If GM wants to have a chance of celebrating the New Year as a (somewhat) solvent company, it needs find $5b in cuts by the end of December. We’ve heard about the layoffs, forced vacations and executive pay cuts (wait, scratch that last one). But what’s going on with product development? After all, if the taxpayers are going to buy into GM big-style, we should know what we’re funding, right? CNN Money went through the GM product pipeline. (Keep in mind that things are changing fast.) The Volt and Cruze are said to be on-schedule, set to debut in 2010, the year that seems to get farther and farther away with every passing day. CNN says GM has given these two projects “protected status;” they’ll remain on schedule “no matter what crisis materializes.” Y’know, out of the clear blue sky. Of course, the fact that GM hasn’t announced a Volt battery supplier might lead you to question whether the Volt will make it in time, and anonymous information from one of the competing firms suggests a widespread pessimism on this point. So, two new products by 2010 (should the General survive till then). Anything else? Anyone? Bueller?
CNN reports that “Camaro is already in the final stages of testing and GM isn’t about to hold back now. It’s on schedule unless, of course, things get even worse than GM expects.” As if. Spring 2009 comes very soon though, and pre-production models ain’t looking great. For what that’s worth.
And if you think it’s strange for GM to release a muscle car as it seeks to redefine itself as America’s publicly-funded efficiency peddlers, you might be even more surprised to find out that a new Chevy Equinox SUV is set to debut later next year. Sure, they’ll cut the Pontiac Torrent version, but they’re also adding a GMC Terrain model. Also, a new SRX and CTS Sportwagon are both considered “on target for 2009.”
If muscle cars, SUVs and cannibalistic CUVs are a go, what’s being delayed? Hybrids (Vue Green Line), already solid products (next-gen Malibu) and the most beastly of utes (Yukon, Escalade) are all delayed far enough to be considered off the menu (2011-indefinite). Meanwhile, a new Buick LaCrosse will debut next year, breathing cruel hope into a brand that is likely to go Tango Uniform as GM scrambles to make savings. All in all, not exactly a world-beating (or bailout payback-ing) product pipeline.
GM is going down. It’s the time to throw everything at product development, to have the most attractive looking lineup worthy of a bailout.
It is important to note that Chrysler developed unique and compelling products during the loan guarantee era. It was able to emerge relatively strong, capture new customers, and pay back its loans early.
Instead, it appears that this time round, an industry-wide rescue package is going to be untargeted, undisciplined and unworkable. I guess unwieldy belongs in there somewhere. A pity, as the template exists. Unfortunately that template is based on pain for all of the participants, and a rationalization of the industry based on future viability.
In any event, it is time to fasten the seatbelts and assume the position. This industry is coming in for a dead stick landing.
There is simply no way the Volt can save GM in the manner in which the Taurus once saved Ford and the Caravan saved Chrysler. At best it will be a niche product. With fuel prices headed back down there is no way even a Volt home run can save the day.
Shut down every brand except Chevrolet and Cadillac. Focus development, manufacturing and marketing on having a compelling product in each significant market segment. Keep said products fresh with one mid-cycle tweak and then a complete refresh every six years. Do all final assembly in North America so that we can advertise the crap out of Made in America.
There you have it, the first sentences of a rational GM North America strategic plan. C11 will be required to get it done. That, and new bosses.
I believe another TTAC article mentioned the Cruze being delayed to 2011, also the CTS coupe was cut. Seems like a lot of their bread and butter cars are getting pushed, not a good strategy considering SUV’s are only profitable when people buy them.
The Volt volumes were going to be too low to save GM; but the car itself would have been fine if it was ever a serious effort (I view it as a “oh crap they actually bought the FUD” disaster more than anything else – there are serious engineering issues with battery life at this much higher energy demand that remain unanswered). Fuel prices are temporarily low, but the long-term trend is obvious.
Word is the Saab 9-4x is getting pushed back a year and the next 9-5 won’t be released in 2009.
How GM can starve a division of product for 10 years and expect it to make money is beyond me, especially when they then attempt to apply this logic to the whole company.
@John Horner
Correction: The Taurus did not save Ford. Ford could not afford to go all in on FWD large cars, like everyone else. When gas prices fell in the late 80s, Ford had some nice old-fashioned RWD cars, on already-paid-for tooling. And that was also the start of the F-150’s reign as the top-selling vehicle in the US. They made bank giving US consumers what they want. Big sedans and pickups are not new and exciting, so the media gave the round new Taurus credit for Ford’s success.
Now if GM can just hang on long enough for the pickup market to recover… Good luck with that.
@ John Horner
It might be nice to live in a bubble where things could be cut without consequences, but here in the real world if GM were to cut brands at this point it would be instant suicide. The market is down so badly that GM needs ANY sale, even if it is for one of their vestigial brand. There are also buyers that will not buy a Chevy, but will buy a Saturn or Buick. They are past the point of no return for making any major changes, mostly because they don’t have the money to do so any longer and have no available lines of credit.
The gas price argument is also tenuous at best. While they are low now, they will go back up. Once the economy starts to get back on its feet, demand will increase and the prices will go back up. Granted, it might not be soon enough to make the Volt a success, but don’t fool yourself into thinking that prices will remain this low for any extended period of time.
GM should cut or sell:
Hummer
Saab
Saturn
GM should keep:
PBG (Pontiac Buick GMC-basically one brand at this point)
Caddy
Chevy
Hummer and Saab can be cut or sold at any time. Saturn can not be sold, but should be cut when their current product line is due for a refresh (2010/11-ish), assuming GM lasts that long. PBG sells too many vehicles to be cut, especially if you consider it to be one brand instead of three, as I do. Also, many of PBG’s vehicles are clones of Caddys or Chevys, made in the same plants. If PBG goes away, those plants become huge money losers due to the elimination of sales of the PBG versions. Plus, there are a lot of PBG dealers (many more than Hummer, Saab, and Saturn), which will demand bribes to be shut down, due to most state’s laws.
GM’s product pipeline seems almost bare. Aside from the Camaro, Volt, and Cruze (Pontiac G5, Saturn Astra??), the Theta II quadruplets, CTS wagon and coupe and the new LaCrosse, what else is there? Nothing beyond 2011 can be contemplated.
And how about that LaCrosse? China is Buicks #1 market, yet GM develops a US only LaCrosse, then re-badges an Opel Insignia as a Buick for China?! What gives? Is GM developing world cars or not?
Can anyone explain why GM is selling the Vue design around the world unaltered, then feels the needs to develop 4 (Equinox, GMC Terrain, Saab 9-4x, Caddy SRX) more models to compete against it in the US? Will any of these be sold around the world? No. They rebadge the Vue as a Chevy elsewhere. When will the madness stop???
For God’s Sake, C11 already, cut brands and stop developing 5 stylings of the same chassis just for the US market!!!
I know I’m getting tiresome, but I’ll repeat the question here: what is GM making that the world will miss? What are they developing that is crucial to the future of automotion?
Nothing. Nada. Zilch.
@Geotpf
They should, but at this point they can’t afford to. Shutting down brands costs money that GM doesn’t have, but more importantly, it would eliminate a lot of the sales that are keeping GM afloat. Cutting brands would accelerate the pace of their problems and force them into bankruptcy sooner. Now, it might be a good thing, but its certainly not the best way to do it. They should either declare bankruptcy first (I’m not sure, but that may relieve them of some of the financial stress with dealers and shutting down brands) and then use that as an excuse for killing brands.
If they get bailout money, I don’t believe they’ll kill any brands, because it would make them a huge lawsuit target by dealers. (‘well, hey, look how much cash GM has now. Let’s sue them since they want to kill our brand and shut down the dealers’)
Actually, 3 weeks ago, GM reported that they had chosen Compact Power (LG Chem division) to source the battery for the Volt.