If the UAW strike lingers, 3 new GM cars are in danger (aka UAW-GM Death
September 24, 2007
By MARK PHELAN
FREE PRESS AUTO CRITIC
Keep it short. A strike that lasts more than a few days could do
irreparable damage to GM as it launches three key vehicles, including
two built in Michigan.
The acclaimed Buick Enclave and Cadillac CTS — both assembled in Lansing
— and the upcoming Chevrolet Malibu could all be jeopardized, and the
brands that sell them might not recover.
It’s an article of faith for some people within General Motors Corp.
that the company’s last protracted strike — a 54-day slugfest in 1998 —
drove the last nail into Oldsmobile’s coffin. The brand had just begun a
major push to sell its Intrigue midsize sedan, a very good car that many
observers thought was a match for the Toyota Camry when it went on sale
as a 1998 model.
The shutdown at a key components plant in Flint stalled the Intrigue’s
momentum. The car never recovered, and GM killed Oldsmobile just over
two years later.
The situation for Buick is nearly identical. It’s a troubled brand with
a distinguished history. GM executives have publicly mulled shutting it
down if there’s no progress from new models like the Enclave, which went
on sale this spring.
The graceful and luxurious Enclave is hot right now, challenging
established models like the Lexus RX350.
Take the pot off the boil for long, and GM and the UAW risk spoiling the
September always is a crucial time for automakers. They gear years of
strategy around the fall production and advertising launch of new
models. That’s why contracts expire now: to give the UAW maximum leverage.
GM’s embryonic recovery makes it especially vulnerable this year. The
company’s plans for Buick, Cadillac and Chevrolet hinge on the Enclave,
CTS and Malibu.
“GM can probably withstand 10 days without losing much of a beat,” said
Jim Hall, vice president for industry analysis in the Southfield office
of consultant AutoPacific.
A short strike shouldn’t hurt the crucial new models’ sales or the
image, he said.
A long strike is another matter. “It can be crippling to a car,” Hall
said. “Once you start advertising, you have to have something to sell.”
The money to promote the vehicles is already spent, and the ads are
scheduled. GM can’t postpone them, and it will have other vehicles it
needs to advertise by the time a long stoppage ends.
That’s what some GM insiders believe happened to the Intrigue, and why
Oldsmobile no longer exists.
The company planned to promote the car heavily in the summer of 1998,
then switch to advertising its new line of pickups in the fall.
The commercials ran, but the assembly lines didn’t. By the time
Intrigues resumed rolling into dealerships, GM had to put its money into
launching the pickups.
The car’s moment had passed and Oldsmobile was headed for the boneyard.
This is the Enclave and CTS’s moment. If it passes, GM and its brands
may not get another.
The company and the union both know this. The strike is on, but they
have to keep it short.