers. What might have been better would have been if GM used Opel platforms with different sheet metal and built them in US instead of developing cars like the Vega. Ford likewise with its European cars.
I think 1977 B/C platform was the right thing to do, but GM should have discontinued the A body sedans and wagons when the 1977 B/C platform debuted. In 1978, GM should have downsized the A body specialty coupes, but not have developed the A body sedans and wagons. The old RWD X body was almost as roomy as the 1978 A body sedans and had roll down windows. Instead the FWD 1980 X body should have been used as the mid-size car as it was more fuel efficient and had comparable interior space to what the 1978 A body sedans had. J cars were close in size to X body, and GM instead should have used the FWD T platform used for the Opel Kadett for its new generation small cars. Later in the 1980’s, I think GM should have either done C/H platform or W body but not both.
Better still, the 1978 Buick and Olds compacts and intermediates should have been based on the Holden Commodore and Opel Senator platforms respectively, with the 2nd generation Seville on the Senator platform the following year.
Kim in Lamark writes “It finally dawned on the suits that at the heart the only difference was bling.” When I looked at the ad featuring the full GM lineup for 1956 that Steve included in his post, it’s pretty obvious that those cars are all related.
Another thought is vertical vs. horizontal integration. You can examine how similar a car is across brands: for example, late 60s Caprice, Electra, Ninety Eight, De Ville, and whatever the biggest Pontiac was (Bonneville?) However, how much brand DNA is shared within one brand? Dis that quality become less important to GM? I drive a Mercedes C class and my husband drives an S class. We can see and touch a lot of shared components. They have similar characteristics. It used to be “one sausage, three lengths” for BMW and Mercedes. It’s not like the smaller car was imported from a different manufacturer like Daewoo or Isuzu and then tarted up. I am thinking more of malaise era GM than in the 50s, but even in the 60s, in trying to adjust each car across brands (Riviera-Toronado-Eldorado or all of those little cars like Monza, Astre, Sky Hawk, Starfire, Sun Bird), how much vertical cohesion was lost? In rereading John De Lorean’s book, he presented himself as fighting for Pontiac to differentiate itself from other GM makes, especially Chevy. There was definitely more styling cohesion among those De Lorean Pontiacs. I am not sure if I am expressing my idea clearly, but I think that after Sloan, brand DNA grew to be less important than corporate economies of scale.
This article is definitely thought provoking. In a tiny bit of cursory research about Opel, a Hemmings article alluded to it being too expensive for GM to use Opels during particular times, especially during the oil crisis, due to the exchange rates.
Lori, you hit on a real point. Regarding the 50s picture, it’s my understanding there was some exterior sheetmetal and glass sharing, more so on inner stampings. This gave the cars a certain corporate family look. All the big 3 had this. In this era there was only the full sized car, each division would have at most a short wheelbase and long wheelbase version with the extra length usually forward of the cowl. You could not, NOT have vertical integration such as it was. ISTM that European manufacturers tended to be one brand companies, and in the brand would have a much larger price range than the big 3 conglomerates. You’ll notice some of the larger postwar independents did this too after the companion make fad flopped. Due to the reasons I described above there was no real chance for vertical integration to grow organically.
Correction- larger PREWAR independents
First: Sloan retired in 1956 and left the board in 1958 with Harlow Curtice, when Frederic Donner (and marginally John F. Gordon) took over. Second: Every U.S. automaker was beholden to its dealers and state franchising laws were much tighter than ever. Sloan and his president would have likely vetoed to Corvair and the 1960 Y-bodies. Likely Sloan would have approved the Chevy II and the intermediates. But Sloan would have opposed the Nova-clones in the 1970s and the Vega. Knudsen would have been G.M.’s President for his resurrection of Pontiac. Yes, the overweight B- and C-bodies would have been downsized, but the B-bodies first, the Olds second and the Buicks and Cadillacs in either 1979 or 1980. The J-bodies and N-bodies would never have happened, period. Still, too many brands with too many models