Until the 1970s, GM automotive divisions made most of their own engines, leading to a confusing array of completely different engines of similar displacements. For example, Buick, Chevrolet, Oldsmobile, and Pontiac each had “350” V-8s, often with about the same power outputs. Here’s why that was the case.
The first thing I’m going to ask you to do in reading this post is set aside all the marketing claims and received wisdom you may have heard about the alleged superiority (or inferiority) of specific GM engines, or the idea that having unique engines gave each division its own identity. Even if all that were true, it would have nothing at all to do with why the divisions designed and built their own engines and why they mostly continued to do so until a shifting market and a changing regulatory environment began to make it impractical.
If that conventional wisdom is irrelevant, why DID GM have so many distinct but duplicative engines? Why didn’t the divisions all use variations of the same engines, as Ford and Chrysler products often did?
Reason 1: Most Early GM Divisions Were Originally Separate Companies With Their Own Production Facilities.
In its early years, General Motors was really just a holding company through which founder William Crapo Durant acquired an array of automakers and automotive supply firms. Not all of those automakers had complete production facilities — a few made what used to be derisively known as “assembled cars,” with engines and other components made by others — but the most important ones did: Buick Motor Car Company, Olds Motor Works, Oakland Motor Car Company, Cadillac Motor Car Company, and Chevrolet Motor Company. (In the early 1930s, Oakland became Pontiac, a brand Oakland had introduced in 1926 as a cheaper companion make.)
The companies that had the facilities to make their own engines continued to do so after becoming part of GM. Even if the corporation had been inclined to consolidate production operations at that stage, there wasn’t much capital for that, and it was not a priority.
Interestingly, Alfred P. Sloan Jr., who became president of the corporation in 1923, seems to have regarded the automotive divisions’ ability to produce their own engines as a sign of their ability to pull their own weight within the corporation. One of his arguments for getting rid of Scripps-Booth and Sheridan, two early GM automotive divisions that were discontinued in the early 1920s, was that neither division had its own engine. Without that, and without their own strong dealer networks, Sloan felt that “they added nothing but excess baggage to the General Motors car line.”
Reason 2: GM Believed in Decentralized Management (Sort Of).
Early GM acquisitions remained subsidiary companies — they didn’t even formally become GM divisions until August 1917 — and it wasn’t until the early 1920s that there was a serious effort to establish a coherent corporate structure, which was a long, complicated process.
GM gradually established policies, committees, and corporate staff, but the ostensible object was to bring order to areas like inventory, purchasing, and cash flow, while still leaving the actual management of the divisions as decentralized as practical. In a September 1923 memorandum, Sloan declared:
According to General Motors plan of organization, to which I believe we all heartily subscribe, the activities of any specific Operation are under the absolute control of the General Manager of that Division, subject only to very broad contact with the general officers of the Corporation.
“Absolute control” was hyperbole even in the 1920s (division general managers were subjected to new corporate policy edicts almost every month!), but Sloan wanted the individual divisions to handle operational management, with the corporation approving strategies and schedules and trying to keep the divisions from getting too much in each other’s way. (The first iteration of what later became known as the “Sloan ladder” was formulated in April 1921.)
Reason 3: GM Wanted Its Divisions to See Each Other as Customers or Competitors.
Even in the 1920s, GM treated its operational divisions as what we now call profit centers, each with its own separate revenues, profits, and losses. One aspect of this was that if an automotive division wanted to use components from another division — such as when Cadillac used Oldsmobile eights in the 1934–1936 LaSalle — it had to buy them like any other customer, and, at least in principle, the divisions weren’t obligated to deal with each other.
As GM VP Donaldson Brown explained in an address to the American Management Association in February 1927:
No division is required absolutely to purchase product from another division. In their interrelation they are encouraged to deal just as they would with outsiders. The independent purchaser that is buying product from any of our divisions is assured that prices to it are exactly in line with prices charged our own car divisions. Where there are no substantial sales outside, such as would establish a competitive basis, the buying division determines the competitive picture,—at times partial requirements are actually purchased from outside sources so as to perfect the competitive situation.
As with many high-minded GM policy statements, the reality wasn’t always quite so clear cut. At times, there was definite pressure on the divisions to buy from or sell to each other (albeit not for free). However, the idea was to encourage the divisions to keep their costs and prices competitive, even when dealing internally.
That policy also provided a financial incentive for divisions to build engines and even transmissions in-house if they thought they could do so less expensively. For example, Chevrolet could have bought Hydra-Matic transmissions from Detroit Transmission Division, as Oldsmobile, Pontiac, and Cadillac did, but Chevy opted to build their own Powerglide automatic instead, which was almost certainly cheaper for them over time. Given the huge number of automatic transmissions Chevrolet would eventually need each year, even a modest per-unit savings would have paid off the initial investment in fairly short order.
Reason 4: Most GM Divisions Needed an Enormous Volume of Engines.
Back in the days when GM market share hovered close to 50 percent, the individual volume of most of their automotive divisions was huge. For example, in 1940, Oldsmobile, which at that point had the second-lowest sales of the five domestic passenger car divisions, still sold more than 200,000 cars, almost as many as DeSoto, Hudson, and Nash put together.
At Ford and Chrysler, the more expensive brands accounted for a much smaller chunk of total production and total sales. For example, in 1940, Ford sold more than 706,000 Ford cars and trucks, while Mercury (which hadn’t existed at all before 1938) sold only about 80,000 and Lincoln just 21,000. To give you a better sense of scope, the following chart shows a breakout of GM, Ford, and Chrysler sales by division for the years 1940, 1950, and 1960.
| Manufacturing Group | Car Division | 1940 Registrations | 1950 Registrations | 1960 Registrations |
|---|---|---|---|---|
| Chrysler Corporation | ||||
| Plymouth | 440,093 | 547,367 | 445,590 | |
| Dodge | 197,252 | 300,104 | 356,572 | |
| DeSoto | 71,943 | 115,023 | 0 | |
| Chrysler | 100,117 | 151,300 | 96,112 | |
| Ford Motor Company | ||||
| Ford | 542,755 | 1,166,138 | 1,420,352 | |
| Mercury | 80,418 | 318,217 | 308,239 | |
| Lincoln | 21,004 | 34,318 | 20,711 | |
| General Motors | ||||
| Chevrolet | 853,529 | 1,420,399 | 1,696,925 | |
| Pontiac | 235,815 | 440,528 | 399,646 | |
| Oldsmobile | 201,256 | 372,519 | 355,798 | |
| Buick | 295,513 | 535,807 | 267,837 | |
| Cadillac | 38,564 | 101,825 | 149,593 |
As I mentioned above, each of the GM car divisions had its own engine production facilities, which had been expanded and modernized over the years. In principle, the corporation could have demanded consolidation of engine production at this point, but with the number of engines required, it would have been a huge, costly undertaking to no obvious advantage.
For Chevrolet to supply engines for Pontiac in the 1940s, for example, would have required expanding Chevrolet engine production capacity by at least 20 percent (and also reaching some accommodation on the matter of eight-cylinder engines, which Pontiac then offered and Chevrolet didn’t). Buying engines from Chevrolet would have cost Pontiac more than continuing to build them in-house, which in turn would have driven up retail prices and probably hurt sales.
For the most part, the only exceptions prior to the ’70s were for lower-volume engines. For example, in the mid-’60s, Oldsmobile bought V-6 engines from Buick (and later inline sixes from Chevrolet) for the A-body F-85 because Olds hadn’t built a six-cylinder engine in-house since 1950 and there wasn’t enough demand to justify the tooling costs of creating a new one.
Reason 5: GM Divisions Had Huge Existing Investments in Engine Plants and Tooling.
By far the most expensive aspect of building an engine is the production tooling. In the early days of the automobile, one engineer could conceivably design an entire engine, but setting up the tools to mass-produce it to reasonably high tolerances was quite another matter.
Engine tooling costs greatly escalated after World War 2, as automakers who could afford them made huge investments in automated transfer machinery. A transfer machine is a huge piece of industrial equipment that can automatically perform a series of machining operations on a complex piece like an engine block or a cylinder head. Some transfer machines may combine five or six operations, while others may have 50 or more “stations,” all of which can theoretically be controlled by a single worker. (In practice, there may be whole armies of technicians to keep the transfer machines running, change cutters, etc.) For example, the Ingersoll milling and boring machine pictured below did all the following:
- Mill front surfaces of crankshaft bearings
- Mill rear surfaces of crankshaft bearings
- Mill anchor slots
- Mill oil filter pad
- Mill oil dip stick pad
- Rough bore cylinders
- Chamfer top and bottom of bores
- Turn block 90 degrees
- Rough mill front and rear end of block
- Finish mill front and rear of blocks.
Transfer machines require a much bigger upfront investment than individual tools, and designing them to be flexible enough to accommodate a range of different pieces requires a lot of intensive advance planning. However, transfer machines substantially reduce both the cost per piece and the time per piece (which in an industrial sense are more or less the same thing). By allowing more pieces to be completed per hour and per shift, transfer machines also make the whole plant more economical to operate. Any large factory has enormous overhead and sizable fixed costs, so volume is what determines the difference between an asset and a liability.
Through the 1970s, each GM division that made its own engines was usually individually responsible for the tooling costs. This was better for the corporation: Because the divisions typically introduced new or significantly updated engines at different times, GM never had to absorb the upfront cost of engine retooling for all the divisions at once. In this way, the tooling expense was also closely tied to a division’s anticipated volume, making it relatively easy to assess the return on investment.
Once the divisions had made those big investments, they had little reason to give them up if it could possibly be avoided. Transfer machinery was very expensive (even in the late ’40s and early ’50s, a single transfer machine cost hundreds of thousands of dollars), and the cost had to be amortized over a period of years for tax purposes. A division might add more equipment to expand production, but it was MUCH cheaper to rebuild and refit existing transfer machines than to replace them. This created a strong economic incentive to develop new engines that could be build with existing transfer machinery, or that the existing equipment could be refitted to build. For example, Oldsmobile’s new 330- and 425-cid V-8s, introduced in the mid-’60s, still used much of the same transfer machinery established for the older Rocket V-8. Quite a few “all-new” engine blocks retained the bore spacing of their predecessors, for similar reasons.
In the ’60s, GM began imposing corporate policies limiting maximum engine displacement in certain classes. Rather than commonize engine designs, the divisions each developed their own engines for those classes that could be built using existing tooling. For example, Buick, Chevrolet, Oldsmobile, and Pontiac each ended up with V-8 engines of nominal 350-cid displacement, all of them different. This often strikes casual observers as nonsensical, but for GM to consolidate those designs would have required not only making a massive investment in new tooling, but also writing off the substantial sunk costs of existing tooling, plants, and equipment.
To give you a sense of the scale of the costs involved, a 1977 Department of Transportation report on downsizing to meet 1981–1984 CAFE requirements included the following estimates for production equipment conversion costs, excluding land, buildings, and supporting facilities, and assuming an annual volume of 400,000 units:
| Engine Type | Change | Tooling and Equipment Cost |
|---|---|---|
| V-8 | Rebuild existing equipment to reduce displacement | $90 million to $100 million |
| V-8 | Diesel conversion of existing engine | $90 million to $100 million |
| V-8 | New equipment | $140 million to $150 million |
| L-6 | Rebuild existing equipment to reduce displacement | $63 million to $75 million |
| L-6 | New equipment | $109 million to $114 million |
| L-4 | Rebuild existing equipment to reduce displacement | $56 million to $66 million |
| L-4 | New equipment | $92 million to $96 million |
I should clarify that rebuilding existing equipment to reduce displacement presumes actually scaling down the size of an existing engine in the manner of the Pontiac 301 — simply changing displacement by adjusting bore dimensions in an existing block or using a crankshaft with a different stroke was nowhere near that costly.
Ideal on Paper Is Not Always Ideal in the Real World
You might be thinking, “But wouldn’t it have been cheaper to produce more of one engine than to build four or five similar ones?” In certain respects, it might have been, but it’s clear that those savings would have been outweighed by the much greater tooling and logistical costs involved, since those engines were produced in very large numbers in different plants located in different cities and sometimes different states.
Think of it like this: Let’s say you’re a rich person with a summer house on Cape Cod and a winter house in Palm Springs, and you want to have a vehicle registered and garaged at each house for you to use while you’re there. Is there any compelling economic reason for both of those vehicles to be the same? Probably not — and even if you’d like them to be the same for aesthetic reasons, you might balk at the cost of replacing one or both existing vehicles just so they’ll match.
On paper, the ideal approach might have been for GM to design a single set of corporate engines that would suit the needs of all its automotive divisions, with the flexibility to offer different configurations sharing much of the same tooling. (GM divisions were certainly capable of that; for example, the 1960 GMC V-6 and V-12 engines shared most of the same tooling and more than 90 percent of the same machining operations, while the Buick 90-degree V-6 shared much of the tooling of the aluminum V-8.) However, actually doing that on a large scale was like the old fable about belling the cat: Even if everyone agreed that it was a good idea, who was going to do it, and who was going to pay for it?
When GM finally did begin consolidating its engines, the object was not to achieve some kind of platonic ideal of a rational engine lineup or to play out divisional favoritism. It was done because in the wake of the 1973–1974 OPEC embargo, and the subsequent establishment of CAFE, the divisions’ engine needs were changing more rapidly than they could respond to individually. Between 1973 and 1980, for example, the percentage of domestic cars with V-8 engines fell from about 80 percent to less than 30 percent, and engines over 7 liters, which had been very common in the early ’70s, disappeared completely except on trucks.
As GM commonized engines across divisions, they also decided to shift control of the existing engine plants from the standalone automotive divisions to new “supergroups” (Chevrolet-Pontiac-Canada Powertrain and Buick-Oldsmobile-Cadillac Powertrain), which were then consolidated in the ’90s as GM Powertrain. A lot of the existing engine designs remained in production for years after the initial consolidation, even though they were no longer really under the control of the divisions that originally designed them. Most of those engines were now widely used throughout the corporation, until eventually the concept of division-specific engines had become more or less meaningless except as a historical curiosity.
Related Reading
Automotive History: When Did Each GM Division Stop Making Their Own V8 Engines? A Brief History of V8 Engine Sharing at GM (by Tom Halter)
Automotive History: The 1977 Oldsmobile Chevrolet Engine Scandal – There’s No Rocket In My 88’s Pocket (by Tom Halter)
In effect, institutional inertia, combined with GM’s large total market share made it cost effective for each division to produce its own engines. As GM’s market share fell under the Asian onslaught of the 1970’s, and rising fuel prices reduced demand for V8 engines, much of the advantages of each division to produce their own engines had disappeared. GM came to recognize this, so starting in the 1980’s, they began to source engines across divisions. The big mistake they made was in not telling their customers. Customers who had been brainwashed by GM advertising to believe that an Oldsmobile was superior to a Chevy, felt cheated when a “Chevy” engine was under the hood of their more expensive Oldsmobile! They sued and won! From that point onward, GM would begin to produce “corporate” engines, with no discernible divisional identity, while phasing out the divisional engines, to achieve greater economies of scale. The fact that meeting Government emissions, fuel economy and safety standards began to consume ever increasing amounts of time, money and effort, simply accelerated this trend. Today, all GM engines are used across all GM divisions, except for Cadillac, which retains a measure of exclusivity, befitting its higher price point in the market.
You’re wrong about engine quality. As a rebuilder, the Chevrolet V-8s needed to be bored as the soft alloy wore greatly, yet Buick and Olds engines had very little wear since the alloy was of much better material. I think Chevy used the cheapest iron alloy possible to save money. Pontiac combustion chambers were fully machined, many examples of superior quality with Olds, Cadillac, Pontiac, over the Chevies
You are expressing an opinion, not a fact, so he’s not actually “wrong”. And many would disagree with you. There’s a reason why Chevrolet was very popular as taxi cabs and why their trucks were so successful for so long. And why Chevrolet V8s were so widely used in other demanding applications. But as I said, YMMV.
Did you not read the second paragraph of this post?
What a brilliant article – especially for an outsider!
Perhaps worth adding that consolidation (where costs are already spent) is very different that going in the other direction (expansion), where the designers have done the heavy lifting for one engine and one might as well crib it.
For example, VW’s EA827 got a block stretch for longer stroke, a pot added for Audi, two pots added for Audi/Volvo/VW and then having realised that was a stupid idea, made it into a V8 and V6 instead. Even the VR and W ranges are said to owe something to that old unit.
Probably the classic Detroit Diesel 71 is the greatest example of extreme rationalisation ever? Bit simpler do do all those variants with a two-stroke.
But the fury of the customers in the late 1970s when they found their Oldsmobile had a Chevrolet engine!
There was a famous lawsuit in the late 1970s when a person bought an Oldsmobile Delta 88 or 98 with a 350 in it. It turned out Olds was putting Chevy 350 V-8s into Oldsmobiles. The person sued GM. This was on the new downsized full sized GM cars. The late 1970s and early 1980s was quite a change in the auto industry with downsizing and fuel economy (CAFE) standards.
Thanks, Aaron! This post is a concise consolidation of answers to questions that I (and I bet lots of other people!) have had over a lifetime of vehicle enthusiasm.
I concur, it did answer the questions I have long had.
Plus 2… Great piece, Aaron.
X3. Excellent analysis. I had always figured that GM had enough $$$ to basically let each division design and build their own engines, but this adds the wider perspective!
The “each division making their own engines” policy makes much more sense when viewed from the beginning and looking forward as shown here, than (as for many of us) viewed from the end and looking back. It wasn’t just powertrains; each GM division had their own frames, suspension, and such until 1965. What strikes me as odd is that while the divisions had their own mechanical components, they mostly shared the same Fisher bodies, at least the understructure under the fenders, doors, and such, often with identical windows and roofs (especially in the 1959-64 period). So what the customer saw looked alike, and what they didn’t see was different. Nowadays, that seems backwards.
Thanks for this long-overdue clarification. I’ll expound on one detail that might be worth another post sometime, about bore center spacing on blocks. These giant transfer lines and milling machines were designed to accommodate a specific bore center, and one that could not be changed as built. This explains why the same bore centers were used across multiple engine families, such as the same 4.38″ used both on Ford’s Y-block V8s and their replacement, the “Windsor” small block V8. This allowed the same basic machines to be reused, as changing them would have been an astronomic sum, given the relatively short life of the Y-block.
Building a new engine with different bore centers commonly involved building a whole new engine factory, as was the case with Ford’s Cleveland and Windsor facilities.
The 4.38″ bore spacing if one of the things the 351c does share with the 351w. In Vince’s excellent pieces on the Ford 335 series engines he notes.
“Early production forecasts had showed that the Windsor plant wouldn’t be able to keep up with demand. The decision was made to expand 351 production to Cleveland Engine Plant #2 and that these Cleveland built 351 engines would undergo a number design improvements. Some historical sources suggest that the 351W was a stop gap to hold Ford over until an all-new mid-sized engine could be developed. This may be why Ford decided that the 351s being produced at the Cleveland plant were to see design improvements.”
Note one of the other reasons was that the 351 was about the limit of the previous architecture.
From Vince again
“It was sometime during this time of the infancy of this project that upper management decreed this new midsize Cleveland built engine should have a minimum displacement of 335 cubic inches with room for expansion, which is how the engine series got its name.”
That room to grow was quickly put to use with the 400 coming on line a year later.
I’m quite aware of that. I was referring to the earlier plants, where Cleveland built the FE and Windsor the small block. The changing demands of the market and the issue of the FE becoming obsolete required a second plant (Cleveland) to also build small blocks (4.38″ bore spacing). And I’m sure it cost Ford a pretty penny to make that change.
Great through explanation Aaron.
When I saw that “rebuild existing equipment to reduce displacement” having the same cost as converting to diesel I had to think WTF. I mean sure Olds cut some corners on dieslizing their V8 but simply changing the bore and stroke is relatively cheap as you explained.
What it all boils down to is that it was cheaper to just keep on keeping on with existing (expensive) tooling as long as it could be kept working with reasonable volume.
A good example of that is the “Buick V-6” which was unceremoniously sold off, lock, stock and barrel when it looked like a dead end. Once the energy crisis made a V-6 a necessity, they purchased back their old tooling both to expedite availability and save big money on new tooling. If the internet lore is to be believed it was moved back into the exact location where it started its life and definitely proceeded to crank out engines out for many more years.
Yes, when they bought the transfer lines back from AMC, Buick found that the raised floor sections where they’d originally been situated were still there, so they were able to put the tooling back where it had been. GM had actually talked to AMC about their putting the engine back into production for GM divisions to buy, but AMC couldn’t offer a competitive price, and since they were no longer using the V-6 themselves, their interest level was not high, so GM finally just bought the tooling back.
I had no idea that Scripps-Booth had been a GM Division. This situation makes perfect sense when we understand that GM was built with multiple independent auto companies, whereas Ford and Chrysler were built from a single company. Maybe the only exception to that summary is Lincoln under Ford, and it did indeed have its own engine through the end of the Model K era in 1940. But after the K, all Lincoln ever got was a variation on the Ford engine.
Chrysler tried to do Division-specific displacements, but they were always variations on a corporate design.
Strictly speaking Chrysler was an amalgamation of Chrysler (and Plymouth) and the acquired Dodge Brothers Company, which was a huge operation and vastly increased Chrysler’s production facilities. I’m not exactly sure of when Dodge and Chrysler/Plymouth engines were harmonized, but certainly initially that would not have been the case. Somewhat similar to Lincoln at Ford but on a vastly greater scale. IIRC, the Dodge sale was the biggest corporate acquisition in history up to that time.
Chrysler originally was essentially created from the remains of Maxwell-Chalmers, which had been two separate companies merged a few years earlier. (The only living people familiar with Maxwell are usually Jack Benny fans — a running gag on the Jack Benny show was that Jack drove an ancient Maxwell, which on the radio was “voiced” by Mel Blanc.)
Plymouth and DeSoto were both created new in mid-1928; the first Plymouth was essentially a cheaper version of the four-cylinder Chrysler 50/52, which was dropped, while the DeSoto had a small six. Walter P. Chrysler was able to acquire Dodge Brothers through a stock swap in late July 1928, about three weeks after the launch of Plymouth and a week before the launch of DeSoto.
IIRC, Chrysler consolidated the six-cylinder engines in 1933. I think the short-lived Dodge eight of 1930–1933 was a Chrysler design. (I’d have to delve into it more, I don’t remember for sure off the top of my head.)
I’m wrong, Chrysler dropped the existing Dodge sixes for 1930. So, they consolidated engine design very quickly.
It’s odd or very Chrysler they didn’t follow standardization or consolidation when it came to their first V8; instead building unique varients for Chrysler, DeSoto and Dodge.
Excellent point on Dodge – I was suffering some brain fade on that one. It is funny how quickly Dodge was swallowed and digested by Chrysler, and completely lost every bit of its identity, save the Dodge Main plant in Hamtramck.
Ford and Lincoln did use different V8 engines for quite a while-Ford had the FE (Ford-Edsel), Lincoln used the MEL (Mercury-Edsel-Lincoln) from 1958-67, as a replacement for the Lincoln Y-block. (Which was also used in big Mercurys and trucks.) In 1968, the MEL was dropped in favor of the “385” series 460.
Ford used the MEL in the Ford Thunderbird. It was a corporate engine used in all three divisions, but yes, mostly in the Mercury and Lincoln.
ell said. For those not familiar with the tyranny of mass production economics, a surprising number of auto characteristics are dictated by optimum production economics rather than optimum design considerations.
It never starts this way though. Optimum design is usually always the initial goal. Then the compromises begin. A great design is one thing, but you have to make the darn thing. Any successful manufacturer know they need to do this in the most cost competitive manner possible.
Put aside the not insignificant issues of balancing design and quality considerations. No manufacturer is likely to intentionally introduce a design that they know ahead to time will create quality issues. However sometimes they do fly to close to the sun and get burned.
The main consideration for a capital intensive process is maximizing output relative to investment. As a long time salesman of manufacturing capacity – albeit in a different industry, I’ll add a few comments regarding the economic considerations.
Metal bashing and machining is a hugely capital intensive. Complex machining process do carry a huge overhead burden in the form of technicians needed to maintain and repair equipment. Somewhat surprisingly, they are not particularly labor intensive though. Parts assembly rather than parts creation is generally more labor intensive.
Economies of scale are achieved by maximizing units of output versus capital investment combined with economies of scale for raw material purchasing and minimizing scrap rates. Once maximum economies of scale are reached, more volume is simply more volume. It does not lead to further economies of scale. Quite often, adding volume above optimum process economies has the opposite effect. It can create diseconomies of scale. A couple simple examples.
The manufacturing mantra is faster is better. While generally true, process speedup can lead to increases in scrap and potentially more line maintenance. Raw unit output may increase, but at the price of increase unit costs. When this is done, it is usually considered a temporary expedient until either investment or purchase can develop more capacity.
Manufacturing investment is a stair step process. Consider an engine line with a max output of 250k units. What happens when sustained demand rises to 250k + anything? Right – you need another source of engines. A manufacturer can address this by adding another line. If 250k output provides maximum economics, there is little point in investing in a single faster line. You’ll obsolete an existing sunk cost investment and end up with a larger capacity line that provides no unit cost advantage. Such an investment can actually increase costs should demand consistently fall below the planned investment amortization rate. In a capital intensive process, the smart choice is to stair step the investment to that required to achieve best economics of scale while satisfying demand – but no more.
As an alternative is buying capacity from other lines that might have excess capacity. It saves both save capital and time. This is what GM did as various engine lines began operating to capacity. Economically smart though perhaps not well executed from a marketing perspective. In some cases, it is even smart to go outside your own company. IH did this when they bought AMC engines. AMC did this when they bought GM & Chrysler transmissions. Ford did this when they bought Borg-Warner transmissions to supplement their own production. Even mighty GM for all its vertical integration bought New Process 4wd transfer cases made by Chrysler. And almost everyone except Chrysler bought GM Hydramatics at one time or another.
Mr Severson’s emphasis on how GM’s historical structure is quite illustrative as to how GM got there. Had GM started in the auto business by creating their own autos as opposed to buying other auto companies, they’d likely have developed a common engine line. GM did this with their original diesel effort. It shows where their thinking was even in the 1930s.
But GM didn’t start this way. They were a collection of auto companies. Many of these companies had invested in their own engine lines. When GM bought those auto companies, the engine lines were an asset they purchased and put on the books.
For all GM’s problems, few fault their accounting expertise. Most car guys would claim GM accountants had too much to say about what got produced and what didn’t. GM accountants were known for being able to squeeze a nickel tight enough to produce a dime.
Given the sunk costs in these lines and the fact that production costs were largely driven by investment and scale rather than the magic of design commonality, GMs decision to let the divisions continue to produce their own engines was sensible at the time those decisions were made.
Eventually of course, a changing market that required new clean sheet engine designs combined with the increasing costs of certifying each and every different powertrain combination changed decision criteria.
New engine designs were going to obsolete existing tooling – period. Each design had to justify a new line item in the form of certification costs. It no longer made economic sense for GM to produce different designs for each division. Some like Cadillac felt they needed their own engines for marketing purposes – but the decision to roll their own almost certainly wasn’t based on a special Cadillac engine having a lower unit cost than a corporate engine.
On an economic basis, GM’s choice of end separate divisional engines was quite logical. If anything, they probably milked their sunk cost investment in existing divisional engines a bit too long. And from a brand and marketing perspective, their execution certainly left a lot of room for improvement.
The comments above got me wondering what happened to Packard’s V-8 transfer line when it got shut down after only a few years’ production. It had 5.0″ bore centers so definitely a big block.
Scrapped when the Utica engine plant was leased to Curtiss-Wright.
Great article Aaron, you made some good points.
About the Packard transfer line: There was a story that the line tooling was in storage for some time after Utica went to C-W. Chevrolet Division was contemplating purchasing the tooling to create a commercial truck engine with 5″ bore centers to power heavy duty trucks Chevrolet was planning. This program was supposed to be the missing ‘Mark III’ Big Block engine. Nothing came of it, Chevy used the GMC 401 and 478 V-6’s in their new heavy duty trucks which debuted in 1966.
“…actually scaling down the size of an existing engine in the manner of the Oldsmobile 260 or Pontiac 301…”
What was different in the 260 Olds block compared to the other Olds small-blocks, aside from the bore dimension? Far as I know, the 260 had the same bore-spacing and deck height as the other Olds small-blocks.
The Pontiac 301 (and the Pontiac 265 that no-one seems to remember) were significantly different from the other Pontiac engines, with a reduced deck height among other block changes.
The Pontiac 265/301 really was different from the other Pontiac engines, but not so for the Olds…unless I’m wrong.
You are correct about the Olds 260. It was simply a small-bore Olds V8. It was not like the 265/301 Pontiac, which used a lower deck height. The Olds 260 was the same deck height as all other Olds “small blocks.” It did have heads with very tiny ports that were unique to the 260. So, the 2bbl intake manifold for the 260 was specific to that engine. However, a small block Olds 4bbl intake or an aftermarket 4bbl intake would physically bolt in place because the blocks were of the same dimensions. Of course, this would result in a major port mismatch. This was also the case with the later model 307 engines that used the 7A heads and roller cams (1985 and newer). These used swirl port heads that had a unique port shape that did not match the earlier Olds V8s.
Unlike the Pontiac 265/301, which could not interchange some major parts with other Pontiac V8s, you could swap other parts onto a 260. Some have hot rodded the 260 by swapping early Olds 307 5A heads on, which would then allow to install a 4bbl intake, and undoubtedly would make a only slightly less gutless 260.
I removed the phrase regarding the 260 from the text.
In 1978 my dad leased a new Buick Electra 225. Not a very highly optioned car, it came with the standard 350. My uncle had bought a brand new 1977 LeSabre Limited that had every option including the 403. He was telling my dad about getting some money back from GM for the Oldsmobile engine in his Buick. So my dad checked with his mechanic only to find that his car had a Chevrolet 350. He never pressed the issue but wasn’t happy, as were many folks at that time.
This was a great article, thanks for taking the time to a deep dive into this history. Most of this I was aware of but only at the surface level, so I appreciate the extra details. It is interesting that you were able to show some of the actual costs involved. Much of the problem for General Motors was that what was laid out by Sloan in GM’s early years didn’t work well in by the late 1970s. While the consolidation of the engines may have come about by CAFE and the market shift, it was long overdue by the late 1970s. As discussed in the comments, the marketing around the brands certainly came back to bite GM when they installed Chevrolet engines in place of the “superior” Rocket 350 in some 1977 Olds 88s.
Another point that was not discussed in the article is the Canadian market. GM of Canada was almost similar to a division in that it produced some engines, and it was certainly easier and more cost-effective to use the engines it produced. GM of Canada produced the small-block Chevrolet and Chevrolet inline sixes, including the Canadian “Pontiac” 261 Stovebolt big six. So, it made much more economic sense to use these engines in its two market leaders – Chevrolet and Pontiac – rather than import Pontiac engines at a higher cost. Even today, the Oshawa GM plant produces Chevrolet Silverados but only with the 5.3L V8, one of the few engines that are produced at the St. Catherines Ontario propulsion plant.
Really, the central issue with regard to engines was that the engine mix changed very abruptly after the 1973–1974 oil embargo. The other divisions had been buying their sixes from Chevrolet, which had been viable because none of them needed that many (in 1973, total B-O-P six-cylinder installations were around 53K across all three divisions). It had made a reasonable amount of sense for each of the divisions to make most of their own V-8s, but it did not make any sense for them to each make their own V-8s, their own sixes, their own fours, etc., and by the ’80s, they needed sixes and fours a lot more than they needed V-8s.
While I don’t disagree with you that the prior to the embargo, the divisional engines made some sense, I do think it still made more sense, at least looking over the long term, to have some consolidation prior to the embargo. When Sloan’s model was originally put in place, there was far less overlap between the divisions line-ups and their respective engines. By the early 1970s there was a a huge amount of overlap. Consolidation may have had some up front investment costs, but I would think would have been a worthwhile investment in the long term.
Very enjoyable. It made me ruminate a little on my views during the 60s and 70s.
During that period, my expectation was that each GM Division would have their own brand-specific engine. Yet I didn’t have that expectation for Ford or Chrysler. A 390 in a Galaxie or a Park Lane was fine, along with a 383 in a Monaco or Fury..
I was one of the many that was shocked when GM tried to hide a few Chevy 350s in their ’77 Olds Cutlasses. Why did I have those different expectations?
i guess it boils down to marketing – each GM Division made an effort to highlight their specific engines. That built an expectation that wasn’t there for the other manufacturers. I imagine someone whose driving experience began in the 80’s has a much different outlook on the topic.
Excellent informative and interesting post. Thank you.
Prior to reading this I thought such distinction by GM was mostly related to antitrust concerns.
Wow, so much information .
Terrific .
-Nate
Thanks Aaron. Great article
Thanks Aaron! Interesting article! Yet there’s a certain absurdity to the fact that five cast-iron OHV V-8s in a narrow size range were designed and developed and transitioned into mass production, all of which have essentially the same characteristics. But they don’t have interchangeable parts, so their manufacturing and distribution networks are quintupled…lots of wasted labor and materials! That’s where a democratically-controlled, rational, planned socialist economy could have paid off. One extensively-developed “National V-8” would have filled the bill.