Car Guys vs. Bean Counters - Bob Lutz [29]
In retrospect, I was wrong. GM, in partnership with SAIC (Shanghai Automotive Industries Corporation), has become a profitable powerhouse in China. As manufacturing capacity increased, other brands (Chevrolet, Cadillac, and Wuling) have joined Buick in consistent double-digit rates of annual growth. Buick sales in China handily eclipse those of the brand in the United States, and it would not be an exaggeration to say that the enormous success of Buick in China has enabled its rebirth in America. China is the world’s largest car market, and GM’s share is growing. In a modern application of Alfred P. Sloan’s dictum “A car for every purse and purpose,” GM in China has a wellexecuted brand strategy, with Wuling fulfilling basic rural transportation needs, Chevrolet positioned for a growing middle class, Buick targeting officials and the affluent (it should be noted that, as of this writing, the average age of Buick owners in China is twenty-eight!), and Cadillac, gaining ground slowly but steadily, competing with the European luxury makes.
A far sorrier tale is that of Saab. This was a “marriage on the rebound” if ever there was one. Irked, feeling diminished, and worried over rival Ford’s successful acquisitions of Land Rover/ Range Rover, Jaguar, and Aston-Martin (organized into what was called “PAG,” or “Premium Automotive Group”), GM decided that they, too, needed a premium European brand, and set out to buy one. Naturally, in this particular dance hall, all of the pretty girls (BMW, Mercedes, Audi, Ferrari) were taken. But what of the lonely, somewhat undernourished wallflower over there, the one called Saab? Thus commenced a journey into misfortune.
Saab had never been a strong or powerful company. An offshoot of Saab aircraft after World War II, the company built small, unusually shaped cars, initially with two-stroke engines (which trailed blue smoke and went “ring-ding-ding” when the driver lifted foot from throttle) but later with the European Ford V4—a lumpy and charmless engine, but the only one that, presumably, would fit in the Saab 900 engine compartment.
The very weirdness of the cars endeared them to those in academia and other intellectuals. Saab ownership was like a badge of nonconformity, of daring individualism. Some of my professors explained their Saab devotion by repeating the fable that the company’s cars were superior because “it’s the only vehicle in the world designed by aircraft engineers.” (Having flown various U.S. military jets in the 1950s and ’60s and experiencing their less-thanstellar reliability firsthand, I’m not sure how impressive—albeit fictitious—a claim that really was.)
Saab, always hovering at around 100,000 units per year, never could survive without a partner, and thus later, larger and more conventional Saabs shared their basic architecture with a midsize Fiat. Financial breakeven still eluded poor Saab. If you add up all the professors of sociology and political science, all the leftish intellectuals who admired the failed Swedish experiment in 90 percent tax rates and womb-to-tomb welfare, all the well-to-do who for some reason eschewed Mercedes, BMW, and Audi, you still couldn’t get to 150,000 sales. But GM bought in anyway, first at 50 percent and then 100! Saab would henceforth use two sizes of GM Europe’s Opel architectures and share systems such as heating and air-conditioning; the resulting better cars and lower cost would make Saab successful at last. (Frankly, I would have steered clear of this charming loser, and I later advocated sale or winddown every chance I got.)
Every effort to expand the appeal of Saab by making it more “mainstream” and less “quirky” ended in failure. Mainstream buyers simply didn’t consider Saab (or had never heard of it and thought it was spelled “sob”) while the intellectual fringe that adored