Yes, GM's light truck sales are in the toilet. Yes, it makes sense to plan their future carefully, given questions about [the loopholes in] new federal fuel economy regulations. But it's also true that GM's stop/start development process hurts its competitiveness. If GM wants to maintain its co-domination of this wounded though high-profit sector– and why wouldn't they?– the automaker would do well to remember that the new Toyota Tundra and Sequoia are still out there, somewhere. AND there's a new Ford F-150 and Dodge Ram coming down the pike. But no. GM has revealed that the next gen trucks– scheduled to go into production in 2013– have been postponed. Bottom line: GM's saving $300m. Bottom line: GM's cash position must dire. Even The Detroit News gets it, kinda. "GM has said it needs more and better passenger cars for the U.S. market. But money to develop new vehicles is tight. The automaker, which hasn't turned a full-year profit since 2004, is burning cash, losing $3.3 billion in this year's first quarter alone." Over at RenCen, the spin starts there. "GM's Wilkinson said the automaker is confident that the existing trucks can compete with other companies' new models. Even without a total makeover of the platform, GM can change anything from the trucks' powertrains to the interiors. 'Our intention is to remain a leader in the segment.' What was that about the road to Hell?
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Although this segment will never again reach the sales volumes of the past, there is still a segment of the population that will always need light trucks. Now would be a good time to start working on a new class of very efficient light truck. Such a truck, properly executed, would have a serious competitive advantage when the economy finally recovers.
Bad decision that can only be explained by lack of cash. I have to agree with Robert for a change, it is a money saving move that will have negative ramifications.
I wouldn’t worry too much about the Dodge Ram. Anyone that has ever owned a Chrysler product knows their transmissions are junk and fail at 60K miles.
This is a good decision. When GM pulled forward all of the GMT900 development, I believe we all sat at our keyboards and exclaimed: “WTF?”
I dont know if it is a bad decision, think Truck and SUV sales are in the tank now, if gas hits $6/gallon the will look considerably worse. The new truck market at this point is taking a beating from the used truck market and probably will for the next few years as people continue to flee the segment. Some new powertrain options can give the trucks what they really need…. increased efficiency.
The market is so uncertain right now, it may not be a bad move to wait until the dust settles a little, particularly if there is a cash shortage. Even assuming gas prices remain stable or retreat a little, there will be a flood of new and used pickups on the market for the foreseeable future. Unless they can fundamentally change the pickup segment with a revolutionary product, it doesnt make much sense to me to throw money into it at this point.
So instead of spending money on improvements that could potentially make the GM trucks better than any of the other brands, which could potentially allow them to sell more trucks, they’re just going to give up because GM can’t afford a pack of gum at the moment? GM should be focusing on making their trucks the best, and most economical in their class. Instead, Ford will come out with the F-100, and Toyota will keep improving the Tundra and Tacoma and GM will lose even more market share. The lack of long term planning is just so sad and mind boggling.
And when are these great, class beating invisible new cars coming? All I see on their lots are Aveos and Cobalts and their derivitives.
2013 is such a long time away when you consider the amount of cash they are burning today.
Ok so they starve the cars, especially small cars, of development money for decades and consentrate on the easy profits of trucks and SUV’s. Now that trucks and SUV can’t earn them a dollar they ditch that idea and try to do something they haven’t been able to or wanted to for the last 30 years, make money selling small cars. The market seems to do the opposite of what these boardroom hacks think.
I am predicting the small car market will plateu and good profits will be hard to get right about the time GM finally gets something halfway competative in the marketplace. Especially with their enormous inefficiencies. And profits from the GMT900’s will be impossible to get while competing with newer more efficient, lighter, better packaged trucks from everyone else. GM caught with their pants down yet again, if they make it long enough to see those losses.
truthbetold37: Anyone that has ever owned a Chrysler product knows their transmissions are junk and fail at 60K miles.
That’s right! I had an ’88 Dakota that fragged its tranny at just about that many miles. Took them three weeks to fix it. Pissed off the wife so bad that she forbids any POS Chrysler product on the property (to her they are are ALL P’sOS).
“GM’s saving $300m.” …. so they could invest it in Detroit office buildings. OMG.
I wouldn’t worry too much about the Dodge Ram. Anyone that has ever owned a Chrysler product knows their transmissions are junk and fail at 60K miles.
Really? Wow, that news to me. I have a 98 Jeep Cherokee with 115K and a 99 300M with 130K and wouldn’t you know that both transmissions are original and in great shape.
Amazing. I must have gotten the only two good transmissions Chrysler has ever made.
These kind of statements have no place in this discussion. We are discussing a decision by GM to halt development on their trucks, and from out of the blue we get Chrysler being thrown under the bus. Again.
Another knee-jerk short term decision by GM management. ::YAWN::
…thanks for fixing that clock on the Astra, though
That’s what happens when you focus on high profit trucks/SUVs and leave the car market wide open for the foreign automakers to make a killing. Not to mention that fleet sales are no longer what they used to be.
So GM saves $300m by postponing development on the 2013 trucks/SUVs and funneling that money to make better quality cars. Good move in the short term, but I think it’s too little, too late.
How is $300m going to help them come out with a good small car? If I recall correctly didn’t they spend $100m bring the Astra here and all that got was new Saturn logos. I see another half assed underfunded small car effort to add to their dismal track record. $300m sounds about right to get us another crappy rebadged car from Korea.
What’s more interesting is that, according to a Wall Street Journal story, GM told analysts that it may consider “dropping another brand.” Which, I assume, means a brand in addition to Hummer.
$300M? That’s it? Well that explans why their products are always so lousy! What a joke! That only buys you 15 guys just as talented and just as determined to turn GM around as Rabid Rick!
Sure, things are bleak now just like they were in the early 90’s. But the economy recovered and thrived. There’s a good chance that our next president will (have to) introduce an Infrastructure Rehabilitation Act, sort of a New Deal for the new century. That’ll mean jobs, a need for trucks, and safe bridges. Honestly, have you any idea how many interstate highway bridges are close to collapse?
The automakers still around will reap the handouts rewards. At the very least, GM could apply the weight-saving, mileage increasing tricks of the Tahoe Hybrid to the rest of the GMT900’s: aluminum hood and liftgate and thinner and lighter front seats; and apply some of the streamlining designs. Every little bit helps.
Alex Rodriguez:
“These kind of statements have no place in this discussion. We are discussing a decision by GM to halt development on their trucks, and from out of the blue we get Chrysler being thrown under the bus. Again.”
Alex, maybe I can help further the discussion regarding these two comments – IT’S ALL GEORGE BUSH’S FAULT!
There, now we can get back to discussing GM.
Guys (and gals), i think 300m refers to savings *this year*. We all know (I hope) that it takes 2+ billion to develop a new car (unless your Ford, then you double that). If the cash crunch is as bad as TTAC and others say it is then they have no choice. 300m *this year* could accelerate another progam (like Volt). A new truck will be developed but in 2015, 16, or 17 not 2013. If they didn’t do this someone would be saying look how foolish GM is, spending $ on the next gen truck when the public wants small fuel efficient cars. Then, if gas prices go back down and they have no new model truck, the same will say look how foolish GM is, they didn’t spend $ on the next gen truck, why can’t they be like Toyota?
Oh, I wouldn’t worry too much about the new(ish) Ford F150. Anyone that has ever owned a Ford product knows they explode into flames when you hit them in the rear. And all Toyota engines, even the ones that are still on the drawing boards, will sludge up. I read it on the internets, so it must true. Right?
Now would be a good time to start working on a new class of very efficient light truck.
You are absolute right crackers.
Being old and short I hate the silly American style pick ups. Hugh engine up front and large waste basket in the rear. They can’t be loaded and unloaded easily without using pallets and fork lifts. And don’t get me started on those unfortunates who are worried about their manhood and jack up their trucks because maybe someday they will do something manly offroad.
Europe and Asia have many small trucks, sometimes with flatbeds and sometimes with high sides, that are easy to actually use for deliveries. We need these trucks so real people can get on with business.
Man, the one segment they are best at, and they are going to let it go. OUCH!
truthbetold37 : said on
June 19th, 2008 at 9:38 am
I wouldn’t worry too much about the Dodge Ram. Anyone that has ever owned a Chrysler product knows their transmissions are junk and fail at 60K miles.
Then Alex Rodriguez at
June 19th, 2008 at 10:29 am said:
Really? Wow, that news to me. I have a 98 Jeep Cherokee with 115K and a 99 300M with 130K and wouldn’t you know that both transmissions are original and in great shape.
Amazing. I must have gotten the only two good transmissions Chrysler has ever made.
These kind of statements have no place in this discussion. We are discussing a decision by GM to halt development on their trucks, and from out of the blue we get Chrysler being thrown under the bus. Again.
Alex, I agree that this is about GM trucks and not Chrysler but I just have to comment on GM trucks, Chrysler trucks and your stable of “Chryslers”
I had a transmission cooler added to my 2003 Chevrolet Silverado at 70K miles because I bought a large boat and the mechanic laughed and said that if it was a Ram, we would be replacing the transmission at 70K miles not adding a transmission cooler.
Good News for you, Alex, the transmission in your 1999 300M was the A606, which was almost identical in design to the Audi electronically-controlled automatic that was in the AMC Premier sedan. (hence the LH sedans having the only longitudinally mounted front wheel drive engines in Chryslers’s line up, they were based on an AMC platform)
And more good news. Your Jeep Cherokee and its entire drivetrain was an AMC creation.
So you don’t have Chrysler transmissions in your cars, you have some of the newest AMC transmissions on the road… you should be glad about that.
It makes sense to spend money on redesigning small cars now instead of on large pickups and SUVs. Duh.
npbheights,
By your logic then you don’t have to worry about the transmissions in the Chrysler 300, Dodge Charger, Dodge Challenger, and Dodge Magnum, since they are Mercedes. And you don’t have to worry about the transmissions in the Dodge Caliber, Jeep Compass, and Jeep Patriot because they are built by Nissan.
(rolls eyes)
The A606 was the original name for the 42LE which is the transmission in the longitudinal front-drive cars (LH bodies like the 300m). The 42LE was adapted from the rwd 41TE. So it has nothing to do with Audi or AMC. Principles of 41TE design were also incorporated into Chrysler’s electronic 45RFE rwd trans.
Quotes from Allpar:
“Compared to other domestic front drive transaxles like Ford’s AX4N or GM’s 4L40E, the 41TE is lighter, smaller and less mechanically complex while providing improved performance.”
“Drawing on the cutting-edge technology of Chrysler’s innovative 41TE, fully-adaptive, 4-speed electronic transaxle, LH powertrain engineers still were determined to literally,”do their own thing.” First off, because the LH installation was going to be longitudinal instead of transverse, the 42LE output direction had to be turned, and because the superior torque output of the 3.5-liter engine on LH was beyond the 41TE’s design parameters, a stronger final drive unit was required.
The 42LE’s significant center-section component detail refinements were designed to cope with the added torque, including upgraded clutch packs and barreled axle shafts. The solenoid pack for the 42LE also is integrated into the transaxle for quieter operation. The 42LE’s torque converter is the same size employed in the 41TE, but is unique with the cover and longer input shaft.
In the final drive unit, a hypoid ring and pinion gear set delivers drive to the differential and from there to the drive axles, Precise adjustment of the hypoid gears to assure quiet operation is automated.”
stupid, stupid, stupid, stupid.
Well, whaddayaexpect, cancelled the new V-8 they will need in a few years too.
They will need less but they will need ’em (if they exist).
Bunter
Now if only GM would cut all executive salaries in half! None of those guys would go hungry, cash would be saved and the rest of the company might start to believe that things are going to be different.
Ice cube in hell.
Ice cube in hell.
Dante’s Inferno hell? If I recall, it was really, really cold in Dante’s Inferno Hell, which means that ice cube would last a long, long time. Snowballs would also have a good chance in Hell. I’ve never understood that metaphor, and I think Dante would agree.
I think this is a stupid decision. On the other hand, short term it’ll sell more trucks. Why? Because people won’t feel a need to wait for a newer, better model to come out from GM. Why should I wait for a better Colorado when I know they’re not going to do anything with the platform for upwards of eight years anyway?
Speaking of that truck, I’ll say what I said on Autoblog: Give it a mild hybrid, give it a six-speed automatic, or give it both. It’ll sell a lot more of those things. Think about it: the Ranger is currently top fuel economy on the market. Once it’s gone, if Chevy had the best fuel economy it might just be able to get the bulk of the fleet sales, not to mention a lot more of the recreational sales. The F/E on the Saturn Vue Hybrid is 28 mpg, up from 22 mpg base. The Colorado could potentially get upwards of 26 mpg from its four, which is most powerful in its class. If advertised correctly, it could sell. I mean, that’s two mpg away from a Ford Focus.
“stupid, stupid, stupid, stupid”
This is how you describe an American car company.
If same decision is made by Asian company please substitute with “flexible, smart, able to adjust to demand, etc.”
Volt will suck up any development money. GM has rolled the dice.