Bob Talks About… Chevy’s Triplets
Another video response from Bob, this time talking about Chevy’s Triplets. -Alicia Dorset, blog editor
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I don’t particularly love GM, though this blog has made me notice the various things you’re doing, both good and bad. I do love small cars. Why do I have to emigrate from the US to get a good, small, GM car? (And, no, the Aveo won’t cut it. I’m not looking at anything that’s rated at less than 40mpg.)
By the way, I’d like to thank Bob for his frankness in these videos. It’s great to actually be able to get straight talk from the head of a major corporation without having it filtered through marketing and legal departments. It shows you respect your audience.
Bob,
First off, I want to say it was great that you addressed the arrogance of some bloggers, you owe us nothing, this blog is a privilege not a right.
Second, I’m pretty sure everyone on this blog, understands how important GM worldwide is to the company. My problem however is this, im 23 and I don’t care about fuel economy as much as looks. On the other hand, some people feel the exact opposite. The Chevy Beat has the potential to be the best of both worlds. It has great lines, and im sure you could cram a small 4 cylinder in there that can get 25-30 MPG. Personally speaking, I wouldn’t mind being more socially responsible, but lets be honest here, you think im going to buy an Aveo? Would you drive one Bob? With a Beat, I get what I want they get what they want and were both buying GM cars.
Great job to you and the Team keep it up,
Frank
I think all three of the Triplets shuld be offered since they have unique personalities. It seems like the the best design seems to be done by and for these othere growing markets – even Buick. They should just design all these cars to be easily upgraded to american standards from the get go…
How about a E-flex version of the triplets? That would be electrifying!
Mr. Lutz:
Thank you for that information.
I believe it’s fine for GM to show cars that are not initially designed for the North American market, it still does beg the question as to “why?”
Isn’t the key to having market-centric auto shows is to show the people living in that market what might be coming up in that market in the coming years?
You don’t see Japanese automakers announcing their kei car concepts in North America, do you? Nor do you see SMART launching their cars in the US first, before launching in Europe?
If the triplets were to truly showcase that GM is a global company and not just a North American company, launch the next generation Silverado, Sierra, Yukon, Suburban, Tahoe, and Escalade in Europe.
I don’t believe GM would do that. Or would you??
I think GM would do well to sell the Triplets in the US. Use a “store-within-a-store” concept to sell them at Chevy dealers nationwide. Target high density metropolitan areas like New York and San Francisco, where city cars would be highly beneficial.
Thanks.
Bob,
Having GM grow outside of the US is great!
Why not emphasize the business goals describes in this video in the press release? Most people should understand that selling cars is a business — and those who don’t should look at the .com on the end of your domainname.
There are those of us in the American market who can afford a big vehicle but who really dig classy little zippy cars.
As you said, Bob, you owe us nothing and we owe you nothing. But I for one appreciate your sharing some info and insight on GM’s new products and focuses.
Wrt Diesel, sorry to hear there is apparently no viable solution from GM for passenger cars. Whether Honda’s upcoming Diesel, which they claim works without Urea, actually does what they say, remains to be seen. But perhaps GM can use its technology to improve stationary diesel performance and cleanliness.
As for direct injection, I hope you can get it into more vehicles. Sounds very worthwhile.
and oh yes…thanks for triplet comments. It will be interesting to see how the production versions (if any) end up.
That doesn’t make sense when you consider that GM solicited approval on the Minicars within the United States in the form of an online poll. Why would Americans be asked to vote on product offerings that they will never have the opportunity to purchase? It sounds like GM has had a change of heart and will abandon the domestic mini car market to the domination of its competitors.
You doesnt seem concerned about the way depressed stock valuation that GM is , well, enjoying lately. How can GM spend to build hot cars that the public want which is not cheap to begin with. All GM had been able to do is patch things along as you go. Kind of scrappy operations. I can see that in GM models as contrary to Japan’s everchanging looks of models. Their Camrys, for example, never looks the same every year not only in style but engineering. If GM is unable to attract captial from willing investors, then what will GM do about it? Just waiting until time to declare bankruptcy next year or two?
GM is complaining about unfair Japan yen tradings. So if GM gets its way, will it mean higher interest rates for us ?
why are you talking so much about dog and pony shows and very little on finance well being of GM?
Where is your 40 plus mpg model? Toyota and Honda got it.. You aint until ten years later, eh?
I also appreciate the non-nonsense explanation of why the Triplets were shown in the US.
That said, I do think you might possible be underestimating how well cars like these would sell. I live in SF and Scions sell very well here. I’ve looked at a few Scions myself and other than the hip, metro styling, they’re really just a cheaply made econo-car. Again- the cars sell and to an important cross-segment of the population: 20 and 30somethings. It is important for your company to aggressively pursue this target demographic.
Why is that important? Because those 20-30somethings will move out of the city and into the burbs and want something bigger for the kiddies. If you provide them with small cars they like and can afford, then you will build brand loyalty.Brand loyalty means a generation of good sales.Not terribly different from what the Japanese did: produce cheap, small, funky cars that the then 20-30somethings bought in the 70’s. Those same people are now soon to retire and drive $70,000 Lexus’s.
Perhaps from a universal marketing perspective, the Triplets would be a small margin product. But just like your diverse drivetrain research and implementation, a similar approach should be considered for your product offerings. Your hip, metro, young market segment portfolio is severely lacking. Fill that gap. The Triplets would fill that void nicely.
Bob,
Thanks for “Giving us” the information. I think you have it backward though, you should give us information since we are your customers. What ever happened to getting the customer what they want (and putting money your pocket)
It frankly ticks me off that you have the attitude you do toward the US market. Yeah maybe GM is a great company and has great cars worldwide. Thats well and good but as far as GM goes, why should I care how the company does when the products I ( and other people) like, never end up in America.
We are your customers not your stockholders (with a few exceptions). We don’t want to hear reports that GM is number one or that they have great products in China. We want to hear that you are making cars that we like and can buy in the US (and whatever markets read these blogs).
Its like GM says here we’re going to show you this cool stuff you can’t buy because we want you to see that we are better then we show you in North America, but we really don’t want to sell you the stuff you want that you see at the Shows because we don’t think you want it and we don’t really need your business. (thats the vibe it gives me).
GM get with it, you make some great worldwide products, why not design them for the US market from the get go, then show them and we’ll buy them and you’ll continue your expansion and sales. As it is if we don’t like what is offered in America by GM and we can’t get what we want from GM Worldwide (knowing that GM has what we want). We simply either do with out or buy someone else’s product. I have to wonder if GM really wants us to shop with another company.
Sounds like a great way to do business guys, keep up the work on it, maybe in a few more years you can have less of the market in the US…. But hey free market is great, GM will figure it out or lose the US market.
If you’re trying to tick off your customers and force us to give you feedback, well, its working, quite well… keep it up maybe you’ll have better market research and will start offering the products we want. If thats not what you are doing, sorry to say I’ll probably not be buying GM until I’m convinced otherwise.
In response to your July 5th video, I have to wonder if you aren’t telling your customers that you really don’t care about their input. Setting Buick up as a cheaper Lexus makes little sense, especially when customers are asking for something like a Lexus. Are your customers really looking for a Cheaper Lexus? What quality sacrifices does GM have to make to put Buick in that catagory?
Again it will continue to put GM a step behind in many ways, it starts that whole cylce of build it cheaper so people buy it when what they want’ isn’t necessarily cheapness… I’ve seen it before GM tries to undercut another product and to do so because of higher costs ends up with a slightly lesser product and the customers go for what they WANT even thought its more expensive. Tough crowd huh?
If you are going to do that at least offer a Buick thats a step ahead of the Lexus in features, build quality and high tech stuff (that many normal buyers don’t want, but premium buyers would probably go for). Again as I’ve stressed in previous blogs, we as customers want options. Same goes for Caddy, As a customer I much prefer smooth body curves over the sharp lines of Caddy. So does this mean if I buy a Buick with curves I’m not getting the same refinement, technology interior quality and performance as Caddy? The video makes me think this is the case. I would hope GM doesn’t shoot themselves in the foot with the thinking I have seen in the video. People don’t all like the Caddy styling. So dont’ discredit Buick as a high end brand, it should be. Overlap them a tad bit and get the buyers that would otherwise be missed by the method you suggested in the video.
In response to the July 12 video, I think I understand the problems you talked about with the diesel. Expecially regarding the emisisons. I can only guess that engine size and compression ratio have been moving in opposite directions to help curb the NOx problem (and of course CO problems). I also would imagine that the high efficiency of the diesel cycle is problematic for post combustion NOx treatments, as the lower exhaust temp means you need to post burn. The two questions I’m left with assuming that the EPA requires lower and lower emissions are: 1) why not put DI engines in more cars, and 2) why not bring the stratified charge engine to market before 2010, some of your european competitors have started to do so. Again here is a case where GM lags, they wait to react rather then being proactive. If you know that diesels are a problem, dump some cash into DI and Stratified Charge and offer the diesels in the interim.
I would love to see diesels here, specifically in the CARS that you plan on equipping with greater then 250 HP, as they really could use the fuel economy and torque offered by current diesels. As a customer I think I am disapointed that GM has taken so long to move developments this way. It almost seems like they’d rather continue to lose money then move technology ahead and keep up with the rest of the market.
On the performance end I’m also disappointed to see that GM very rarely turbocharge models. I’d love to see a Caddy with a turbo on it, or any of the cars. Can’t we get economy and big power from turbo cars while still meeting emissions?
As I mentioned above I’m glad GM reads these and takes the Flak from the posters. Hopefully our feedback helps you to make better more marketable products, despite the fact that I may or maynot buy another GM. I look forward to the Auto Show in motion events nearby to drive some of the new Caddy and Pontiacs. However I’d like to also continue to emphasize GM have better all inclusive warranties, to me its a big selling point.
Keep up the nice work blogging even if it ticks us off a bit.
As an appendum to my comments above, I have to ask why is urea a problem in diesels? If it works where’s the problem? So what I have to fill another tank, just like washer fluid, trans fluid, power steering etc… No big deal as long as its not hard to get and isn’t too costly. Car buyers are a funny group. Even with todays fuel prices, fuel is a small percentage of “average” sallaries (like less then 3%. So a few cents to me for urea is fine if it gives me a diesel. But again why hasn’t GM figured out what other companies have? Yes I know combustion engineering is no simpler then rocket science.
The arrogance of some bloggers? Hah!
Bob, thanks again for the candid words. Even if they end up pushing me away from my GM fanaticism, at least you tell it like you see it, and I appreciate that.
From everything I’ve heard from you, especially the unscripted remarks, you seem to have a disdain for small, versatile, fuel efficient “city” cars. And importing cars like Toyota does with Lexus and Scion seems something that GM’s US brands will do only as a stop gap, not a more permanent thing, regardless of how well it works and has worked for the Koreans and Japanese as their market share in the US increases.
Even in this video you say (paraphrased) “there’s nothing to stop us from PRODUCING these cars here, with modifications”.
What I get from that is more “NIH?, NSH!” (not invented here? not sold here!) think, and a big resounding “NO” to GM fans like me who were hoping for a GM-Global born Scion-like line (under Chevy’s badge or whatever) from GM that is imported from GM Daewoo or some other low-cost location where small cars are big sellers, so that GM can actually turn a profit on them and where it can be quirky without the heavy hands of Detroits designers messing with the styling or powertrain (Cobalt vs. Astra, North American Aveo vs. Kalos coupe, for instance).
Now let me say, the Saturn plan with Opel is a very good one, but with the Euro going up against the dollar a low-priced line like Scion’s (or the Mini-Cars – as Corsa variants, for instance) would not seem to make sense from that region of the world. I’ll give props to GM for trying at least to bring more cars like the Astra here (though we’ll see how well it does if it gets the unimpressive marketing the Aura was handed).
You seem to be supporting what I’ve been noticing from Detroit’s GM — a move to further solidify GMNA as a seller of trucks, SUVs and Crossovers. A nail in the coffin banishing of the 1980’s style GM hatches and wagon variants of inexpensive GM cars (like, say, the way the Cavalier was once sold as a hatch, wagon, coupe and sedan) across the board, while relatively pricey crossovers are pursued instead.
GM’s R&D and Advertising focus has been on trucks, SUVs for so long (and now large crossovers), that I fear you may never be able to convince people to come back and buy much else from GM. And perhaps that’s the way you want it.
And the almost dismissive attitude towards small cars in the US that can’t rake in a $5,000 profit is just going to push people away and turn them to brands like Toyota that do offer a true full line of cars where the lowliest (Yaris) and the largest (Tundra) are all treated with equal advertising emphasis (Yaris ads plastered all over TV, at least as much as the Tundra — where are the Aveo ads?) and engineering effort.
While GM focuses on what is profitable in the US, you risk further losing the young generation that can’t afford Enclaves or very nice sedans over 25 grand.
In the pursuit of quality and crossovers, you’re losing me, a fan of the quirky hatch and wagon sedan variants that GM used to make so many of years ago.
I bought a GM Daewoo manufactured (with a Holden engine!) Suzuki Forenza Wagon recently. I’m glad, as you wrote, I could help GM do well, at least in another part of the world. Too bad you don’t see the value in selling (and advertising) more cars like that here (without some wagon-stigma-avoiding retro or crossover styling).
i love general motors, and i also will! what i dont understand is, why they keep making tahoes when they just should focus on crosssovers? Ford is losing 3,200 for every Focus they sell. does it really justify losing that much for the profit they make on Explorer SUV? same thing applies to GM. if u could just apply the two-mode hybrid technology to the crossovers, i believe it will more than double the sales, achieve more than 30 mpg and replace tahoes. and why doesnt gm offer 50-state compliant diesel engines? california is the largest market. as i said, i love gm and i always will.
sorry i forget about a game-changer. every saturn outlook and gmc acadia should be outfitted with solar panel roof. it is a game changer. think of all the free energy when you park your crossover under the sun. it could easily get 60 mpg. you could easily sell it for a premium. i seriously think this is one way to beat toyota, short of using aluminium and carbon fiber to build crossovers. think about it.
First, I’d like to applaud GM for producing not one, but three concepts of a vehicle size more relevant to our current energy supply and global warming situation today. These cars don’t work for everyone, but for many they provide an affordable, responsible answer when most cars, trucks, and SUVs carry only a single person most of the time anyway. This is a burgeoning market in the US no longer due simply to low price of entry, but due to the reduced carbon footprint these cars exude simply through their diminutive stature. It is also something critical in many parts of Asia such as China and Korea where pollution levels are at a point where the US was in the 1970s due to their rapid growth.
There are a few reasons I believe people have expressed such confusion and frustration over the 3 microcars.
1) As stated above, having the US vote on a favorite seems to indicate that GM was gauging public reaction for some future introduction of a similar vehicle. At the very least, GM’s reaction to the overwhelmingly positive reception these vehicles garnered seemed to be surprise followed by an immediate denial of any US sales.
2) The vehicles were debuted in the US with familiar Chevy badging.
3) Honda Fit, Scion xA, xB, xD, Nissan Versa, Mini Cooper, Smart ForTwo, Dodge Hornet, Fiat 500…
4) The smallest cars GM offers, the Aveo and Cobalt/G5 are only capable of 37mpg and 34mpg highway respectively in their most efficient manual transmission guise. A Toyota Yaris gets 34/40 city/hwy, a Corolla or a Ford Focus can get 37 hwy, Honda Fit 33/38, and the non-hybrid automatic Civic even gets 40 mpg. GM should be aiming for more cars at or over 40mpg hwy, and it’s clear that small light cars like the Aveo or the Chevy trio of microcars can do so with good aero and a well developed engine.
5) The reactive nature of GM development (this is probably the most critical). Classic American ingenuity has the US being first in many bold and new ideas of how to do things. For instance, the confident and imaginative styling of the 1950’s and 1960’s had the rest of the world following American aesthetics in more than just cars.
I understand that corporate infrastructure and approval methods due to the massive investments that new vehicles require slows development, but it shouldn’t prevent a good idea from getting through in a timely manner. Previously, GM has been late to the game in smaller SUVs, crossovers, hybrid cars, bringing back RWD, improving interiors and other areas because GM waits until the business case is certain–but by that point, other automakers have already taken advantage of an empty market and made tremendous notoriety and sales for themselves.
Even among US companies, Ford beat GM to the classic muscle car game by 4-5 years, or almost an entire product cycle for the Mustang. Even after the runaway success of the concept car, GM still took a ridiculous amount of time to make sure “there was a business case for the Camaro” while Ford was selling over 160,000 Mustangs per year in 2005 and 2006. Not to mention the need for the same RWD platform among Pontiac, Chevrolet, and Cadillac.
This leads to the final bit of frustration that you often feel from journalists, bloggers, and the general public:
6) People are telling you what they want and GM always seems to need an explanation for why we cannot have it. Gas prices are nearly at an all time high with no signs of falling ($4/gallon gasoline is all but a certainty), Al Gore’s “An Inconvenient Truth” has slapped the collective world awake to the tremendously detrimental effects of global warming, and being green is more en vogue in the US than ever before (with the possible exception of the 1970’s gas crisis, which we may go through all over again if we aren’t careful). If you look at the vehicles in #3 above, you will see that this market is already hot and it is about to explode, which is exactly what the public has been telling GM. So when GM says that these vehicles are not planned for the US, you can imagine people’s frustration.
The warning signs are all around you GM; don’t be late to the microcar game. Don’t make poor Bob explain to us in 5 years why GM is still developing a business case to enter the market when you should be listening now. While Bob makes clear in the video, for the first time, that these cars COULD be adapted to US standards, timing is the key factor here.
That said, GM is making tremendous advances for energy independence with the Volt, which I believe is destined for success and deserving of every bit of Bob and GM’s publicly expressed enthusiasm. Affordable mild-hybrids, hybrid busses and dual-mode hybrids are here today helping to get us there. E85 lacks infrastructure in many places, but still helps and may play an increased roll in the future. GM has set the bar in fuel economy when it comes to offering traditionally large vehicles like SUVs, trucks, and some large cars like the Impala. Here is an opportunity for GM to lead in small cars, show us some of that good ol’ American ingenuity GM.
From your comments Bob, I sense that at some level, GM is throwing in the towel in the US. Granted the growth of the little crap-boxes like the triplets will help keep GM alive in emerging markets, but you’ll forever lose the (dwindling) passionate fan base here in the US. When Bo wins, we all lose. When will Bob start winning?
It’s too bad, really.
I like the interviews with Mr. Bob Lutz.
He’s a great speaker especially for GM!
The triplets are cool and I might even buy one to park next to my C5 Z06.
Make them cool looking with big tires as shown in the concepts and buy it.
I wish it was available today.
Great to hear GM is doing great outside the United States for the third year in a row.
Hello Bob,
I wish GM success in ALL markets.
With that, consider creating a new group I would call GM World. It would be a sales outlet for ALL GM products in all parts of the world, not just NA. (for NA this could be under Pontiac)
You could select products that makes sense at the time due to currency changes or market conditions. The product mix would always shift. You could draw from volume production around the world for economies of scale while selling at lower volumes & premium pricing in other markets. There is always a demand for something different. A GM World crest on the C-pillar would be enough while keeping the home market brand, no re-branding necessary.
I think the recent fuel price increases over the past few years caught GM by surprise. I think the next surprise in play is a rising Yen, Chinese Yuan, & lower dollar. What this could say is that NA manufacturing should be exported. The new GM World network could facilitate that. When things shift again, you can easily adapt.
It would appear that GM is focusing on the China group. That makes sense for that market. However, most companies are locked into thinking China manufacturing for the China market followed by exports to the home market. Don’t get to engrained in that thinking, currencies may not cooperate. Don’t lose focus on NA just because the costs are high and the margins aren’t there today. Things change fast.
Bob..Glad to hear you are NOT retiring! Can you tell us what the latest is for some type of Solstice Hardtop (removable or retractable)? I have putting off ordering a Solstice GXP because I’m afraid as soon as I do, there will be a hardtop option available. Thanks, Jim. (2002 Z06 Corvette/ 1998 WS6 Formula)
Bob,
I echo the thoughts of others. The reality is I could care less if you make great small cars for India, the reality is you don’t make them in the US or for the US. Should the media cut you a break because you are making hot little small cars for someone other than us? Well, I don’t know. We generally eat your dog food in the passenger car market and that is a fact the media is focused on. I agree with the prior comment about the Aveo that gets less MPG than a thirty year old Chevette according the the CAFE standards site.
You deserve no mercy as GM has made its own mess. Yet, I don’t hold you responsible for the past. I hold you responsible for the present. You don’t owe anyone anything. And that’s why Americans don’t owe you anything and excluding fleet sales, truck sales and sales to auto industry employees, your market share is drastically lower than official stats.
Saying that growth outside of the US is great comparatively is a little misleading. That’s because your market share in the US has gone to the dogs over the last thirty years with continual market share losses.
I’ve been quite tough on this blog but that’s because I want GM to lose the arrogance and get its act together. You’ve made a great impact on GM but the job is far from complete.
Alicia said:
Alicia and Christopher,
The videos are nice, but do you know that still only about 40% of the people in the U.S. have a high-speed, broadband connection — the other 60% still use dial-up.
Is it possible to have one of the crackerjack stenographers at GM HQ make a transcript of Mr Lutz’s videos so you can also post the text?
That would also make it easier to respond to things he says. We could cut and paste from the transcript if we had a comment on something specific he said, or if we thought a point he made needed further amplification.
Nigel Gamecock
Hey Bob as a 45 year old male that buys a car ever 3 years I can tell you that at this very moment there isnt a single GM car that I would own. I do own a Tahoe and SAAB and find some of the CUVs very nice but the cars are very week. So I think until the G8 with all wheel drive comes out(just joking that would make to much sense in Colorado)or the New CTS arrives I will have to look at your world cars at shows. One thing, why does GM never go 100% when cars come out and leave us wanting for the little things. The new cars are better but they still miss the mark including the new Camero (great car for weekends but two few doors for me). Not every car can be a muscle car wantabe.
RWD is great for 70% of the country but some of us really need AWD or FWD and with the excepton of an aging W platform with 4 speeds their isnt one car that you make in America that hits the mark…. Build what I need and want and ou will have a customer for life, or start asking us on your web site what we really need to avoid the mistakes that you keep making.
That SAAB commerical on the Tour de France
First
Thanks to GM and SAAB for sponsoring the Tour de France. I appreciate what your doing.
But, on the other hand:
That same commercial you keep running cracks me up. How did former Marine Corps fighter pilot “Maximum” Bob let that one slip by him?
For those who haven’t seen it, a SAAB 9-3 is driving across a desert at about 80-90 mph, when a formation of SAAB Gripens belonging to the Swedish Flygvapnet comes zooming out of the sky, and after after doing a couple of barrel rolls, begins flying formation with the 9-3 driving across the desert.
Everytime I see this silly commercial I have to wonder:
What exactly am I supposed to get out of that commercial?
I might be inclined to buy a SAAB auto, if I thought the aerospace engineers that designed and build the world class Gripen actually had something to do with the car — but they don’t.
Regards,
Gary Dikkers
Hi Bob:
I would be interested in the TRAX concept if the final version looks like these concepts and the vehicle has more 36 MPG ule economy. I like these cars – GM should offer them in US ASAP. It gives people like me who want to buy good looking US small cars that have fuel economy a chance to purchase one.
Hope you bring these to production ASAP.
Bob,
Let’s never forget that GM is a public company. Your blog is wonderful and allows us Shareholders to be better informed about the complexity of the organization. I was told once three variables are key to manufacturing in large companies like GM, Time, Money, and Resources. To reduce the Time it takes to produce a product you must supply as much Money and Resources as possible. It seems that GM is spreading itself thin trying to make everyone happy. As an American, after my trip to London and Paris, I realized one thing that is common worldwide; the pain people feel when they have to shell out so much of their hard earned money to buy gas for the cars they drive. GM has the solution in the E-Flex vehicle. Stop wasting TIME and reallocate more MONEY and RESOURCES into the production of the E-Flex Chevy VOLT or E-Flex VUE. These vehicles need to be on the road in the latter part of 2008.
There are those of us in the American market who can afford a big vehicle but who really dig classy little zippy cars.
I meant “classy little zippy cars with great fuel mileage.”
My new-to-me Volkswagen Jetta GLS TDI is just such a vehicle. I hope that the Volt or the triplets will compete with this car — I’d love to Buy American.
—
P.S. I’ve been running Biodiesel in my Jetta lately. The only blend that’s available on the beaten path in my area is B5 — which is still 95% dead dinosaurs. But it seems to me that it’s 5% better for the world, and that this 5% comes from farmers!
A cynical observation would be that the Minicar voting for Chevy customers was PR spin to get more people to think that Chevrolet is serious about fuel economy.
GM is very good at concept cars (like the Volt), but when you look at what they are actually selling the most of at any particular moment, and what keeps them afloat financially, its usually the low MPG trucks.
North American standards…
I think that in North America, we need to change our standards, to be compatible with the rest of the world.
The north american automotive industry created this standards as a market protection wall… not for our safety… But now that japenese automakers like Toyota broke this wall, it’s a aberration to keep it.
But I think that the U.S. is a special market not only because it is the most free, fair, and open the most competitive, healthy, and prosperous.
It’s important because what happens here does not stay here it goes everywhere. What happens in China, Japan, India, Russia and Brazil, it usually stays in China, Japan….
So while the U.S. may only account for less than 47% of your sales, it is 95% of what investors care about. And if they see G.M. struggling in North America they will consider it only a matter of time before Toyota takes the next battleground to Canada, then Australia, then China and so on. The investor who generally spends about a minute considering a stock is going to rate G.M. on its home turf and there is nothing you or I can do about it.
I know GM considers $1 billion spent in the U. S. will get us a minivan, a $1 billion spent in India will get us three factories and 2 or 3 of these triplets and it makes sense. But all the while Toyota is punching your head. Like a runner who builds up his leg muscles everyday but all the while his head is going bad because he is leaving it unprotected. In the end those legs will be useless. You need to protect your head, your home turf period. And the way you do that is simple. A car for every purse and purpose.
If I were a minister I would ask “What would Jesus Do?”
If I were a clown I would ask “What would P. T. Barnum do?”
If I were a poet I would ask “What would Shakespeare do or say?
If you are running G.M. you need to ask “What would Sloan do?”
He faced just as much if not more competition than we face today. But he built a great dam and covered every segment of the market. We have great holes in our dam today and weak spots-too many. Holes like product to compete with Scion while Kia is coming with more in this segment. Weak spots that will become holes like the minivan market or the mid-size van market. The list goes on.
I don’t want you to spend senselessly on new product but I want you to be versatile with your use of platforms and factory space. Ask do we need 5 versions of the same crossover or can we make 1 minivan and 4 crossovers.
We can’t run from the competition whenever its economically beneficial, that is how they get stronger. When we compete where it is hard that is how we get stronger.
The world is a big place and we can always find what seems to be a safe place to invest while Toyota is not watching, but trust me they are watching and here is what they are saying.
“Why go for their tail when we got their head wide open and unprotected?”
It’s time to draw the line and say “look we are going to fight you for every sale, meet you head on with vehicle for vehicle, product for product, engine for engine, hybrid for hybrid, minivan for minivan head to head.
That is the fighting spirit that Wall Street and America is waiting for and if you ain’t got it, trust me your competitor has reinforcements coming.
In short…
Stop running, stand up and fight.
GM could build and sell all three as a Chevy subdivision, just in the way Toyota sells it low-priced and stylish Scion compacts. My worry with that avenue is if the quality will have to be spread three ways. Three mediocre cars is not a replacement for one good one.
The Aveo is the cheapest car in America, but I don’t know of anyone who’d take it over a Honda Fit or a Nissan Versa. The Triplets all look fun, but they need to be good vehicles inside & out. Make a light, small, cozy, agile, and fuel-sipping car for a low price and you have a winner. In principle, it’s so simple. In practice, that’s another matter.
As a college student, the car I find very appealing is the Mini Cooper. The Mini is a hip, stylish, and quick car. It may not have the mileage of a Toyota Yaris, but it’s small and fun. Not every young person wants a Subaru WRX Sti or a Mitsubishi Lancer Evo. All I ask for is a compact, sporty, and attractive car for a good price (under $22,000). Maybe the Astra will solve that. In the meantime, I’ll settle with motorcycles.
Nate, I strongly agree with all your comments. It seems GM is just ignoring what makes Japanese and Korean carmakers thrive and prosper here in N.A. market. It’s not the SUVs and Pick-up trucks that makes them prosper – it’s their small cars. Instead of making cars like Fit, Yaris and Versa, GM is busy spending money on developing and improving G8, Camaro, Corvette, Hybrid Trucks. Mr. Lutz, if GMs direction is just selling income-generating assets just to spend in developing cars that the masses cannot afford to buy, and flex fuel cars that the battery is not yet readily available, diesels that are only available to Heavy duty trucks and Cadillacs then no wonder that GM will be down or becomes bankrupt!
I’d like to add some more thoughts pertaining to some comments above that got me to thinking.
For one, the target consumer group for Chevrolet has been a singular model for decades: It has been touted as the brand of choice for “good-ole’-boys”. This is your flagship brand as clearly demonstrated with its sales and chosen marquee to launch the Volt.
In doing so, GM needs to consider diversifying the brand perception of Chevrolet to be equally appealing to middle America right along with those living on the coasts.
Is it feasible to market Chevrolet as cool and hip for younger people in metro areas yet also maintain the same “American Hero” campaign elsewhere? I’ll be honest with you that even though this might sound highly unpatriotic, the whole American hero image isn’t very appealing to many young professionals. Hence they go with imports that have a more agnostic approach to marketing.
These cars caught customers interest, GM asked people to vote for which they liked, an excellent feedback tool which helped keep customers engaged.
The trouble is all the comments from high up downplaying the cars for the US market. Yes, the margins are small on a vehicle like these compared to your never ending truck and suv lineup. In the final analysis, it will be another segment that GM NA will not be a player in.
Small cars can be built profitably here in the US. Go and analyze the costs, volume and CAFE implications of the Fiero program.
Hey Bob, I would really like to buy a new Fiero GT, how about it? It would be a nice replacement in the Pontiac lineup for the Solstice(easily double the Solstice annual volume). A series of Small, rwd and affordable cars would be ideal. You have 2 near empty plants that could make it happen. Could your competition match your volume or build flexibility, I think not. What GM needs to do is start playing to its strengths and build what the customer REALLY wants and is passionate about.
i saw the G8 prototype on americancarfans.com, and it is fantastic. The car is handsome, slick and gorgeous. One bow-tie version should be made for Chevy, a luxury version for Cadillac and a hip, import-killer version for Saturn. why i would never buy a Prius? First it is a crappy FWD, and second, it looks funny. You could offer the G8 derivatives in hybrid or diesel, or better still diesel-hybrid. I think people would kill to drive a big, comfy car that handles like a BMW and gets over 80 mpg. This is America.
Thank you Nigel, 7/15, 6:01 PM.
Amen!
Ghent, 7/17, 12:34 PM:
The Prius May “look funny”, but I heard on the radio just yesterday that it has a coefficient of drag of 0.26, lowest in the industry.
Beauty is in the eye of the beholder, and form follows function.
Arrogance
Mr Lutz,
I’m surprised you would accuse some of your faithful blogging team with arrogance — especially after listening to your interview with NPR’s Tom Ashbrook a few weeks ago. I figured that was just because you are an old fighter pilot, but maybe not.
Respectfully, I suggest that you do owe us something. GM started this blog and you and other GM executives invite us to comment. With that invitation, comes the expectation that we have a two-way communication channel with GM HQ. If it irritates you for us to comment, then shut the blog down.
But I wouldn’t recommend that. The people that respond to your blogs are in effect a huge electronic focus group, that actually has presented you with some pretty solid feedback and ideas. We could be doing other things, but obviously we care enough about GM to spend time trying to get a message through to you.
Certainly we aren’t experts on making and marketing automobiles, nor do we understand all the government rules and regulations you must contend with. But we do offer something of tremendous value to you.
You are in the business of satisfying customers, and we give you an idea of what today’s customers want. If you can’t or won’t produce something that we will buy, GM will continue its downward spiral.
For the last four decades, GM has been mostly offering the same stale products hoping we will buy it. Talk about arrogance, for those 40 years, GM has largely been guilty of forgetting about innovation, and figuring you could send anything to your showrooms and we would meekly buy it — just because you are GM.
Well that is over, and as you must realize the product and satisfying customer needs and wants are foremost.
Most of the last 40 years aren’t your fault, but it will be your fault if it doesn’t change, and we can help you do that.
You and Rick Wagoner are in fact the chief salesmen for GM, and both of you have to be fully in tune with what customers want. This blog gives you an excellent tool with which to do that.
Respectfully,
Gary Dikkers
Bear in mind that no one is a player in this segment in North America (the expensive 2-seat smart comes closest), and probably won’t be anytime in the near future, as it is dominated by Korean and European manufacturers. Toyota’s only entry is a JV with Peugeot and Honda, Nissan, Ford and Mazda have none. Zero, zip, nada (Honda’s slightly smaller offerings in Japan cannot accommodate even a 1.0 L engine, and are supplied by a another company at that). Even the Mini is significantly bigger. GM will not be surrendering this segment to anyone.
Think of it this way, GM doesn’t plan on creating this segment in the US, but would like to know if there is enough interest to do so, and in what form.
You’re right Bob, you don’t OWE us anything, and we don’t OWE you anything.
GM doesn’t HAVE to build small fuel efficient cars that the average person could be proud to own without feeling like he was subsidizing Al Qaeda and Hezbollah with every fill-up, and the average person certainly doesn’t HAVE to buy the inefficient and mediocre vehicles that are the hallmarks of GM’s current line-up.
But it sure would be nice if GM CHOSE to build cars that its customers would want to CHOOSE as their next vehicle.
But it won’t be me for a while. I got a great deal on a 2007 Corolla. It’s rated at 32mpg city / 41 mpg highway, 2nd greenest non-hybrid car on the road after the Yaris, cruises comfortably at 100mph, and is reasonably fun to drive with a stick shift, it was made in America, and I bought it out the door (including taxes/fees/etc.) for less than $14k.
Too bad nothing in the GM lineup comes close to meeting those specs.
But you don’t HAVE to make better cars, Honda and Toyota will be more than happy to do it for you.
john remember one thing the people who bought the big gas guzzling V-8 toyotas help subsidize your purchase
I read in todays press that this car year will be the best in GMs’ 100 history. This was from John Middlebrook GM Vice President of Global Sales.
Why is it then that GM can’t make a profit on it’s best car year ever? Do you guys really know what you are doing?
Bob, there is a very clear message resonating here that GM continues to ignore. The focus at GM needs to be on product improvements, not cost reductions. You cannot cost reduce your way to market share growth and profitability. Yet, this strategy continues to be GM’s direction and your market share continues to decline. Will GM ever stand up to the beancounters and insist on building a class-leading anything? Why do the beancounters continue to control GM, even in the face of its continued demise? If you build it for cheap, and nobody wants to buy it, have you achieved anything?
This mentality needs to change from the top down. Employee’s will follow the direction they are given, and the misguided direction of build it cheap and cost reduce it more tomorrow IS NOT WORKING. As an agent of change, why not attack this problem?
Mr Lutz,
Since your company is helping sponsor coverage of the Tour de France, I’m wondering if you’ve had the chance to watch any of the bike race?
I’ve been watching, and one of the things that catches my eye most, is all the neat European cars I see parked along the streets of those little French villages as the bike riders sweep through. Those team cars that follow the riders also look pretty nice. All those neat looking hatchbacks and small station wagons, and every night I ask myself, “Why can’t we buy cars like that in the US?”
Why doesn’t your company have anything to offer us similar to those Citroens, Pugeots, Renaults, Fiats, VWs, Opels, and Skodas I see? Why does your Opel subsidiary make such neat little cars for the Europeans, but that you don’t want to make here and sell to us? (I know you are finally bringing some Opels over to rebadge as Saturns, so a tip of the hat to you for that — although I don’t understand why you can’t just call them Opels.)
You’ve been quoted as saying, you can’t make any money selling small cars, so on one of your next videos I’d like you to elaborate on that. Those European companies are no less encumbered than you with legacy and labor costs, and they have even more drag from their unions than you. So what is it about building small cars in the US, that makes it unprofitable? Is it because of the medical costs you must pay for your US workers?
I don’t know, and would like to learn. So please enlighten us.
V/R
Gary Dikkers
Just a quick note: If you care about fuel economy you’re not buying a car that only gets 25-30 mpg. There’s no reason the Beat can’t get over 40 mpg.
Why not have a Beat Green Line and a Beat Red Line, in addition to the standard model. The Green Line could have a 3 cylinder gas or diesel engine with a dual-mode hybrid system that got 40 or 50 mpg, and the Red Line could have a turbocharged four cylinder that got 25 mpg. That way, folks like me (25 year old treehugger) and Frank (23 year old speed demon) could BOTH buy a GM car.
Paul:
Well, because everybody knows you can’t make money building small cars in this country.
So GM wants to become a crossover/SUV/light truck company and let the overseas companies lose money on those stupid small cars. Except for the !@#$%^&* Feds and their *&^%$#@! CAFE, of course, but we’ll work/lobby around that somehow.
Everybody knows Toyota loses money on the Yaris/Corolla/Prius turkeys anyway. They’re just cover for their gas guzzling Tundras.
See I’ve been reading this blog long enough now that I’m actually starting to learn something.
Maybe shutting the blog down would be the best thing you could do for Gary Dikkers. Just imagine what he could do with all that free time.
This blog without his constant diatribes might be worth reading again.
Gary, get a life already.
Bob,
I think I would like to disagree with people that agree with this blog.
I appreciate the fact that you take the time to answer your consumers, but, if you don’t give care about the consumer’s point of view, why are you talking at all?!?!?!?!
Do you think you, Bob Lutz, exist to have people throw you money at you or GM?!?!?!
Do you now think you are George W. Bush, and are some monarch, and don’t have to consider your constiuents (aka consumers)?!?!?
No, certainly you don’t OWE us anything, and we don’t OWE you anything, but YOU don’t exist without OUR consumer dollars.
Not to mention your cough, toward the end, right before you say “without significant modificantuons”… sorry you might have said sufficient.. was very apropos… I will give you 1 point for press relations, still nil for consumer relations.
You must think we are all idiots, and buy GM products because we OWE you somthing for past performance, based on the arrogance of this blog.
I was trying to decide between a last year Grand Prix, or a first Year G8, and this blog entry decided my mind.
What is the Charger model you have for sale?
This blog has been bothering me for days. The total arrogance of Bob Lutz and his “We’re GM and we know much more than our customers do so we don’t have to listen or answer to you” attitude reminds me of the famous quote from the 1950s: “What’s good for General Motors is good for the U.S.A.” We’re GM and we’re smart. You’re stupid and don’t know what you’re talking about. Well, Mr. Lutz, I’m a consumer, I’m interested, but with this kind of attitude, is it any wonder I now won’t buy another GM car? When GM can start to build cars as good as my Camry hybrid, then maybe you will have earned the right to be arrogant. Until then, you should listen to your customers and not yell at them. GM=arrogance=bankrupcy
Bring it on Gary Dikkers, I agree with you about 99% of the time.
To Gary Dikkers on July 17, 2007:
As usual, you are spot on buddy.
To Randy Jackson on July 2, 2007:
Gary is offering his opinion, as you are entitled to do as well, but why not show some manners ? You know – tact, diplomacy ? Just a suggestion, this post will not likely get put on anyway.
“Everybody knows Toyota loses money on the Yaris/Corolla/Prius turkeys anyway. They’re just cover for their gas guzzling Tundras.”
Noel Park, If you can show us proof that Toyota loses money on building small cars then I will stop posting comments on this blog.
You know, we bought our Equinox and V6 Vue not because these cars are better compared to some of the SUVs produced by Asian manufacturers but because we want to help American auto industries and because America is so gracious that we are granted an immigrant visa. But if GM will continue to be arrogant then our love for American industries will die.
Onell, 7/23, 9:51 PM:
Sorry. Actually, I was just being sarcastic. I don’t believe that for a minute, but some bloggers here appear to.
As I have commented here before, my neighbor is a supplier to Toyota, and is very close to their management. I asked him about the urban legend that Toyota loses money on every Prius. He just smiled and said, “Toyota doesn’t work that way.”
I share your longing to help American auto industries. I am just venting my intense frustration at the same arrogance, and/or unwillingness to face reality, which you so correctly point out.
Thank you for your thoughtful comments.
Gary Dikkers:
I have long since learned, through participating in local political blogs, that, once you begin to post comments that say uncomfortable truths and touch nerves, you start to draw intense, and often nasty, counter comments.
Don’t take it to heart, it’s just a fact of life. At our local level, many believe that “professional” PR flacks get involved in this sort of counter battery fire. Is that happening here? I doubt it, but who knows.
Thank you for all of your hard work on these issues. I have learned a lot from you.
Randy Jackson said:
Thanks for your feedback Randy, but are you sure you know what “diatribe” means?
It’s true I’ve been critical of GM at times, but I wouldn’t categorize it as bitter or abusive, instead, since they open up this blog for comments, I try to make solid points that might actually resonate with someone in the Renaissance Center. (However unlikely that might be.) Believe me, if I didn’t have some affection for GM products and what they’ve meant to America, I wouldn’t be here.
If you have a specific problem with something I’ve said, post it, and we’ll cordially discuss it.
As ever,
Gary Dikkers
Paul said:
“Why not have a Beat Green Line and a Beat Red Line, in addition to the standard model. The Green Line could have a 3 cylinder gas or diesel engine with a dual-mode hybrid system that got 40 or 50 mpg, and the Red Line could have a turbocharged four cylinder that got 25 mpg. That way, folks like me (25 year old treehugger) and Frank (23 year old speed demon) could BOTH buy a GM car.”
I think that’s a great idea Paul. I would definitely buy a beat red line.
Noel Said:
“Well, because everybody knows you can’t make money building small cars in this country.”
I’ve actually heard a few people say that. Is it because they don’t sell enough of them, or there is a narrow profit margin?
Frank, 7/25, 10:05 AM:
Well again, this was just my sort of obviously failed atempt at irony. Actually, I don’t believe it, but Mr. Lutz has said it on more than one occasion, so who am I to argue?
Haha its cool Noel, I don’t believe it either. If you have a stylish Eco friendly car, that people can get behind, I cant see how you would loose money.
I had the initial impression that the “Triplets” represented a fresh, new approach for GM to begin offering fuel-efficient models for each of the three “bread-and-butter” divisions- Chevy, Pontiac, and Buick- but then, disturbingly, I discovered they were never intended for the North American market (yet somehow, I imagine some will eventually trickle into Canada and Mexico)…
But the most befuddling aspect is the somewhat lame excuse that they were introduced in the US to show GM’s “Global Nature.”
OOOkaay.
While I’m still struggling to make sense of that not-so-intuitive explanation (odd as it seems, I actually care very little about vehicles sold in Europe or Asia, especially the ones I’ll never see here, and since I’m not a GM shareholder, I’m not especially impressed that GM is doing well in other markets), I’m watching with interest as both Toyota and Honda assembly plants are opening here in Indiana in the next few months, hiring many thousands of Hoosiers to build cars and trucks, while GM is still laying off people- dedicated, hardworking people- who have demonstrated their loyalty time and again by buying GM products decade after decade.
Well, Election Year 2008 is just around the corner, and once again it looks as though it’s going to be a free-for-all fight over health care issues at the core of the political campaigning. Maybe GM could do itself and the rest of the country a huge service by using its leverage lobbying for UAW-equivalent health benefits for the rest of us; having Uncle Sugar take over those legacy costs would certainly level the playing field,and might actually make GM competitive once again in the realm of making quality, inexpensive vehicles.
Bob,
Since you mentioned diesels, any news on when the diesel version of the Chevy Colorado will be available?
I’d love to upgrade my RWD Ford Ranger to a compact pickup truck with 4×4, alternative fuel capability, and more torque.
This really isn’t about the Triplets. It’s about the fact that GM doesn’t offer a compact or sub-compact car that gets competitive fuel economy in America. Forget about hybrids and all that other stuff. Where is your Civic fighter? Where is your Yaris fighter? Why can’t GM just build a normal car that get 40 MPG?
Were not asking you to reinvent the wheel, just Build a Cobalt that gets better mileage then the Civic. That it, that’s all we’re asking for.
Thanks for the video and the explanation, Mr. Lutz.
I’m a bit confused, as I bet others are, as to why these were shown in the US and a poll solicited our input HERE in the US.
You say “significant modifications” may be required for the US market. Fair enough. But I hope that doesn’t mean they will be made three times larger, far less fuel efficient and five times heavier.
If so, don’t bother building them for us.
I’ll also note that these three cars are excellent designs, and frankly, when gas hits $6 per gallon, I bet your bottom line that GM, or Toyota, WILL be selling them here.
Mr. Lutz, I must say I am diappointed that GM seems to have decided against offering the Triplets in the U.S. market. As others have correctly pointed out, these are interesting vehicles that will do wonders for GM’s image in the U.S. The profit margin maybe slim, but you must look at the millions of dollars it will save in PR advertising. The general public is not as informed about cars as most bloggers to this site so they are unaware of GM’s recent product improvements and judge GM by the Ads seen on TV which are over 80% truck/SUV or seem like it.
Interesting small cars like the triplets with high MPG will attract buyers who may have NEVER considered a GM vehicle otherwise and the fact it is low cost they will be more inclined to give a GM product a “Try”. If GM puts the right driveline in the Triplets like the 1.4L Ecotec Gas and 1.3L Turbo-Diesel with optional automatic transmission, they will have high MPG, fun to drive car at an attractive price.
Like the MINI the fact the Triplets are interesting and more than another cheap car will allow GM to have an asking price above “Bargain Basement” so the potential profit maybe higher than you may think, and with a good ad campaign and attractive accesories (like MINI and SCION) GM and it dealers could actually make a decent bit of money on them – think outside the box.
To me the Tripets are a “Must Build” because GM must offer a high MPG/low price car for sale here, there is no other way that GM can turn its image around an get GM products into the hands of new to GM customers. The Volt will not sell in enough numbers to make a real difference and by time the technology allows it, the competition will have an answer to it.
I just stumbled upon the GM FastLane Blog site because I was looking for info on the Chevy Beat. Its been impossible to find info on Beat on an official Chevy or GM web sites. What a disappointment that is! As a “baby boomer” who no longer needs a “family car” or SUV, who has 7-figure net assets and whose daily drive totals less then 10 miles where I live in a densly-populated area of Dallas, I want my next car to be “mini-car”. I feel a lot of affinity with GM – I grew up in Michigan and my father worked his whole life for GM as did several uncles and cousins. My parents benefited greatly from the retirement and health care that GM provided. Except for one rebellious period, I’ve always owned a GM car. I have had the GM Card as my only credit card for years and it currently has a purchase benefit of over $3500. But, I can’t find any GM car I like! The Beat would’ve been perfect for me, but after perusing this blog site, I see I won’t be given a choice to buy one. I think GM is missing a opportunity for marketing quality, safe mini-cars to financially secure baby-boomers like me. So, I have, instead, registered for purchase of the Smart car.
Beaugrand, Benjamin, Stephen, Rick, Hank:
I agree with all of you.
It puts me in the mind of Bob Dylan who so famously said, “there’s ten thousand whispering but nobody listening.”
Rick, have you noticed how many times I have brought up the 1.4 Ecotec I first heard of from you? Just put that in an Aveo with a CVT and I bet GM could go back to the glory days of the Metro when it was the unchallenged mileage king. At least of the nice, simple, non-hybrid segment. It’s way more important now than it was then.
Luke:
Diesel Colorado? Oh yeah, I’m there for that. My 2000 S-10 is about to turn over 200k miles, and it’s getting a little tired. I’ll rebuild it from front to back before I buy a Colorado that gets 20% less gas mileage, but diesel? I think that works!
Noel: Thanks for the compliments.
I like the 1.4L CVT idea, and for the Aveo LT GM should put the 115 HP 1.6L VVT Ecotec with 5-speed Automatic, the Aveo is a nice car it just needs a drivetrain.
I agree with you and Luke on the Diesel Colorado, GM does offer a Diesel in the Holden Rodeo (and a 3.6L V6 like the one in the CTS) so both engines could be offered in the Colorado.
Luxury pod. thats what I want. I want a small luxury car that transports me in absolute comfort with the ease and agility of a small car. I was a japanese car guy until I bought my Cadillac DTS. I now love luxury cars, but that doesn’t mean I love inefficieny. I want a second car, and it should be just as comfortable as my big cadillac, but with all the benefits of small: fun, fast, and easier to drive and park in the city.
Blogging is great. It offers GM the ability to build relationships with existing and new customers and new customer. It’s all about the relationships which requires honesty and integrity. We need to have frank conversations. We should all agree to the #1 rule of communications: attack problems and not people!