Working Hard on Tomorrow, Today
By Bob Lutz
GM Vice Chairman
As you’ve no doubt heard me say before, we’ve made a lot of progress in the past few years at General Motors. And we’ve delivered on what we said we would do. We’ve tackled the legacy costs. We’ve improved our quality. We went from having, at least in North America, some mediocre products to having acclaimed products that are selling extremely well, especially on the passenger car side. In June, for example, in a slow market, our retail car sales were up 8 percent.
We continue to reinvigorate our product portfolio. We’re pursuing advanced propulsion technologies that will greatly reduce dependence on petroleum. And, we’re reacting to the swiftly changing market conditions here in the U.S.
But even with all the changes we’ve made and the actions we’ve taken, our business results aren’t yet what we want them to be. Why not? What went wrong?
Well, we got hit with a triple whammy: we face a generalized economic weakness due to the mortgage meltdown, which is creating a borderline financial crisis in the United States and other parts of the world; we have seen a big decline in the dollar; and we have, of course, experienced an unpredictable and very rapid rise in fuel prices.
Now, it’s easy for everyone to say about oil prices, “They should have seen it coming.” My answer to that is nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.
And to say that we recklessly and stupidly kept producing trucks in the face of it is just wrong. In fact, if we hadn’t kept producing trucks before the fuel prices rose, we would’ve been in a lot worse shape, and a lot more quickly. And if everyone is so smart except us, how come most of our import competition was rapidly rushing into the full-size truck market, just as the party was almost over?
I’m not going to sit here and say we have done everything right and made nothing but good decisions. But I will say that in recent years, particularly since Rick Wagoner announced our North American turnaround plan in 2005, we’ve had a firm, sound plan and have delivered on it.
As economic conditions here in the U.S. continue to decline, further adjustments and actions are necessary, many of which we outlined at this morning’s press conference. If you didn’t get the chance to see it live, you can read the press release here.
These actions — the corresponding business decisions we announced this morning, including employment reductions and elimination of post-65 retiree health care, as well as some cuts in capital spending — were hard calls to make. They weren’t made lightly, they weren’t pleasant decisions to reach, and we’re fully aware of the challenging impact they’ll have on our employees.
I know a lot of people are going to look at the cuts in capital spending and say, “Here they go, cutting their bread and butter.” Well, they’d be wrong.
We did make some cuts — like those that we confirmed a few weeks ago regarding the next generation full-size pickups and SUVs, which by the way are still best-in-class in terms of ride, handling and fuel efficiency. But we are conserving our capital for those things that we know will move the mark… and no strategic programs are being impacted; it’s full speed ahead on E-Flex technology and the production program of the Chevrolet Volt. And we will continue to cut costs and adjust to changing market demands. In fact, 18 of the next 19 GM vehicle introductions are cars or crossovers. We will adjust our portfolio to meet the market where it is headed — and still keep the integrity of that portfolio intact, while maintaining and enhancing the improvements we’ve made in product design and technology.
Being a leader means doing what must be done. Let it not be said that we won’t make the calls and take the actions that are necessary to keep GM viable and ensure that we remain the best automaker in the world — which I fully believe we are and will remain.
We’re doing exactly what you need to do in these situations, you cut back on anything that isn’t necessary, you limit your cash outlays to only those things that are truly going to move the company forward, and most importantly you continue the ethic of producing the world’s best cars and trucks because that is the only thing that long-term is going to get you through it. We have a complete and total commitment to a massive onslaught of outstanding new global products over the next 24 months as our top corporate priority. No compromise there!
So while some may choose to see the glass half-empty, I couldn’t disagree more, or more loudly. As the saying goes, “Those who say something is impossible should refrain from interrupting those who are doing it.”
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I happen to be cheering on GM, personally. I want nothing more than for U.S. automakers to be restored to glory. But these two statements in the same blog post make me very sad. To take something away from the people who worked so hard for so many years…..gosh. Just when they need it most, too.
Mr. Lutz,
Good to hear that Mr. Wagoner and the Board have announced these cuts — they were long overdue. I’m sure they were not an easy decision but GM needed drastic financial measures years ago to stay competitive (they also needed great product but that is now being delivered). Now if product overlap between division could be eliminated you would make some real progress.
That being said, I have 2 major concerns about today’s announcements:
1) It was noted that Engineering spending will be held at 2006-2007 levels. GM will NOT be able to produce innovative vehicles that reduce energy consumption without significant R&D dollars. Not good. I don’t know if Design spending is being reduced but if so GM is moving in the wrong direction. Great products are not (usually) created on shoestring budgets.
2) While it makes sense to direct more effort to cars/crossovers, if you neglect the truck program I forsee large problems in the future. While I agree that less effort should be spent there, please make sure it doesn’t become a red-headed stepchild. There will ALWAYS be people who need trucks for work and need a Suburban/Tahoe for pulling a trailer and fitting the whole family in the tow vehicle at the same time. If you intend to keep Ford at bay in this segment PLEASE don’t neglect it. The downturn in the truck segment will eventually stop and begin an upward trend again. While it will never reach the levels that it did recently, by ignoring the segment GM will miss out on opportunities when the market rebounds (and it will, even if only slightly).
Once again, kudos for today’s announcements. I hope they deliver as promised.
~ “My answer to that is nobody saw it coming.”
With all respect that’s simply not true. The Peak Oil community has recognized for years that we were soon to hit an oil crunch where demand outstripped supply. (There is actually still a lot of oil in the ground, but as soon as demand outstrips supply, the balance shifts dramatically causing prices to spike.)
It’s true that the exact date when that would happen was unpredictable, but that it would happen was inevitable. Unfortunately, GM and the others remained in denial and chose to stick with the profitability of big pickup trucks and SUVs and uneducated customer demand far beyond what was reasonable or healthy.
~ “We went from having, at least in North America, some mediocre products…”
Since you brought that up, why does your GM-Europe division seem to make better products?
How much of a pay-cut are you and the rest of executive management taking as a result of the miscues of the past 3 years going to take?
I was so disappointed during the employee broadcast when you showed all the new vehicles. They looked great but not one was a hybrid. Not one.
Thanks you all for taking the necessary actions. There are indeed a large number of us GM employees who believe in and support both the company and its leadership. In fact, among salaried employees there is a grass roots response to the current situation which suggests that GM take immediate out of the box action and not the usual headcount reductions. Especially in Engineering there is more than enough work to be done to avoid mortgaging our future. A lot of us would rather see us all give back any recent merit increases, even take a pay cut rather than see more headcount reductions. All the management effort focused on re-organization, redeploying work, etc. with these reductions only takes the focus away from the product and the real engineering / product related issues. However, the announcement today about the retiree health care elimination will undercut the employee loyalty! So now I’m not so sure so many would offer taking a pay cut to support our company’s future as the company walks away from our future.
In the end though, we still appreciate the tough decisions and will do our best to support the company. Thanks for the opportunity to provide feedback. While I have this opportunity I once again would like to suggest that GM re-use the phrase I remember seeing on GM keys and products “Mark of Excellence”. Why didn’t we include that with the new GM logos on the cars? I’ve suggested this in numerous ways.
Best wishes.
rum doodle,
I see you are providing more Monday morning quarterbacking. If we have learned anything in the last year or so its that few people or companies were ready for a $1/gallon jump in oil prices. GM is one of many companies who did not see this coming. Any commodity that increases in price so quickly is going to have an adverse affect on some people or companies. You are repeating GM bashing talking points with no regard for reality. You infer that GM was exclusively producing SUVS when fuel was cheaper to the detriment of cars. Last time I checked the CTS, Aura, Cobalt, Impala, G6, Solstice, Vette, STS, etc. are all cars that were introduced in the last 5 years or so. GM never stopped producing cars, they just sold more trucks because their trucks were regarded as the best in the business.
“Since you brought that up, why does your GM-Europe division seem to make better products? ”
Simple, its about costs and consumer tastes. Americans have different standards and this is why Toyota isnt nearly as successful in Europe as in the US. In the US resale and quality are what people care about most while in Europe design, interior materials and handling matter more. Toyota makes average cars by European standards and they havent been embraced across the pond the way they have here. Another fact that Euro car worshippers fail to mention is that premium small and midsize cars available in Europe are very expensive by US standards. PEople want the European Ford Focus for example but they dont mention that a loaded Focus would be close to $30k in Europe. Folks want GM to sell its European products here but they dont want to pay the prices GM charges for those vehicles.
I stand behind GM as a 3rd generation GM’er. But rather than expect the ‘workers’ 7th level and below to give back merit raises, in an economic situation where we’ve really not gotten one given that gas has doubled. I think the 8th levels and above, the people making the poor decisions that got us here, need to step up and pay for their own gas. that accounts for more than any merit raise.
I think the question of hybrids has been answered by vehicles like the Malibu, Aura, Vue (both versions). As well as the full size truck hybrids that get the same fuel economy as a four-cylinder car. No one said that there wouldn’t be hybrid versions of vehicles like the Equinox or Cruze and until the Volt debuts that’s probably enough.
I’m sure these cuts were very hard to make; and I hope for the best for G.M. workers, and for that matter, all workers in the U.S. auto industry. But this will all be for the best as the company is -hopefully- right-sized when it meets up with the economic turn-around coming in late 09.
The product G.M. has in the pipeline are wonderful. Not to mention, there is a lot of wonderful product on the streets today from G.M. I am glad Lutz was on the panel today. To me, that shows a commitment to new product. These cuts are needed, but even more importantly, new product programs are needed to move the company forward towards sustained profitability.
I’d like to make one other point… If GM was the only company to not see this coming why did Toyota blow 4 Billon on the Tundra and Sequoia only to have the plant shut down 12 months after SOP for nearly 6 months? Is it possible that Toyota also may have missed the rapid increase in oil prices?
Bob, if it is true that the Beat was not designed to meet US crash test standards, then one or more GM executives need to be fired.
If it is true that the Cruze isn’t coming here, then one or more GM executives need to be fired.
If you really believe that the Cobalt is “coming into its own” and doesn’t need to be replaced ASAP, then I’m sorry, Bob, but you need to go too.
We’ve all seen the sales data from May and June. The only cars selling in the US are subcompact and compact cars. While GMs compact cars have improved significantly, GMs subcompacts are very, very subpar. They need to be replaced yesterday.
Mr. Lutz, It is no longer the time to point fingers now that GM is heading in the right direction. Mistakes were made but too many people fail to realize that the other two big US automakers are in poor shape too. Chrysler lost everything years ago and Ford is taking the wait and see attitude, which is a mistake. GM is the only one that is moving forward. I buy GM stock and one day hope that it’ll reach that $50 ~ $65 a share price. I believe it will with all the inovation that GM is pouring into the E-Flex system. Thank you for all your efforts, and I will be purchasing a Volt once available.
Thanks for this, Bob.
I may not be in “the know” regarding what you guys are doing…but given the press-release, and your sentiments here; it is painfully obvious that you’re not excited to make the decisions that have to be made. Frankly, not all CEOs, and executives can say that. I’m glad the automaker I’m rooting for has real, down-to-earth people leading it.
Keep up the good work. Your products are outstanding, and only stand to get better. And your innovation and foresight should serve to get the company through the alternative fuels shift fairly easily.
You haven’t given up on us Bob, Rick, etc; so I for one, won’t give up on you. My next vehicle WILL be a General Motors product without fail.
And on a somewhat related note, here’s an interesting read for anyone doubting the General’s ability to produce fuel efficient vehicles:
Most Fuel Efficient Automakers
Chevrolet virtually ties with Honda. But the kicker is that they do it with a full lineup of trucks!!!
Again, Thanks for the update, Bob. And I’m sure we’ll all make it through this.
Bob,
I think the announcements today are largely necesary and good for GM
However, I dont think GM can afford to slow its R&D spending – the competition (Toyota) is spending big to beat GM now
And I dont think GM should loose sight of what GM do best – Camaros, Corvettes and Cadillacs
GM is too short sighted and reactionary -
BMW isnt switching all their cars to Front Wheel Drive!
Toyota didn’t stop work on their Camry or Lexus when they developed the Prius!
Keep it real Bob – remember the PEOPLE who ACTUALLY LIKE CARS and you will continue to make CARS PEOPLE ACTUALLY LIKE!
I am to be a man who is going to purchase his 1st GM vehicle with pride . I am also an employee out in Fremont California where we make the Pontiac Vibe . These are cuts that have to be done . Just like in life when you eat well you find yourself after alot of hard work to get to a place where you can be a leader on your job or in your life you find yourself complacent . This is something that has happened and The General is getting back into combat shape . But like some of the people who have posted I have concerns. Like how we have many copies of vehicles like the Buick Enclave . Chevy Traverse GMC Acadia and Saturn Outlook are the same vehicle . But good looking small and gas conserving vehicles like the three concepts that we took a pool on the Beat, Trax, and Groove . All these cars are good looking trendy vehicles that meet different demands in what a person might want . I guess what I am saying is that GM is on the right TRAX for innovation in categories for design , fuel economy and quality but the must level up not watering down what they bring out that can help US you and me . USa . In competing with cars like Mazada 6 which looks like Robins version of the Bat-mobile . Verses the Sierra concept that hit a home run . That looks like a vehicle that I would buy at 26 someone at 40 even 60 + cause it brings this level of the style and flair that is US and at the same time can be that new lux. car with the E-Flex system . And I believe when it comes to vehicles that we produce that the E-Flex system needs to be push to all forms of development through out all of GM’s brands . This will not only allow us to have brands that can compete . Like the Provuq concept another vehicle that shows innovation in quality design and fuel economy . This is what will keep GM alive and will allow it too compete with all other car manufactures .
It is called the Law of Supply and Demand
“Unfortunately, GM and the others remained in denial and chose to stick with the profitability of big pickup trucks and SUVs and uneducated customer demand far beyond what was reasonable or healthy.”
In 1981 (the previous gasoline peak price) according to the DOE, trucks represented 20% of the market. By 2007, trucks represented 50% of the market. So, don’t blame GM for the SUPPLY, blame you neighbor for the DEMAND.
“I was so disappointed during the employee broadcast when you showed all the new vehicles. They looked great but not one was a hybrid. Not one.”
Hybrids, people are being so ecologically green that they are not being financially green. There was an article last month at Edmunds.com listing the top ten lowest cost to own and operate. And guess what at $4 gas, none of them were hybrids. And at $5 gas, none of them were hybrids. And at $6 gas, tenth place was a hybrid.
So wake up and do the math. And if you want the price of gas to come down – DRILL!!
Mr. Lutz
I am a firm believer in GM and I wish it all the success possible in the future. I would like to see an accelerated Volt program to get more of them out sooner than what I have been reading. We need to see a better hybrid system for the other current and soon to be released vehicles to allow them to compete more fully with other vehicles in their class.
The Volt should introduce a BEV version soon. That would get the Volt out to the buying public sooner and get cash coming in. The BEV version should help GM to stave off some of your competitors that is coming to the market with competing versions of BEV, PHEV and E-Flex type vehicles.
Thank you.
…We’ve all seen the sales data from May and June. The only cars selling in the US are subcompact and compact cars. While GMs compact cars have improved significantly, GMs subcompacts are very, very subpar. They need to be replaced yesterday.
Posted by: Jared on July 15, 2008 12:14 PM
Jared,
Yes, we have seen the June sales.
Have you? Your conclusions are a bit off. From http://www.gm.com, investor information, sales and production numbers, some intersting highlights:
% chg in sales, JN07 to JN08
CTS +16%
STS +12%
Cobalt +21.6%
Malibu +73.4%
G6 +34.2%
Vibe +23%
Aura +25.6%
SKY +44.1%
SRX +12%
Equinox +45.9%
HHR +23.6%
Trailblazer +28.2% (not a typo)
VUE +24.8%
Definitely, not all of these are compacts or subcompacts. Try looking at the actual data, and not regurgitating uninformed soundbytes.
Yes, there is a shift in the model mix away from large trucks, but this does NOT mean that NO trucks are being sold, it just means that LESS trucks are being sold.
There are people, believe it or not, that actually require a large truck capable of towing significant load or a large number of passengers.
The Aveo, a subcompact, actually dropped by 19.7%.
The Prius dropped by 24% also, as well as the Scion tC (-28.2%).
Mr. Lutz,
Great to hear the good news about retail car sales being up 8 percent.
Really like the photos of the new 2010 Cobalt / Cruze (cool name). Its just what is so needed for the youth appeal. The new Malibu is drawing people, even as a stand along car. The Malibu has a classic profile and that should show that GM’s special classic styling can lure them in, just as GM enthusiasts having been saying.
I believe expanding Cadillac’s offerings up, down, and sideways a bit would improve your car/crossover sales, profits, and market share dramatically. This move would help the other divisions too. Consider the refined and unrefined luxury buyer targeting the Mercedes buyer for reputation, and the more cosmetic Lexus/BMW for looks. Its evident by their current offerings these makes are trying to keep up with Cadillac. Cadillac should not fall for the slogan of we don’t want to compete with ourselves by having an alternative style offering. A sedan with a bit more room with alternative headlights and tail light designs to the CTS would round out Cadillac’s middle and literally take market share from the foreign competition. Round out the XLR too. Cadillac should keep the focus on what’s the best car with price no object (even if its a lower price than theirs) and not simply the best for the money. They already know Cadillac is the best car for the money, thats what irritates the foreign competition, and its how they get by with soaking their luxury customers.
Pontiac and Buick need a couple gorgeous designs for their flagships.
A small V-8 with even better fuel economy would help luxury and near-luxury sales.
GM should be mentioning in its fuel economy ads that GM cars use regular gas, many from the foreign competition do not.
Also, thanking customers in your ads for their support would wake them up a bit, and probably would bring even more in. With your sales increase in cars, it seems there are people looking for a great American car.
@Jeff: Seems you missed the part that said “Affected retirees and surviving spouses will receive a pension increase from GM’s over funded U.S. salaried plan to help offset costs of Medicare and supplemental coverage.”?
Focus on the VOLT. Stick with that vehicle GM.
It’s the future.
Don’t screw this up.
There is everything you need to know about the future market of autos.
You can now fire all of your market research people and save a few million.
Get to work.
~ “So, don’t blame GM for the SUPPLY, blame you neighbor for the DEMAND.”
OK, point taken, But we can blame GM, Ford, and Chrysler for their continued, irresponsible (and unfortunately successful) lobbying effort to exempt trucks and SUVs from having to meet more rigorous CAFE standards.
All they were doing was turning a blind eye to reality in order to bolster the short-term bottom line. Unfortunately, those chickens are now coming home to roost.
I wouldn’t be surprised now if they wished they hadn’t spent so much money on lobbyists and politicians fighting CAFE, and had instead invested that money in research and development for better cars and alternatives to fossil-fueled internal combustion engines.
Realizing that trucks consume more gas that our car counterparts, they are also a neccessity. If i could buy a BASE pickup with only PS/PB – no air / air bags / carpeting / headlining / radio etc – would buy that in a heart beat. The price of the vehicle would offset the cost of gas at $9.00 per gallon. (which it is in England right now)GM still could make money on a base pick-up and not degrade the entire line.
Hi Sheth,
Hi Rum Doodle,
saying, that European cars are generally better than GM- or other US-cars, doesn’t meet the facts. How would you explain, that some European manufacturers (especially Volkswagen) repeatedly fall behind the GM-Brands according to JD Power? I am driving a US-made GM-vehicle since more than 7 years (2001 Alero) and so I have the chance to do real-world comparison all the time. My resolution after 82.000 miles: I definitely would buy an American GM-vehicle again.
Nevertheless, considering the current oil-prices, it for sure was a right decision to bringing the Opel Astra to the US. In my opinion the Corsa should follow a.s.a.p. in order to gain some market-share for GM among the sub-compacts. I am wondering what you have been writing regarding the sticker prices. The Astra is vastly more inexpensive in the US than over here in Germany. I’d say the Astra is far from being a high-priced compact in your country.
Another GM Employee:
The reason for the drop in sales for the Prius and Aveo is due to AVAILABILITY, not a lack of market. The current waiting list for a Prius is 6 months and there is roughly a 1 day supply in the US.
Also take into consideration that while the % change looks good, what matters more is market share in a growing market. The Honda Civic just became the best selling car in America. Do you really think that most Americans (or even half) believe that the Cobalt is the Civic’s equal? Not likely, and for good reason. The Malibu shows that when GM produces a world class product, the world sits up, pays attention, and puts it’s money where its mouth is. However, the Cobalt has not and will not enjoy the same level of success. The Aveo? GM’s polishing a turd. They’ve spent so much time cheapening the car to get a low price point they forgot to make it truly competitive and fun to drive. I can only imagine how bad sales will be when the new Ford Fiesta rolls out, along with a revised Fit, and the Beat isn’t here to meet it.
Bob:
18 of the next 19 may be cars or crossover, but are they the RIGHT cars or crossovers? The Camaro is a great car, but will you have the 4 cylinder model with the correct rear end gearing to help give it that fun-but-fuel-friendly image? It’s already been announced that the US won’t see a version of the Beat. BIG MISTAKE. How about using some of the $15B to rush the program and get it here in a year. Good Lord knows that there is enough spare capacity in the truck plants to turn a line to making the US version. Why is the Cruze not being made in the US until 2010 when the rest of the world has it next year? I understand about cycle times and model changeovers, but when you have a great product you put it on the market as soon as possible!!! Don’t let some theoretical calendar of refresh times dictate what you put on the market!
BTW: When does the board vote to kill GMC?
I hope GM goes broke just for the fact that their Home finance division is horrible ran and unwilling to work with it’s customers. I just had to come here today to remind myself what brands make up the GM family, that I will never buy again. GO Ford! GO Toyota!
Rum Doodle,
Couldn’t disagree more.
CAFE is a farce by the far left to attack American business, unfortunately acquiesced to by a weakling Congress. It should be repealed entirely. So you don’t seem to like the revised CAFE with its more fair formula done by vehicle type? What’s the matter are you afraid that if the foreign competition has to put out by vehicle foot print they won’t be able to keep up with superior American technology.
Regulating C02 is also a joke.
What the left wing pessimists seem to hate most is success in America.
And on investment: American companies have done most of the reseach and development into alternatives and most of it with their own money.
~ Nevertheless, considering the current oil-prices, it for sure was a right decision to bringing the Opel Astra to the US.”
What are your observations of the Opel Agila and how it would do in the North America market as a city-car offering?
Now, it’s easy for everyone to say about oil prices, “They should have seen it coming.” My answer to that is nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.
100% correct Bob. While GM gets virtually all of the press, quiet as it’s kept the ENTIRE auto industry is reeling.
Toyota has seen a sobering 35% drop from their December 2006 (down 22% from their high this year alone) high as a mix shift caught them broadside. Nissan is down 45% from their 2006 high. Porsche is down 53% from October 2007 to present. BMW is down 45% from their 2007 high. Daimler is down 47% from their 2007 high. Lead times for this industry are such that the vehicle mix on the road now was of course set five years ago. NOBODY in this industry can truly see five years into the future. They can make educated guesses and with 20/20 hindsight the peanut gallery can always anoint themselves geniuses even when the available evidence points out that nobody else in the industry got it right. They can spare me the points on Honda (down 20% from their 2006 high). Honda cut back on more profitable Ridgelines and Pilots to make less profitable but salable Civics. Let’s see what that does for their profit margins after the hype about how smart they are dies down. Also neatly not mentioned by the clueless media is that those flexible plants could not build the larger trucks and SUVs without which Honda’s current market cap is one third that of Toyota which does.
Sheth and David, great posts. Glad to see some here get it.
On my second Vette and looking forward to my ZR1 next year Bob. Thanks for always getting excellence from your team.
Bob
I applaud the tough decisions that both you and Rick had to make. I am fully confident that GM will win again in the not too distant future. If I had a couple of billion dollars to spare, I would plunk it down on your table for sure.
A couple of points I disagree with in your missive. As someone who is often mistaken for a dumb blonde, I foresaw gasoline prices rising substantially over two years ago. I also noted back then that Bill Gates and Warren Buffett were speculating with the declining dollar. I even predicted an equilibrium point of $6.87 a gallon which should be reached sometime next year. Of course, no one ever takes me seriously, until it’s too late that is.
Some things to consider:
Although I applaud GMs efforts in combining their distribution network into four channels, I believe you really must pare down to ONE channel. I had even thought GM would be able to survive with 2 channels, Cadillac-Chevrolet and BPG, but that seems to be a rather weak choice now.
Similarily acceleration of the global manufacturing system is essential to sustained growth and economies of scale.
It is fairly evident that GM cannot eliminate any of its brands, but it should be reducing the number of models it sells.
CADILLAC is AOK.
CHEVROLET is AOK.
PONTIAC should be reinvented as sporty rebadges of Chevrolet cars with sport suspension and turbocharged engines.
BUICK should be reinvented a near-luxury rebadges of Chevrolet cars with touring suspension, turbocharged engines and AWD.
SATURN should be the new moniker for greenline GM products like the Chevy Volt. Merge all Saturn dealerships with Chevrolet.
GMC would become a commercial division of Chevrolet and offer only MD and HD trucks.
SAAB/OPEL/VAUXHALL would provide Cadillac/Chevrolet products geared for European markets. No need to duplicate line-ups there. Saab would move upscale more to compete with BMW, Audi and Mercedes.
HOLDEN/DAEWOO would provide Cadillac/Chevrolet products for the Australasian region. GMDAT would continue engineering and manufacturing products for GM.
There you go. All the brands neatly positioned and uniquely different.
Heard the reference to cuts in motorsports budgets.
You can cut NA$CAR 100% and most would cheer.
You built that organization along with Ford. See how long they last with Toyota.
The oil situation in my opinion is largely a result of what many are starting to call ” The rolling bubble”. First there was the tech bubble, which of course burst fantastically. Afterwards, everyone jumped into “safe” investments-aka- real estate, and especially after the Fed lowered interest rates. It too went into the stratosphere and people who invested in it did so with great abandon.
So what happened to the get-rich-quick money after the housing bubble burst? Why- it all went into oil and commodities, hence the bubble just keeps right on rollin’ this time causing even more havoc on the American people.
The sad part about these bubbles is that they ultimately come back and bit everyone in the rear. As we see now, companies like GM- a company that ACTUALLY MAKES PRODUCTS versus inflating make-believe ones is being seriously affected by the rise in oil, which as I suspect is from investors buying oil futures.
Anyhow, thanks for being open and transparent as usual. Thanks Bob. I and many others thing GM is doing a great job.
Bob & Others,
Wow, seems like there’s a whole lotta DENIAL going on… half the comments (and Lutz’s post) read somewhat like a Support Group for Poor Corporate Decision Making.
Kinda sad, because that’s what got GM in hot water in the first place, and it’s what will kill GM if GM does die in the end (which I hope they do not).
Bob, you can cry, “NO ONE SAW IT COMING”, and your sycophants can make cute comments about Monday morning quarterbacking, but really, SOME DID SEE IT COMING, and it wasn’t all that hard to figure out, really.
The rise of China and India + global oil output not keeping pace + no real improvement in auto gas mileage/efficiency (and GM, through its anti-CAFE lobbying, was a direct contributor to that) = an eventual crisis/breaking point.
It was obvious that it was going to happen sooner or later, the only unknown was the date. Now we know that, too. It’s now.
What I predict will happen is that same thing that always seems to happen… GM will REACT, but will still lack the VISION needed to see what’s coming or at least to have hedged its bets enough to be ready.
Toyota may not have seen it coming either, but they at least had a sufficiently diversified portfolio that they had a product out there that was ideal for what was a likely eventuality (the Prius).
GM, in contrast? Killed the EV-1 back in the ’90s, didn’t even want it EXISTING alongside its behemoth SUV lineup. Oh well, their bad and their loss.
Lutz, Wagoner, and Co., will likely survive the current situation (just barelly), but, lacking vision and the gumption to STAND FOR a certain set of values NO MATTER WHAT (the environment, reliability, whatever) but rather only up to the point where it stops being convenient, they will no doubt be caught flat-footed the next time something goes wrong or *gasp* CHANGES in their industry.
And they will, once again, REACT, while insisting that “It’s NOT OUR FAULT!”. With the support of the usual crowd of ‘me too’ sycophants.
Lather, rinse, repeat, ad infinitum. This is very mediocre and no way to run a railroad, but I guess we’ll all try to make ourselves feel good about riding this particular dinosaur, eh?
‘Dinosaur’ may actually be a bit mean… to dinosaurs, actually. As of February, Bob was still saying that global warming was a “crock of s***”, and that hybrids and diesels made no economic sense.
Rock on Bob, no one does denial and lack of vision better. You do get an ‘A’ in blame deflection, however. A pity that that is the least of GM’s needs right now.
Mr Lutz,
OK, no one saw it coming. The question is, “How do you react?”
From what I’ve read, you already have a car that will get 50+ mpg, but one that you don’t plan to sell until 2010 because you’re still fiddling around with its Li-ion battery pack.
I’m talking of course about the Volt which you have said will get 50+ mpg running as a series-hybrid with a small ICE turning a generator to power electric motors at the wheels.
Doesn’t anyone at GM/HQ realize the Volt running as as series-hybrid — even w/o a satisfactory Li-ion battery pack — would by itself be a tremendous step forward?
Why not immediately push up release of the Volt — advertising it as a revolutionary series-hybrid — and then take your time perfecting the battery pack?
Who could resist a series-hybrid that would get 50+ mpg? You could be going toe-to-toe with the Prius in a matter of months.
Crank up some of that under-used assembly line capacity at Janesville or Moraine and start churning out those series-hybrid puppies now — then offer the batteries as an add-on option later.
V/R
Gary Dikkers
MR. Lutz, Thank you for your comments.
I would like to present a few ideas to you to help GM out of it’s current problems. Some you may not agree with and that is fine, so here is a couple thoughts.
The Refining and Recapitalization of GM
GM must REDEFINE itself and finally making major changes within the management structure.
Marketing should move to Southern California to see “first hand” how the competition operates here and the problems GM dealers have moving GM products in the California market and get “one on one” time with both the dealers and customers. This “insight” will enable GM marketing to better equip models with the correct “content” needed to improve sales to both import and domestic buyers in California.
GM has to get in touch with the loyal buyers it has and conduct some market research on what they consider important and what they are looking for in their next GM product.
Using this combined data GM must give each brand a distinct direction and create marketing both in line with the direction and complimentary to brand(s) that share its “sales channel”.
GM has to consolidate sales/marketing/logistics and production for each “architecture” under one management/engineering team and using market data and each brands “identity” to maximize shared parts between models in the architecture while maintaining each brands character within each model. This data can be shared between architectures identifying opportunities to share parts across architectures.
Each “Sales Channel” will have one management not the multiple ones of today to handle dealer relations, accessory sales and product distribution, streamlining decision making and lowering costs and will interface with each architectures development team to minimize redundancy and lower inventory levels in the distribution system.
GM must drive out all redundant efforts and bureaucratic roadblocks to agile marketing changes in order to “keep up” with day to day changes and be more aware of “major” swings in the marketplace.
CASH:
GM needs cash and positive cash flow today more than ever and must make adjustments to previous decisions such as fleet sale reduction.
Fleet sales must be increased on high inventory models, outgoing models and ones with name changes pending to generate as much cash in the shortest amount of time, not talking dumping here more inventory reduction coupled with production adjustments to get 2008 model vehicle inventory where it needs to be across the board.
ASSET MANAGEMENT:
GM has assets that are not creating the cash flow they are capable of and offer opportunities for GM to build both market share and cash.
Hybrid Technology: GM has built up expertise in Hybrid technologies like Two-Mode and E-Flex that can attract private equity if GM creates a separate business unit for it. This new unit can create powertrain, control modules and battery technology for future applications in GM’s own products and license them to others.
Alternative Fuels: GM has experience in Hydrogen Fuel Cells, Bio-Power Ethanol and E85 capable powertrains that again can be moved to a separate unit attracting private equity interest.
Next Generation Powertrain: GM’s powertrain group is one of the best in the industry and it soo can can “split out” into a separate unit, first just the HCCI portion since it has great promise and can be licensed to third parties. Later the remaining portion of Powertrain including production may be incorporated.
Dealer Network: The most underused and misunderstood asset GM has, most dealer profit lie in used vehicle sale, accessory sales, parts and service not new sales. GM has the most extensive network in the industry and treats it like a liability not the asset it represents. The retail portion of the network can have a business unit created with private equities help remaining completely separate from GM, relieving GM from the day to day retail cost burden. Ad and web site management costs can be consolidated throughout the country with data on latest market trends like color and interior preferences shared between dealers. This data can be fed back to GM’s marketing for national ad strategy and future product development.
Automotive Finance and Leasing: Separate from the Dealer network GM can create an Automotive Finance group (spin-off from GMAC?) with ties to the GM Card making loans easier and lowering handling costs of special offers. This group can provide Automotive finance for any manufacturer expanding it’s market and diluting potential risk to GM.
Product Enhancement and Inventory Control: The inventory, accessory, service parts, training and “dealer installed” factory options will be handled by this unit. Along with private equity this unit manages new vehicle inventory in centralized locations (next to rail lines where possible) cutting transportation and inventory holding costs of dealers yet enabling faster response to customer orders. This centralized location would perform service training and install upgrades such as AC on base model cars, leather seating and electronics upgrades on interiors and wheel, tire, brake and suspension upgrades on vehicles in inventory before or after sale. It could also perform factory warranted hybrid battery swap/upgrades as they are available.
Similar to the Inventory Control unit, GM can create a Performance Group to install performance parts on new and old GM products using crate engines from GM Performance Parts and other performance parts from established high performance companies that could partner with GM.
Medium-Duty Trucks: When the economy picks up and with the possibility of more companies using rail to ship from major metropolitan area to another the Medium Truck business will pickup in the next 18-24 months and GM has available facilities, powertrains, chassis and trained assembly workforce to offer a partner – this one can become sticky with UAW representation potentially being a problem.
Production Facilities: GM has excess facilities that can remain vehicle production centers for companies looking for a U.S. location in a JV with GM (or not) and with a private equity partner used for Alternative Energy production like Cellulosic Ethanol or Algae to Bio-Fuel providing GM with additional cash flow.
Real Estate Management: GM also has excess office facilities that with a private equity partner can be “managed” to maximize cash returns to GM – these properties can be sold, leased or used for JV projects depending on what best fits the property. This will maximize the value of the property, give GM some upfront capitol and allow a private equity partner to make a good profit from the properties.
These are some ideas that do not involve selling/dropping brands and can work, maybe not all but most and will build a stronger GM.
Keep up those great new models coming.
Mr. Lutz:
The Detroit Free Press has quoted you as saying GM needs “triples and home runs” from its upcoming products. The new Buick on Epsilon II is beautiful, but no one would ever know it from the photo that was shown behind Rick Wagoner today. Either the shot was too plain or from the wrong angle or something. And why the hesitation with what it’ll be called? I haven’t heard a single person ask for the LaCrosse (or Allure) name to be retained, but Invicta seems to be desired overwhelmingly. Are you listening? Also, whatever the NEXT Buick beyond that is (Delta II?), it needs to be not just beautiful but startlingly so. Please.
- Christopher Popa
What hurt GM so much isn’t only the economic situation or the price of oil.
It’s also the cars that GM currently produce which don’t meet customer’s exectations.
I really like cars but not all kind of cars. And my favourite brand, which happens to be a GM division, didn’t procuce a car like in the last 20 years.
Please change that and the sales will go up!
And I’m quite surprised to see that there is still not a a less expensive alternative to petrolium for internal combustion engines. At 10$ a barrel, it was easy to understand, but at the actual prices, I think that large corporations like GM should find something. Even your large network of dealers could be the distributor for this inexpensive fuel and that would increase their incomes!
Lets see, we have to wait yet another 3 years and GM will be saved. Seems we hear the same thing every 3 years!
You had us vote on the Beat, Trax, etc, yet didnt design the car for the US market. If you had, it would be here next year when it is so desperately needed. You guys are so clueless its almost as if you are trying to fail!
How about designing all your ‘global’ cars so they will meet US specs? Is this so hard for you to grasp!?
You say the Cobalt is hitting its stride? Did you say this with a straight face? The Cobalt is falling behind its competition by the day. Do you even look at your competition? They all have telescoping steering wheels, more comfortable seats, better steering dynamics, etc. I know you can’t make the rear seat bigger but what about all the other things I mentioned that would at least make the Cobalt a little better? The Kia Forte will be another nail in the coffin while we wait for a new design.
Now, here you have the Astra with better steering, better seats, and a telescoping steering wheel. The Cobalt has the superior powertrain. Can’t you swap out the different pieces to make both cars more competitive? Is this rocket science to you guys?
The Aveo is garbage. I rented one when my Cobalt was in the shop for the umpteenth time (coming into its own and falling apart at 40,000 miles) and the interior smelled like a toxic dump, the engine was rough and buzzy and the handling was atrocious. It was a rental, you say, thats why it sucked…………..it had 600 miles on it!
You can make a small car fun to drive, see the Fit. See the Versa. Replace the Aveo with something far better than what you have now or the Ford Fiesta is going to kill any sale you can get. And change the name to Metro while you’re at it.
Rick Wagoner really needs to go, 3 years ago. I’m sorry to say that its time for you to retire also since you are primarily the one responsible for GM ignoring their small cars.
Lets watch the Cobalt whither on the vine just like the Cavalier, only to have GM say oh, this one is going to be really good thats why we renamed it…….again.
Bizarre logic, especially when you give it quite possibly the most pathetic name in the world.
Cruze………….what were you thinking!?
Better yet, you guys had better START thinking. Even better, let more competent people take over GM.
I cannot believe that the Beat and the Cruze will not be sold in North America! What poor planning! I think people are going to be very disappointed by this announcement, and it is just one more example of how GM will miss the boat and be years behind the competition! Unbelievable! We need more fuel efficient smaller cars, not more crossovers and cute utes!
edvard,
Nicely said. I’m glad someone else understands that when the price of something, oil in this case, rises out of proportion with actual supply and demand, that there is a bubble. A huge one by the looks of it. It’s not only got GM and other automakers scrambling, but is putting a bunch of companies that make up our global transport system on the ropes, particularly airlines. People who think GM and the others were short sighted and irresponsible need to seriously take a look at the oil speculators who completely fail to see the big picture. If they did, then they’d see that they are causing more damage to our economy than a few more mortgages than usual going into default (it’s hardly a meltdown).
I agree there will always be a truck market. Its not going away, only reduced. Yet, why hasn’t GM put a v8 into the Colorado. Ya, the Colorado is a mid to low quality vehicle, but if the V8 Dakota can tow 7000 pounds, why can’t the colorado with a 5.3? Its in the H3, which of course is Colorado underneith. Why hasn’t GM explored the smaller truck market with big truck cababilities. Shed the extra 1000 pounds, and the 5.3 should be good for near 25 mpgs. Not to mention it would be a stop light sleeper. Or, you could always toss that 4.5 into the silverado a little sooner…
What I am curious about is why during the entire live conference yesterday, did it seem that the name “Saturn” was purposely omitted or avoided during the entire GM conference?
I have to agree with a lot of the posters. If anything there has been a lack of leadership from GM. The “hard” decisions that GM announced is no more than the same path taken by most others when times get a little tough . . . .cut employment, cut spending, cut benefits. At least the leadership could have taken a pay cut (a bonus cut isn’t enough) to show that they are part of the team. It’s not like they need the money. We were late to the market with crossovers (now I would bet that we will have too many with all that are coming). We have never had a quality, competitive small car until the Astra. The Beat needs to be sold in this country, and it should be available now. We’ve been late to market with quality, high milage four cylinders. How much has market share declined since Wagoner has been head of North America or higher? He has had to operate in tough times, but I’m amazed that he still has the confidence of the board. GM is going to need real leadership and real changes to prosper in the future. It’s not going to get any easier. I’m glad that I got rid of my GM stock long ago.
Another GM Employee:
Prius sales are down because Toyota can’t get enough batteries. You either know that and you are deliberately using the Prius sales figures to mislead people, or you should know that.
GM subcompacts are simply subpar and that is why they selling poorly. If you drive the competition you’ll see that.
GM should have engineered the Beat for the US. The demand for it was plain to see.
The Cobalt needs to be replaced and the Cruze should be coming ASAP.
The top 4 best sellers in May were the Civic, Corolla, Camry, and Accord. The Cobalt was 9th with about 1/2 the sales of the Civic. The Ford Focus, which is horridly ugly and based on a 10-year-old platform outsold the Cobalt in May. That should tell you something about the Cobalt — it simply isn’t competitive. The Cobalt was at best an adequate car when it was introduced.
While the Malibu and Aura are greatly improved, neither of them are in the top 10.
You (and the rest at GM) need to stop being defensive, face reality, and accept that you have a problem. Your cars are not selling anywhere near as well as the competition. There is a reason for that — with a few exceptions they simply aren’t as good.
You can keep trying to tell us that the world is flat, but that isn’t going to move metal off the showroom floor.
Actually Bob, many people did see it coming. All of those you cite that didn’t see it coming but that surely isn’t everyone. And, many mainstream people saw it coming. It isn’t rocket science. The world was awash in capital to ignite never before seen global growth. That growth would spur an underlying demand for commodities and investment in oil discovery was at the lowest level in modern times.
And, I’m going to tell you what is going to happen in the future to prove that I not only saw it coming but that the future is predictable as well.
Just as you are quoted in the Detroit News that you aren’t even sure if GM should develop the next generation pickup in reference to high energy prices, oil is about to bust. I don’t mean drop. I mean bust. And, so is China and many emerging markets that GM believes is going to save them from the U.S. slowdown. And, that means all of the investments GM has made abroad are going to be subject to tremendous risks. Including risks you have no control over. That being potential political and social unrest.
No one saw it coming? Well, watch for the future because it’s coming
GM’s with high fuel prices is due to the fact your company doesnt have a balanced product portfolio, it was basically becoming General Trucks. All the analysts predicted that cheap gas was over and you could see demand shifting back to cars a full two years ago. How did GM react? Close the Spring Hill plant to retool for another crossover, 250,000 units of small fuel efficient vehicle production were lost.
Your Wilmington plant could build another 200,000 small fuel efficient vehicles, yet 80% of it is sitting unused. You want to be the fuel mileage leader, yet overlook the spaceframe technology that could get you there quickly and at a low cost. Why stop building the old vue and replace it with a steel paneled model that weighs 800 pounds more?
Time to build more coupes, rwd and how about one competitive minivan instead of just handing these segments to your competition. Chevy isnt even selling a minivan in 2009, one could argue they didnt offer one in 2008 either.
You want to eliminate unnecessary spending. First step towards this, end the model renaming. The person calling the shots here doesnt understand GM’s customer base nor the value of many of the companies storied model names. Want proof, look at the declining sales at both Buick and Pontiac.
Next step, sell Saab and Hummer, both are just distractions. Buick and Pontiac have great potential with the right marketing and product infusion. A new fiero would be the ticket, along with a GTO. Bob, it will take your Solstice 20 years to sell how many Fiero’s Pontiac moved in just five years. You got the car you wanted, the customers didnt.
GM needs smaller luxury cars. Why don’t you sell the Buick Excelle here (with a non Hyundai name)
You have nothing to compete with the 3-series, Volvo s-40 or small Lexus.
How about a hybrid called the Buick Electra?
Also, how about a car for Tiger? Buick Bengal? Velite?
Why is Buick still neglected?
I read alot of negativity about the current Cobalt. I grew up on a farm in mid Illinois and drove mostly trucks. In 1985 I moved to Detroit and got a job at GM Engineering working in the truck chassis dept.
I continued to buy trucks (I do home makeovers). My place of business is 30 mi one way and the high price of gas was taking coin out of my pocket. I dreaded the thought of moving over to a small compact car. I was use to my big roomy trucks. On May 23 2008 I purchased a Chevy Cobalt LT Special Edition. I have already racked up 4,800 mi.. I tell everyone this is a great fun to drive car. The interior is beautiful. The outside is eye catching. The ride and handling is smooth. The 4 cylinder is quite and has plenty of power and pickup. The latest trip to Chicago I got a solid 34.4 mpg. My feelings about the Cobalt is echoed by anyone who is an owner. For $15,550 out the door I didn’t expect a luxury car by no means. But I feel I have gotten alot more car then I expected for the money. Anyone who bashes the Cobalt most likely has never driven one but has the perception (there’s that word again) the Honda Civic must be better. And they probably have never driven a Civic either. One more thing, I didn’t trade in my 2003 truck since it’s paid for. It has 156,000 carefree mi. and many more to drive.
I AM GM
Steven Gilles
“The top 4 best sellers in May were the Civic, Corolla, Camry, and Accord. The Cobalt was 9th with about 1/2 the sales of the Civic. The Ford Focus, which is horridly ugly and based on a 10-year-old platform outsold the Cobalt in May. That should tell you something about the Cobalt — it simply isn’t competitive. The Cobalt was at best an adequate car when it was introduced.”
The Cobalt outsold the Focus in June. This is indicative of the production increases recently instituted at Lordstown. You criticize it for being on an ancient platform yet the Toyota Camry/Matrix is on a platform that is almost 20 years old and has very poor NVH performance and refinement.
Forget all these crossovers already.We at your selling dealers need cars that people want to buy.I work for Chevrolet and I really dont think the Traverse is going to be a great seller.Nice yes……but at 14mpg? The Beat and cars like that should be here right now.GM has been behind for so long,its time to get ahead or even at least.Other car lines can make fuel efficient vehicles,so can GM.I would really prefer not lose my job because the place closes due to poor sales.Forget the trucks,forget the crossovers,start being competitive and give us something to sell.Maibus are great,HHRS are as well.I drive a 2007 HHR…..speaking of why are there virtually no commercials or advertisements for this car??? The press and all media is killing you guys.They seem to favor everyone but GM.All you hear is Toyota and Honda but they never mention that they have gas guzzling suv’s also.The Impala gets better mileage than a Camry,yet thats not talked about.You need some heavy marketing and some new models a.s.a.p. as well letting alot of 6-7 figure salary people go.Start doing business like you mean it and get on the same boat as the other car lines. Fire Rick and get some new,young aggressive blood in there and change the way GM does business.I really dont want to be unemployed because the company we rely on to give us cars to sell cant give us cars that people are after now.
And yes,GM should have seen this coming when gas started going up in 2004! You should have at least had a back up plan.SUV’s couldnt last forever…….Get with the program now.
Edwin: ~ “CAFE is a farce by the far left to attack American business, unfortunately acquiesced to by a weakling Congress. What the left wing pessimists seem to hate most is success in America.”
I’m far from a left-winger, but exactly what success are you talking about?
GM, Ford, and Chrysler have all lost billions over the last few years. GM just announced major restructuring and has had to cut thousands of jobs for hard-working Americans. That’s success?
The fact is that all three majors fought CAFE tooth and nail, and shortsightedly rode the SUV horse into the ground with few long-range plans for an energy future that has been all too obvious since at least 1979.
As much as they didn’t like higher CAFE standards, the hard fact is that if 15 years ago CAFE had been upped to 40 or 45 mpg, and had included SUVs and trucks, all three majors would be in a far more competitive and better position today.
If the CAFE of US automakers and the US auto fleet was 45 mpg, we would have to import virtually no foreign oil. Instead, we have to import almost 70% of our oil while sending billions of dollars out of this country. How can you call that success?
David wrote:
That should tell you something about the Cobalt — it simply isn’t competitive.
I’m trying to be unbiased here even as a GM employee. So many times I read comments on this blog site relating to
some of our products being not competitive to foreign. Almost every time it is with out facts, figures and or statistics. It is usually written with emotions only derived by hearsay from media outlets or special interest groups. I feel in order for any comment to be taken seriously that blogger needs to have done their own fair comparison. Please explain in more detail David as to why the Cobalt simply isn’t competitve. I beg to differ as I did ride and drive a Honda to see what my competion is on the road. We can nit pick differences all day how the Cobalt has this over the Honda and the Honda has that over the Cobalt, but at the end of the day it’s not like the Civic has round wheels and the Chevy has square. Don’t take my word for it or any magazine that has their own hidden agenda but take a look yourself and be honest if there is a real reason not to buy an American vehicle anymore. As GM cuts back headcount so does hundreds of GM suppliers and their tiers layoff thousands that will and does effect yours and my economy. As our American car industry goes so goes our countries economy.
I AM GM
Steven Gilles
I understand that you have to release information on future models to calm the nervous nellies on wall street, but releasing photos is not a good move. Two years from now when they hit the market,everyone will say,Oh! I’ve seen that before, that’s not new. You need to play yours cards closer to your chest to overcome GM’s image of a day late and a dollar short.
I think that quality and service will be your biggest problem going forward. You have a superb “bench” in thye cars sold elsewhere in the world under your other brands.
Meanwhile; my new CTS4 has been waiting over three weeks for a wheel speed senson-without it the ABS, 4 wheel drive, traction, and stabilty control are nonfunctional. he longest I ever had to wait for a Toyota part was 4 days; and that was when my 4WD Celica was 14 years out of production!!(usually all parts were overnight delivery)
Quite apart from the failure of a critical part on a new Cadillac; the extremely delayed repairs won’t kindlydispose me to GM in future. I doubt I would wait so long for parts on a Lexus AWD sedan (If it failed at all!!)
David wrote:
That should tell you something about the Cobalt — it simply isn’t competitive.
I’m trying to be unbiased here even as a GM employee. So many times I read comments on this blog site relating to
some of our products being not competitive to foreign. Almost every time it is with out facts, figures and or statistics. It is usually written with emotions only derived by hearsay from media outlets or special interest groups. I feel in order for any comment to be taken seriously that blogger needs to have done their own fair comparison. Please explain in more detail David as to why the Cobalt simply isn’t competitve. I beg to differ as I did ride and drive a Honda to see what my competion is on the road. We can nit pick differences all day how the Cobalt has this over the Honda and the Honda has that over the Cobalt, but at the end of the day it’s not like the Civic has round wheels and the Chevy has square. Don’t take my word for it or any magazine that has their own hidden agenda but take a look yourself and be honest if there is a real reason not to buy an American vehicle anymore. As GM cuts back headcount so does hundreds of GM suppliers and their tiers layoff thousands that will and does effect yours and my economy. As our American car industry goes so goes our countries economy.
I AM GM
Steven Gilles
You had me up until you wrote” Now, it’s easy for everyone to say about oil prices, “They should have seen it coming.” My answer to that is nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.
Is that last clause suppose to be some sort of qualifier? Are you saying that nobody predicted oil would rise X percent in Y months to $145+ per barrel? The fact is plenty of people have been talking about our vulnerability to foreign oil, and inflationary prices, for years. Oil was $11 a barrel with GM produced the EV1 – you must have had some suspicion this day would come.
Really sad,
when I read my company’s vice-chairman publicly declaring – “nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.” … I sadly feel like GM’s glass is half empty of talented and visionary leadership.
GM Dealer Employee:
“I work for Chevrolet and I really dont think the Traverse is going to be a great seller.Nice yes……but at 14mpg?”
As usual, a dealership employee knows next to nothing about the product that they will be selling. Had you done about 30 seconds worth of homework, you’d know 2 things:
1. The Traverse is a platform mate of the Enclave, Acadia, and Outlook with a 3.6L V6 (see point 2) and a 6 speed transmission. Those vehicles get 16-24 and 16-22 city/hwy for the FWD and AWD variants respectively.
2. The 3.6L V6 going into the Traverse will feature Direct Injection which actually boosts fuel economy and horsepower. The current thought is that the numbers for the Traverse will probably be 17/25 FWD and 17/23 AWD. This would be a combined fuel economy of 20 mpg FWD and 19 mpg AWD.
To put that in perspective, the FWD version will get 42.86% better fuel economy than you predicted, and the AWD version will get 35.71% better. I pray that you in your infinite ignorance haven’t been telling potential customers that the Traverse will only get about 14 mpg. My Acadia SLT-1 FWD sees 17.5 mpg in mostly city driving, which is better than the 16 mpg on the sticker.
As for the Impala, it may get better mileage, but if you’ve ever driven the two back to back you wouldn’t even bother comparing them. I personally hate Toyotas because they aren’t any fun to drive, but the Camry SE is an infinitely better handling and better performing car than the Impala.
“It was noted that Engineering spending will be held at 2006-2007 levels. GM will NOT be able to produce innovative vehicles that reduce energy consumption without significant R&D dollars.”
Hi Sklunk,
maybe you have got some incomplete information. GM obviously will not cut spendings on key R&D-areas, but there where it makes sense (SUV-, Truck-development). That’s interesting: http://www.autoobserver.com/2008/07/gm-spreading-the-pain-to-raise-cash-get-lean.html
Also…..get rid of GMC.Phase the Denali models into Chevy if needed and offer as upper scale package than the Tahoe. One thing I always didnt like from GM was making one model,then making the same car with another name….Acadio,Outlook,Traverse,Enclave…..The Equinox came out then all of a sudden we get the Torrent.Why??You take from pocket to put in the other! Please dont continue this ridiculous pattern.This was a trend in the late 80’s-90’s…remember the Celebrity,6000,Century,Ciera??
~“Now, it’s easy for everyone to say about oil prices, “They should have seen it coming.” My answer to that is nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.”
Hmmmm…No one saw it coming, eh? No one, as in this major article published in Scientific America in 1998: The End of Cheap Oil
Or, no one as in petroleum engineer King Hubbert who as early as 1956 predicted the world would reach Peak Oil by around the year 2000.
I cannot foresee anything changing for the better until corporations like GM realizes what they have done to the US economy by exploiting communist and third world countries for lower wages.Greed for profit has destroyed the fabric America was built on.
Also…..get rid of GMC.Phase the Denali models into Chevy if needed and offer as upper scale package than the Tahoe. One thing I always didnt like from GM was making one model,then making the same car with another name….Acadio,Outlook,Traverse,Enclave…..The Equinox came out then all of a sudden we get the Torrent.Why??You take from pocket to put in the other! Please dont continue this ridiculous pattern.This was a trend in the late 80’s-90’s…remember the Celebrity,6000,Century,Ciera??
“All they were doing was turning a blind eye to reality in order to bolster the short-term bottom line. Unfortunately, those chickens are now coming home to roost.”
actually they were selling SUVs that people wanted. In the 90s and early 2000s SUvs were very popular. Suvs can attribute some of their success to CAFE standards which encouraged automakers to develop more truck like vehicles to benefit from the lower CAFE requirements. If there was no CAFE in the first place SUVs may not have been such an attractive proposition for automakers. Its amazing how simple facts easily refute poor arguments.
“saying, that European cars are generally better than GM- or other US-cars, doesn’t meet the facts. ”
I will say that GM’s european cars are more upscale and have more premium content. I dont know that they are actually better in terms of American’s taste. The Astra is popular in Europe but lacks proper cupholders or a front armrest and has odd ergonomics. I think that GM’s vehicles are tailored to specific markets but many in the press believe that GM should simply sell everything they sell in Europe. It hasnt worked that way for the Astra.
“Not likely, and for good reason. The Malibu shows that when GM produces a world class product, the world sits up, pays attention, and puts it’s money where its mouth is. However, the Cobalt has not and will not enjoy the same level of success. The Aveo? GM’s polishing a turd. They’ve spent so much time cheapening the car to get a low price point they forgot to make it truly competitive and fun to drive.”
You have no clue what you are talking about. The Cobalt’s capacity isnt anywhere near that of the civic. Sales of the Cobalt cannot touch the civic at this point in time. GM is adding another shift so GM should be able to move more cobalts later this year. My employer just got a Cobalt LT and its not a bad car at all. The engine is quiet, the tranny is smooth and the ride quality is decent. Ergonomics are superior to the civic if you ask me.
As for the Aveo, the interior of the 2009 model is actually one of the best in the segment. It looks far better than the interior of the Yaris or Versa. GM has already said a NEW Aveo will be introduced in 2010 with better fuel economy.
YOu seem to have trouble undertanding that GM is trying to advance the art of vehicle design and execution over time. To say the Cobalt is worse than the Malibu is silly because it should be due to its age. The Cobalt came out 3 years before the Malibu and it shows. I would imagine the 2011 Cobalt/Cruze will be a step up vs the Malibu. This is the way things are supposed to work. Gm’s latest products should ALWAYS be their best.
” That should tell you something about the Cobalt — it simply isn’t competitive. The Cobalt was at best an adequate car when it was introduced.”
For 2009 the Cobalt gets more power AND better fuel economy. The 2009 model gets 2mpg lower city economy than the Corolla and 1mpg less in the city than the Civic and has far more power and torque than either of those cars. Furthermore, the Cobalt with the 2.4L engine and 171hp gets better mileage than the Corolla S with 158hp. When the Cobalt came out C&D said it was a very refined small car and GM sweated the details. They said it compared favorably to the Jetta which was seen as the most refined compact of that era. The Cobalt is plain to look at but it offers nice features and THREE engines. None of its competitors offers two body styles and three engines. In addition, only the Mazdaspeed3 offers performance comparable to the Cobalt SS but even the Mazda cant match the mileage of the SS.
You say GM’s cars arent selling well and yet the CTS is outselling the G35 and TL. The Malibu is outselling the 6, Passat and Sonata and the Cobalt is outselling the 3, Sentra and Rabbit. In 2006 or 2007 the Impala was the 3rd best selling family sized car. Before the Altima coupe was available there were months when the Impala outsold the Altima.
According to the Internation Energy Agency, production of oil is still ahead of demand. In fact oil demand has grow ~4.5% in the last 4 yeast, where price has grown 298% in the same amount of time.
The two largest contributers to the oil prices is the weakening dollar and the oil commidities market being open to everyone. Up until 2003 only oil companies and very large users of oil could by it directly off the market. Now anyone with very deep pockets and looking to make a qwick buck can buy crude oil. So we have a percieved shortage, until the buyers put it back on the market for a higher price. And the fact that oil futures don’t ship for a month makes it even worse.
“We have never had a quality, competitive small car until the Astra. The Beat needs to be sold in this country, and it should be available now. We’ve been late to market with quality, high milage four cylinders.”
In spite of all the Cobalt bashing the car has sold well. There are only two compacts that routinely outsell the Cobalt- Civic and corolla. How those kinds of sales decribe a failure in the compact market is beyond my grasp. What the Cobalt bashers here fail to acknowledge is that GM has been updating the Cobalt ever since it was introduced. The SS/Sport model with 171hp was added. A new head unit was added. For 2008 the SS model with 260hp was added as well as the XFE model. For 2009 the Cobalt gets VVT on the 2.2L to make a class leading 155hp and fuel economy also increases. Once GM increases capacity I am willing to bet Cobalt sales will take off. The Cobalt lacks class leading mileage but it offers class leading hp and a great price.
The Astra is a nice car in many ways but it has not sold well here because of its price and hatchback configuration. While its the dream compact for many a GM basher it hasnt gotten traction in the marketplace. MEanwhile the mediocre Ion which was bashed by the press and GM critics was actually a successful vehicle. Sometimes when GM listens to the critics they may a price. Posting uninformed commments here is much easier than running a car company.
Instead of saying “many people” knew about the pending jump in oil prices I suggest folks start naming names and offering specifics. Tell us which individuals or corporations predicted that fuel prices would double in 2 years. The Airline industry certianly didnt know. The trucking and shipping industries certainly didnt know. Government entities certianly didnt know either. So the question is who actually predicted this rise in prices and make drastic changes to prepare for the increase?
Another GM employee.
I have to say that in many ways the competition products are ahead of ours. Their designs are modern or futuristic while ours have that 90’s look. Their engines are more efficient because they have more technology.
I always try to convince my friend to get a GM car, I tell them all the advantages they have but no matter how hard I try they always go with the competition and when I see their new cars I think inside my head that they got a better vehicle than what we offer.
GM is working real hard in making global platforms but there are some good vehicles around the world that they could sell in the US but they just don’t.
In Europe the price of the gas has always been higher than the prices in the US and we have very good vehicles there, the Corsa is a great example a good looking, fun to drive and fuel efficient car. Also in Europe people prefer diesel over gas because is more efficent. Why don’t we offer diesel vehicles in the US? There aren’t any, even as an option!
I think GM is doing a good job with the hybrid aproach but once again, we’re focusing on the Tahoe, the Vue, I think is good that the Mailbu will get soon an Hybrid option, but what about the sub-compact and compact vehicles?
The Toyota Corolla is in my opinion a very ugly car, yet is the high seller.
The Honda Civic on the other hand I think is great looking.
But the Cobalt, is not ugly but it isn’t exciting, looks like a very old car compared with the Civic. The engine I think is good, but both the Toyota’s and the Honda’s have better technology.
I’ve been talking only about the sub-compact and compact vehicles because I think that’s where GM should focus rigth now.
Develop new vehicles not to compete with what the competition has rigth now, the will renew their line in 2-3 years, develop vehicles that will be better than the competition’s after they renew their line.
Have more engines available as options, diesel, hybrid, turbo, etc.
I’d love it if my Silverado 5.3 V8 had a 4.8 V8 with Active Fuel Management or even the 4.3 V6 with the equipment and trim you get with the 5.3 package. I’d also love if there was a 6-speed transmision along.
If we have the variety of engines and transmisions, why not offer all those combinations?
I’m sure a lot of customers will be grateful of getting a high level vehicle with a 4 or 6 cilynder engine if there’s the option.
I’m definitely not a marketing expert, but I’m just telling you all what I’d like or consider in a vehicle if I’m planing to buy one.
David:
Huh? The Camry/Matrix are on two different platforms and no, neither is 20 years old. The Matrix is built on the Corolla platform. The Camry is built on a different, larger platform.
As for the Ford Focus, Ford is already selling the third generation Focus in Europe. The US Focus is a mildly revised version of the first generation. The third generation Focus is much better car than the first generation.
If the Camry, Corolla, and Matrix are so poor in NVH, why are they selling so much better than GM’s cars?
Steven:
Sorry, but I’ve driven both the Cobalt and the Civic. The Civic is a far better car and the general public recognizes it — that is why the Civic is the number 1 selling car and the Cobalt is number 9.
The responses from the GM employees here demonstrate exactly why GM is in such deep trouble today: you are in denial. You keep saying that GM cars are the best, when the marketplace keeps telling you otherwise.
I want GM and Ford to regain their former greatness. I really do. But you can not do that until you accept the fact that, outside of a few exceptions (CTS, Malibu, Corvette, etc.), your products are not world class. If they were world class, they would be topping the sales charts. They aren’t.
SteveG said, “How about designing all your ‘global’ cars so they will meet US specs? Is this so hard for you to grasp!?”
Exactly. We should be seeing the Beat et al in the US (and Canada) now. Instead, GM gives us (not even a “in a few years”) but a “never”. If GM shares weren’t at about 30 percent of what I bought them for, I’d probably sell them now.
Having said that, no one can deny the quality and beauty of the CTS and the Malibu, among others. GM does have potential. But unrealized potential = waste.
Chri (Toronto)
Mr Lutz,
This is getting really interesting. On the same day your CEO announced major restructuring, and lamented the “triple whammy” of the declining economy in the US, Volkswagen announced they plan to invest $1 billion in the US and build a new plant in Tennessee, and that by 2018 they expect to be selling 800,000 cars per year in North America. VW to build billion dollar plant in Tennessee
What does Volkswagen see in the US and our economy that you and Mr Wagoner don’t see?
An idea for you
You are about to shutter several assembly plants including those at Janesville, Moraine, and Oshawa.
You have idle assembly capacity and skilled workers at the ready. VW wants to build a new plant, but one that can’t be ready until at least 2011.
Have you and Mr Wagoner thought of offering your excess assembly capacity and workers to Volkswagen and signing an agreement to build cars for them under license until their new Chattanooga plant is ready?
It seems like that would be a way to keep your workers and assembly capacity at work while at the same time providing a revenue stream into GM from VW.
The only downside I can see to such a plan would be GM’s pride and foot dragging by the UAW.
V/R
Gary Dikkers
There is a great business opportunity to re-engine, re-car America. The Cruze should launch ASAP, not two years from now. If that is not possible, at least get a more sophisticated and attractive front end on the Cobalt. Capital expense to construct a Traverse line in the old Saturn plant is a mistake and should be stopped. Build the Traverse with the other sister cross-overs; their sales volumes are sliding. GM is on the right path to re-think “legacy” marketing expenses. NASCAR funding is an embarassment to any ecologically-minded person, and never did sell Monte Carlos. Best wishes.
Posted by Jared
The top 4 best sellers in May were the Civic, Corolla, Camry, and Accord. The Cobalt was 9th with about 1/2 the sales of the Civic.
The Corolla numbers include the Matrix which is bogus, since the name Corolla does not appear on a Matrix, it would be like GM putting Cobalt and HHR sales numbers together. If you remove Matrix sales (GM sold nearly 5K Vibes, the Matrix sell more so let’s est. 7K) from the Corolla it leaves the Corolla below the F-150 and probably Silverado dropping it to 5th or lower.
Cobalt, Impala and Malibu sales were off at least 5,000 units due to a shortage of cars.
The Cobalt has made it’s 4-year run and is in need of updating at least and the rumors are the Cruze will replace the Cobalt in the U.S. market, Mr. Lutz can you clarify the timelines for the Cobalt and Cruze as they apply to the U.S. market?
Mr. Lutz,
You’ve got plenty of people here (and there) giving you tactical and strategic advice. I’m NOT going to do that. I can’t presume to have anywhere close to the amount of automotive expertise that you and your colleagues at GM have.
I can, however, ask you to reconsider GM’s attitude concerning product development and marketing.
You say: “most importantly you continue the the ethic of producing the world’s best cars and trucks because that is the only thing that long-term is going to get you through it.”
I can’t disagree more and here’s why:
The auto industry has many players and is highly competitive. As can be expected in such a highly competitive environment, everyone (including GM) are indeed building great vehicles. It is therefore simply not effective to aim for being “the best” because there is no such thing. Or to be more precise, “the best” car for each consumer/car buyer out there varies from individual to individual.
The question that your designers, engineers, marketers, and dealers need to consider at ALL times is this: Why would anyone buy this [Chevy, Buick, Pontiac, Saab, Saturn, Cadillac] over any other make?
If they consider that question at all times, then they have at least a chance of delivering on answers to that question.
For example, Ford/Microsoft answered that question in the form of the Sync system. There are tens of thousands of buyers that are buying that system and getting a Focus along with it.
If GM keeps telling me that they have “the best” cars, that doesn’t make me or any other car buyer consider a GM car.
If, however, you tell me that you’re gonna have a built-in fridge in your Enclave, I may consider it. If you tell me that your Saabs will all have standard iPhone integration standard, my neighbor would consider it. If you tell me that all Chevy’s will come standard with touch-screen GPS, that would make my uncle consider your cars. If you unleash a 40 mpg compact that sells for $4000 less than a Prius, the local Sierra Club members will be all for it. etc., etc.
The point is that if you think that all it takes to succeed and survive is to make “the best” cars, then you are very, very, very mistaken.
“…nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming…”
Actually, I’ve advised you repeatedly to make more efficient vehicles, and I’ve explained why you should. Read my comments over the past two years.
“…nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming…”
Actually, I’ve advised you repeatedly to make more efficient vehicles, and I’ve explained why you should. Read my comments over the past two years.
It will be very interesting to see what pans out in the next 2 years, with all that is going on. Some aspects of your business case I agree with and a few I don’t. As for HUMMER and Saturn, we’ll just have to see. It appears Saturn is gaining a little momentum and a 2.8 1-4 turbo 28k H3T could work for the mainstream; just hope you guys don’t give up on them. I am also excited to see some new cars in the next two years and not too enthused about any crossovers – but that’s just me.
Mr. Lutz,
Last week, during a ‘day trip’ to nearby retail facilities, I witnessed a new for 2009, foreign, mass produced, advancement of critical importance within future ICE assisted electric ware.
Novelty -
A multiple cylinder, lightweight, ICE with inherit balance.
(Not a V-8 design)
Described ICE employs no associated balancing (i.e. gear, mount or shaft) methods.
Embarrassed technical engineers globally are hastily reviewing this specific commercially available product as we communicate.
Suggests future investigation by GM, $9,000 (U.S.D.) retail makes this so.
Enough ‘gloom and doom’, Back to Serious Work!
Something about reported ‘unavailable solutions’ to observed maladies existing within retailer facilities today …
Lets bring back the EV1. Its funny how the day GM closed the EV1 plant down. GM goes out an buys Hummer? Who would’ve predicted that one?
Hey JG!
The a version of the Buick Excelle was sold here in the states… It was the Suzuki Forenza… Americans won’t accept a vehicle like that, which is to say, “mediocre at best” as a BUICK! It wasn’t even mediocre, more like daewoo-esque…
GM should invest in a compact vehicle with the ecotec 4 cylinder using either the Kappa or new Alpha platform. If they go Kappa it could make strides as a great Civic fighter… If they went Alpha then the overalll wheelbase of the vehicle could be played with and possibilities extreme.
Bob,
When this blog started you told us that GM had finally got in touch with the real world and was going to deliver us the Camaro…
Now as Camaro launches – 5 long years after the new Mustang, GM will be percieved to be as seriously late and out-of-touch as ever.
The Volt will be 12 years too late in comparison with the Prius…
The Beat and Cruze will also be hopelessly late..
Getting rid of experienced GM workers and saving a few bucks isn’t gonna fix GM’s Problem…It’s gonna make it worse!!
You need to pay more attention and spend more money on diverse global advanced research & design.
You need a deverse range of cars that will cater to a diverse and rapidly changing market – not 4 similar lambdas and 7? similar epsilons!
Diversify the portfolio! You need 1 big RWD sedan, you need 1 small RWD sedan, you need 1 european premium mini, you need 1 class leading compact, you need 1 Corvette and 1 big pick-up.. BUT you dont need to waste money developing a whole lot of derivatives built on the same platform.
You need to be more open minded and you need to consider options that are not always the most conservative solutions.
Take some inspiration from Apple:
1. Adveturous forward thinking and smart leadership
2. Great Design
Wake up GM! You can do it – but you have not even started to fix your One Big Problem yet.
A local Ford dealer is advertising new F150s for $11,900. I couldn’t buy a Focus that cheap. It’s tempting. I could buy a lot of gas with the thousands they’ve slashed off the price.
With car sales actually increasing, it’s a pity you don’t have a nice minivan, and maybe a minivan-based or HHR-based pickup truck to offer those who need the hauling capacity but want fuel efficiency- too bad nobody advised you about that.
Oh, wait- I did…
A local Ford dealer is advertising new F150s for $11,900. I couldn’t buy a Focus that cheap. It’s tempting. I could buy a lot of gas with the thousands they’ve slashed off the price.
With car sales actually increasing, it’s a pity you don’t have a nice minivan, and maybe a minivan-based or HHR-based pickup truck to offer those who need the hauling capacity but want fuel efficiency- too bad nobody advised you about that.
Oh, wait- I did…
Sheth:
“MEanwhile the mediocre Ion which was bashed by the press and GM critics was actually a successful vehicle. Sometimes when GM listens to the critics they may a price. Posting uninformed commments here is much easier than running a car company.”
If selling 105,000 Ions while Honda sells 686,000 Civics (2005) is “successful”, then GM might as well close the doors now. GM cars aren’t selling well. Yes, you can pick and choose segments where GM has some great product and is doing well, but overall sales/market share has continuously declined which is why GM is in the shape they are. I did not say that it is easiy running a car company, but Wagoner and his execs are paid very well, and they have not demonstrated that they can deliver in a tough market.
One of the major airlines (I don’t remember which one) set up some long term fuel contracts a couple of years ago. They are still paying low prices, so someone did see the rise in oil prices coming. GM has done this with steal and other materials many times. GM should have been prepared for a rise in oil prices. Not desinging the Beat to meet U.S. standards is inexcuseable. Maybe you need to be better informed.
Mr. Lutz:
I appreciate what GM is trying to do today and for up coming models but I think it is a mistake to not consider more diesel engines and making the 2-mode hybrid system available in all new CUV’s. Putting the 2-mode in the Enclave, Arcadia, and Traverse would be a big PR move. Combine even better MPG and great new styled vehicles would move GM into a new world. Keep up the good work, I’m waiting with anticipation for the Volt.
While the Volt seems to be the hingepin of teh future direction and possibly ultimate salvation of GM there are still families who eschew crossovers, minivans and mini-suvs for their daily driver. Those of us desirous or needful of traditional full-size family sedans such as the departed Bonneville and Grand Prix cannot comfortable survive in a Malibu/Aura/G6. My needs will be best met by a G8, but again, you are missing the big picture with the recent comments by Mark Reuss that the Commodore (basis of G8) Hybrid may never see the light of day and that all efforts instead will be thrown to LPG. Come on, you can talk people into $50,000 hybrid Denalis, but we can’t talk you into $35,000 hybrid sedans?
I’ll add more to the oil debate. I’ve been paying attention to energy stocks lately, and one thing that I find extremely interesting is that oil refiners, oil drilling companies, oil shipping companies, and so on are actually losing significant value.Why? Because the higher cost of crude means they make less profit. The result? There is an enormous supply of unprocessed crude that’s not being refined simply because the price even for the refiners is too high. So at least for now, the issue is not a supply problem. Notice that I didn’t say that eventually oil will not become scarce. But I’ll repeat what I mentioned above, which is that this is more of a oil future manipulation via investors more than anything. As soon as those who invest in futures panic and sell, I wouldn’t be surprised if oil actually comes down by a significant amount.
But if it does… I think GM, Ford, and all the other automakers hopefully learned something from it, which is that just like stocks, it helps to be diversified in order to deal with unforeseen future events.
“Two years from now when they hit the market,everyone will say,Oh! I’ve seen that before, that’s not new. You need to play yours cards closer to your chest to overcome GM’s image of a day late and a dollar short.”
The models GM showed are coming out next year. Does anyone here every do any research before starting to lecture Bob Lutz? There is so much misinformation here that its embarrassing.
soon to be former GM,
You might want to learn how to accurately state sales figures before challenging me. The civic has NEVER sold 686k units in the US market in one year. I said the Ion was successful in that it did better than the Astra is doing. I never said it was a candidate for best selling small car.
Also, the fact that SW airlines got their fuel prices locked in just means that they thought they could get the fuel at a good rate that would benefit their bottom line. It does NOT mean that they predicted fuel prices would spike within a year. The point is that none of GM’s competitors have shown any more ability to predict fuel prices than GM has. All of this lecturing is pointless and based on the view that certain import manufacturers have exclusively focued on fuel efficient vehicles. Last year the same folks who are lecturing GM would have been talking about Toyota as the poster child for an automaker that was ready for high fuel prices. FAst forward to July 2008 and Toyota is posting the worst declines of any of the major import brands. Why? because their product mix doesn’t reflect that they anticipated $4.25/gallon gas.
Jared,
You are definitely not shy about revealing your ignorance and bias. You claim that except for a “few” vehicles GM isnt competitive. People like you dont want to talk about the auto industry sales outside of camry, accord, corolla and civic. The CTS is outselling the G35 and TL and even the ES350 at times. The Enclave is outselling the MDX. The Malibu is outselling the Sonata. The Silverado is outselling the Tundra and the Impala is outselling the Avalon by a long shot. While the Cobalt cant match civic sales, it is beating the 3 and Sentra each and every month. BTW, the civic was the #1 vehicle for ONE MONTH. It is NOT the best selling vehicle in America. At the end of this year the Camry will be the best selling car and overall vehicle in the country.
“The fact is that all three majors fought CAFE tooth and nail, and shortsightedly rode the SUV horse into the ground with few long-range plans for an energy future that has been all too obvious since at least 1979.”
You keep leaving out that Toyota joined the Big 3 in resisting the latest CAFE change. LEts tell the whole truth or be quiet. Not ONE major automaker came out in favor of the latest CAFE hike, not even Honda.
“I have to say that in many ways the competition products are ahead of ours. Their designs are modern or futuristic while ours have that 90’s look. Their engines are more efficient because they have more technology.”
This is totally inaccurate. GM is farther ahead on 6 speed trannies than Honda or Toyota. Honda doesnt even offer a 6 speed. As for engines, GM is right near the top in terms of mainstream manufacturers. Not ONE Honda or Toyota branded product has a direct injected engine. For 2009 you can get a Di engine on any lambda crossover, Sky/Solstice, Cobalt SS and Vue two mode hybrid. Then of course you have the CTS and STS. GM is the only manufacturer to have two powerful naturally aspirated four cylinders on its compact car. Toyota and Honda dont even have a model that directly competes with the Cobalt Sport with 171hp. GM is also using AFM more than any other auto maker. Honda has this feature on three vehicles and Toyota has it on ZERO. Same goes for Nissan and Ford.
As for design, anyone with eyes can tell that GM’s recent designs are far better than what’s coming out of Honda and Toyota. Have you seen the 2008 Accord?How about the 2009 Acura RL, TSX or Pilot? The Avalon (any year)? Give me a break. Only luxury brands like Audi and BMW are turning out designs as good or better than GM’s most recent efforts. If the cruze looks like the renderings it will be one stylish small car.
Steven,
You arent going to find any substantive reasons why the Cobalt is worse than the Civic. The Cobalt trails in ONE significant area- mileage. Of course that is largely due to the fact that it has a 2.2L engine while the Civic has a 1.8L engine with far less torque. For 2009 the gap gets smaller because the Cobalt auto gets 24/33. The Cobalt XFE with manual actually gets better mileage than the Civic. The Cobalt has numerous available features that cant be had on the civic such as trip computer, 17″ wheels (only Si has them), heated seats, remote start, Onstar, etc. For 2009 the Cobalt gets bluetooth and a USB port. I dont think the civic has either. Also, you have to get navigation just to get XM radio on the civic. The cobalt is dull but so is the corolla. In terms of refinement and feature content its right there with the corolla and civic in spite of being older than both.
Jared you wrote:
“Sorry, but I’ve driven both the Cobalt and the Civic. The Civic is a far better car” “You keep saying that GM cars are the best, when the marketplace keeps telling you otherwise.”
Jared
I haven’t read one blog from any GM employee who has said all our vehicles are World Class. As a GM employee I’m not saying the Cobalt is superior over the Civic. Is what I was trying to point out is some folks make it sound like the Civic is so much better of a vehicle. In my personal comparisons I could see were the Civic was better in some areas but the Cobalt was better in others. Neither is a high end luxury car. When you say the Honda is “far better” please follow up with your statement what you found in your vehicle to vehicle comparison that brought you to this conclusion. Those are the things GM would like to hear from the bloggers. Too many times there are very broad undescriptive comments made when talking about a GM vehicle to another competitve vehicle. No hard facts (plenty of personal opinions) are listed.
As for the “market place” comment, I would like them to start comparing vehicles themselves instead of basing their purchase on certain magazines and other media outlets that have their own agendas. The gentleman from Germany ,Gereon, made a comment awhile back saying Toyota penetrated 3% while Honda had only 1% in Germany. I see Gereon as someone who is independent and isolated from the American media. He is unbiased in his comments about American vehicles. GM products do very very well outside North America when the playing field is all equal. Why do you think that is Jared? Can anyone say GM hasn’t made forward improvements with their latest released products. I am sure if new consumers can have an open eye and do fair comparisons they will see and feel GM is equal to any competitive vehicle available.
I AM GM
Steven Gilles
Sorry Jared but the Camry and the Matrix/Corolla are both on platforms that are by GM’s standards “ancient”. The Camry platform has been in production since 1993 (15 years) and the Corolla/Matrix since 1993 as well. The Cobalt blows away the Matrix and Corolla in refinement, quietness, and overall NVH performance.
The Civic might be slightly better in powertrain NVH but but the Cobalt is far from uncompetitive -especially considering that it’s the fuel economy leader in the segment. By the way; it’s #8 not #9. I guess by your measurement of quality the Ford F-Series must be the best vehicle made because it outsells even the Camry.
Hi Mr. Lutz. After being a GM “short” years ago, I am now among the “longs” for the first time in my life. Bought some at $10.59 last week. I believe your company will make it through these challenging times.
I have a suggestion. GM could move the inventory quickly if you discount the largeer vehicles substantially and make up for the loss by teaming up with a company like Exxon-Mobile by selling multi-year “gasoline contracts” with the SUV’s and trucks, much the way wireless service providers discount wireless PHONES in return for service contracts.
More at TableofWisdom.com
MrArbitrage
Bob,
Well put I suppose… however…:
Despite the market problems and fuel price increase what I fail to understand is why it has taken something like this for GM to realize they need to do something about fuel prices. Car companies should always be striving to find new technologies, and better their product energy efficiency. During the 1970s GM and every other car company should have known that oil prices are a problem. Whether or not they fluctuate or go up significantly should be irrelevant.
I still drive a 1990 Buick because I get 29 actual MPG on the highway (and the car is paid for). I look at GM’s offerings and I scratch my head… why would I pay so much for a new car that gets less mileage then my old one? Sure they have more HP and safety options etc.. but the point I”m making is that in the past 20 years GM really hasn’t done anything I would consider significant besides crank out car after car.
The whole problem is that GM should be looking far enough in the future to have products in the pipeline just in case. Where are the leaders in GM saying “What if fuel hits $8 or $10 a gallon what do we do then?” Sure it may never hit it buy since when is having marketable technology for that kind of market a bad thing? As it is it takes GM several years to react and bring a product to market.
A great example are the GM diesels. GM has a lot of diesels around the world but why are they just now starting to talk about bringing them to market. I’m sure someone at GM will say customers didn’t want them.. but I am forced to ask how is GM to know if they don’t offer them. GM soiled the reputation of diesels in the 70s with some ill fated products. Only recently did GM figure out it needs more diesels with the creation of the 4.5L Duramax. Again I ask why so long… why didn’t GM develop a 4 and 6 cylinder diesel alongside the current 6.6L Duramax? Offer a cobalt with a diesel or even a Buick.
GM if you want to do better you have to look further ahead past the current market and start being proactive rather then reactive. Stop saying “well the market wasn’t predictable” and higher someone who says “what if this happens” and plan on it. If for some weird reason fuel went up to $15/gallon what would GM be able to do to sell vehicles to its customers? Sure it may never hit that but isn’t someone asking these questions and planning contingencies?
It all boils down to leadership Bob. Sure you’ve turned GM around now take the next step and get today’s technology like the 4.5L diesel and the new electric vehicles out the door. And in the mean time figure out what GM can do when gas hits $6.00 because by the time GM can figure something out that will most likely be reality.
Be prepared it sure helps.
In the mean time there aren’t many GM vehicles I’d want to buy new, however there are plenty I wouldn’t mind buying used.
Mr. Lutz:
IF ONLY YOU COULD GET THE U.S. GOV. to tighten there belts maybe the dollar would stop crashing. Also Honda was the only manufacturer that had a small sales increase when everyone else was in the dumpster. I saw an article that they can reconfigure production lines in 10 days to switch from trucks to cars?? sounds like a good idea in these tough times. I WISH GM THE BEST MY VOLT DEPOSIT IS GETTING BIGGER EVER MONTH DONT LET ME DOWN.
Hello Mr. Lutz,
I’d like to share with you a few comments from a consumer’s perspective. I want my next new car purchase to be the Chevy Volt. I currently own a Ford Escape Hybrid and a Toyota Prius, both suit my lifestyle very well. I feel we need to shift our transportation energy source away from petroleum and toward electricity. I live in the Pacific Northwest where we have an abundance of Hydro and Wind power…electricity as a transportation fuel is a no-brainer.
I feel strongly about supporting GM as the Volt can be the vehicle that shifts the fuel source paradigm away from petroleum. I know the Volt isn’t the answer for everyone, but it sure is for me.
I agree with others that say GM needs the Volt to demonstrate its Technological expertise to the rest of the world. The U.S. needs the Volt as a step toward reducing our dependence on foreign oil.
I have my checkbook ready.
Scott Winneguth
Scott, a multi-year fuel contract is exactly teh deal Chrysler is offering. I am assuming few takers since now they have cash in addition to. But where does the price difference come from? It is not like the folks at America’s #3 were able to lock in that $2.99 Future cash outflow that GM is attempting to avoid would be eaten up in such a scheme and there is no guarantee that Chrysler will be around at the end of their 3 year program.
All the talk about Cobalt boils down to unquantifiable criticisms. I finally got to drive this “subpar” car recently and I can tell you the engine NVH and overall quietness is on par with my brother’s Mazda3. The Mazda looks better and has more features, but the cars sound the same from behind the wheel. While the Cobalt is stuck with a 4 speed I can say it shifts smoother than the 6 speed in my car. I also found the base stereo to be very respectable and no worse than the BOSE in the 3. GM has made improvements to the Cobalt’s biggest weakness- mileage.
The next generation car needs more upscale features like auto climate control and navigation as well as better mileage. I’m sure GM is working on this.
I can tell by the defensive nature of your article “Now, it’s easy for everyone to say about oil prices, “They should have seen it coming.” My answer to that is nobody saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world – no one saw it coming, not this kind of rise.”, that you feel a little, just a little bit guilty about not being better prepared for this recent rise in gas prices. Hurricane Katrina should have alerted the so called leadership at GM that oil supply is way too sensitive and volatile to not be prepared for near and/or long term price increases in gasoline. It shows a lack of understanding and grasp of the U.S. car market. You guys have been clueless in the U.S. market for a long time.
Sheth:
Well said, you’re spot on. Cheers.
Chris (Toronto)
Steven Gilles: ~“The gentleman from Germany, Gereon, made a comment awhile back saying Toyota penetrated 3% while Honda had only 1% in Germany.”
Steven,
Doesn’t that make sense when there is already an abundance of quality auto brands in Europe to choose from? Opels, VWs, BMWs, Mercedes, Porsches, Fiats, Pugeots, Citroens, Skodas, Renaults, SEATs, Vauxhalls, et al.
The Japanese carmakers haven’t penetrated the European market that much because the market there is really competitive, and they couldn’t offer anything that doesn’t already exist there. They’ve concentrated here because the American carmakers were an easy target — for years the Japanese have offered what GM, Ford, and Chrysler either couldn’t or wouldn’t provide.
“The Volt will be 12 years too late in comparison with the Prius…”
The Volt compares more to the locamotive than the Prius. So, by your figures they would be later than that. Yet, it praise GM for being the first automaker to notice this design.
“I’d love it if my Silverado 5.3 V8 had a 4.8 V8 with Active Fuel Management”.
It seems that it would be better to drop the 4.8, since the 5.3 currently gets more fuel milage than the 4.8. You could add the AFM to the 4.8, but I doubt the 4.8 gets better than marginally better fuel economy. Its like asking why the 305 got better milage than the 350. I dont believe its because of the lack of CI, but rather the smaller bore. The 4.8 and 5.3 share the same bore. Im not sure how to explain it, but it has to do with the flame front required.
“A local Ford dealer is advertising new F150s for $11,900″
At that figure, its still over-priced.
“there is no guarantee that Chrysler will be around at the end of their 3 year program.” as much as I dont like Chrysler, their stock is 6 times higher than GM…
Finally, to all those who “saw” the oil prices coming. Hind sight is 20/20. Would you have been willing to place your paycheck on it?
PS. When is GEO coming back?
Rum Doodle,
Success is the obvious superiority of GM vehicles. (Except for the economic slow downs/market disruptions the American automakers would probably be quite profitable).
Chevy’s CAFE average miles per gallon at #3 is better than Toyota’s at #10, see the article linked above by Joe B.
Its not the government’s place to tell people what vehicle to drive, the consumers should decide for themselves. And certainly not to be decided by the far left, a collection pessimists who seem to hate success in America.
GM’s has many vehicles including SUVs that are the most fuel efficient in their class, surely misguided critics know this.
And if the gov’t has a regulation, it ought to be fair, not biased against the American business. CAFE has clearly been biased against American business. And it should be repealed, it is a failed farce by the far left used to attack American business.
U.S corporate tax rates are the highest in the world. U.S health care costs are also the highest. That might help you to understand profits. This is the fault of a weakling Congress.
As someone who actually owns a 2006 Cobalt LT Sedan Automatic and drives it every day I can say that this car has simply not been updated enough to keep up with the competition and improve its chances in the marketplace.
How difficult is it to read reviews and comments and then improve the car so that the faults are fixed?
The seats needed improvement from day one-you actually sit on these seats, not in them. In addition the height adjuster keeps breaking and when you adjust the height upwards it tilts you forward-WTF? The seat cushion is too narrow and offers no thigh support. This has been known since the car came out and the same seats are still there.
Telescoping steering wheel. Very important for a small car, offered in the 3, Civic, Corolla, Rabbit, Elantra, Focus…………….Not offered in the Cobalt.
4 wheel disc brakes should be standard.
Steering-I’ve already mentioned faulty intermediate shafts, and every review of the car pans the steering-it is the most glaring fault of the car and has not been improved since the car first came out-inexcusable.
The Mazda 3 came out and immediately became the highest rated compact, yet Mazda has still found ways to improve it year after year.
The Cobalt has potential to be a good compact car. It needed improvements from the get-go and has not received them.
If GM made those improvements to the car I would be trading mine in on a new one. Now, theres no way.
GM let the Cavalier rot on the vine and did the same thing with the Cobalt.
We GM fans are sick and tired of this company not seeing things that everyone else can see.
Management is inept and needs to be changed. NOW.
I read the press release, but the action didn’t go far enough. GM should freeze pay raises until at least 2011. The recession may last and deepen longer. And you have to pay a huge sum to the UAW. And a loss will be sustained for the initial production of Chevy Volt.
Looking ahead, I don’t really see a future for 8 brands in the US except Chevy, Cadillac and Buick. You have duplicate brands(Pontiac and Saturn) that market basically the same cars(G5, G6, Aura) to the Chevrolet counterparts. This internal competition or cannibalization will definitely bring down profit margins. GM dealers are making profits, yet GM makes barely $100 per car. GM should make a goal of $1500 per car($1000 for GM, $500 for dealers). If you sell 9 million a year, that means 9 billion in decent profit. You will then have the capability to compete with Toyota(even bring it down!). And i don’t see a point for budget RWD Pontiacs, which are basically rebadged Holden sedans and coupes. You can’t make much money, and you’re gonna cannibalize Cadillac!
Before I depart, let’s take a look at the 2010 Corvette concept at http://www.worldcarfans.com/9080717.009/new-shot-of-mysterious-corvette-concept-set-to-star-in-transformers-2. It’s edgy and futuristic.
And best of all, it’s a Chevy AND a Corvette. You don’t need anything else.
~ “Success is the obvious superiority of GM vehicles. (Except for the economic slow downs/market disruptions the American automakers would probably be quite profitable).”
Edwin,
I guess those market slowdowns and disruptions explain why GM is closing four North American factories. But if the economy caused it all, then tell me why VW recently announced they will build a plant in Tennessee, and that they expect to sell almost a million cars a year here within a decade.
It seems success would be best judged by how well companies can adjust to those “market disruptions.”
Sorry, but fighting tooth-and-nail against a more robust CAFE for the last 25 years wasn’t a successful business strategy. I don’t like government regulation anymore than you do, but it must have occurred to GM that had they just voluntarily chosen the strategy of increasing the fuel mileage average of their cars, they would have been much better prepared to face the current economic slowdown.
The fact is that GM rode the SUV horse into the ground, and unfortunately, now their employees, stockholders, and the communities that are home to GM assembly plants must pay the price.
“Scott, a multi-year fuel contract is exactly the deal Chrysler is offering. I am assuming few takers since now they have cash in addition to. But where does the price difference come from? It is not like the folks at America’s #3 were able to lock in that $2.99…” chiefpontiac
That trite marketing gimmick by Chryler has absolutely no similarity to what I have propounded. There is zero correlation. You would need to read the column at tableofwisdom.com as it goes into much more detail.
Last night I spent a great deal of time elucidating on a response to your statement but it was apparently filtered out by censors. There was nothing profane or uncivil about it; so either someone didn’t want the idea to be read or it was too long.
Best!
MrArbitrage
Ernie Williams,
I think you hit the nail on the head. I would hope that GM feels bad about it especially since it has effected their sales. But I honestly think the attitude of big business is “we’ll not worry about it until we have to maybe no one will notice and things will be ok”. It is my opinion that that worked for GM for a while had their engineers or marketing people been in place to look at such future trends they would have done something sooner. On the other hand maybe they are just tryin got pay off the old technology before they release their new Volt and other secret concepts (though I have my strong doubts on this one).
I think a good comparison would be air bags and seat belts in cars. The auto industry would probably not mind excluding these things because they cost money. But reality is accidents do happen and thats why our cars have safety devices for the “what if”… where is GM’s what if on the future of fuel and energy?
Clearly they are sleeping at the wheel in some regard.
All that said GM keep up the good work I still plan on buying a GM vehicle as my next car, however the questions is whether it will be new or used.
Nate
Brady,
While I don’t have any GM numbers to back this up. The bore and stroke combination, compression ratio, cam timing and intake components all have an effect on economy. As does that choice of drive line and the vehicle. Simply saying the 4.8 should be phased out makes little sense. The 4.8 should get nearly the same BSFC as the 5.3. The big question is will the HP requirement at cruise change. (BTW BSF stands for brake specific fuel consumption or lbs/(hp*hr))
For the 4.8 to be better it’d have to have a higher BSFC which may or may not be the case.
Seeing an F-150 sell for $12,000 tells me that either its junk or everyone else is making the much profit.
GM should have seen the oil prices coming. They probably did but realized it was to late to do anything about it. NOW it IS GM’s job to predict where the market is going and steer the company there. In h history companies that have done this have always been highly successful (GM take note). GM can’t afford not to bet its future on these predictions. Either way they SHOULD have been preparing for best AND worst case scenarios at all times. Anyone who doesn’t think that needs to rethink their logic in my opinion. If GM can’t innovate they will stagnate and go out of business.
As for placing my paycheck on it… well I already have and am doing so. I’m investing my paychecks in technology that will work whether fuel is $1/gallon or $20/gallon.
As I see it anyone invested in the stock market should be wise enough to be able to bank their pay check on it because in effect they ARE!!
Nate
Rum,
“The fact is that GM rode the SUV horse into the ground, and unfortunately, now their employees, stockholders, and the communities that are home to GM assembly plants must pay the price.”
What business are you in exactly? If you were in the hotdog business and people were asking for Kosher dogs even though the fat is going to kill them what do you do? Do you tell them “no” and give them the address of another hotdog vendor who will fullfill their wishes or do you do as they ask?
Fact is; GM makes all kinds of products but people percieve them as being only an SUV maker. Since when are the Malibu, Aura, Astra, Cobalt, G6, etc. SUVs?
Edwin,
You are right its not the government’s place to tell people what vehicles to drive. However its the responsibility for everyone to look out for their best interests in the future. Unfortunately it seems the average consumer doesn’t have the foresight to really do what is required.
The customer has only one option to buy or not buy the vehicle. It is up to the market and innovation to meet demand. However if you look at the delay time for this reaction to occur it is large. Therefore it is up to individuals, leaders of companies and the leaders of the US to foresee and predict these changes in a timely manor. And if the public cant’ do this on their own and the company leaders can’t then I guess all thats left is the government. Its a hard thing to realize in my opinion but the evidence is right there.
You should consider putting away the whole left right concept and look at the real issues at hand if you haven’t. Name calling (which is what left vs right is.. in my opinion) does no good.
GM may and does have some of the best fuel efficiency in their class but thats no reason GM should not be always looking for better economy and technology. Anyone thinking they shouldn’t is foolish. Fuel economy is just one more thing that makes a vehicle marketable. Being the best is great, continually raising the bar is only better. I’ve never heard of a right winger who isn’t about saving money (ie better economy)…. saving money does equal more personal gain.
Cafe is much needed because corporations seem to lack the ability to auto-regulate; which, is critical of all properly functioning systems to survive.
If you look at our economy ask yourself why corporate tax rates are the highest in the world. Trace the dollar around the economy. I did this and it was very revealing of what really goes on. The reason we need Cafe is because other mechanisms to regulate have failed. Cafe and increased fuel prices are a good thing for GM and a good thing for economy. Though on paper it may not appear so, in reality its needed.
Nate
GMisCARKING,
I think the solution should be pretty obvious… until GM can be competitive they need to ax Pontiac, and Chevy. There are no need for them. Saturn is a budget car company and could take half the Chevy Line. GMC is the truck division so move the trucks and vans there. Caddy is the performance luxury segment move everything else there, and Buick is the luxury market. No need for cars that overlap a whole lot anymore. I personally am sick of GM never having what I want and never making it optional. I recently was checking out their Equinox line of SUVs. Between the Torrent, Vue, Equinox and the new GMC model soon to come out. Not a SINGLE one had what I really wanted. If I could have mixed and matched features I could have gotten what I wanted but not as it stands. GM really needs to fix this by removing un needed brands and simply offering more options on each car model they sell. This would put their marketing strategy in line with Honda, Toyota, Acura, Lexus, Nissan, VW, and BMW… all of which offer basically one or two brands of their cars withe trim ranges that take care of a wide customer audience.
Of course Corvette should be a brand of its own and be disassociated of the lowly Chevy name. When I hear Chevy I think of a POS stripped down car not a performance car. Corvette on the other hand has enough reputation that I don’t even associate it with Chevy anymore.
sklunk,
Great products can be created on shoestring budgets. It just requires more care and better management and less fat. All things GM has plenty of… which is why they need fat budgets.
Rum Doodle,
There is nothing wrong with Trucks if GM puts the R&D in them rather then just trying to use them as profit sources.
Why DOES GM NA make lesser products? Perhaps it is customer demand, leadership and the assumption that Americans don’t want what Europeans do. The new G8 seems to be doing well and its not American. Also the new High Feature V6 I’ve heard is derived from an Opel design (not sure if thats true) but it seems maybe the Europeans have something to teach GM NA
sheth,
Why haven’t companies been working harder on economy the past 30 years?
GM does make cars and trucks but how many of GMs larger cars are getting less then 30 MPG right now… I can think of quite a few.
If the products were actually better from Europe maybe people would pay the difference. Quality and longevity of the vehicle are hard things to see unless you are an engineer with some time to study the cars. Is a European Focus better then an American one?
“Is a European Focus better then an American one?”
Yes
Rum Doodle,
GM, and the American makers have stayed ahead of the gov’t CAFE standands. Gov’t mandates are not the answer and the people should stand up and say NO MORE, especially those that are unfunded. Gov’t mandates for safety and emissions often conflict and are incompatable with those of CAFE. Gov’t investment is welcome, but again, the America auto makers funded most of the investment in researching and developing alternatives.
Understand, when the U.S. savings rate is healthy, U.S automakers tend to gain market share, when there is a downturn in savings the reverse tends to happen.
The anti-American business climate in the U.S Congress is unacceptable. Heavy handed gov’t mandates like CAFE and regulating emissions of CO2 are unacceptable, U.S highest corporate taxes in the world are unacceptable. If you want a high mpg car then buy one, if you don’t want an SUV, then don’t buy one. Its not the governments place to be telling the people what type of vehicle to buy.
The assertion by some that its the automakers fault for not making some unilateral shift toward another vehicle away from SUVs is unreasonable, and plain wrong. GM and American auto makers have offered other types of vehicles including minivans, and crossovers, and responded to each market success in kind. Crossovers are a success.
Toyota also idled two truck plants in case you don’t keep up with the news. As to why foreign makers build transplants in the U.S., they maintain flexibility with currencies and to have the ability to assemble in the U.S. when necessary. No wonder, everyone wants a piece of the American auto market, since it is the world’s largest.
What you seem to be missing is that the American auto makers build superior products and have competed against foreign companies and their governments (which subsidize) on three continents.
American companies have managed massive pension and health care funds which foreign governments take off the books of their corporations.
The U.S govt bails-out and rebuilds just about everybody in the world except American enterprise. If you don’t see the contradiction . . . .
I am the former owner of a ‘99 Chev Suburban. I loved that truck, I still miss it. We went shopping for a new vehicle about in Oct 2006, I knew there was a storm coming, so gas mileage was the key criteria.
My old ‘99 had a 5.7@255hp and 12mpg. The new Tahoe/Suburban at the time was a 5.3@300hp and something like 14 mpg. This was the main problem. In 8 years, they squeezed out almost 50hp from a smaller displacement and yet mileage was marginally improved. Why didn’t you guys leave the horsepower level the same and use all of the technology to greatly improve mileage?!?!
The ironic part is that I also own a ‘02 Nissan Maxima that has a 3.5L@255hp. Same horsepower rating as the 5.7 with 2 less cylinders. Sure, the torque is less, but you get the general idea.
I personally believe that GM just was not interested in mpg and unfortunately, these are the consequences of that lack of interest.
I really miss my Suburban. The Honda Pilot we bought is nice, but it just does not compare to my old warhorse Suburban.
“Doesn’t that make sense when there is already an abundance of quality auto brands in Europe to choose from? Opels, VWs, BMWs, Mercedes, Porsches, Fiats, Pugeots, Citroens, Skodas, Renaults, SEATs, Vauxhalls,”
Hi Norman,
you obviously missed some important facts. By far not all European cars are superior. For example, French and Italian cars had many more serious quality-issues for decades, than GM ever had. The quality of the all-new Chevy Malibu, just as an example, for sure is a million miles ahead of any Renault or Peugeot. Even Seat, Volkswagen’s Spanish subsidiary, was leading to big concerns in Wolfsburg. I am well aware of the results of the various quality-studies conducted in the US and in Germany as well. Even Volkswagen, supposedly a symbol for German manufacturing-quality, is falling behind the GM-Brands at JD Power surveys. The same was repeatedly valid for Mercedes Benz. The only German brand, which recently was really performing impressively at JD Power, is Porsche. Also BMW had good results. Opel’s quality is constantly rising, also due to the efforts inside the GM Group.
BTW, when there’s such an abundance of high quality vehicles over here, as your saying, why is Chevrolet (whereas GM DAT-sourced) one of the fastest growing brands all over Europe? In March Chevrolet outsold Smart in Germany and has left (e.g) Alfa Romeo, Subaru, etc. far behind. Also the GMNA-brands had 3-digit sales-increases over here recently. The all-new CTS is expected to have one of the best resale-values of premium-cars in Germany, according to an independent forecast-company over here.
Hi Steven,
thank you very much for your friendly words. Although I am living in Europe, I am studying closely, what’s going on in the US-Car-industry. Considering the latest developments at GM on the product-side, I am pretty confident that GM will recover from its difficulties. Opel had similar problems and now the situation already has improved, as you should know as an GM-employee. I think this history will be repeated for GMNA as well. BTW, the Civic looked rather pale next to the Astra at a comparison-test on German TV.
~ “There is nothing wrong with Trucks if GM puts the R&D in them rather then just trying to use them as profit sources.”
Nate,
Good point, there is nothing inherently wrong with trucks and SUVs. They are important tools for those who really need them.
The problem, as you so well pointed out, is marketing them to people who don’t need them solely as a “profit source.” And of course, as the cost of fuel spikes, those who bought SUVs and trucks for no reason other than to satisfy some emotional or social craving, reevaluated their motivation and found they can get along just fine without them.
Problem is, that demand for fuel to satisfy emotional needs only hurt the farmers, ranchers, cowboys, contractors, truckers, etc. who really need heavy vehicles to do important jobs and make a living.
In WW II we rationed fuel to better do the important job of winning the war. I’d hate to see it happen, but perhaps we’ll have to resort to that again.
Mr. Lutz,
can GM really afford 8 brands in North America?
Pardom me but, if we want to quickly recover and win as a major global player, we urgently need to focus our business into global brands, which I see, only Chevrolet, GMC, Saab and Cadillac are worldwide recognized as strong brands. Chevys are known, like Coca-Cola and Nike, in most countries in the world. Buick is known in America and China. Saturn and Pontiac only in North America.
Do you see opportunity to save GM’s cash with model nonproliferation?
Thanks for the opportunity and to share your thoughts with us.
Roque
Nate,
I understand BSFC, but looking at both engines Id take the 5.3 with AFM over the 4.8 with AFM. Trucks need torque, which is what the 5.3 will have more of. I think at the low cruise rpm, torque would be more benificial, expecially with a load. Expecially with a 6 speed auto…?
Consider this tid bit
In the last two years, the Chinese market has gone from the fifth largest in the world in terms of new-vehicle sales to the second largest car market in the world. At the time of this writing, new-vehicle sales in China were up by over 30% (as reported in the Asia Auto Weekly, December 2006) compared to 2005 figures and were likely to reach over 4.2 million vehicles for 2006 calendar year.
Now how can you put that many new cars on the road and not know that you will increase demand on the oil market?
Come on now that is an absolute croc, SWOT analysis?
It’s time to push the panic button, GM.
Given that:
- It is a fact that initial curiosity and interest in the Volt will far outstrip actual sales of the car.
- When the Volt comes to market, GM will have a once-in-a-generation opportunity to brag about a truly unique automotive product.
It follows that GM should consider nixing the Chevy label and call the Volt the “GM Volt”. The 1st gen product should be available for gawking, feeling, and test-driving at every Chevy, PontiacGMCBuick, Cadillac, Saturn, and Saab dealer.
This will achieve two critical objectives:
1. It will allow the Volt to be the ultimate halo car for GM, increasing traffic to ALL GM dealers. Not just Chevy dealers.
2. It will maximize sales of the hard-to-sell, easy-to-admire Volt. It’s very difficult to sell $40K cars. It’s near impossible to do so at a Chevy dealer. Why not maximize the sales potential of the Volt by making them available at Saab and Cadillac dealers where the customers actually DO have $20-50K burning a hole in their pockets?
The GM Volt. Think about it.
As a GM fan, but also a stockholder, my only comment with your new announcement is, “It’s about time” and i’m hoping it’s not too late. But you have to do more with your dealers. My local dealer sells Dodge, Chrysler, Jeep, Honda, Buick, Pontiac, and Chevy; no GMC, Saturn, Hummer or Caddilac.
Mr Lutz,
I make my living selling GM commercial products as a Business Central dealer. Nobody on a corporate level has explained to me why all of the alternative fuel/hybrid focus is on passenger cars and trucks and not targeted toward commercial vehicles where the extra cost for the technology makes sense.
As good as the new Yukon/Tahoe hybrid is in fuel economy vs. the regular model, it simply doesn’t make up for the $5,000 plus premium for most families. It does however make sense for most buyers of Savana cargo vans for example who may travel 30 or 40 thousand miles per year. What an opportunity to prove the technology works and make a real impact. The business community is begging for relief yet the focus continues to be on compact cars which would get 30 mpg or better anyway. Consumers aren’t walking away from trucks or sport utilities, they’re walking away from 13mpg. For businesses walking away isn’t an option.
Lower the speed limit to 55 mph!
The way drivers speed on the thruway, you’d think there wasn’t any oil crisis.
All this talk about focusing on the Volt is part of the problem at GM. GM needs a complete balanced portfolio of cars, trucks, SUVs, etc. That is a low risk portfolio and the optimal one from a business model perspective. That balanced portfolio will be the least affected by any change in market prices for fuel. After all, no one can criticize GM for not predicting the run up in gasoline prices, but they can be criticized for having a business model that is severely impacted by it.
Reliance on any single vehicle is not the way to go. If there is any single lesson to be learned from this, it’s portfolio diversification.
Here’s an idea for you, Bob. Back in the 1960s, when Japan was trying to enter the U.S. market, they copied American car technology. Now that GM is behind the Japanese in practically every dimension, why don’t you copy them?
For example, make a Chevy Civic. Copy it, in every detail. No “improved American style suspension” or “special more comfortable American seats.” Just copy it. You don’t know how to make economy cars yourself, so follow the lead of they guys that do…
Nate said, “I think the solution should be pretty obvious…until GM can be competitive they need to ax Pontiac, and Chevy. There are no need for them.”
Any GM executives that actually bother to read this blog but must get quite a chuckle from it.
I can’t help but suspect that some of the decision-makers at GM are still anticipating that the market will eventually “get back to normal,” and that GM will be “back on top, where we belong.”
THIS is the new “normal.” You’re right where you belong, and if you want to be “back on top” you’re going to have to get there clawing and kicking and struggling.
Evidence of this is in the comments, “no one saw it coming. Not the economists, not the governments, not the oil companies, not the smartest pundits in the world –”
Hubbert saw this coming in 1956. He told you about it.
Harley Earl also saw this coming, too, and in 1956 tried to interest GM brass in smaller cars.
Maybe “the economists, the government, the oil companies, and the smartest pundits in the world” need to climb down from their ivory towers, open their eyes, and look around at the realities here on the ground.
GM needs to figure out how to make money building and selling small (or at least economical) cars, and FAST. I’ve been telling you this for the past two years.
There isn’t a higher priority and there isn’t time for a shallow learning curve. This needs a no-holds-barred engineering and design approach.
I know it can be done, because GM has some of the finest engineers and designers in the world. They just need to be released from the constraints of worrying about offending upper management by telling them some brutal facts about reality.
It can be done, but you’ve just cashiered a lot of the people you needed to do it- and you’ve retained nearly all the ones who got you in this mess to begin with.
General Motors is a business, and that means they exist to make money for their stockholders. At the same time, the automobile business is an emotionally-driven, living, breathing thing. Probably no other product in the history of mankind generates so much passionate discusssion and debate. General Motors invented that passion. GM has to make products at a profit that people are willing to put down their hard-earned greenbacks to own, drive, and in many cases, love and care for like a member of the family. To many, cars are a hugh part of life. I think the emotional pull is especially true of American cars. They seem to have more personality – more “soul” as is the commonly used term – than almost any Japanese vehicle ever produced. To many who grew up during the performance boom of the 60’s and early 70’s, that is how it is and that is where the heart-felt interest remains. Younger generations have a different view, fitting their own experiences. And so, the business today takes on multiple facets and challenges.
But General Motors is showing some very good direction, both with current new offerings and future models. Timing has been unfortunate in the recent past, however. Just when the new trucks and utilities hit the market, gas jumped to $3.00 a gallon and upwards. These are very good vehicles, winning over both critics and the public. To think GM should have abandoned these lines while the public couldn’t get enough of them is ignoring the reason for manufacturing and selling, well, almost anything. Now big changes are needed, and GM has turned the ship in a new direction. They have limited fleet sales in an effort to bolster residual value, and have sold the new Chevy Malibu for the model year to date without the need for any large incentives. This in a time of price-slashed Accords and Camrys. Kudos for having the sense and courage to make some tough decisions, and congratulations for the successes so far.
The car lines might have been neglected a bit in the past – and how I lamented the practice of letting once big-selling models like the Citation, Cavalier and others die on the vine through neglect – but the Aura, Malibu, CTS, G8, and upcoming Volt, ZR-1 (viva diversity!) Traverse, Invicta, Camaro (wow, by the way, great work!) Cruze (pull that one up to a sooner debut if you can, with an estimated 9 mpg gain over the Cobalt) plus new models in the CTS and Solstice lines.
I think they finally “get” that standing still in this industry means getting run down. And that cutting product development budgets is cutting your own throat.
By the way: I still want that Kappa-based Nomad…
Hopefully generation what-evers without the negative view of domestic vehicles will take a new look at some very refreshing models, and others will come home to support and champion companies that have products deserving of a chance. All those old Buicks I see running around on dubs give me hope for a younger generation willing to, well, drive Buicks.
I have no doubt these new offerings can and will stand up to the competition. That’s the General Motors I know is in the business today, and still in the business of fostering dreams.
“until GM can be competitive they need to ax Pontiac, and Chevy.”
Nate,
While I agree that GM needs to reduce the number of brands, I think axing Chevy would be a huge mistake. Rather, Chevy and Cadillac should be all that remain of the domestic brands. Pontiac, Buick and GMC can all be folded into either Chevy or Cadillac. Hummer can be sold off or GM can simply let AM General run the entire show instead of just the military orders. Saturn needs to be turned into what it is: Opel. SAAB could then be sold along side in a similar way to how VW and Audi operate. let them run their own show with minimal interference from GM corporate. In other words, no more forcing SUV’s on them that they really don’t want in their lineup (9-7x).
The Astra also needs a production line in the US. It’s not selling well because there simply aren’t enough cars being produced. Forget making the Chevy Lambda in Spring Hill. Axe the Outlook and make the Chevy on that line. Then retool Spring Hill for the Astra. I’d also ask you to consider eliminating the 5 door in favor of a more traditional four door. This combination worked out well for Ford with their Focus and it’ll work well for the US Astra.
The biggest thing GM needs to do to improve fuel economy is make their vehicles lighter. Right now most are to heavy. I read somewhere that the VUE/Antara was over 4,000lbs. This is a small SUV we’re talking about here. I’d much rather see it at 3,500 to 3,800 lbs. Less weight also improves handling. So a car like the new malibu weighing even 200 lbs less than it currently does would handle better as well as save fuel.
Edwin,
I completely understand your point however I don’t agree. In a world where people truly asses what they need vs what they want the Gov’t wouldn’t need safety standards or CAFE.
This always seems to be a double edged sword. People are screaming about gas prices (I hear it all the time from SUV drivers). Reality is that they CAN afford gas but they don’t want to change their life styles. Thus they complain to the gov’t. As to Safety standards they complain the same way when accidents happen they ask why nothing was done by the car makers. Very rarely do you hear someone say accidents happen oh well my injuries are fine. There is always pressure from people to make the gov’t make higher safety standards. The same goes for CAFE.
Reality is that we need these new standards. Otherwise what would drive the auto industry forward? We would buy cars and trucks that have no new features and would be buying new for the sake of buying new (to me this makes little sense).
The reality is that all the auto companies should have been pushing fuel economy and safety forward on their own for a long long time. Why squander what little oil we have in the world, why not make the best use of it.
Profit and buyer price is hardly the only way to judge things in my opinion. I don’t mind paying more for a more efficient vehicle. Of course I also plan to drive my vehicles until they fall apart. Today few build for that kind of use.
I guess the reality of it is that SUVs and crossovers are the convergence of the requirements of every day people just like the minivan used to be. If someone could only buy one car to do everything an SUV or crossover is the best way to go. That said people won’t stop buying them until they are forced to, and even at that people are changing their lifestyles to adapt. But many aren’t and for that reason CAFE is needed in my opinion.
Tell me when better fuel efficiency is a BAD thing? or safer cars is bad?
I can’t think of a reasonable time its not unless I start worrying about GM’s profit and car prices. And thats a totally different subject altogether as it gets into global economics and business practices…. a whole different set of US issues.
Toyota wanting a piece of America’s market also has to do with many Americans refusing to buy foreign products… having a plant in the US eases their conscience regarding where things were assembled.
What you miss is the fact that even IF American car makers build better products the average consumer doesn’t seem to notice or care. And quite honestly many think American vehicles are inferior to foreign ones.
There is nothing wrong with subsidizing cars. If the US did more of it we probably wouldn’t be having these discussions. Whether you want to hear it or not America’s infrastructure is huge and requires a lot of maintenance. And no one seems interested in fixing that kind of thing. Cars today ARE part of our primary infrastructure. In case you haven’t noticed Public transportation in many parts of the country is mediocre at best and non existent at most places. Our power grids and power plants are nearly at maximum capacity and our railroad services are struggling. And in case you hadn’t realized this because of our infrastructure problems we are stuck with petroleum as a fuel because no one wants to change it for fear of costs.
Personally I think its time to wake up the gov’t does need to get involved in these things change needs to happen and people aren’t going to like it. But then who ever does like change. If it doesn’t happen what are we going to do when gas prices are upward of $8.00/gallon. Reality is at present rate it will happen.
Nate
GM can “fix” many of these past errors with a few simple moves.
1. Saturn will only sell GAMMA platform vehicles in Chevrolet dealers in a “Scion-like” deal like Toyota does.
GM needs to find a “spot” for Saturn and what better one than the one Saturn started with – small efficient cars.
GM has to create an image of making efficient vehicles and by only offering one “type” vehicle under one brand it simplifies the message and make it easier for the public to understand.
Chevy has too many models; and this overabundance of “choice” is confusing to the buying public who really do not understand what makes an Aveo different than a Cobalt/Cruze so selling the next Aveo as a Saturn eliminates the confusion, allows GM to “place” the Satrun “Aveo” up from “entry” and will not really cost GM anything since GM was not doubt going to have yet another costly “name change” from the Aveo to whatever they were going to call it’s replacement.
Putting Saturn with Chevy allow’s GM to “drop” the next Aveo (and G3), but keep it as an option for Chevy sales reps to “sell” to buyers they cannot sell a Cobalt/Cruze to.
Giving GAMMA to Saturn enables GM to do what Toyota does with Scion – market it as “different” and package it so the dealer can “customize” it to individual needs (raising margins).
2. GM can then focus on marketing the Delta based Cruze and Skylark as desirable cars that happen to be small instead of high MPG “entry” vehicles and can offer different styles for each brand.
Chevy gets a 2D Sedan and 4D Sedan Cruze models in LS, LT and SS trim.
Buick gets a 2D Hardtop and Hardtop Convertible (Astra Twin-Top) to go with a luxury 4D Sedan and Wagon.
3. GM can then focus on selling Epsilon and up models as Chevrolets and Buicks eliminating one brand from the Epsilon mix and boosting volumes for models it does offer.
4. All future Buick FWD cars will be shared with Opel in place of Saturn in order to “match” each brand’s U.S. and European marketing strategy. This also enables GM to easily place desirable new Opel models in the Chinese market with the added U.S. volume raising profit margins.
5. Buick line from Opel would be:
Skyhawk Coupe (Astra Calibra)
Skyhawk HTC Convertible (Twin-Top)
Skylark 4D Sedan (Astra sedan)
Skylark Estate (Astra Estate)
Regal Coupe (Insignia Coupe)
Regal Sedan (Insignia Sedan)
Century Estate (Insignia Estate)
Invicta (LeSabre) – not currently slated for Opel
CUV
Rendezvous (Zafira)
6. Saturn would get a very desirable line of:
Cars
Matiz (high MPG – over 40 MPG) and low price
Beat
Groove
Corsa 3D (needs a name change IMO Saturn Corsa just doesn’t do it for me)
Corsa 4D
Corsa 5D
Sky (derived from next Tigra with better engines and aggressive Sky styling.)
CUV and Truck
Trax
Meriva (replaces VUE)
Combo (great fleet vehicle and potential Ford Transit Connect competitor)
Montana Pickup
All of these vehicles would be rated at least 30 MPG giving Saturn a good marketing angle with high gas prices.
Fit in the strong new Chevy line from Cruze on up and the Chevrolet, Saturn and Buick brands are well matched with minimal overlap and with plenty of room for some desirable Pontiac, GMC, Cadillac and even SAAB models.
Hey Bob,
I’d like to remind you that in the first iteration of the F-16, for cost and convenience, they slapped together a bunch of off the shelf avionics that were not designed to work together in such unique high performance platform. How many men died before McDonald Douglass finally admitted it, and purpose built avionics for it?
Now I hear GM is putting an off the shelf 1.4L ICE in the Volt. A monster of an engine to accomplish the simple purpose of range extension. I thought u were building a platform from the ground up here? Or are you just slapping-in a bunch of avionics from “tried and true” level flight bombers for convenience sake?
I guess fighter pilots really do just make movies…not history.
Here is a suggestion for your engineers, ask them about building a solid aluminum 40kw, AIR COOLED 4 cylinder Flat-4 for the Volt. The plant would weight at least 250 lbs less (no radiator, water pump, cast iron, smaller displacement etc) and have a lower center of gravity, better fuel economy, shave $1500 in cost, and reduce complexity and maintenance for the driver. I know such an engine can get the job done.
Didn’t you guys already do this only, with much more horsepower and displacement back in 1966 with the covair?
#DA
Edwin said: “It’s not the government’s place to be telling the people what type of vehicle to buy.”
In a perfect world with unlimited resources that would be true. Unfortunately, we live in a world with limited resources, and where very few members of the human race are so noble as to put the common interest above their own personal well-being and satisfaction.
One of the main jobs of a true leader is to make it clear to people that individual sacrfice is required for the common good. Unfortunately true leadership and a call for sacrifice has been missing from Washington for at least the last two presidents. (If you’ll remember, one of W’s responses to the crisis of September 11th was that we should all go “shopping.”)
In WW II, we rationed fuel, rubber, and metals in order to gain the greater good of winning the war against totalitarianism. If the current battle agaisnt extreme Islam is as important as some think, why is no one asking we make any personal sacrifice?
I secretly suspect that for at least the last decade, almost everyone in a position of authority–including the leadership at GM–knew it wasn’t in the best interest of America for so many people to be driving SUVs and consuming fuel at a rate driven only by personal wants and satisfaction instead of by actual need. But, hey, GM was making big profits from selling those SUVs to the suburbs, so everyone looked the other way and probably hoped they would be able to retire before reality set in.
Well, guess what? Reality is here.
“~ “My answer to that is nobody saw it coming.”
With all respect that’s simply not true. The Peak Oil community has recognized for years that we were soon to hit an oil crunch where demand outstripped supply. (There is actually still a lot of oil in the ground, but as soon as demand outstrips supply, the balance shifts dramatically causing prices to spike.)
It’s true that the exact date when that would happen was unpredictable, but that it would happen was inevitable. Unfortunately, GM and the others remained in denial and chose to stick with the profitability of big pickup trucks and SUVs and uneducated customer demand far beyond what was reasonable or healthy.
~ “We went from having, at least in North America, some mediocre products…”
Since you brought that up, why does your GM-Europe division seem to make better products?
Posted by: Rum Doodle”
Mr. Doodle, Peak Oil is a excuse for inaction by the worlds Governments for not allowing enough development of likely new sources of oil (especially here in the United States). We would be swimming in oil produced here in American if not for the constant roadblocks put in the way by politicians and the environmental movement. Mr. Lutz is correct when he says that nobody saw it coming, because those that where predicting a spike in the price of oil expected it to go to around $100 a barrel and linger there not go to $130 to $150 a barrel range this year.
Mr. Lutz, I am glad to here what you say about future product development. I am very concerned about this talk of getting rid of Pontiac, however. Pontiac simply needs to be given many more fresh products like the G8. I also would recommend that a Coupe version of the G8 be developed to complement the Camaro. Simply put, some people who might consider a Camaro but need more room would likely purchase a larger, more usable Coupe version of the G8. Also please produce it like the Camaro in V6 as well as V8 versions (possibly a four-cylinder as well). I own a 2005 GTO and while I am partial to using the name again for the top of the line V8 Coupe G8 should it be produced I would certainly understand if Pontiac would prefer to badge it as a G8 GXP.
Someone asked:
‘Since you brought that up, why does your GM-Europe division seem to make better products? ‘
That’s because in Europe a car is about the same price in Euros as it would be in dollars in the states (look for Saturn Astra and Opel Astra). That is because we are used to better-equipped cars (alas, with smaller engines) and better finish. Plus, the tax to be added is usually even higher in European countries.
That market environment makes better cars because people demad it. An Astra is a small or young-family car here – it is more like a shopping bag in the US.
BTW, gas price here is a little bit over 9,20$/gal just today. 4$/gal would be 70Euro-ct/liter – a price not heard of in Germany since 5 years (or even longer??). I remember starting wit 95ct/liter when the Euro replaced Deutsch-Mark a couple of years ago…
Greeting from Germany,
Alfons
“GM may and does have some of the best fuel efficiency in their class but thats no reason GM should not be always looking for better economy and technology. Anyone thinking they shouldn’t is foolish. ”
Nate,
Thinking that GM will not innovate without prodding from the government is foolish. I am pretty sure that the government didnt mandate that GM introduce 6 speed automatics, AFM and direct injection. GM is using those technologies in order to be competitive and attract customers, not because Congress said they must do so. You have absolutely no proof that CAFE has forced innovation or that automakers wont pursue increased fuel economy without government intervention. The Prius was brought to market with no prodding from the government. GM is introducing three 2009 midsize cars that get 33mpg because thats what the public wants in this day and age, not because of CAFE. You need to consider all the facts before assuming that GM (and Toyota) resisted higher CAFE standards simply because they are reluctant to innovate.
GM has already announced that their next generation small car will get substantially better fuel economy than the Volt. Do you think that engineering decision happened simply because of CAFE? No, it happened because fuel costs are high and GM wants to have a class leading product in 2010.
I find it so interesting that people like you have determined that GM is against fuel efficiency simply because they got beat to the market by the Prius. I notice that people with your agenda never mention the two mode hybrid system or the fact that Honda and Toyota have no hybrid system compatible with large vehicles. Trucks are not going away and GM and Chrysler are the only ones offering full size trucks hybrids. Why would GM invest hundreds of millions in the two mode hybrid system if they didn’t want to raise the bar in terms of fuel efficiency?
“I don’t like government regulation anymore than you do, but it must have occurred to GM that had they just voluntarily chosen the strategy of increasing the fuel mileage average of their cars, they would have been much better prepared to face the current economic slowdown.”
Nate,
You just dont get it. The economic slow down is affecting almost EVERY automaker, even those with more car biased lineups. GM’s cars are selling well and almost all of them have posted increased in recent months. What you fail to grasp is that GM (and Ford) are struggling because their trucks/SUVs are considered class leading and were dominating the sales charts. Nissan and Toyota have seen their truck sales collapse but the meager success of their trucks and SUVS means that cars make up the majority of their sales. That said, Toyota posted a bigger sales decline last month that GM which kind of contradicts your arguments about GM being unique in its “unpreparedness” for this economic downturn. The bigger they are the harder they fall and GM was the dominant force in pickups and SUVs. Currently, the import brands are benefitting from the lack of market success achieved by their largest vehicles. Toyota and Nissan make plenty of gas guzzlers but those vehicles did not sell in the quantities of GM’s large vehicles and thus their sales decline hasn’t been as steep as GM (or Ford) this year.
Why is it people want to drop Pontiac? Its line up is always sporty and competitive. Take a trip back and look at their design. The Trans-am has almost always looked better than the Camaro,their line up of the grand am and grand prix always seemed to sell well, though Im not so happy the G8 would replace the Grand Prix (not that I don’t like the G8, I want one personally). For a 3.8 liter, the Grand Prix delivered 30 mpg in real world driving while providing adequate power. Anyways, I always seen Pontiac as a multi-segment brand. Young, old, mid-aged, they all seem to drive them. Maybe I’m weird, but I also liked the GTO.
#DA. What do you think would be more efficient, that aluminum motor or a small diesel engine? Given that its running a consistant rpm, I would think diesel is the way to go, then again its just me.
Chris R. Making their SUV’s lighter would be good, but their cars need more work. Alot of them are in the 3800-4000 pound range. Im not an engineer so I don’t know where this weight is coming from, but maybe using more relays would help. Mercedes does it and saves 200 pounds, which if I remember right is around 1-2 mpg savings. Yet, when it comes down to it, you can’t blame automotive manufactures for heavy cars. You can only blame the general public who wants a car with no exceptions. It has to be safe (weight), quiet(weight), and ride nice (weight, if you cant find the right sprung/unsprung balance). Anyone remember the story call “If you give a mouse a cookie”?….
Sorry Bob, but insisting that -”noboby saw oil prices climbing!” is not a true statement. Everyone that read more than sports in newspapers could imagine that, but only highly paid executives should quickly plan for it…!
We can understand your denial on being informed about oil crisis with the portfolio you created, but for sure, you could realize on which products GME, GMLAAM and GMAP moneys come from. The neglected worldsellers Corsa and Astra and derivates – 1.0 to 2.0liter 4 cylinder engines! Not 400hp V8 or V6 trucks and SUVs!
As already mentioned in this blog…Limit GM expenses to maximum 3 global brands (Chevrolet, Cadillac, Saab) – the rest is part of GM’s 100 years history!
BTW, do you have price for GM’s fuel cell car? Honda has …U$21600 for the FCX Clarity.
Hello…is there anybody in there?
Nate perhaps said it best above when he said that:
“What you miss is the fact that even IF American car makers build better products the average consumer doesn’t seem to notice or care. And quite honestly many think American vehicles are inferior to foreign ones.”
That nails the problem on the head exactly. I live out in the Bay Area of San Francisco. The number of import brands here far outstrips the number of domestic brands, and by a large margin at that. Honda, Toyota, BMW, VW, and Mercedes are all very popular brands here.
In my opinion, the new Malibu is probably one of the best family cars on the market. Plus it actually has some style. Regardless, I see very few of these on the road compared to the sea of Camrys and Accords. As Nate mentioned above, few if any Americans who drive Honda and Toyotas heed much attention to anything that GM produces. That’s a problem. These decisions aren’t based necessarily on actual quality either. VW’s have typically been rank with mechanical and electrical problems for years.Toyota has had some problems as of late too, losing some of its sterling reliability. But regardless, GM and Ford products remain to be viewed as inferior products.
The only solution to change this is with drastic, sweeping, industry-shaking innovation. It means an entire re-engineering of the brand, the products, and the way in which they’re marketed. I am in no ways saying that what you are doing is bad. But obviously, it isn’t working. So try and try again until you find what these consumers want.
RumDoodle/Nate:
The problems are the anti-American business Congress and the anti-American business media.
Federal mandates traditionally drive up costs, and don’t necessarily help consumers. All regulations are not good.
We don’t have a world of limited resources, we have plenty of resources, what we have is a Congress with limited common sense, a Congress that has blocked and continues to block pumping and producing domestic oil, even when its found, a Congress that hasn’t built new nuclear power plants in over 30 years when the Europeans are doing both. Oil experts say it takes two years to do the job, but with this Congress it takes too long. Congress was given the authority to regulate interstate commerce, not to block legitimate commerce like oil pumping. The President should just override the Congress in Court and drill and pump.
The lifestyles people choose are none of the business of the Congress. The Congress was denied sumptuary authority over people’s moral spending choices at the Constitutional Convention in 1787 (the George Mason Amendment was voted down by a nearly unanimous vote). The Congress does not have the authority over people’s economic lifestyle choices. The auto companies invented safety, not the government. The American auto companies have been ahead of CAFE and most federal standards.
Someone is avocating rationing out of context? This is not the Soviet Union. The hammer and sickle world view is an unacceptable one, regardless of its push by the a segment of the American media.
For those media who want to push foreign cars, dump the guilt by the roadside, don’t blame that choice on American products which are obviously better. Foreign car companies just want a piece of the American market, since its the world’s largest, not because they are doing Americans a favor by ‘assembling’ here.
Mr. Lutz,
I currently own an ‘07 DTS and I’d like to know about the future of this and similar GM vehicles. I’ve heard that it will be meshed with the STS and tentatively called the DT7. I like the soft ride and isolation in the current DTS, but I would prefer a rwd car. When will the new car be available? I would also consider a large rwd Buick or possibly a Riviera if those cars are in the future GM product line-up. I understand that GM will have at least one car each from Cadillac and Buick that will still appeal to those that like ride and drive of the older Cadillac Broughams and Fleetwoods (actually, the current DTS is a fwd compromise for me). Thank you.
Ken
Sorry Bob, few are impressed by the strategic thinking of management at GM; for the last several decades now. One example: efficient, light, small displacement, high rev and high output motors were available in the 60’s. It’d sure be nice to have a modern 265 c.i. or smaller V-8 today. You could also order lightweight parts. Today, I’ve got to go to BMW to get similar choices.
Otto…are you serious? Why do you want to push the powerband up to an un-usable rpm? Backed by a 6speed auto/manual, it may be possible. Yet, what are you gaining? The useable powerband at a lower rpm should offset the need for high rpm acceleration. Look at the LS1. 346 ci, over 25 mpg, some knocked on the 30 mpg door. Sure the F-bodies were slick, but drop the low speed torque and you would probably find yourself downshifting to make light-moderate acceleration, or just to climb a slight incline.
Going to BMW,, their 3.0 inline 6 in the 3 series is rated at 28 mpgs. Chevy Impala 3.5 v6 rated at 29, and I’ve seen 30-32 regularly. Why? BMW makes more horsepower in a lighter vehicle with a six speed tranny, while Chevy makes less horsepower in a heavier vehicle with an “outdated” four speed tranny. Answer..useable power at lower rpms.
bob, i have to tell you that your decisions in the past have saved the gm. the malibu and cts should in every way be credited to you. the product side is perfect thanks to you. between you, rick, and fred, this is really a dream team.
the right balance of vision with rick, the product excellence with you and the discipline with fred.
keep on the path, just dont cut the product excellence and all those brilliant engineers.
Sheth said: “You just dont get it. The economic slow down is affecting almost EVERY automaker, even those with more car biased lineups.”
Every automaker? Then why is Ford’s Focus assembly plant in Indiana actually working overtime? Why is VW about to invest one billion dollars building an assembly plant in Chattanooga?
Edwin said: “The problems are the anti-American business Congress and the anti-American business media.”
Would those be the same anti-business Congressmen that GM, Ford, and Chrysler have been able to lobby successfully for the last two decades to stop CAFE increases? (Congress isn’t anti-business, they are pro-whoever contributes to their campaigns.)
Or would that be the anti-American business media who profit from the billions of dollars of advertising American businesses buy from them?
Read in Business Week today that Ford is about to retool at least one of their US plants in order to build one of their European models here for sale to US auto buyers. Ford to retool US plant to build European models
Could GM be about to do the same with one of their soon-to-be-shuttered assembly plants to build a car here such as the Opel Agila?
I’m just a dumb American car buyer, but it seems a car like the Agila could quickly become popular here. Especially for urban/suburban commuters, since it would get outstanding mileage (probably 70+ mpg in the diesel version) plus sell at a price of about a third of what the Volt is projected to sell for.
#DA said: “I’d like to remind you that in the first iteration of the F-16, for cost and convenience, they slapped together a bunch of off the shelf avionics that were not designed to work together in such unique high performance platform. How many men died before McDonald Douglass finally admitted it, and purpose built avionics for it?”
#DA,
You have made an ill-informed statement. No one died flying the F-16 because of “off-the-shelf” avionics.
During the flight test phase of the F-16, the only significant problem uncovered was the need for a larger horizontal stabilizer to increase pitch sensitivity at high angles of attack.
Also, “McDonald Douglass” didn’t build the F-16. General Dynamics was the primary contractor. (There was a company called McDonnell-Douglas that built the F-15.)
The choice that one makes when purchasing a vehicle is their own.
Just three years ago, BIG SUV’s were the flavor of the day. All of a sudden, when gas prices skyrocketed, it seems that some on this blog would like to blame GM. Nonsense. The managers at the top did what was best for their company; try to make a profit.
Consumers think that Toyota and Honda are benevolent organizations out for the best with consumers in mind. Are you kidding? They’re out there trying to make a buck just as the American car companies do.
Knocking GM management reminds of something A. Lincoln said when asked how he liked being president. He answered it’s kind of like the man who’s tarred and feathered and ridden out of town on a rail. The man stated, “If it weren’t for the honor of the thing, I’d much rather walk.”
At the end of the day, the fact is that “the economists, governments, oil companies, the smartest pundits in the world” aren’t collecting a GM paycheck.
Bleating about “unfair” comparisons in the media, “unfair” government regulations or policies, or “misguided” political orientation of elected governmental leaders isn’t going to turn things around.
Let historians fix the blame, and focus today’s efforts on a course of action that will provide consumers with quality, affordable, economical, relevant, well-designed products.
You need to be able to change assembly lines quickly, to meet changing market demands. The plant that today cranks out full-size pickup trucks needs to be able to switch to sub-compact hatchbacks or 2-seat roadsters within a matter of a few days, not weeks or months or years.
Once again I suggest that maybe you need to give away a 250cc motor scooter with every SUV or pickup you sell.
Sell or lease some of those closed pickup plants to motorcycle companies…
You need product that can be manufactured in any GM plant, anywhere in the world; this requires that they all meet a common set of safety and pollution standards- I would suggest they all meet the highest standards of any market. To make sure all companies are playing on a level field, agreements should be negotiated with governments and competitors to make sure the rules are consistent. A GM dealer in Louisiana should be able to order a shipment of Asian or European or Latin America-made vehicles and know they meet US standards; likewise, a dealer in Japan or Rio should be able to order US-made product and know they are in compliance. GM needs to take the leadership role in this.
As for the product- you really need some out-of-the-box thinking- like the van der Brink Carver, like the VW “one liter,” like the Peugot “20 cup,” or like some of the European classics, such as the Citroen DS and CX sedans (out of production for almost two decades but still more sophisticated than most other luxury cars: I had a 1965 Citroen DS. Present-day Cadillacs aren’t even close).
You need to trim the model lineup. I’ll reiterate, you need to have at least one but not more than two unique “platforms” (chassis) per division: RWD for Cadillac (”upscale luxury”) and Pontiac (”performance”), FWD for Buick (”mid-level luxury”), Saturn (”Soccer Mom” crossovers and minivans) and Chevy (economy), and full-length 2WD and 4ED frames for GMC light trucks. Sell all GM models under one roof. I like the Saturn sales model.
You need to win the Progressive Automotive X-Prize. Forget the prize money, you need the “bragging rights.”
Oh, yeah- if your dealers are offering 7-year financing, shouldn’t you also offer a 7-year warranty?
Brady Turley,
I was just using the VUE as an example. Reading some automotive message boards, it seems that many people find the new Camaro at 3,700lbs and especially Dodge’s new Challenger at 4,000lbs to be much to heavy. While I don’t agree that the cars, given their size can get to the rather enthusiastic weight of 3,100lbs a some have suggested is optimum without basically turning them into gas cans with wheels, I do think that perhaps some materials might be to heavy. I’m not sure if Chevy does it with the camaro, but some cars use an asphalt like substance for sound deadening. By going with some sort of lighter weight foam, you could probably save several hundred pounds right there. It’s the parts that we don’t see that tend to weigh the most. Though I’m also the type that says that if it isn’t a luxury car, then why does it need power seats that weigh 75 pounds.
GM really should take a careful look at what Mazda is doing to keep the weight of their cars in check. They may even get a good idea of how to configure a small roadster so it actually has a trunk too, but that’s a different discussion.
Beaugrand. that idea would almost work, but not. There would be a great expense retooling robots, paying “skilled” workers to reprogram, adjust fixtures, not to mention setting up cooridinates with suppliers to get the right parts. Then, what do you do with the old parts? Storage probably isnt free. It takes about a day between where the body is made and where it gets a frame, paint, and interior. So, what do you do about the workers the make the body? They will have to be laid off until the all the bodies make it out and the robots, and fixutes are corrected. No matter what you say, it just takes time. Rome wasn’t built in a day, and if you want quality vehicles out of the factory, you cant expect instant turn around.
Mr. Lutz,
are we working hard today to bring these models to NA, yesterday?
Model Engine MPG avg. Fuel
Opel Agila Edition 1.2 (MT5)1242 cc / 86ps (63KW) 42 gas
Opel Agila Edition 1.3 CDTI (MT5) 1248cc / 76ps (55KW) 52 Diesel
Opel Corsa Sport 1.4 Twinport ECOTEC(AT4) 1364 cc / 90ps (66KW) 34.5 gas
Opel Corsa Sport 1.7 CDTI ECOTEC (MT6) 1686 cc / 125ps (92KW) 49 Diesel
Opel Meriva Cosmo 1.8 ECOTEC (MTA) 1796 cc / 125PS (92kW) 30.1 Gas
Opel Vectra Caravan V6 Turbp ECOTEC (AT6-AS) 2792cc /24v/ 280PS 20.5 Gas
Opel Zafira Sport, 2.0 Turbo ECOTEC (MT6) 1998 cc / 16v/ 200PS 24.8 Gas
Simple; build quality cars and offer them at a fair price. Lutz is out of touch in the recent Automotive News article (7-21-08). He suggests that the Cobalt transaction price in Europe is around $35k and that customers might pay that here in the US if gas prices continue to rise? Is he suggesting that? Nuts! This vehicle (the US version) is years behind a Japanies couterpart. It is not even close. Another expample is the new Malibu. This vehicle is not even close to the Camry or Accord. Why does he think it is as good? Why does Welborn think it is as good? Why? It is not. Annual sales should tell you that. The Camry will sell around 300,000 US made Camry’s in 2008. How many Malibus’ are you on track to sell? The Cobalt is pure junk. Good luck with that one too! Here is my advice: fire Lutz and Wellborn and Wagoner. Whoever was in charge of the Malibu should be let go as-well. This mentality is the same as the 80’s when GM had a chance to change. They did not. Same as it ever was. Good luck GM as you need it more then ever with these men in charge.
Regards,
Steve
PS your GM Europian counterparts design better cars. Use their talent becuase you are out of touch.
It is being spread on web sites that the Mini is sold out for the year.
That Cobalt XFEs are sold within a day on the lot.
There’s a pattern there.
Yeah I’m a GM employee. I’ve seen the Zafira, Meriva, Corsa and the others. Nice rides all of them.
I saw the Brazilian four door S-10 years before it was sold here.
It amazes me that there is no effort to sell or even explore the posibilty of selling my favorite.
The Chevy Montana is a no brainer. Don’t bother with clinics or focus groups. Just bring it.
What are you going to do, wait for somebody else to trump it?
brady turley:
I’m not going to suggest it would be easy, cheap, or painless.
It’s just that it’s going to become necessary- not desirable, or enjoyable, or pleasant, but necessary- to be competitive.
There are alternatives to a complete retooling with every model change. For example, look up the 1995 Mercedes VRC concept:
http://www.carstyling.ru/cars.1995_Mercedes-Benz_VRC.html
This could be adopted for the assembly line.
Four, five, or more models- sedan, “phaeton,” coupe, roadster, wagon, “El Camino” style sedan/pickup, all on a 90-95% common platform. With a little tweaking, this could include minivan, compact pickup, and “crossover” models, still with over 80% commonality of parts.
One unique platform per division, four, five, or more models per platform. Keep the lines running constantly cranking out the basic platform, order model parts as needed or as demand shifts.
Or, GM brass can continue bleating about things beyond their control and crying “unfair.”
“The biggest thing GM needs to do to improve fuel economy is make their vehicles lighter. Right now most are to heavy. I read somewhere that the VUE/Antara was over 4,000lbs. This is a small SUV we’re talking about here. I’d much rather see it at 3,500 to 3,800 lbs.”
Chris R-The 2007 Saturn Vue weighed in as low as 3200 pounds with spaceframe construction and mostly plastic panels. To put it in perspective, it weighed in the same neighborhood as the Corvette. The real question here is who decided to stop building it? So much for being a leader in fuel economy.
That would be a consumer demand thing, but personally, Im not sure I want a bunch of similar looking vehicles. It bothers me enough that dodge has the same looking front for alot of their vehicles. There may be a time when people want to become similar and can’t think for themselves, but I am going to avoid that trend. Thats a plus to the GM line up, different strokes for different folks applies.
“Im not sure I want a bunch of similar looking vehicles. It bothers me enough that dodge has the same looking front for alot of their vehicles.”
While I would trust that GM stylists can work cosmetic wonders, the concept is that all models in a division would have a single platform- that is, the chassis and powertrain would be the same; for example, all Cadillacs might be on a 120″ wheelbase RWD chassis, Pontiacs on a 110″ wheelbase RWD chassis, Buicks might be on a FWD 110″ wheelbase chassis, Chevys on a FWD 100″ wheelbase chassis; common body parts could include things like the “doghouse,” doors, rear quarter panels, and of course, all on the same chassis with the same engines and transmissions, etc.
At the end of the assembly line, the final composite body components are attached, which determines if it’s a sedan, pickup, wagon, etc.
Keep in mind, these composite parts are cheaper to design and fabricate than sheet metal parts.
Cadillacs and Buicks could all be 4-door vehicles, Pontiacs 2-door, Chevys could be either 2 or 4 door versions; having (for example) 4 grill options, 2 tail options, and 5 body options, with a really very small number of unique parts to “mix and match” you could have 4 X 2 X 5 = 40 distinctive models per “platform.”
Let’s say we have 6 brands: Cadillac, Buick, Pontiac, Chevrolet, Saturn, and GMC.
Only 6 “platforms” to engineer, but potentially 240 (or more) very distinctive models.
I don’t see how “Toyota made the same mistake” in specific instances is in any way a defense of GM. Look at the big picture, Toyota keeps growing in a tough market while GM, year after year, loses market share. It doesn’t matter that Toyota made significant investments in large vehicles that they have to backpeddle on, this was a foray into a profitable (at the time) market segment that they had the luxury of doing because their core business is booming. Not so for GM, they are relying on this segment for their meager profits while the rest of their business serves as a loss leader. Even if they never make a penny in large vehicles (which they will) this is still a winning situation for Toyota because if nothing else, they take away sales from GM and further undermine their precarious position.
And I don’t see how GM management can claim they didn’t see this coming. I’m not paid the big bucks but I’ve been saying for years if GM is making money and large vehicles are a lock, then isn’t it time they learned to make money on small cars? If you can’t make money on a compact car you shouldn’t be in business. They took away the Japanese cost advantage and any excuses there when they bought Daewoo so if they still can’t make money on compacts then management is incompetent and should be replaced.
Beaugrand.
While that would solve how to build the car, how do you quickly transition from Truck/SUV to car? BOF to Unibody doesn’t exactly seem conceptual.
“Sorry Bob, but insisting that -”noboby saw oil prices climbing!” is not a true statement. Everyone that read more than sports in newspapers could imagine that, but only highly paid executives should quickly plan for it…!”
You make a statement but back it up with no specificis. Show us some quotes from CEOs and other management types that prove your assertion that “some people” knew gas prices were going to take off. The average consumer didn’t see it coming and judging by recent auto sales it seems few auto execs saw it coming.
Rum doodle,
You should read what I wrote before going on the offensive. I clearly stated that GM is suffering because it’s trucks and SUVs were very successful and those segments have been battered by high gas prices. I also said that GM’s CARS are selling pretty well right now. The same goes for Ford to a lesser extent. Since GM’s sales mix was tilted towards trucks (although not to the degree of Chrysler) their sales results for the year havent looked good. Most of Gm’s cars are selling better this year however.
gtjeff,
They stopped using the plastic panels on Saturns because the media criticized Saturns for having large panel gaps. In order to make their products look more upscale Saturn ditched the plastic panels and went with steel. This added weight. You also need to remember than the Vue was largely engineered by GM’s foreign teams and European and Korean vehicles tend to be heavier than their Japanese counterparts.
“Another expample is the new Malibu. This vehicle is not even close to the Camry or Accord. Why does he think it is as good? Why does Welborn think it is as good? Why? It is not. Annual sales should tell you that. The Camry will sell around 300,000 US made Camry’s in 2008. How many Malibus’ are you on track to sell? The Cobalt is pure junk.”
I would say you are out of touch if you believe the Malibu isnt competitive with the Camry and Accord. The Malibu has beat the Camry in several comparisons and it beat the Accord in a Motortrend comparison. Most comparison tests rate the Malibu interior better than the Camry. Chevy cannot build as many Malibus as Toyota builds Camrys. Its just not possible. At the end of the year the sales of the epsilon cars should be well over 400k units which will be in the same ballpark as the number of US built camrys sold. You have to look at production capacity before you start talking about how desirable a particular model is or is not. A better measure of demand would be how long it takes Chevy to sell a Malibu and the average transaction price. The fact that the Malibu is leaving dealer’s lots quickly and doing so with minimal incentives lets you know its in demand. The Cobalt isnt “junk” and if you believe otherwise you should at least give some objective reasons for your criticism.
“GM really should take a careful look at what Mazda is doing to keep the weight of their cars in check. ”
The CX-7, CX-9 and new Mazda 6 are all heavy vehicles. The CX-7’s gets poor mileage for a compact crossover partially because of its weight.
“At the end of the day, the fact is that “the economists, governments, oil companies, the smartest pundits in the world” aren’t collecting a GM paycheck.
Bleating about “unfair” comparisons in the media, “unfair” government regulations or policies, or “misguided” political orientation of elected governmental leaders isn’t going to turn things around. ”
It amuses me when people decide to jump on Lutz’s back every time he states a little truth about GM’s critics. When did Lutz ever say he wasnt working on improving GM’s lineup? When did he ever say the media or government is to blame for GM’s past or current problems? When did he suggest he was giving less than 100% towards turning GM around?
People need to get real in regards to selling European cars in the US. The markets are not the same and the price points are not the same. Toyota, nor Honda nor any other successful automakers sells the EXACT same vehicles in Europe and the US. There are many reasons for this but the bottom line is Americans by and large are not looking for small 100hp diesel powered cars. GM can adapt certain things from it European vehicles, but it cannot simply bring over European product and sell it with no changes. The new Insignia going on sale later this year will have a starting price of 22,700 Euros which is well over $30k. This from a car that is in the same class as a $20k Chevy Malibu and $18k Camry. On top of that the Insignia has 3 or 4 diesel engines and base engines that make less than 120hp. Its a great car for Europe but would need tweaks to be successful in the US. The first modification would have to be the price because $30k isn’t an acceptable starting price for a midsize family sedan in America.
Sheth said: “Chevy cannot build as many Malibus as Toyota builds Camrys. Its just not possible.”
And why isn’t it possible? GM certainly has trained workers available and extra production capacity — they are about to close four of their North American assembly plants. Why couldn’t GM rapidly convert Janesville, Oshawa, or Moraine to a production line for Malibus? In 1941-1942 it only took a matter of months for Ford to gear up the Willow Run assembly plant to start turning out B-24 bombers.
Are you saying making a Malibu is more difficult than building a bomber?
“When did he ever say the media or government is to blame for GM’s past or current problems?”
About every post where “the Media” is mentioned: Toyota/Honda gets good press, GM gets bashed, yadda yadda yadda.
In his own words: “From time to time I have berated the media, in this space and elsewhere, for a variety of reasons, and so when they print something favorable and accurate, it’s only fair that I recognize that, too.”
Again, in his own words:
“I also feel the need to comment on recent talk centering on possible revisions to the government’s Corporate Average Fuel Economy (CAFE) standards. There is now a team of “independent CEOs”, most of them in the transportation business, that has recommended a 4% per year increase in the standard.
“My feelings on CAFE are well-known; I’m the guy on record who compared forcing automakers to sell smaller cars to improve fuel economy with fighting the nation’s obesity problem by forcing clothing manufacturers to sell garments in only small sizes.”
I’ve also got to wonder if his “Global Warming is a crock” comments haven’t contributed to the recent spike in crude prices. Could it be that his comment, coming from an influential business executive, might give investors the impression that the industry is somewhat less than enthusiastic about improving efficiency?
“Americans by and large are not looking for small 100hp diesel powered cars”
How do you know this? There aren’t any such cars available here.
#DA,
A flat 4 cylinder? Hmmm I think Honda already makes one for their motorcycles… that’d be an easy off the shelf solution.
Maybe what GM needs to do is get its head out of its corporate……
Just as a thought I wonder what GM engineers could come up with if they were allowed to raid ANY corporate parts bin not just GM’s. There are so many designs out there for engines and things of that nature that it really makes little sense to start from scratch. Wouldn’t it be easier to simply license a small 4 cylinder engine?
GM spends so much time trying to be #1 in sales and competing why not work with some of the other companies to get better solutions?
Just an off the wall thought I had as I read your post.
Nate
Rum Doodle,
you said ” In a perfect world with unlimited resources that would be true. Unfortunately, we live in a world with limited resources, and where very few members of the human race are so noble as to put the common interest above their own personal well-being and satisfaction.”
Well said in my opinion. As much as I love toys and capitalism its really clear the system is nearing an out of control state. I have no fear though that it WILL correct itself. But people need to be told that they need to change because they won’t figure it out until it hits them hard. The 1920’s are a good example of that. If memory serves (and my history lessons are right) government projects were one of the things that helped bail the country out (and WWI followed not long after by WWII).
This whole idea of cost savings and cuttings and retirement plans seems to have gotten out of hand. How long will the country continue being afraid to do what needs to be done because of cost.
I’m a fan of cheaper is better but at what point does that mentality become ineffective and problematic. These are the things people and leaders need to consider.
I have often posed the question to those I have engaged in conversation regarding this and similar subjects “How was the first dollar made and paid for in the US? Who printed it and how did they pay for the process?”
I have yet to find a textbook answer but I’m willing to bet that sweat, hard work and donated resources made it work. I think the same would apply to our economy and all that is wrong with it. The US is in need of some hard work just as it was in WWII (though maybe it hasn’t gotten that bad yet).
Nate
To everyone who say “look at the sales numbers, that should tell you which car is best.” Really? Because last time I checked, Microsoft sells tens thousands more operating systems than Apple (MS has about a 90% market share, and Apple is at about 5%), but I guarantee that more than 5% of the population thinks Apple is better than Windows.
How about another comparison. McDonalds sells more french fries than anyone else, and they even claim that they have “America’s favorite fries”. But if you read the fine print, it says that claim is based on sales. I would be willing to bet there are better french fries out there even though McDonalds sells the most.
In other words, calling the Malibu junk because it isn’t selling as well as the Camary or Accord is rediculous. If you think it’s junk for some other reason, please let us know, but don’t base it on sales.
Pontiac Man,
Lets not forget the other side to the oil equation. If oil stays cheap and readily available it can’t be sold for a high price. That of course doesn’t consider the problems of using it all up to quickly.
I see nothing wrong with high prices (even though it IS hurting my wallet to an extent) its forcing us to adopt new energy systems which will eventually rid us of our need for oil (to a large extent).
Peak Oil may be an excuse but inaction in developing new technologies isn’t much better of an excuse. The so called road blocks you talk of are only half the story. Personally I don’t trust oil companies to be responsible in finding US petroleum (and the same goes world wide). How many tanker spills, pipeline leaks etc… have to happen before people wake up to the fact that businesses have little regard for safety and the environment when it impacts profit.
There are to many cases in history that are disturbing to me to agree with the points you made. GM and the gov’t have had more then 30 years to fix the problem.
I am in no way a die hard environmentalist but I’m wise enough to know that people and companies and greed have a way of destroying things that is very sad. What GM and the gov’t should have been doing is switching to newer energy sources and focusing on that. There is no reason that half to two thirds our countries energy can’t be supplied by Nuclear power. I’ve heard all the issues with it from the environmentalists… but it is one of the only ways to indefinitely meet the energy needs of our country. At present if the energy industry was allowed to refine their wastes they would be able to reuse much much of their spent fuel. Per ton Nuclear is probably the most cost effective and clean way to generate power. It is very heavily regulated by the Government due to its dangerous nature but thats what makes it so clean and good. It would take roughly 30-40 new plants to almost completely cover the energy demands of the US. Of course this would cost money but think about all the new jobs that would turn up to build plants and the accompanying infrastructure to run vehicles on the energy produced by the plants.
If you doubt this take a look at the energy content of gasoline and convert it to kilowatt hours. Electric and gasoline are very similar in price right now.
The point I’m making is that 30 years ago the US gov’t and GM should have known this would be the case and should have pushed for alternate vehicles on a large scale and supported them. If that had been the case we wouldn’t be where we are today and the oil companies would be producing electricity as well as oil.
So GM should have saw this coming for a long time and should have been ready for it just in case. The fact that cars today make twice as much power with nearly the same fuel mileage as they did 20 years ago is obvious proof that GM has no interest in providing cars that meet real needs. But rather is only interested in selling cars.
Additionally it doesn’t matter what badge is on GM vehicles. They might as well use the GM square as the brand name and make a whole bunch of model names rather then brands. Pontiac can go as far as I’m concerned there are plenty of other GM cars to take their place. In fact I think Chevy and Pontiac need to be axed. Leave GM’s brands to Saturn, Corvette, GMC, Buick and Cadillac. Or for that matter get rid of GMC too.
Nate
Sheth,
You make a good point. There is no proof that Cafe forced GM to innovate. But there is also no proof that they would have innovated without CAFE. If you look at GM’s history EPA standards have always caught them off guard. The change in power output of GM engines in the 70’s and 80’s is a good example. Things like smog pumps were placed on cars and engines that previously made 300+ HP were making less then 200 to meet emissions. All that has forced GM to innovate to get power back up above and beyond those old standards while reducing emissions quite a bit.
Ok they might have done it on their own but I doubt any company would spend money on increasing MPG and cleanliness of their vehicles just because customers demand it. And from that regard if customers demanded it would GM comply (and how long would it take them). Of course how many people are demanding Congress to make cars cleaner? Could it not be said that the Gov’t wouldn’t be demanding it if companies were meeting the standards?
Then there is all the argument and anger the auto industry has raised after the new EPA standards were released not to mention the struggle to meet new CAFE. And, by all accounts I’ve found GM, Toyota and Honda are all annoyed with the new CAFE standards as they are coupled to the new EPA Tier 2 Bin 5 standards. These standards make it tough to raise economy. Do some searches online to hear the industries pleading with the Gov’t over CAFE and new EPA regulations.
GM’s SUV hybrid was released to help meet the CAFE and EPA requirements. And since when is lower fuel usage and emissions a bad thing?
I know for a fact that GM has been working on such vehicles since at least 2001/2002.. but the question is how far in advance does the EPA publish their requirements?
Also take a look at GM’s portfolio of concept vehicles and ask why its taken this long for hybrids to get produced?
I think CAFE has heavily influenced car companies to step up and do more development on things besides higher HP and faster cars.
I don’t think that GM and Toyota are reluctant to innovate as much as they are catering only to the market. And in the case of the last few months or years its quite clear that people want cars with better economy. At very least there is a perception that better economy is needed (and it is). From an engineering point of view GM is in a tight spot. Their customers want cars with more power and features but at the same time gas prices are going up. If the average consumer did a cost analysis the price of gas would probably not be an issue on the personal level. In fact I’m sure it isn’t. But the real issue is long term. Where will the price of gas be in 5 or 10 years (the amount of time GM’s current products will be in consumer’s hands). The point of CAFE is to look ahead that much and force some change since its quite clear that over the past 30 years customers haven’t cared about fuel that much. Recently this may not be quite the case. But reality is that the customers who are complaining about fuel prices aren’t the ones buying all the new cars.
There will always be a need for trucks in the US and its a good thing GM has been focused on economy on them because its quite clear that none of the other companies have been. GM is leading the way in that area, but by no means should they be satisfied with that.
Toyota and Honda developed the hybrids and supply of batteries has been a huge problem. If that weren’t the case I’d be willing to bet that GM would be selling hybrids to. Hybrids though aren’t the only solution and certainly not the best solution today. VW’s diesels have a good track record going for them in terms of economy. And, until the new EPA standards came out they were probably the most fuel efficient car in their class for the price. Yet why is it GM hasn’t brought out a diesel Cobalt or Impala or Malibu? Clearly the mileage savings are there. I know as well as you that the answer isn’t quite that simple. And this is just another reason CAFE is needed. GM most likely isn’t selling a diesel because 1) until recently in the US they had a bad reputation, 2) the oil refineries out there can take a large portion of their base fuel oil stock and make either gasoline or diesel from it. 3) GM knows that to many diesel cars will upset this balance and hurt their gas car sales.
An out of balance demand for diesel shifts the price between them. So right now diesel is higher in cost because it is in higher demand and shorter supply. I have observed over the past 10 or so years that diesel prices seem to oscillate around gas prices. Meaning that some months diesel costs more while other months it is less then gas. I would conclude that supply and demand is pushing the prices. And my guess is that right now the demand for diesels with higher thermal efficiencies has pushed the price of fuel up from what it had been. Of course I know its not quite that simple as the trucking, shipping and aviation industry use much of the diesel stock out there one way or another. But imagine if GM started selling all Cobalt’s with diesels. what would that do to the price?
A very fascinating thing has happened to the price of used VW diesels it has remained fairly constant. If you go to either eBay or Autotrader.com you will see that VW diesels are consistently selling for a lot more then GM cars. I have seen VW diesels with upward of 100K miles going for well over $12K while a similar mileage GM gas car goes for maybe 1/4 that price for similar miles. Interesting to say the least.
CAFE at very least is forcing action. Its causing GM and other auto companies hardship and making them innovate all the while the auto industry is giving the gov’t feedback on why CAFE is so hard to meet and gov’t is evaluating the feedback to figure out its next move. Certainly not a bad thing in my opinion. I bet if the auto industry told the gov’t that electric cars aren’t possible without more power plants or that more refineries need to be built there would be a noticeable shift in where the gov’t’s policy. Or maybe they’d start working on solutions with other private industries (after-all isn’t that how this country works).
I’m pretty sure I get the whole economic slowdown issue. It is effecting every automaker, it is effecting the whole country. But at the root of it fuel price is an issue that has changed the cost of everything. The reality is that US made cars weren’t doing well until GM recently updated and got on the ball. The reality is that sales numbers will go down and unless GM steps it up and leads the way with innovation they will be forced to downsize. And if they aren’t careful they’ll find themselves in a situation like Chrysler was in.
IF GM wants to do well in the current economic state the country is in it needs to release top notch products in all its classes that people want to buy.
As a last comment I don’ think sale numbers and quantity sold should be the benchmark GM uses to determine how good the company is. The reality is that growth in the auto industry is finite and at some point they have to realize that remaining solvent is more important then growth. Everyone talks sales numbers and who is number one but in all honesty I don’t think that matters beyond bragging rights. There are a lot of number 2 companies that are doing decently also…. so why not focus on making good cars and let the people find them. There are many companies that do this and are better off for it. Toyota being one of them until recently. When Toyota was smaller it focused on quality and price now that its larger its trying to compete with GM for quantity and it has lost sight of that here and there.
Nate
Brady Turley,
To me GM needs to ax a few of their lines. It makes little sense the way they market them. A year ago I was considering an Aura/Malibu/G6 and I was very disappointed at the option packages. I really liked the Aura exterior, the Malibu dash and the G6 engine and transmission options. What bugged me is that all three cars are almost identical (to my knowledge). Yet I couldn’t get the features I liked in one car.
A few months ago I was looking at the Equinox/Torrent/Vue and again the same problem. Both the Torrent and Vue had the interior features I liked but only the Chevy offered the ~270 HP V6 (which as the same as the 24 MPG 250 HP V6 in the other two).
What bugs me about that is that GM spends the money to sell different brands of what are essentially the same car when all they need to really do is have one brand and actually allow their customers to pick their customizations.
The same could be said for a lot of their vehicles. Rather then Sell one vehicle in many trims and offer it the way the customer wants it they force option packages on their customer. Which in my experience has been enough to deter me from buying. After all why spend money if it isn’t exactly what you want.
Their trucks are another example.
As it stands Pontiac is an odd ball brand. In the past the quality of Pontiacs hasn’t always been there. They make some nice sporty cars and also some lame ones as well. It seems to me that GM could just as easily move the performance brand to another division. Certainly if they are based on the same cars anyway. In my opinion though a better option is to totally drop Chevy. Let Pontiac be the low end Performance brand, Corvette be the high end as well as Caddy. etc…
No matter what GM needs to do what it takes. Their dealer network is probably one reason they keep pontiac or chevy around. It doesn’t make sense to keep all the marketing going for all the brands they have. On the other hand they have so many dealers that changing it wouldn’t be much better. A tough situation. But my guess is GM will have to cut down on the number of dealers eventually and as they do that it will help them overall.
Nate
Edvard,
The Malibu may be the best car on the market its to bad that I cringe when I think about buying a Chevy car. Personally I cringe at buying any GM car yet I continue to look at them for some reason. I really wish GM would rebrand all their cars and accompany that with a new look and feel that is on par with Toyota and Nissan and the like. I have to laugh when I hear some of the videos about chrome strips on cars that “cost a lot and are luxury items” (referring to Bob’s intro of the new Malibu). Sorry Bob show me interior design and quality and good mechanicals and back it up with a warranty and maybe I’ll take a second look once I can get the features I want in the car. Great car otherwise I hope someone else is buying them.
GM does need innovation badly. It needs to shake the old corporate mentality and offer a few cars marketed solely toward future technology. I don’t think they need to get rid of some of their legacy products just yet (though soon).
Nate
Edwin,
Referring to “The problems are the anti-American business Congress and the anti-American business media.
Federal mandates traditionally drive up costs, and don’t necessarily help consumers. All regulations are not good.”
You are partially right but also partially wrong. All regulations are not good for consumers… but all of them are (yeah reading that made no sense). The truth is good and bad is relative to the subject of discussion. What is good for consumers now isn’t always what is good for them in 5 or more years and this is exactly why the government needs to be involved at SOME level.
As much as I like the idea of pumping more oil because its cheap it really doesn’t solve the problems we ACTUALLY have…. The problem of unwise consumption and usage. The price just went UP for oil why?
Common sense says that even if there is a lot more oil out there investing the time and money to use less of it makes a lot of sense in the long run. Why wouldn’t’ anyone want to make that oil last longer and postpone using our own stockpile of it until it is absolutely necessary. There is an inherent advantage to not using our own oil. Mainly that if we are selfish and use the rest of the world’s oil first they will be forced to come to us for the last of the oil stockpile (unless they come up with feasible alternatives) at which time we can sell it to them and make our money back.
Whether or not that idea is good valid or realistic is another thing.
The real issue though is that without foresight and government foresight when the oil finally does run out what are we going to be left with and who will be able to afford it?
The wise thing is to plan now for it. For the last 50+ years we have enjoyed bountiful cheap oil. Our economy has grown and prospered with the cheap energy. But on the downside our infrastructure has become nearly obsolete. Gone are the public transportation systems and industries that one existed (or are now in serious need of revision). Our country relies on cheap energy, at one time it did not. This is a problem. Simply drilling for more energy won’t necessarily alleviate the problem but rather will delay it. As soon as energy prices drop the SUVs and high HP cars will be in full swing production (perhaps only with small efficiency increases). We need to plan properly for increase energy costs NOW, then once that is underway we can open up drilling for more oil when companies are forced to be responsible with their drilling and environmental operations.
Anything short of that is short sighted American ignorance and arrogance.
As far as our Government regulating commerce… I can argue that two ways. 1) Commerce heavily relies on transporting goods between states using petroleum products and 2) The Government needs to be involved to make sure corporate america doesn’t screw things up to badly.
Oil pumping may be legitimate commerce but the consequences of it aren’t.
Unfortunately the lifestyle people chose is the responsibility of congress or any good government. While I am by no means supporting total government control I am saying that the government needs to step in when the general population becomes unreasonable and unwise. At what point does the good of one outweigh the good of everyone? (an often tough question to answer).
It really doesn’t matter what our government was intended to do or what authority congress has. The fact is the efficiency of these actions is more important. The government needs to serve to stimulate and retard the system when necessary to make sure it sustains in the long run. Plain and simple.
Will pumping oil now help sustain in the long run? I’m not convinced.
The auto companies may have invented and marketed safety but the average person bought into it and made it a government action item.
You may associate rationing with communism but don’t forget a well balanced country/society/nation has both capitalistic and communistic systems. Insurance is one example. Somewhere between the oil liberals and the environmental conservatives is a good balance that needs to be found. Simply burning oil because we are afraid to invest in future technology (for the past 25 years) is outright foolish and a hilarious notion, and only serves those who stand to gain something by the use of oil.
Perhaps it would be better to blame the capitalistic ways of picking the products with the lowest costs and highest returns to make. The media only has a small part in all of this. The controlling members of society and business have steered the common person toward this outcome in their own self interest, and now that has turned around and bit the very people who gained from it.
If American car companies could afford (or budgeted the expense) of expanding and updating their facilities and could produce cars at a competitive cost foreign car companies wouldn’t have the advantage of building factories in the US to market the “Built in USA” concept that many of them now use to leverage sales to people just as yourself.
The problem is circular and drilling for more oil is a band aid for a larger fundamental problem that has existed for a long time.
Just my opinion like it or not things are never as simple as they seem.
Nate
Brady Turley,
Otto makes some sense. Offering smaller high revving engines offers a few advantages. 1) marketing them is cooler, 2) lighter weight since displacement is smaller, 3) if you design them for cruise speeds they can be more fuel efficient 3) you can turbo a small engine to meet a wider variety of driving conditions while keeping fuel efficiency decent. 4) it uses less material so costs less
Since most cars today have 6 speed transmissions anyway I think your argument is somewhat moot.
You do make a good point that GM has proven that smaller isn’t better. And realistically thats a function of a lot of complex inputs. Unfortunately in the real world of engineering many of these systems are non linear so increasing the RPM of an engine sometimes means a non proportional increase in losses. If it were really easy GM would have done it already.
But on the other hand GM has shown that they make good small 4 cylinder engines that are quite efficient.
Nate
Gary Dikkers,
If GM brings the Opel Agila over how will they make their money and milk Americans for high priced vehicles which get less efficiency then they could?
LMAO
Nate
getalifeagain,
You make a good point GM did what was best for itself. But my question is when will business do not only what is right for itself but what is right for its country or world?
In school I had to take an ethics class that talked about just such a thing.
Are corporations exempt from social responsibility? Should they be?
Nate
Beaugrand,
I love the idea of a universal product but thats not realistic. That would mean all roads would be the same and all other requirements. Which simply isn’t the case. Its a great thought though.
Better yet though your idea of universal assembly plants. Logistics aren’t easier and the facilities to manufacture cars can be quite specialized. Not to mention the cost of such a thing. But in reality if companies are to stay in business maybe they should cooperate and pool resources to make their plants more efficient and more quickly adaptable. Right now there isn’t much of this thinking maybe a bit more would be healthy.
Nate
gtjeff,
Weight isn’t the only thing GM needs to look at. Aerodynamic drag and component selection is a big deal as well.
Nate
Brad Turley,
Unfortunately when efficiency is concerned designs will converge to be very similar. I know this because the math is the same. And it hasn’t changed in years. Airplanes are already on this trend. The latest generation of small 4 and 6 seat airplanes almost all look the same because aerodynamic efficiency drives them that way. The same is true of cars. Eventually if GM or anyone else wants to increase efficiency their cars will have to look more like:
http://www.aptera.com/
Unfortunately this also means cars will become boring appliances. Maybe its time someone rewrites the laws of physics.
Nate
Sheth,
You make a good point about GM selling European cars. However I wish to counter that. If you look at VW’s 2006 Jetta Diesels they were priced in the high $20K range with all options (about as much as a nice Buick back in then). I would gladly pay that for a car that gets 50 MPG on diesel with just slightly over 100 HP.
The thing is that kind of car isn’t a disposable car in my mind (despite what it may or may not be in reality). a car that gets 50 MPG should last long enough that I can justify the cost difference (whether or not this is true I’m not sure). Either way I have looked at some of GM’s non US cars and I think they are very nice. Certainly different. I would consider buying one if they started showing up on dealer lots. The problem is due to saftey standard differences etc… GM doesn’t build them in such a way that they COULD import them if they wanted to. I think they should. Bring them over and let buyers choose whether or not they like them.
If that were done GM could probably get even more customers. And if they continue to build good products they would do well in doing so despite the price difference.
If a higher price means better quality it is only a matter of time before GM markets that and people are buying them because they are better cars despite the cost difference. The tough part is how do you measure quality of a brand new product?
Nate
Beaugrand,
Good call on Bob’s comments. When I read his press releases I hear a certain tone about him that makes me think he doesn’t like CAFE or the Global Warming. Certainly he isn’t a leader trying to improve the company by putting out a better product.
As I commented earlier his tour of the Malibu was laughable “It is a much more luxurious car we use chrome here something only found in higher luxury cars” I cant’ help but laugh at that. If seriously think chrome makes a difference in luxury feel… well I’m not sure what to say.
If he is going to introduce a product then he should give a tour of what makes the car better and how that decision was made. I like hearing technical details that are backed up by engineering rather then marketing propaganda.
Nate
That may all have been true five years ago, but in case you haven’t been paying attention, there has been a seismic shift in how the increasing cost of energy is affecting Americans, their driving habits, and what they see as desirable for personal transportation.
The very reasons that led Europeans to adopt those “small 100 hp diesel-powered cars” are about to smack us alongside the head too. The European and North American markets are rapidly heading towards a convergence point, and Americans will soon value EXACTLY the same kind of cars that Europeans have enjoyed for the last 20 years.
There is also no reason GM, Ford, VW, BMW, et al. couldn’t be selling exactly the same car on both sides of the Atlantic. All it would take is for our bureaucracies to synchronize the silly rules* that say a car that is safe on the Autobahn at 160 kph (100 mph) can’t be safe on U.S. highways unless it is modified to a different USDOT standard.
—————————————————
* Silly rules that have more to do with UAW lobbying than any real safety issue. No matter how safe a European car may be on the Autobahn, Autoroute, or Autostrada, if the UAW can get rules passed that make those cars require expensive mods in order to drive in the US, that drives up their cost, and benefits the UAW.
“I am in no way a die hard environmentalist but I’m wise enough to know that people and companies and greed have a way of destroying things that is very sad. What GM and the govt should have been doing is switching to newer energy sources and focusing on that. There is no reason that half to two thirds our countries energy can’t be supplied by Nuclear power. I’ve heard all the issues with it from the environmentalists… but it is one of the only ways to indefinitely meet the energy needs of our country. At present if the energy industry was allowed to refine their wastes they would be able to reuse much much of their spent fuel. Per ton Nuclear is probably the most cost effective and clean way to generate power. It is very heavily regulated by the Government due to its dangerous nature but that’s what makes it so clean and good. It would take roughly 30-40 new plants to almost completely cover the energy demands of the US. Of course this would cost money but think about all the new jobs that would turn up to build plants and the accompanying infrastructure to run vehicles on the energy produced by the plants.
If you doubt this take a look at the energy content of gasoline and convert it to kilowatt hours. Electric and gasoline are very similar in price right now.
The point I’m making is that 30 years ago the US govt and GM should have known this would be the case and should have pushed for alternate vehicles on a large scale and supported them. If that had been the case we wouldn’t be where we are today and the oil companies would be producing electricity as well as oil.
So GM should have saw this coming for a long time and should have been ready for it just in case. The fact that cars today make twice as much power with nearly the same fuel mileage as they did 20 years ago is obvious proof that GM has no interest in providing cars that meet real needs. But rather is only interested in selling cars.
Additionally it doesn’t matter what badge is on GM vehicles. They might as well use the GM square as the brand name and make a whole bunch of model names rather then brands. Pontiac can go as far as I’m concerned there are plenty of other GM cars to take their place. In fact I think Chevy and Pontiac need to be axed. Leave GM’s brands to Saturn, Corvette, GMC, Buick and Cadillac. Or for that matter get rid of GMC too.
Nate”
Well, Nate while you are correct about the cost of electricity and gasoline, the major problems with what you propose are:
1) More vehicles powered by electricity equals much greater demand, in no way can our current electrical grid handle what you propose, and unfortunately upgrading and expanding that grid to the point where it can will be hugely expensive.
2) Battery technology has historically been among the slowest advancing technologies that mankind has created. At the moment the best range of a vehicle powered solely by a battery is about 200 miles, not suitable for long trips especially in the wide open western part of the Country for instance.
3) No matter what is claimed in the media and elsewhere alternative energy cannon possibly be ready to replace conventional energy sources for many decades at the earliest.
4) Who says that oil is created from plant and animal matter from the early periods before man’s accent to dominance of the planet? There is a theory that the earth itself may be creating oil through processes we are not aware of deep in the planet.
Finally I really disagree with you about Pontiac, badges do matter to some people and certain brands have a reputation for certain types of cars. GM’s cars should never become like Toyota’s products and be more of a appliance than a car to enjoy driving.
Hello Mr. Lutz.
I am a stockholder of GM. I admit, not being all together pleased with GMs performance.
GM needs to cut its bureaucracy, and start bringing the right products to the market, at the right time! Clearly, this is not being accomplished in an efficient manor.
GM needs to embrace world cars as a design standard. One world!
GM has a very strong pipeline of products, in production and under development.
The Beat, Camero and new Opel mid size models look very promising.
The Beat is needed in the US market now, not 2 – 3 years from now. This is a big mistake. One-world designs could prevent this same mistake from happening in the future. Gm would also be able to build the same cars in different plants around the world; hence preventing unions from Hijacking GM. Products could be shipped to different regions based on local product demand. The potential savings to GM would be huge.
As for Opel, I suggest taking advantage of its good name and reputation.
Clearly, the Saturn name should be changed to Opel. The benefits to GM are numerous.
1. Opel has a far better reputation, hence more US sales at higher margins!
2. Savings: design, production and marketing.
3. There are many Europeans, especially from Eastern Europe living in the USA. As a group they do not buy US made cars, the Opel brand could catch that segment of buyers.
I would also suggest combining Buick and Opel into one dealer network. Eventually, Buick should be completely integrated with Opel worldwide as one brand.
Bob, Please do not take my suggestions in the wrong way. I have great respect for you! You are a legend in the car industry. Nobody can take that from you!
“While that would solve how to build the car, how do you quickly transition from Truck/SUV to car? BOF to Unibody doesn’t exactly seem conceptual.”
I’ve actually given that problem some thought, and I’ve done a little bit of research.
The kind of construction I have mentioned wouldn’t be “moncoque” or “unibody,” but wouldn’t exactly be body-on-frame, either: something in between, a stiff, pressed or stamped, reinforced sheet metal belly pan (like the old VW bugs; remove the body and the chassis was still quite strong enough to more than support the vehicle). To this is added FWD powertrain, wheels and axles, at this point the assembly splits into different lines:
1.) for “car” models, “doghouse,” doors and rear quarter panels, possibly interior components are added as well. At the end of the assembly line, body panels are added.
2.) for “minivan” and “light pickup” models, a different “doghouse,” doors and sides would be added, at assembly line end the pickup inner bed lining and cab roof, or, minivan cargo area/seats, roof and hatch would be installed.
One plant, one assembly line, possibly dozens of models with 80 to 95% commonality of parts, yet none need be “badge-engineered.” For example, let’s call it the Chevy plant: all models use the same FWD 100″ wheelbase chassis, the same assembly line cranks out coupes, sedans, roadsters, wagons, an El Camino-type “car-pickup,” a minivan and a minivan-based pickup. Let’s say 4 “car” grille options, 3 “truck” grille options, the same number of taillight options: mix and match, that would make dozens of “models” to choose from.
Pretty much the same could apply to a RWD line, a bit stiffer chassis than FWD, but a lot of commonality and the ability to quickly switch from, for example, coupes to wagons. Changing from FWD to RWD would probably take a couple of weeks.
Except for medium and heavy duty trucks, I don’t think BOF should be needed. Still, changing quickly from one model to another could be done easily and quickly, using the same or similar principles.
And I’m still not suggesting it would be easy, cheap, or fast to do this, but it might be necessary. Like it or not, the future is going to be more efficient cars and trucks, and GM is going to HAVE TO find a way to make money cranking out smaller, less expensive cars.
Lutz said: “Well, we got hit with a triple whammy: we face a generalized economic weakness due to the mortgage meltdown, which is creating a borderline financial crisis in the United States and other parts of the world; we have seen a big decline in the dollar; and we have, of course, experienced an unpredictable and very rapid rise in fuel prices.”
Mr Lutz,
Enough already, quit whining. Instead, use your industrial capacity to make this country better.
GM is not just a car company, you’re an industrial powerhouse
You and Mr Wagoner may not fully realize this, but GM is a lot more than a carmaker. GM is a significant part of our country’s heavy industrial manufacturing capacity. Sure, the car market is changing. So how do react? You start laying people off and shutting down manufacturing capacity. Instead, why can’t you use those skilled workers and that manufacturing capacity to make other things this country vitally needs?
All the major carmakers shifted manufacturing capacity in World War II
In World War II, you and the other carmakers reacted rapidly to that crisis by shifting almost all of your production capacity to making things that were vital to winning the war. GM factories built tanks, heavy-duty trucks for combat, airplanes, machine gun barrels, and other essential war goods. In only a matter of months, Ford put up their huge Willow Run assembly plant and it was pumping out B-24 bombers.
Why can’t you react to today’s crisis by shifting production capacity?
Now we are faced with a different crisis — a seismic shift in how we use energy and where it will come from. A seismic shift that requires actions similar to those needed to win WW II. It’s obvious to me you can react to (and profit from) this crisis by changing what you do with your industrial capacity.
Why not build wind turbines to support the T. Boone Pickens plan?
Of course, by now you’ve have heard of the T. Boone Pickens plan to invest in and build billions of dollars worth of wind farms in Texas and the other windy states in mid-America. (I’d be surprised if both of you don’t personally know Mr Pickens.)
The wind turbines those billions of dollars are going to buy have to be built somewhere, right? In fact, there will be billions of dollars out there looking for wind turbines to buy. And what do you have? You have skilled assembly workers, machinists, and engineers, plus excess industrial capacity.
Why can’t you rapidly–just as you did in WW II–use your production capacity to start making the wind turbine nacelles that will be in huge demand? Assembling a wind turbine nacelle really shouldn’t be all that different from assembling a car. Making carbon/graphite composite blades certainly requires skills you don’t have, and you probably also don’t have the heavy rolling capacity needed to make the steel support towers. But making the nacelles should be right up your alley.
Quit whining about the economy and the energy situation, and take advantage of it
So why not jump on-board the T. Boone Pickens plan and use your excess industrial capacity and skilled workers, and start making some of the thousands of wind turbines that will soon dot the United States heartland?
Why can’t you shift industrial capacity now with the same sense of urgency you showed in World War II? It would benefit you, your workers, your stockholders, and the United States.
V/R
Gary Dikkers
I couldn’t believe it this morning when I hear Erin Bernett say “if everyone in the US drove a Honda, we would save a million gallons of gas everyday”. She said Honda is building plants in the US, therefore the implication is that Honda employs US auto workers and it is fine for the US economy. Statements like this are killing GM, Ford and even Chrysler.
Beaugrand: I understand the basis of what you are saying, but I still believe that a truck needs a full frame. Maybe I’m just old fashioned, but I actually use a truck for a truck. I overload the bed, I haul more than I should, and I drive through the fields, the snow, and the muck like its going out of style. For a truck to take that kind of abuse, I find a full frame nessecary. I’ve had my silverado a year now, and its got over 22,000 miles on it. In additon its got a bent bumper, cracked tail-light, crinkle in the bedside, and more dents, dings, and scratches in the bed than I can count. Why? Its a truck getting used as a truck. Now for those with pretend trucks, you could use your idea for that (think Honda Ridgeline). Its possible the G8 ute may fill that nitch.
Nate: Why drop Chevrolet? That makes absolutely no sense. Its the heartbeat of America. Everyone knows the brand and respects the brand. Why drop its big seller? Also, adding a turbo to smaller CI engines seems like would add cost, as well as packaging concerns. The way I understand it, the 4.5 fits in the same area as the LS motors, thanks to the central mounted turbo. Now, maybe waiting to see what applications it ends up in would be a good choice. With over 300 hp and 500 ft/lbs of torque. It could really haul in a 1/2 ton truck, and haul in a different way in say..the Camaro. All while offering excellent MPG’s.
It wasn’t until 1944 that Willow Run was able to produce planes in quantity. Edsel Ford (Henry’s son who died in 1943) headed up that project. FDR visited “Willit” Run because there were so many problems.
I am not knocking Willow Run though. Edsel is one of my heroes and my grandparents worked there. These are facts.
I’d like to add, that WiIlow Run outproduced even the highest expectations when they produced the B-24 bombers. (And I am proud of that).
“I couldn’t believe it this morning when I hear Erin Bernett say “if everyone in the US drove a Honda, we would save a million gallons of gas everyday”. She said Honda is building plants in the US, therefore the implication is that Honda employs US auto workers and it is fine for the US economy. Statements like this are killing GM, Ford and even Chrysler.”
Is Erin Bernett’s statement wrong? Wouldn’t we save millions of gallons of gas if everyone drove a Honda?
The way to fight that is not to express disbelief and complain, but to build an even better car than Honda. GM, Ford, and Chrysler need to build products that make people such as Bernett say, “If everyone in the US drove an American-built Chevrolet, Ford, or Dodge we’d save millions of gallons of gas everyday.”
“Why couldn’t GM rapidly convert Janesville, Oshawa, or Moraine to a production line for Malibus? In 1941-1942 it only took a matter of months for Ford to gear up the Willow Run assembly plant to start turning out B-24 bombers.
Are you saying making a Malibu is more difficult than building a bomber?”
Yes. This is common sense. Today’s autos have far more electronics than a WW2 bomber and there are tons of complex robots involved in the assembly of a car in 2008. In 1942 you simply had assembly lines and lots of workers. You can do a lot of things in a time of war with 24 hour shifts and an unlimited budget. In the real world it takes a year or more to convert a plant from one use to another. To think you can shift production from vehicle A to vehicle B on a whim based on a quick increase in fuel prices is insane.
“Is Erin Bernett’s statement wrong? Wouldn’t we save millions of gallons of gas if everyone drove a Honda?”
No. Have you seen the mileage of the Pilot, Odyssey, Ridgeline or Accord V6? Honda makes more than the Civic you know. If you remove the civic from HOnda’s lineup it’s barely more efficient than GM’s lineup of I-4 and V6 vehicles. The 2009 Malibu/Aura I-4 models get better mileage than the Accord. Seems to me we could save fuel if Accord owners traded in their cars for 2009 Malibus.
“I really wish GM would rebrand all their cars and accompany that with a new look and feel that is on par with Toyota and Nissan and the like. I have to laugh when I hear some of the videos about chrome strips on cars that “cost a lot and are luxury items” (referring to Bob’s intro of the new Malibu). Sorry Bob show me interior design and quality and good mechanicals and back it up with a warranty and maybe I’ll take a second look once I can get the features I want in the car. Great car otherwise I hope someone else is buying them.”
Comments such as the one above show why you arent taken seriously here. The interior of GM’s recent model is superior to what Toyota and Honda are offering. Go sit in the Malibu and then in the Camry. The camry is full of hard plastics, cut lines and visible flashing. The Malibu has a woven headliner while the camry has an old school mouse fur headliner. The camry has gooseneck hinges for the decklid while the Malibu has struts such as those found on German cars. You talk about “good mechanicals” as if the Malibu doesnt offer more standard hp than the camry. For 2009 you will be able to get an I-4 engine and 6 speed auto with the Malibu and Aura. You cannot do the same with Accord or Camry or Sonata. The Malibu/Aura will get 33mpg on the highway compared to 31 for the Accord and Camry. Anyone who has any taste can tell you that GM’s exterior designs are well ahead of whats being put out by Toyota and Honda. Now the interiors are starting to surpass Toyota and Honda in terms of design and materials quality. If you doubt this compare the obscene interior of the new Pilot to the GM crossovers. People are so awestruck by Japanese vehicles that they don’t even bother to make objective comparisons of the vehicles in question. GM is offering models that look better than the competition, meets or beats them in mileage and offers superior warranty protection as a bonus. Not sure what’s not to like about that.
~Are you saying making a Malibu is more difficult than building a bomber?” Yes. This is common sense. Today’s autos have far more electronics than a WW2 bomber and there are tons of complex robots involved in the assembly of a car in 2008. In 1942 you simply had assembly lines and lots of workers. You can do a lot of things in a time of war with 24 hour shifts and an unlimited budget. In the real world it takes a year or more to convert a plant from one use to another. To think you can shift production from vehicle A to vehicle B on a whim based on a quick increase in fuel prices is insane.”
Building a bomber — even a WW II bomber such as the B-24 — is vastly more complicated than building a car. Just for starters…
First we’re talking about four very complicated, supercharged, high-compression engines, each with 14-cylinders.
Second are the hundreds of thousands of rivets it took to put one together. (Over 300,000 rivets in one B-24.)
Third are the miles of aircraft-grade steel cables and wires for the flight controls and the electrical system.
Fourth, the retractable ball turret with its high-pressure hydraulics would be almost as complicated as a car.
Fifth, is the complicated piping and switching needed to connect all the fuel cells so they supply four engines while still keeping the airplane’s weight and balance within limits.
Sixth, the the oxygen system for the crew.
I’d say building a bomber such as the B-24 was as “real world” as you can get. Don’t try to tell me putting together a Malibu is more difficult.
Trevor Bainbridge,
The Chevy Impala 3400 V-6 has better EPA fuel economy at 21/32 than a Honda Accord 4 cyclinder at 21/31. Impala offers flex fuel, Accord does not. The Chevy Malibu has better fEPA fuel economy at 32 mpg than either Accord or Camry at 31. The Buick Lucerne V-6 has better fuel economy than the Acura RL V-6. The 2009 Lucerne will offer flex fuel, Acura does not.
It seems almost no one should drive a Honda. If they want to save fuel, they should drive GM products. Almost no one wants subcompacts, sales of subcompacts are down while sales of midside cars are up.
Rum Doodle/Nate,
CAFE has amounted to regulatory discrimination, and arguably unconstitional. Wouldn’t it be fantastic if the Supreme Court struck down CAFE, I’d love to write that brief. The auto companies have worked to just have a level playing field on CAFE, for each type of vehicle to have its own average. In that way more meaningful progess might be achieved. The Congress has stonewalled American business only to finally pass a compromise. CAFE is a failed policy. It should be repealed. CAFE and emissions regulations are contradictory and should be struck down by the courts. Once again, not all regulations are good, but CAFE is especially bad for consumers.
Auto companies do fine in the market place without CAFE, American makers have stayed ahead of it. Most of the Research funding for alternatives comes from American auto companies.
GM vehicles are offer mostly the BEST IN CLASS fuel efficiency.
Why do you suppose those foreign luxury cars offer twin spark in the US market? Its not for performance, its to burn off all the excess smog they emit in Europe. What about wisdom of that consumption????
ACTUALLY, in the USA we have a FREE MARKET. That may be a far out concept for some. The market self regulates efficiency and choice through supply and demand. Thats why in the USA we drive great vehicles as opposed to the failed world view of the old hammer and sickle. In that part of the world they drive their bucket of bolts, and receive their ration from their all knowing centrally planned party of government.
Some follow the party of government, while the rest of us believe in the FREE MARKET. Its not the governments place to tell people what kind of vehicle to buy, nor is it the place of far out think tank organizations that waste their donors money.
Nate,
The price of oil rising has nothing to do with consumption. Consumption has actually fallen this year. The price of oil was less than $20 a in 2000. Speculation has driven up the price, lack of new refineries has also contributed. Increasing supply is a good idea though. Just about everyone in the world except the U.S Congress has taken steps to increase the supply of energy for their respective countries. The U.S Congress does support subsidies to fund energy projects through the World Bank for other counties, but not much for the USA. And we know which party has been against energy production for the US now don’t we.
On quality, GM quality is second to none. Pontiac has superior products. So what are you talking about? GM quality has bested the competition through the years as well.
—-
There are many foreign brands that should probably be dropped from the market place.
I like what you are doing, better late than never. I’ve had 2 Chev Cav coupes. Even though they weren’t the best built, I loved the styling until that last restyle of the front and rear facia’s, so I bought a SolsticeGXP. Other than it’s totally impractical without a trunk, has a a cheap plastic interior (I oppted out of the leather seats and air), I love it. I have a 2002 Buick, and since that Chineese Park Avenue isn’t available, and my dealer doesn’t have a G8 to look at, can’t order a CTS, says that since they are such a small dealership they will never get a Camaro. He, thinks it’s such a limited production vehicle that they are only going to build 1000 cars. It might be wise to re-train some of that sales staff out there. It’s pretty disheartening to visit a a dealer and know more about what they sell than the salesperson.
Brady Turley said:
“Beaugrand: I understand the basis of what you are saying, but I still believe that a truck needs a full frame…”
Actually, my comment as regards trucks was:
“Except for medium and heavy duty trucks, I don’t think BOF should be needed…”
As far as GM’s lineup is concerned, a 3/4 T pickup is in the “medium,” range, since GMC no longer makes the bigger class 8 trucks.
Pontiac Man,
In response to your list.
1) you are 100% right our current grid can’t handle the power demand of electric cars. But it is something that must be done. And more importantly STARTED now. It will take at least 10-20 years to update things and it is important in my opinion to start now. Additionally it is also my opinion that infrastructure is a necessary evil of an ever advancing society such as ours. All around the US infrastructure is being neglected because of cost. Its not healthy for the country to neglect such an important thing. In the past infrastructure has never been cheap to build but it was needed none the less. The same is true of the power grid regardless of the cost. It is the willingness of our country to keep pace with ourselves, the world and our own need and technology that will keep the US strong and in its position worldwide.
2) Battery technology is way behind in some regards but has also made some quantum leaps lately. But there is nothing saying we need to use only batteries. There are many ways to store energy. Chemical conversion is a good method that way. The issue right now is that our oil supplies are effectively a giant battery of solar energy. And like all batteries they do wear down. Why not store electricity as hydrogen? Its not the most efficient way but its sure got a better energy density then current batteries and it’ll run in most current technology with some reworks. (I hear the dollar being referenced here… does that mean more cost or more jobs?)
Batteries need not be the only storage medium. but today’s diesels are getting 40-50 MPG. Why not a small diesel hybrid? or a hydrogen piston engine hybrid? There will always be people who need more then 200 mile ranges. At present it shouldn’t be a big deal. Simply add a supplemental engine or power source or use quickly recharging batteries or storage devices.
(BTW right now I’m not a fan of fuel cells because of the cost and problems with them)
3) You are right, at present alternate energy won’t replace current fuel sources for a while. My concern is opening up more oil wells will put a band aid and some pain killer on the problem. Instead of attacking the problem and solving it we’ll be forgetting about it for a while. Hydrogen has been produceable with electricity for more then 100 years. Nuclear power offers a competitive cost to charge batteries and create hydrogen so why not use it? Per ton there is plenty of nuclear fuel right now. This gives the fusion people some time to make fusion commercially viable.
4) No one says. Heck some guy is genetically engineering e-coli to produce gasoline molecules from sugar. The problem with theories is they can be hard to prove or disprove. But I’d rather err on the side of caution and have a backup or alternate available. And at very least strive to tweak the most efficiency out of what we have so we can slow down our consumption.
Some food for thought…. according to a study I did a few years ago (and based off the US statistics for oil use); the US burned roughly 80 million gallons a day in 2004. Now I’m not sure whether this was crude or refined fuel oil… none the less thats a big number. Imagine a 3% savings on that number or even a 20 or 30% savings. Thats a big difference in how long that same quantity of oil would last.
Imagine if every car and truck sold in 2009 had a regenerative brake system on it and was powered by an engine as efficient as a diesel. Would there be any harm in that? Sure it would cost some money but it IS needed and a good thing none the less.
Interesting point you make about badges. Enjoying a car is hardly a cost effective way to do business in my opinion. But then there ARE certain things in life where cost isn’t the main concern. Pontiac is one of them. Unfortunately even Pontiac is a business that thinks it needs to make profit (and it probably does).
So my logic on this one… GM is hurting as are the Big Three. I suspect they have over diversified their product offering. I love the fact that GM has tons of cars. What I don’t like is that compared to some of their competition a lot of them in the past have been half a@@ed. I’m not saying all or even that far in the past. Just that they aren’t up to the standards that I think they could be. And I think trying to win everyone over is why GM has this problem. I think reducing the overhead and focusing on quality again would be a good move for GM….. What benefit does re-badging a Holden Monaro or Commodore have? What ever happened to making new legends in the auto world? How much cheaper would it be for GM to just bring in the euro brands?
I’ve always loved Pontiacs (and ironically disliked Chevys because I thought they were the cheap version of GMs products)… but I also have found Pontiac interiors in the past to be cheap and compromised. The Pontiac car itself in some regards has always felt like a cheap sport car. Recently they have been doing better. I have yet to see a Pontiac that makes me want to buy it.
I really don’t care which GM brands go, but I think there is to much overlap and redundancy and inter-brand competition. My example is the Aura, G6 and Malibu. None of them appeal to me to the point I’d buy them. Each of them is missing something. And since I can compare them as the same or similar platforms I choose to buy none of them. To me a better option would be one car offered in a more customizable package. The same goes for the Vue, Equinox, Torrent. I’ve looked all of them and not been impressed. Ridding GM of some brands I feel would free up the talent to focus on perfection and it would also make GM more competitive. I’d rather have fewer products that are better then a lot of them that are mediocre. Its a shame that GM seems to favor that latter.
Just my thought again.
Nate
PS my favorite car is a Pontiac though I probably wouldn’t buy another one.
Its my opinion that the US can’t afford to NOT improve the infrastructure, fuel consumption and energy sources. We can’t afford to be sending all of our money to other countries without getting it back somehow. If it keeps up it the American way will be lost.
The auto industry has been building cars for the sake of building cars too long. The industry has matured from its hay-day of cheap fuel and designs. Its time to mature the product and optimize it a bit more and make sure that it is world class.
Just more of my thoughts.
Beaugrand,
Wow thats a tall order. The Volt I thought was supposed to do that… originally a skateboard like concept??
The problem I see is that the role and requirements of those vehicles are soo different that it wouldn’t work that well.
Though.. GM has already started to narrow its engine and power train down. If I’m not mistaken the latest gen of engine lines are basically three or four groups… The Ecotec 4s, the High Feature V6 (3.6L) and the Small Blocks and then the Diesel…. speckled with a few older designs like the Buick V6 and whatever saturn is using. Overall I am very excited to see GM using the high feature V6 in so many cars.
The same goes with transmissions. From that aspect GM has done very well at stocking the corporate parts bin.
Nate
I love the G8, a Rivera coupe/ convertible and the Zeta ParkAvenue might just fuel the Buick market if built for the world and the US along side the Camaro.
Gary Dikkers,
Well put. GM is part of the economy, and industrial powerhouse. I suppose its not ok to diversify at GM… yet I think Japan does that… Mitsubishi Heavy industries and a few others come to mind.
I wonder how much money the gov’t threw at the auto industry to make B24s? (speaking of which has anyone been to the Dulles Air and Space Museum near DC? They have some of the most efficient diesels ever made there from WWII which still hold efficiency records).
The problem wit the seismic shift in energy is that the Gov’t hasn’t declared war on it yet. So no one has been forced to solve the problem. It does however threaten the American way and that should be enough reason for the whole country to be willing to spend some money to fix it.
GM probably has to much invested in their current pool of technology to want to shift their industrial capacity to a more profitable thing. They are still to worried about selling cars for the sake of selling cars. They really do need to change that attitude.
It seems like poor leadership and lack of vision is Lutz’s problem.
Maybe he should directly read these postings more. If GM could apply half the things people talk about their cars would be way better.
There really is no reason GM can’t diversify and get into wind turbines. Though I wonder how many of their factories are old and falling apart and not worth saving.
Nate
Tom Gilmore,
These statements are only killing GM because GM isn’t taking advantage of the economy and the situation. Instead of trying to push its products and convince us their cars are actually good they should be doing something about it and showing us just how good their cars and leadership are. But GM hasn’t latched onto the formula that the Japanese and Europens have.
Heck one big thing is that the US seems to love foreign cars. If you tell them its foreign they think its good. To bad GM hasn’t latched on to that one and brought Opel and Holden over.
I think one of my friends said it best “If everyone drove Honda and Toyotas their cars would get better mileage and last 200K miles”.
Nate
Brady Turley,
From an engineering point of view there is no reason a truck NEEDS a full frame. It is simply the way cars have been made since the beginning. A full frame does make it easy to put beds on trucks and custom boxes on the back. It is perceivable that the overall quality of the vehicle would be better if they adopted a large mini-van style chassis. However this would probably mean a heavier truck. Today’s truck frames probably don’t wear out nearly as fast as the driver, sheet metal and interior. A truck could however be made with a half frame in the rear and a semi-monoqoque up front.
As for Chevy? I guess it boils down to my personal preference. However Chevy seems to be the brand with the biggest overlap of all the brands. Want a truck? Buy a Chevy or GMC… want a sporty car buy a pontiac G6 or a Chevy Malibu. Want a Small car buy a Saturn, G5 or a Cobalt…… I just see way to much overlap and the Chevy just appears to be cheap to me (a compromise of design, styling and cost). I think GM could delete Chevy (nostalgia aside) and no one would really care. They did this with Oldsmobile. Oldsmobile made nice cars they were somewhat plain like Chevys but a slight notch above in performance and luxury and styling. But I don’t think anyone misses them now. I think the same would be true of Chevy.
Drop the brand move the luxury cars to Buick, the sporty cars to Pontiac, the econo cars to Saturn and the trucks to GMC. Add Caddy in there as the sport luxury for each type. Want a luxury truck buy a Caddy truck, want a regular truck in 3 or 4 trims buy a GMC… want a legendary sports car buy a Corvette (yes make it its own brand it practically is anyway). Nostalgia aside it makes a lot of sense to reduce the number of brands and make the purpose of each brand more clear. Additionally offering more options on each car would attract the Honda and Toyota crowd. In my opinion no one wants the same cars with only a few option differences. They want the same model with 5 different option levels. Many of the foreign cars are quite successful with this.
Chevy is only GM’s bigges seller because it sells cars cheaply something Saturn could easily handle. For some reason GM is trying to grow each of its brands and in the process is making them inter compete. That cost money and to me makes no sense. Instead make each brand specialize in a certain type of car and use trim levels to attract various customers… BMW comes to mind with their 3 series… same car different feature groups and different model NAMES. If you look at GM you have the company then the brand then the model then the sub model… if you look at BMW you have the company the model end of story. Big difference… even Toyota is the same way… you have the company the brand and the model no sub models (that I can think of).
Its a marketing thing, a logistics thing, a cost thing and a duh thing (in my opinion).
As to the smaller engines…. For cars and even small trucks the demand for peak power is maybe 15% of the time (estimated). Why carry around extra engine? Also a smaller engine usually gets better mileage (to a point). Adding a turbo would make up for the lack of power while still affording better fuel economy. (A friend of mine has an Audi TT that gets 32-34 MPG on the highway and is a blast to drive with 180 HP). Can any of GM’s V6s get that kind of power and mileage? Can they even be put in a car that small?
Turbos are great because they grab nearly free power. Packaging is an issue as is cost but in my opinion they are outweighed by their gains.
The nice thing about the 4.5 CI engine is that the turbos increase the effective compression ratio and the efficiency. So you get high HP when you need it and great fuel economy (sounds like a win win to me). The only downside is cost. Currently though the Duramax 6.6 is to heavy to put in the 1500 trucks and cars. Making a Diesel that would fit in place of a SBC would mean quite a few high performance cars could be made that get great gas mileage at the same time.
I’m wondering how the corvette would fair with a diesel in it. It probably has one of the best drag coefficients of any GM car. With a more efficient engine I bet it’d get almost 40 MPG.
The Camaro could use a fuel economy boost big time… the 4.5 might be what the doctor ordered.
Nate
Sheth,
So are you saying US consumers are ill informed of the actual mileage of Toyota and Honda’s larger cars? Or do they maybe just not care?
Gm interiors for the most part aren’t that great. And maybe some of the lower end Toyotas and Hondas aren’t either. But the Camry I was in (possibly a 2004) was much nicer then even the latest I’ve seen from GM. ALL of GM’s cars use plastic for their interiors. What really bothers me are the materials and feel GM allows to go out the door. One example is the new CTS I saw at a car show. The tan leather interior and plastic showed dirt easy. And unlike older plastics the new ones seem to absorb the dirt. Also the CTS panels near the door (on the dash) felt hollow and cheap. The Camry even though 4 years old didn’t FEEL cheap. Maybe it is but it impressed me.
There is nothing wrong with hard plastics in my opinion if they hold up and don’t sound hollow or make noise. GM certainly STILL uses its share of plastics in the dash. I can remember a 2008 Pontiac Grand Prix I rented and how cheap that dash felt. The seats weren’t bad but it wasn’t the quality I’d expect from a car that new and in that price range (yeah I know it was a rental).
Good mechanical isn’t about the engine. Its about everything else that moves. And the interior is about more then the feel. How long do all those electronic actuators last and all the AC vent parts last before they crack and break? How long before the car falls apart. GM engines seem to last long enough however in the past their transmissions weren’t that great. The major parts of GM’s cars are fairly mechanically sound what bothers me are the small mechanical parts that wear out and are hard to get or replace because GM discontinues them.
I personally love the styling on the new Civic its sporty and small. I’m not sure I agree on the styling of the interiors or exteriors. People are awestruck by foreign cars. But GM’s brands don’t help the matter because they have to overcome their past. I have no doubt that the Malibu, CTS and a few others are pretty decent, they just aren’t up to par yet in my opinion, close but they still have a lot to do.
I guess I’m just a hard customer to please.
Nate
“Wow thats a tall order. The Volt I thought was supposed to do that… originally a skateboard like concept??”
The “skateboard,” IIRC, was a battery/fuel cell concept. My understanding is that the battery pack would be under the floor and extending the length of the chassis.
What I’ve proposed is a reinforced, stamped or pressed sheet metal, rigid chassis, with mostly non-structural, interchangeable composite or plastic body panels, powered by (more of less) “conventional” internal combustion engines. Rather than “badge engineering” several brands off a common platform, I suggest devoting one (maybe two, in some cases) platform per brand, using the interchangeable body components to create different models within that brand.
The purpose of this is to lower costs of switching production from one model to another.
All 100″ wheelbase FWD models, for example, could be Chevys, all 100″ wheelbase RWD models could be Pontiacs, assembled in specific branded plants. Buick and Cadillac, being larger luxury cars, would have longer wheelbases, roomier interiors, and more powerful engiens.
This would enhance brand uniqueness and value. Presently, a 10-year-old Buick is no more expensive than a 10-year old Chevy built on the same platform.
At the core of this, GM would have to learn to make money selling smaller, cheaper, more efficient cars and trucks, as well as the higher-margin brands.
It might not hurt GM to explore building motorcycles and motor scooters. I suspect that’s going to become a growing market in the US.
Nate,
Where do you get these opinions about interiors???? Quibbling about American models using names vs letters and numbers, interiors, quality straw man, these are talking points by the anti-US media. And they are plainly wrong. GM quality in the 80s and 90s was superior to the foreign brands, despite media complainers. You know, back in the day, when foreign makes didn’t even use hydraulic lifters. Oh but the media was so convinced foreign cars were good for consumers. Many more GM vehicles from those years past are still performing, but there is a reason for this: GM has always made superior products to the foreign brands. Far fewer foreign branded vehicles are around, of course, but why buy a throw-away car from a foreign maker anyway??
None of the complainers complain about foreign brands using letters and numbers, the same bunch of media plays along to cover-up recalls by the foreign brands, even when they are investigated by their own governments. Many foreign models have fallen by the wayside, and the anti-US media buries their collective heads in the sand. The media likes to discuss brands, there are too many foreign brands that keep getting subsidies from foreign banks. They just can’t stand that American products are superior.
The foreign branded interiors are not anywhere near as nice as GM’s. They know this. Take some time. Some of the foreign brands even use less expensive (cheap) pigskin leather, while GM uses higher quality calf skin. GM offers world class interiors, and more choices (better for the consumer). GM was the first automaker to offer high tech features like night vision, well before foreign luxury brands. GM was the first to offer affordable anti-lock braking. GM is the market leader, the foreign competition knows this. Any of the American car makers are better than comparable foreign makes.
And what about the phony tests done by the far out auto print media. They sell pictures, certainly not their content. Funny thing happens when certified drivers do actual tests like they did in the broadcast for the Pontiac challenge on TV: Pontiac won, beating foreign brands, even so called foreign luxury brands. The far out auto print media test numbers appeared so fake compared to actual tests. The anti-US media is so desperate, they test and test, scavenging to find just any little thing for which they might be able to criticize an American brand which they know is better.
Its so obvious to people who are able to think for themselves.
Beaugrand: Do you drive a truck? What kind of area do you live in? This may be what is playing with the perception of what a truck is. Im in a more rural area. Tons of gravels roads, pot holes, ect ect. It would seem to me that over time, the unibody would have its work cut out to keep straight. Consistantly haul an 18 ft trailer with 3500lb load (trailer and load total a little north of 5000lbs) in these areas and I could see problems shutting doors as it would start to destort the body. Again, its all in where you live. I also need the ground clearance because roads around here arent exactly the first to be cleared of snow and ice, and once in awhile roads get washed out from the storms. For the city drivers and those who don’t go out an play with a truck, a unibody may be fine. But for longevity, I can’t see any other to build a truck. 1/2 ton included. I don’t need a 3/4 ton. For one I never need to move 9600 lbs, so I don’t need the additional weight or decrease in fuel mileage. The 1/2 is the right size for the things I need.
Nate: Yes, GM V6’s can get that power and mileage. Back to the Impala example. The 3.5 in the Impala, I have personally seen knock down 32 mpg regularly. In addition, it makes 31 more horsepower than whats in your example, and its in an car that is around 700 pounds heavier. Not to mention it can seat 3 more people than that Audi. A much more effiecient vehicle in those terms. And, it doesn’t really need to be said again, but if you drop Chevrolet, you drop General Motors.
I’ve logged 1,113,000 miles in Freightliners, Peterbilts, and Kenworths, got my start driving my uncle’s worn-out 1958 twin-stick International back in the 1970s.
Yes, I know what a truck is.
~ “The price of oil rising has nothing to do with consumption. Consumption has actually fallen this year. “
Edwin,
You have to think beyond our shores. Consumption in the U.S. has fallen, but worldwide consumption and demand for oil and gasoline is up. Oil is a worldwide fungible commodity and that is what is affecting us.
Just in the next ten years there may be as many as 10 million new gasoline burning cars on the road in China. The number of fossil fuel-burning cars in India is also rising dramatically. China is aggressively buying and locking up oil contracts for the future. If you don’t think that increase in demand and consumption will affect us, you are wearing blinders.
Beurgrand. That is not a truck, that is a road tractor. But for this purpose we’ll let it count. Now, do you think road tractors would last as long as they do with a unibody? When your not driving them, do you drive regular ol pickup trucks and use them for work?
Rum Doodle,
There really is not a significant shortfall of oil supply though, even though there is a need for refineries. A $100 dollar/barrel price rise in 18 months could not be a function increased global consumption. More likely, speculation is the culprit, as the price of oil fell $20 in the past two weeks with the lowering of tensions in the middle east. The inelastic demand for oil foments a precipitous price rise beyond what producers expect. Reigning in speculation and increasing the prospects for future supplies of energy through domestic drilling/production and alternatives could lower the price to a more appropriate market value of around $50/ barrel in the near future.
My apologies, we seem to be stuck with differing terminologies. As far as my experience is concerned, a “road tractor” is actually the “real” truck, a pickup truck or SUV is still a “4-wheeler.”
That’s actually a derogatory reference to the very poor average level of skills associated with those who drive “light” vehicles (anything under 26,0000# GVWR); specifically, those who think a pickup or SUV is “safer” because it has a greater potential for injuring or killing people in “lesser” vehicles. GM (and all the other manufacturers of motor vehicles) has done very little to encourage those who drive light trucks to improve their driving skills, to even suggest that driving heavier pickups and SUVs require more skill than does the typical sedan, or to foster a responsible attitude about sharing the road with other vehicles, of any size. In fact, most automobile advertising shows vehicles being operated very irresponsibly and in unsafe and illegal ways (with the usual disclaimer about “professional driver on closed course, don’t do this at home” or other such legalese).
For most people who buy trucks for the “image,” which will probably include well over 50% of “light truck” buyers, a unibody 1/2 ton vehicle will do just fine. For those who actually need a “real” light truck, the 3/4 or 1-ton BOF pickup is just right. Actually, for hauling gravel, anything less than the Sierrra 3500 probably isn’t adequate (I’ve seen light 1/2 ton pickups loaded with well over 3000 lbs of sand or gravel, scary that I have to share the road with those kinds of drivers).
Actually, a unibody “crossover pickup” would probably sell great, especially if it’s easily lowered and has room for those 22″ rims. Great “image’ vehicle, cheap to make.
~ “There really is not a significant shortfall of oil supply though, even though there is a need for refineries.”
You’re right there is no shortage of petroleum. Just a shortage of inexpensive petroleum we can get to easily.
There is probably lots of oil on the continental shelf under 7,000 ft or more of water. It’s there, but very expensive to find, drill to, and get out.
There are billions of gallons of oil in the shales of Utah, Colorado, and Wyoming. Again very expensive to access and technically daunting to separate from the rock that holds it. Using that oil shale will also have a significant environmental impact.
There are signs there are huge amounts of oil under the Arctic ice cap. But that’s even more daunting to drill for and more expensive to pump out than the deposits on the continental shelf.
There are billions of gallons of fuel to be had if we dig up the coal in Montana, Wyoming, and Utah and convert it to liquid fuel. But that won’t be cheap, will require water that is in short supply, and would probably have a huge adverse environmental impact.
The oil is there, but it won’t be cheap. You’re hope for a return to $50/barrel oil is unrealistic.
Mr. Lutz,
I notice you wrote, “And if everyone is so smart except us, how come most of our import competition was rapidly rushing into the full-size truck market, just as the party was almost over?”
But that’s not an accurate representation of the situation. Honda offers one car-based “truck,” the Ridgeline, which I expect they can build on an Accord or Pilot line. Toyota got into trucks in a big way… that is to say the truck is big but Toyota has only planned for 200K units and is probably going to be comfortable with the program at a lesser unit volume (although… their current rate of 120K units or so may be less comfortable than they like). The Titan is another big truck… but also not in unit volume.
The import competition has certainly ramped their truck production but they have not made an unsupportable commitment to it.
Selling big, gas-guzzling vehicles to people who’s real vehicle needs were much, much more modest was never a good long-term plan and was always potentially subject to a nasty correction, either with a tanking economy or rising oil prices. And we’ve seen nasty jumps in oil prices before.
Don’t you have any former Boy Scouts working there? Remember the Boy Scout motto: Be Prepared!
Rum Doodle,
Its speculation driving up price not a shortage, even the Saudis said the market price should be about $60/barrel. Closer to $50 is more like it. Speculators have run the price up from Middle East tensions well beyond what producers expect. Why not just admit it. Your’re not being realistic. But let’s see Congress pass a speculation bill and find out for sure. Yes, there is plenty of supply as you say, let’s lift all bans on drilling and pumping and let the market place work. Let’s find out if its hard to get, let the oil companies do their job. Lift the bans.
They have plenty of gas at the pump. Thus, it simply can’t be a global consumption problem. There is no justification to punish demand. Let’s build more refineries and more nuclear power in the USA for a change. Let’s find out for sure if that will do the job. Unless of course the left wingers in Congress are afraid to find out. The environmental scare tactics are so phony. Using water sensibly doesn’t impact the environment, its called the “climate cycle.” Water evaporates and comes down to in form of rain. Its been doing this for millions of years. Ice has been melting for millions of years too. The glaciers formed the Great Lakes. Plants in the sea take in CO2. Its called a biosphere, not a greenhouse; the earth is not terrarium for leftist Utopians.
I think we are at point to agree to disagree. I still find a 1/2 ton to need a full frame, just from my experience. Maybe if I find a Ridgeline 30 years down the road what is still operational, doors still open and shut fine, and has actually been used for a truck, then I may change my mind on the unibody pickup.
I do notice the amount of people buying trucks for the image. GM already has my complaint about not offering a crew cab standard bed 1/2 ton. I told them if I wanted a car, Id buy a car, if I wanted a truck I’d buy a truck, if I wanted something in the middle, I’d buy an Avalanche, but I want a crew cab half ton with a real bed. Their answer “Well we do offer that in the 3/4 ton”. Amazing.
As for handling, have you driven the latest Silverado? The feel from the steering is nice, good feed back and easy to handle. Braking is pretty impressive, if memory serves me correct, 60-0 in 133 feet. Not saying driving like an idiot is ok by the way. And yes, a 3000 pound payload is a little scary in a 1/2 ton, but its done all the time.
Finally, 22″ rims do not belong on a truck, unless it is a “road tractor”….
It’s really unfortunate that the issues have become so politicized. If we continue to bash each other over political stupidity, we all lose.
Aesop said “united we stand, divided we fall.” This basic concept is that unless the people are united and one people, it is easy to destroy them. This is a counter to the maxim “divide and rule.”
Patrick Henry used the phrase in his last public speech, given in March 1799, in which he denounced The Kentucky and Virginia Resolutions. Clasping his hands and waving his body back and forth, Henry declaimed, “Let us trust God, and our better judgment to set us right hereafter. United we stand, divided we fall. Let us not split into factions which must destroy that union upon which our existence hangs.”
“Pinko tree-huggers” and “thick-skulled rednecks” pay the same price for a gallon of gas today.
Unfortunately, there isn’t a simple solution to the “gas price problem” because there isn’t a simple cause.
Pick your villain, there are plenty, but no one person or group is completely responsible for this mess, it took all of us.
Singling out a company to boycott their branded products will only work if it means we’re actually buying less product. For example, if we just switch from Exxon to Shell and buy the same amount of gas it won’t affect the supply situation, and won’t have a noticable effect on prices. Think it through, if Exxon is selling less product at their retail locations and have a surplus of product, they’ll sell it to Shell, if that’s where we’re buying it from instead. Who suffers? Not Exxon, just the (legal) immigrant family who runs the local Exxon franchise (and has his children running the cash register, unpaid, and the family all live in the store and sleep on the floor in the store, to save rent money…)
Reduced consumption of fossil fuels, especially petroleum, will ease the pressure, but even that only postpones the inevitable rise in cost due to diminishing supply. Increased production will accelerate the process in the long term, because crude oil is a finite commodity, we’ve already used up at least half of all that ever existed, there haven’t been ANY new oil field finds in over 50 years (Bakken was discovered in the 1930s!!!), and, despite crackpot theories to the contrary, it isn’t being produced naturally today; and even if it was, we’re burning it up at a rate more than 400 times faster than it took to form (look it up).
For a lot of reasons, we need to get off our dependance on petroleum. That’s just one.
I’m a “futurist.” I always have been, and I’ve seen a lot of this coming, for decades. This stuff doesn’t come off the top of my head, I’ve been mulling it over for years. I’ve done what I can do to make sure I’m on the side trying to make things better, not worse. To that end, starting my “cabin scooter” discussion group was one of many, many efforts I’ve been involved in: for another example, earlier this year, I sent messages to 73 US Senators and 312 US Representatives with respect to promoting energy conservation… that was in March.
I got back about 15 replies, most with the same content- “people (that is, Americans) won’t want to conserve if it means driving less or driving slower or buying smaller cars.”
“Diss” them all you like, the politicians know their constituents.
The price of crude continued to rise since then, by July demand actually started to ease, but the price of crude didn’t slip much until Senator Warner (R-VA) and a few others (on both ends of the political spectrum) started talking about a national speed limit to enforce conservation (as well as some other idiot schemes that I won’t get into). Maybe it would have dropped anyway, a number of pundits predicted it would (but, of course, an equal number predicted it would continue to rise).
Predictable, of course. Americans (and I’m as bad as anyone, but I have the spine to admit it) don’t like anything or anyone that interferes with their “God-Given Right to Squander Resources.” The “I’ll use as much gas as I want to drive my 10 mpg gas hog as much as I want because I can afford it” mentality still thrives. We’ll see how that holds up when (not if, but when) we have to cope with gasoline rationing. One tank a week, most could adapt, but what if it’s 20 gallons a week, or 10?
In my case, a tank a week I can do comfortably, as long as I can “carry over” unused ration credits week-to-week (the Buick has a 14 gallon tank). 20 gallons a week, again as long as I can “carry over” unused ration points, actually puts me in a surplus situation (I can gas up the Buick as well as put some in the minivan). 10 gallons a week? Ouch! Doable, survivable, barely, but still- Ouch! and still requires the “carry over” feature.
For those who think they “need” more than 20 gallons a week, they can buy my surplus “carry over” ration points. I’ll want twice the going pump price… if you think you can do better, try eBay.
Long-term, and I’m talking about beyond my natural lifetime, we are really going to really need electric vehicles, with either energized roadways that we can tap for power (massive capital expense in infrastructure), or much superior batteries or energy storage (more expensive cars for the individual, not so much capital expense for infrastructure), or a mix of the two. Two promising examples of practical, (almost) usable, (nearly) affordable electric vehicles (maxiscooters) available NOW are the $12,000 Vectrix and the $4,500 XM 3500. Except for range, the Vectrix could keep up with my 1978 Vespa, at 1/3 the price of the Vectrix the slightly less capable XM 3500 is something I could live with.
In the interim, we do need an energy-intensive, “renewable” liquid fuel to replace gasoline and/or diesel (I like CNG because it burns cleaner than gasoline, most existing “Otto cycle” {gasoline} ICE engines can be adapted to use it, and we have a respectable reserve of natural gas; but I don’t like the idea of 150 million CNG fuel tanks careening around our highways).
Ethanol from corn hasn’t proven to be cost-effective, but ethanol from other feedstocks like sugar beets, algae, and switchgrass may work out more economically. Personally I prefer butanol (or propanol) as a replacement for gasoline (closer to gasoline in BTU content than ethanol, can be used in most existing EFI vehicles without modification, not as reactive with plastics or rubber as ethanol, less miscible in water than ethanol so the process of refining is simpler).
And we’re going to need more efficient internal combustion engines, more efficient transmissions and drivetrains, more efficient tires and more efficient use of aerodynamics in vehicle design. I’d buy another copy of Walter Korff’s 1980 book “Designing Tomorrow’s Cars” and mail it to Bob Lutz if I thought he’d actually lower himself to reading it.
For a single-seat or two-seat commuter vehicle capable of freeway speeds, I believe 300 mpg is possible and doable in a realistic timeframe.
Good grief, I have a viable design out on the patio as I type this, a 1981 Freeway, I could simply clone it, or even upgrade it, and have them in production here in this city before snow hits, we might even be able to get some of the obvious “bugs” worked out in that timeframe, I just seem to be lacking one well-heeled “angel investor” to bankroll the project. With GM’s resources I’m surprised they haven’t got one running already.
Done with the soapbox. Go back to the futility of pointlessly bashing each other.
Beau
Nice soapbox. What we need is to let the free market work. We don’t need CAFE regs and we don’t need emissions regulations of CO2. These contradictory regulations have trade-offs which constrain manufacturers ability to increase fuel economy.
The govt should be focusing lifting bans on energy production to increase supply and regulating rampant speculation driving up the price.
What they are doing is seeing if they can push the American electorate around.
Edwin
I have to disagree. As much as I dislike government standards, the CAFE requirements worked. Car companies would still be making 5,000 lb gas-guzzling sedans without CAFE- oh, wait, they found a way to do that, by calling them “SUVs…”
After the CAFE standards became effective, fuel economy actually dropped- until 1990.
Rather than pushing for higher and higher economy standards, automobile manufacturers lobbied to “freeze” the standards; at about that time, they also began pushing light trucks, which didn’t have to meet the higher standards for cars. It was a loophole that car (more accurately, “light truck”) manufacturers were more than eager to exploit, and they did.
I never believed light trucks should meet a lower standard, and I still don’t. An SUV is a big, heavy CAR. A pickup used to haul kids and dogs and groceries is a CAR.
I also don’t care for the E85 loophole. It allows a 10 mpg truck to be rated better than a 50 mpg car.
Well, the chickens have come home to roost, and “car” manufacturers have lots of gas-guzzling light trucks they can’t give away.
As far as the “market correction” working, if people could always be relied on to make rational choices, there would be no drug addiction or alcohol abuse, and police wouldn’t collect speeding fines.
We’re addicted to oil, and we need to get off of it.
An idea I’ve suggested (to my US Senators and House Representative) is a higher tax on larger quantities of gas. For example, the first 20 gallons a week would be priced according to current market value, but more than that would be subject to another $2 per gallon tax.
Oh, but how do we track who buys what?
Have you ever gone to one of those gas stations where the pump asks you if you’re a “rewards customer?” You slide the “rewards card” and get a small discount on the gas you buy.
Same idea. You’d get a DOE-issued “rewards card” and swipe it before you buy gas. Works with credit/debit as well as cash purchases, rebates the tax on the first 20 gallons.
It could actually be incorporated into your drivers license.
I test-drove a cool electric maxiscooter this weekend, I’ve been anxious to see them. Goes 55 mph, has a 75 mile range (at 25 mph). Costs $4,500. I think the $14,000, 4-seat electric car is very, very close, but I don’t think it’s coming from GM.
Typo in previous post, should have been “fuel consumption actually dropped.”
Rum Doodle,
Sure there may be a lot of petroleum but that is only HALF the picture. Its not just about cheap available energy. Its about the impacts of use of that energy and obtaining that resource. It would be just as easy to build power plants to produce and bottle hydrogen or hydrogen derivatives (such as natrual gas, methane and ethane). Of all of them natural gas makes a lot of sense.
Additionally simply drilling for more oil causes a few other problems like what to do with the rest of the waste byproducts of the refinement process. At some point I would hope common sense or some widsom would chime in and people realize that they can’t use oil forever. How many more tons of it will need to be pumped before people realize we have an energy addiction and that some thought of how to use it needs to be done.
A agree $50.00 a barrel is very unrealistic. Additionally as prices go toward $6.50 and $7.00 a gallon other fuels will be more economical (mainly hydrogen which is infinitely renewable when produced with nuclear power).
I say let the prices go where they will. In the mean time I hope someone is working hard for more fuel efficient engines, better cars and a social/mass transit system that will alleviate the addition to the auto in geographical areas where possible. Maybe my idea is a bit unrealistic but it certainly sounds better then wripping the planet apart for fuel to drive around 50 year old technology. But what do I know.
Nate
Charlie H,
Be Prepared AMEN!!!
Thats what amazes me about the country and the auto industry they appear to have little to no forsight all in the name of profits.
I hope they wake up soon.
Nate
Edwin,
I agree on the speculator bill idea… But let’s be realistic if we are going to let the market do its thing. Then shouldnt we leave the speculators speculate? Afterall isn’t the American way to let those who can, do? Meaning that apperently the speculators have gotten away with it and made a fortune so good for them thats what capitalism is all about. Its just our own stupid faults for not finding another market alternative?
As for the bans, I hope they never get lifted. Not because I hate oil, but because I think anytime money is involved people become corrupt, companies cut corners and accidents happen. Additionally I can’t see supporting the idea of expending more resources and energy unneccisarily without vehicles that get better fuel economy. Why splurge such a hard to get resource out of self interest and greed alone?
If oil were easy to make we’d be doing it. But its not and for that reason I dont’ see why people are so dumb, deaf, ignorant and blind about splurging it on SUVs and other vehicles that dont’ get better then 30 MPG highway. Maybe I’ve missed something but wouldn’t the right thing to do be to conserve the resource and make it last as long as possible?
Using water sensibly doesn’t impact the environment. But define sensibly? Contaminating water with heavy metals and other contaminants that the ecosystem can’t filter out is not good either. And certainly no company will want to pay to be environmentally responsible. I agree more nuclear plants are needed. and at least 1-2 more refineries (for now). Again I think a shift in thinking is more important then simply burning through more fuel without control…. it reminds me of a kid in a candy store eating everything in sight… the parents are there telling the kid he needs to eat good food but the kid doesnt’ care and won’t liste… a parent is needed to put the kid back in check… I think the energy industry is in a similar situation. The US public is the kid in the candy store with little to no self control.
The main issue with water is the cost associated with importing it. Why doesnt’ the midwest bring water in from the atlantic and pacific oceans, purify it and use that? Why even worry about drought in a country when there are oceans everywhere? My guess is that purifying that much sea water to pump half way accross the continent is to expensive.
The major issue with energy is population growth. Populations grow with available resources and shrink when they are scarce.. how big can the US grow before we have serious problems?
Just my thoughts.
Nate
Brad Turley,
In a country where the Auto industry seems to sell vehicles to sell vehicles. Do you really expect any company to make a car or truck that will last 30 years? Most companies expect drives to drive 40-60K miles or maybe 100K at most with their cars… after that its out of sight out of mind.
In engineering we often have that problem. Aircraft are a great example. There are planes that are 60+ years old and still flying. There are two main reasons 1) maintenance, 2) availability of parts. Also aircraft are actually designed more around function then form. If the auto industry would do that cars would be appliances for function and would all look very similar. They also could easily be run for 30+ years.
I don’t quite understand why thing aren’t this way but I doubt 2% of car buyers plan on owning their vehicle 1/2 to 1/3 a lifetime. That seems to be a very old school mentality by my standards (though I almost agree with it).
Also a 3000 lb payload while exceeding the Gross vehicle weight is probably within safety margins assuming the tires can handle it. Does a truck pulling a 3000 lbs trailer need trailer brakes?
Nate
Beaugrand,
You make several excelent points. Though how can we prove how much oil there is or was and how long it took to generate?
As an engineer about all I can think of is how much energy it takes to store that…. make an assumption for the amount of light available to produce plant life, correct for atmospheric losses, estimate an efficiency loss in the photosynthesis to oil process and figure out a ball park amount of formation time per mass unit. Slightly helpful but not what I’d call an exact science. Though I suppose it is accurate enough, more accurate the people probably give it credit for.
You are absolutely right Americans dont want to conserve. We are on a vacation of lifestyle (as compared to the past 2000 years). Never before in history has energy been so easily and cheaply available. Imagine removing it from the picture…. we’d be back to driving horses again.
Gas rationing won’t ever be an issue however. Because we’ll have converted to an alternative like hydrogen generated from nuclear long before that.
150 million CNG tanks aren’t an issue if there is a little tighter regulation on their maintenance. there are probably millions of propane and acetylene tanks floating around and they are fine. If you have seen the DOT testing of CNG tanks and Hydrogen tanks you probably wouldn’t’ be so worried. In some regard they are safer then liquid fuels.
CNG is probably the single best alternative available right now since it is available now and also available by chemical processing of hydrogen and carbon (thus made from electricity supplied by nuclear energy).
As it is though we burn to much in power plants that COULD be going to cars. To bad there aren’t any new nuclear plants scheduled to reduce the load on fossil fueled plants. All thats needed is a bit of gov’t thinking and action for once.
There is a car out there that you’d probably like :
http://www.aptera.com/
Its really not hard to design aerodynamic cars with higher efficiency today. But no one would buy them because they cost a lot to build for a relatively low usability return. Additionally people for some reason don’t’ like the way they look.
As an Aerospace engineer I can tell you that aside from supersonic aircraft and computer simulation programs not much has changed in the field of low speed aerodynamics since WWII. So we’ve HAD the knowledge for the past 60+ years and done next to nothing with it. Awesome!!
Nate
Edwin,
Respectfully I must ask if you have any science training or background at all?
Are you serious the free market work? The free market reacts slower then slow. By the time the free market figures things out we’ll already have run out of fuel or be paying 20/gallon.
The problem is in infrastructure. Or lack of proper planning of one. Sure if gas hit 20/gallon some startup companies would have new solutions but would it work? Would the big companies already have adapted?
I guess what you are talking about is a rate of change of things. And I suppose at present things are going well.. by the time gas prices go up to 10/gallon GM will have figured something out and will be marketing that. In the mean time how bad can we screw up the environment?
Sorry CAFE is a great idea because until we realize we’ve pumped the last drop of oil on earth the price of gas wont’ go up past maybe 200/barrel. Because we think we’ve got plenty and therefore no reason to change…. who are the smart people warning of short supply that no one will believe? Sound like a repeat of history… isn’t there always someone warning the people who wont’ believe them?
One thing is for sure, we wont’ run out in the next 5 years. But I don’t know about the next 50 or 500.
Nate
Beau,
Take a moment. Your analysis is flawed. Gov’t regulations are not the solution to the problem, gov’t regulations are the problem in this instance. The reason the auto makers sell so many SUVs has little to do with the auto makers, .besides that the public likes them. The reason SUVs rose as a percent of the market is not the automakers doing. Its fault of consumer groups and government, the same bunch of complainers who enact punitive regulations and high taxes on U.S business. More goverment regulations force consumers to buy SUVs. One is more stringent car seat regulations, another example is the tax break given to businesses for buying vehicles that weigh 6,000 pounds. Another problem is emmissions regulations which run contradictory to the automakers’ goals of raisng fuel efficiency. Emissions regulations achieve little except to run up the costs. Europe isn’t burdened so much with that particular regulation but has other problems of its own. Still another is crash test/ safety regulations which increase vehicle weight. The effectiveness of these types of regulations when applied marketwide is questionable, since different size vehicles have different safety records and may vary based on the type of vehicle with which it impacts. It would be far better to the automakers freed to make market decisions.
The result of the the swamp of contractictory gov’t regulations is obvious. The pro-regulatory politics of the anti-business lobby in the U.S. is a problem.
The automakers continue to offer vehicles with higher fuel economy without gov’t regulations and have the best technology without gov’t regulations. CAFE is a failed policy. As you noted the averages dropped with government interference in the free market. The automakers invented safety, on their own. Its in their best interest to have well built safe highways and vehicles. Thats their business, they’re is little need for such excessive gov’t interference. Product liability issues take care of themselves in a free market.
The automakers have proposed changes in regulations, and worked to have the CAFE by vehicle type to level the playing field and to free them to achieve results without interference. What you term a loophole is not a loophole at all, it levels the playing field in the market place. Each class of vehicle must have a separate set of goals in order for such a regulation to have a meaningful effect. GM vehicles are more often the best in class in fuel efficiency.
CAFE is not the answer though. CAFE is an interference which has inhibited the implementation of innovation. CAFE has historically burdened investment not created any. CAFE is a punitive type of regulation which has not worked and created market distortions, it only serves political egos.
Lets more away the a world of punitive regulations on business innovation and toward one where business is rewarded for success. The U.S. Congress has become one of the most anti-business entities in the world. Its bows the whims of anti-business lobby groups who for the most part have not done much innovation themselves.
Investment and incentives are a better approach. Thus, in some cases deregulation works best.
The swamp of contradictory regulations should be repealed and let the free market function.
Gov’t regulations and prohibitions are run amuck these days and have caused market distortions in many areas.
Beau,
The U.S government’s high taxes on business and contradictory tax code created the problem of high U.S corporate debt, undervalued equites, and run away health care costs, jeopardizing the U.S economy. Its generally the same bunch of anti-business Congressmen that have driven away U.S. jobs.
U.S. companies have been forced to borrow to cover the rising costs of health benefits during down times.
Higher taxes are not the solution, higher taxes are the problem. Since when has the gov’t ever lowered spending growth or revenue confiscation from the American people. A little more taxes are never enough. Interest costs keep rising. The gov’t can collect more revenue from a vibrant economy than it can from one that is over-taxed. Further, its not the gov’t place to be telling people kind of spending habits to have and so on. The Congress was denied the power to regulate personal spending habits, called sumptuary power, at the by the Consitution Convention in 1787 by a near unanimous vote.
Instead of helping business, the complainers want to compel employers to do this or that, worsening the situation.
Instead of a gov’t takeover of healthcare, the gov’t should incentivize fully funded Voluntary Employee Benefit Associations (VEBA) – 509c3 organizations – that could function like endowments – marketwide so that insurers would have bid or compete for the business in order to lower costs. This way, businesses would be freed from the health care cost burden in the U.S.
The U.S is a free market, not a centrally planned Soviet bureaucracy as some in Congress seem to think.
Nate
Respectfully, I don’t “need” to prove how oil was formed, since I am neither geologist nor chemical engineer; but I do have access to information about contemporary scientific theories about the formation of crude oil, as do you, and I’m not about to be drawn into non-scientific speculation about anything.
My latest reading indicates that: the quantity of crude oil we consume in a year took well over 400 years of biological growth to make (Look It Up!!!), that this formation was a geological event some hundreds of millions of years ago, and that it is not an on-going process at present. That’s a fairly long-winded way of saying it’s a finite quantity; this is reinforced by the fact that NO major discoveries have been made in the past 50 years. There is no evidence at all- NONE, only wild, baseless speculation- that crude oil is being formed today, and no basis for any explanation of any natural process that would make it possible.
We’re running out of oil. Any planning that ignores that fact will cause disaster.
As far as CNG in car fuel tanks, it isn’t so much the tanks themselves that concern me, it’s the track record of 40,000+ automobile fatalities in the US every year (equivalent to the death toll of a fairly large war), and the generally very poor skill level of the typical North American “4 wheeler” (car) driver that makes me squeamish; and the fact that companies like GM are more than happy to put powerful, dangerous vehicles in the hands of such an unskilled set of consumers. People may like to think their SUVs are “safer,” but in fact they have a greater potential for causing injury or death to others than a “conventional” sedan.
With respect to CNG safety: I can’t see arguing against higher CAFE standards but for tighter CNG tank protocols. Getting EPA and DOT to sign off on CNG safety is going to require some political horse-trading, and I suspect it’s going to come down to giving in a bit on the higher fuel economy standards if the industry wants to convert to CNG en masse.
The Aptera is interesting, but it’s going to be too expensive for what I assume the intended target market to be. They’ll sell a few to “early adopters,” but whether that will be enough to cover development costs will be the real question; development time for the Aptera has been just as long as for a “clean sheet of paper” Chevy design. The projects I have in mind could be brought into production in a matter of months, not years, and the final product would be price-competitive with a 5-10 year old mid-size American sedan.
Considering the huge impact gasoline consumption and pricing causes the economy, both global and national, I see some kind of gas rationing plan to enforce conservation as inevitable. Bob Lutz himself has stated he favors higher gasoline taxes; while I dislike giving the government any more money from taxes, it may come to something like that.
My concept of adding tax to gas purchases over a specific amount per driver per week (e.g., $2.00 per gallon for purchases over the 20 gallon “base” weekly allotment) avoids an across-the-board gas tax increase (such as favored by Mr Lutz) but also avoids outright rationing. The technology to do this is already in place and needs no new, expensive bureaucracy to implement; it could happen in months.
I don’t think it’s possible to please everyone, but the very next best thing is to avoid favoritism and piss ‘em all off- err, I meant to say “share the pain.”
Nate,
Its pretty well documented that the US has plenty of fuel supply to last practically indefinitely, not to mention biofuels and nuclearpower. Oil shale, coal gasification, domestic drilling are all available. Congressional testimony and the Saudi’s have placed the actual market price of oil at around $60. E-85 is competitive at $45/barrel.
Supply is not the problem, the problem is the U.S Congress. And we know which party is against more energy production for America now don’t we.
No need for rationing, no need for more regulations, no need for more taxes. No need for CAFE, no need to regulate CO2. Marxism is a failure all over the planet.
Dear Mr. Lutz,
I was lucky to see you on TV today talking about the quality of the new GM autos – My husband loves his new Cadillac CTS and we certainly agreed with you, that is, until a wheel sensor failed. He took the car to our local dealer where it’s been since 06/10/08. We’ve been told on several occasions the part has been located, etc., but 8 weeks later we still don’t have his car back. Of course we’ve talked with service, locally and in Detroit with no resolution. We’ve researched all options, but we have come up empty-handed.
Unfortunately, GM still has a way to go.
Nate,
Just to nit pick, it seems alot of people have problems with my name. It is Brady, not Brad. I have not quite figured out what was so complicated about the name, but everyone mis-pronounces it or mis-types it. Brady is probably one of the most famous names out there(TV show, and many athletes share this name). Not coming down on you about it, but once in awhile I have to say it.
I do expect that whatever vehicle I am buying is going to last 30 some years. Thats why whatever it is I buy is usually front engine, rwd v8. I know its going to come down to maintence, and probably and engine, tranny, and rear-end replacement, but I have no problem with that. To me, these vehicles are easy to service, and those replacements can be done in a short amount of time. I bought the truck I did because I never plan to sell it. In fact, I have documented all the factory marks that in 30 years, I can go through a restore it back to factory conditions. As for trailer brakes, it would depend on the situation. For me, if im just heading down back roads and rural roads, then at that weight Im not worried about them. If its a long haul, or down heavy traffic, then they are a must.
Mr Wagoner and Mr. Lutz:
Update the turnaround plan:
*SELL SAAB and OPEL at a premium now: With the Euro trading higher, GM should sell Saab Opel at a premium, get out of Europe, and focus on the U.S, Australia, and Asia markets.
*REBUILD GM customer LOYALTY:
*FAMILY PURCHASE PLAN special: If family members buy a total of three GM vehicles at one time receive a special disount or free OnStar for ten years. If family members buy four GM vehicles then they receive something free.
*TWO for ONE sale: If someone buys a new Chevy SUV give them a free AVEO or a gas card. The idea is to have a gift with purchase marketing strategy that benefits the consumer.
*Let GM credit card points be applied to ONSTAR renewal.
*Buy a new SUV and receive a family Disney vacation special.
NEW PRODUCT:
*Focus on have a tiered product line that offers LUXURY sedans and coupes. Hit Lexus and Mercedes and take their business. A return to GM styling like the Malibu is what we’ve been asking for all along. A classic revival a GM. The Camaro is just the beginning. A new Riviera will bring them in. The 1977 Grand Prix and Cutlass Supreme looks will bring them in. The mid-size coupes and sedans need better looks. As you can see, good looking LUXURY cars sell. Transaction prices on Malibus are up, that proves it.
*Give Cadillac a four cyclinder and a new small V-8. Target rising professionals and upper class youth. Thats what your foreign competition does.
*MAKE MORE CUTs on HEALTH CARE: GM should do even more cost cutting on health care. Its better to have an across the board 50 percent cut in health care now than to cut a talented workforce. Perhaps offer stock options in lieu of health care. Make the health cuts now. The company may need to cut retiree health as much as it takes. Time to give it back to Uncle Sam and make the health care cuts.
The health care industry has ridiculous prices and over board standards of care. A CAT scan can costs $2,100 to $4,000. Generic anti-biotics run $25 pill. Hospital medicine is breaking America’s companies. This is not GM’s fault or responsibility.
Many companies contribute little or nothing for employee health care. Some salaried employees in other companies pay large premiums out of pocket for their health care and they are just happy to have a job in this economy. GM is a generous company, but past company planners didn’t foresee health costs rising exponentially. Legal and medical reform are certainly needed in the U.S.
Rum Doodle/Nate:
The high temperature fuel cell (HTFC) method for recovery of oil shale and oil sands substantially reduces costs without harming the environment. This new method injects steam without the need for bring in water. Geothermic fuel cells can produce oil and suplus electricity at the same time, 100 kwh of electricity produced for every barrel recovered significantly reduces the cost of oil shale and oil sands recovery. Its a win win with lower costs and its environmentally friendly.
HTFC method, geothermic fuel cells, reduce the estimated cost of a barrel of oil from shale to as low as $10 per barrel through the surplus electricity and gas produced from employing the method.
The U.S has more oil shale than the Middle East has oil. Not to mention ethanol is competitive at $45/ barrel. With the use of the HTFC method, the price of domestic oil from US oil shale and Canadian oil sands will be less than Middle East oil. The estimates as low as $10 per barrel.
Its only a matter of time. There is hope and a virtually unlimited supply of fuel.
Besides a Flex Fuel SUV uses less gas than a sub-compact car.
There are safe technologies for Nuclear waste disposal today.
While the increase in gasoline prices appears to be the issue that has brought all domestic makers to their knees, there is another problem that has been perculating for decades: our declining buyer demographics. When the sub-prime mess hit, too many of our buyers were taken out of the market. They can’t buy Chevrolets, Fords, Chryslers or Hondas. They don’t have savings, they are very concerned about paying their bills, they have little or no equity in their homes and they are out of the market.
We have relied on what Chevrolet dealers call “get me done” buyers for too long. Read the Fortune article entitled “Will this Customer Sink Your Stock”. Fact is, some customers are valuable assets and others are not. Tracking and reaching out to better educated, younger, higher income buyers is the critical success factor in any industry – especially ours. High gasoline prices affect everyone but the high quality buyer just buys a smaller but still high status vehicle. The low quality buyer leaves the market.
Edwin said: “This new method injects steam without the need for bring in water.”
Correct me if I’m wrong here Edwin, but steam IS water. It’s just a different phase. Whether ice (solid), water (liquid), or steam (gaseous), it’s all “dihydrogen monoxide”
“The U.S has more oil shale than the Middle East has oil.”
True. But one big problem with oil shale is that it is really uncompleted liquid petroleum. It is about halfway on the process of algae, proto-algae, and dead plankton completing the several million year conversion process from organic matter to liquid petroleum. If we could afford to wait several million years, that oil shale would gradually change to liquid petroleum by itself. Unfortunately, it takes a lot of energy to speed up what should be a slow natural process.
I’ll tell you what else is wrong – you keep allowing the beancounters to make decisions about content, and they have no responsibility for sales, marketability, performance, or revenue. Only cost. If Bo and his henchmen had their way completely, you’d still be building the “cheap knobs fall off interiors” of the 80’s. Who is watching over that group to make sure you guys don’t continue down the path of cost based decisions that are penny wise and pound foolish? Why do they have so much power over the real car guys at GM?
to Mr. Bob Lutz and GM
I have the formula to bring GM out of the hole, its easy. SLV = Super Lightweight Vehicles. Oil goes up Vehicle weights must go down. I understand that alternative fuels and green this and that are futuristics goals in order to depend less on oil, and I’m not saying that GM is not in the wrong track. BUUUUT the future is unpredictable who know’s what kind of fuel’s are going to make it at the end, besides theres no infrastructure now to support any other fuel other than Oil. Hell wen I go to the country a majority of what i see is corn, but I haven’t seen many bioDisel pump’s anywhere not to mention electrical power stations to plug in electric cars, especially with all these power outages.
Really is simple guys have yours best engineers work on ways to make super lightweight Vehicles, and if you need help ask NASA, the military or see what other countries are doing, if money is the issue get the government to subsidize, ask bill gates.
I Know that American’s like big cars and that has been the American way, No problem supper lightweight materials, carbon fiber, super plastics, see whats out there. don’t have it make it. European, and other countries have had high gas prices thus there small size vehicles, small turbo charge engines,
I’m not going to give a big lecture of what everybody knows but come on, how much energy does it take to move an object? well every one knows the answer, it depends on how much mass there is to move right. OK enough said about that. Nonetheless I know that if GM some how would make these vehicles a reality then MPG would not be a problem not to mention electrical usage on the other platforms.
So GM I challenge you to make these SLV bring back the “can” in American, but do it now don’t make the mistake and wait to mobilize the solution. the platform is SLV so put whatever powerplant you want. Trust me you can’t go wrong.
I wish you all the best of luck.
Rum Doodle,
Maybe it was the typo. The high temperature fuel cell (HTFC) extraction method does not need to tap sources of water, since the method self generates steam from heat. This method negates the concern of a water shortage. This new method is environmently safe for extracting oil from shale or from oil sands. It reduces the cost of a barrel of oil and generates surplus electricity. Estimates place it at around $10/barrel for oil from shale using this method. The U.S and Canada have more oil in shale and oil sands than the Middle East.
Jose Reyes,
Like the term SLV. The auto companies know how to make light weight vehicles, but then the gov’t has the crash test regulations, not to mention super light weight materials can be more costly. Contradictory regulations have made a mess of the market place. The gov’t needs to get out of the regulation business and let the auto companies to make vehicles.
The government tries to follow consuemer demands, and the consumers wanted a car they could crash into a tree at 80 mph and walk away safe, because after all its not the consumers fault they got in an accident… Take away the mentally challegened drivers and you can have lighter cars.
Edwin
I understand that the gov’t has set some regulations on safety, I think thats good, however I honestly think that GM can shed some pounds off their vehicles, GM can use the same plastics that there using now, just use more. The outside shell could be composed of light weight plastics and have the steel cage for the passenger safety. its used all the time in the racing industry, I see some awful crashes that race drivers come out unharmed, the car is destroyed but their ok. I truly believe that these big huge heavy vehicles with enormous engines where obsolete a long time ago.
I’m definitely pro doing away from oil dependence but as of right now the only thing I’m sure needs to be done is the reduction of weight, and size, by doing so MPG will only improve, thus making the car more appealing to the customers.
Water, aka “dihydrogen monoxide,” HH-O, would actually be hydrogen hydroxide, H-OH. Surprised nobody else caught that. It’s the very property of water that allows acids to be so easily dissolved in it.
Collision “crush zones” don’t need to be heavy, they can be made with composite/foam/composite sandwich construction (for speed and economy of fabrication, foam can be injected between layers of composites; as used in many other applications, composites [reinforced plastic] can be molded). Such sandwich structures can absorb a great deal of impact energy; it should be possible soon to fabricate entire monocoque bodies in this manner.
“a Flex Fuel SUV uses less gas than a sub-compact car. ”
What nonsense. An SUV uses more FUEL to move than a sub-compact car. It uses less GASOLINE if it’s Flex-Fuel equipped, and it’s rated by the amount of GASOLINE it consumes, not ethanol, so the FlexFuel SUVs look really good in comparison to other kinds of vehicles, if you look only at the amount of GASOLINE they use.
FlexFuel is a gimmick, a loophole that allows companies that lack the will to create real innovation, to continue to sell oversized, overweight, inefficient, outdated vehicles.
“Taller” final drive ratios, more gears (6-speed, 7 speed) in the transmission (plus 2- and 3-speed rear axles on the heavier trucks), variable valve timing, variable displacement, MILLER CYCLE engines, lower rolling resistance tires and BETTER AERODYNAMICS will produce better results than tax schemes/publicity stunts like FlexFuel.
If GM wants to be on the side that fixes the banking/credit/mortgage crisis, extend the warranty to cover the term of the original loan, and make it transferable. 5-year warranties for 5-year loans, but extended 7-year warranties for 7-year loans…
Beaugrand,
Personally I wish someone could prove how oil was formed. Because until we are able to replicate the process in the lab (and thus eventually outside the lab in production) oil is a finite resource. Theories are just that… theories… they may or may not have been proven. Generally though in my everyday experience the word theory means that someone has an idea that hasnt’ been proven. Being 100% certain is important when talking about how oil is made and how much exists etc.. Estimates are great but often wrong. Therefore I like to be conservative.
Actually figuring out how much oil (and thus energy) we use can tell us how long it takes to make or replenish. This is a fairly simple calculation in my opinion as satellite data from NASA gives us a good idea of the energy density of the solar rays that hit the upper atmosphere. Additionally NASA tracks the heating and cooling of the earth with their satellites. Given that and some surface data and a little bit of orbital mechanics we should be able to predict the Net amount of energy flux at the surface which would then be usable by plants to photosynthesize our eventual fuels. 400 years.. could be. I’d have to see the calculations or at least read a creditable source.
I agree evidence is needed of the formation of crude. However the swamps could be the closest thing out there.
CNG is safe enough. And you are right in Germany they require more testing to allow a person to drive (or so I’m told). Additionally flying an airplane requires a lot of training. If 1/3 that training were put into driver’s training the road would be safer. However, this can’t cover the fact that people are people an a large majority can’t think much beyond their own noses. Take a look around its scary.
I don’t see how CNG has a bearing on CAFE. Personally I think CAFE should cover CNG as well and be based on Killo Watt consumption of energy (or BTUs which ever system you prefer). EPA and DOT signing off on CNG saftey shouldn’t be to big a hassle, not nearly as much as the infrastructure (which will also involve EPA and DOT).
I don’t see why fuel economy needs to suffer with CNG. Do you have any technical basis for this beside the fact that by the gallon CNG may (or may not) contain as much energy as gasoline?
I stand firm in the fact that fuel sources should be sold in terms of BTU content or KW-H content. When I buy fuel I wan to buy x number of killo watts or BTUs or KBTUs. Gallons to me is a useless and out dated measure. In a world where chemistry is a common science and computers are already at every gas pump… dispensing the energy source of choice as enery/dollar or dollar/energy should be an easy step…. except explaining it to the uneducated masses.. but they already buy electricity in KWs so why not fuel for their car. It also keeps overall prices of energy easier to compare.
The Aptera is expensive. But to me its an example of what can be done with today’s technology using WWII aerodynamics information. The drag coefficient on the Aptera must be decent with the shape its got. Compared to today’s cars at least.
The real problem is the material processing fees and the fact that people want to recover their investment in it. Another similar example is the SMART car. The fuel efficiency isn’t bad but its 14K new around my area. For the same money I can get a brand new Toyota Yaris which is a bigger car and gets maybe 3 MPG less… The Aptera will share the same problem. The cost of the materials to make any vehicle that weighs 1000 lbs will eventually become a problem.
Keep in mind development time is also a function of budget and talent. The Aptera was probably brought to market in the same time and on a fraction of the budget GM uses.
Well I’d love to hear your idea your projects that don’t take as long.
I think CAFE WITH fuel TAX is the way to go. The Gov’t needs to help shift the fuel source to something that will last for another 100 + years (nuclear powered hydrogen/natural gas maybe??). And CAFE will encourage companies to make better cars. Free market may work but its going to take a long while. And I always wonder if it weren’t for the EPA (a form of checks and balances for the country) would cars ever have been made cleaner? Or would the whole US be a SMOG zone like Pittsburgh or Los Angeles.
Edwin,
The US may have plenty of fuel. But the issue is responsible consumption. Something I think the US isn’t doing right now.
Isn’t the ACTUAL market price what oil companies are buying it at? Even so I think $60.00 is to cheap. and $45 for E-85 isn’t directly comparable. One is crude the other is refined fuel. There are some big issues with E-85 to be fixed yet too.
There is nothing wrong with Congress keeping the US from squandering its resources. The only energy production I favor right now is Natural gas, hydrogen, and Nuclear power. Anything else is just a waste of our resources in my opinion.
How about a little good old fashion common sense, thinking and personal responsibility. How about holding people responsible for how much they drive. The idea that if they can afford it they can use as much as they want is ridiculous to me. But even so the system balances itself in the end… the end just may not be pretty.
So do you suggest we lift all EPA restrictions, all CAFE and let people do whatever they want?
That to me is as stupid as removing the requirement for a driver’s license, pilot’s license, minimum drinking age, allowing drinking while driving etc…
As for the CO2 restriction.. I thought the problem was CO not CO2. CO2 is usable by plants… so if we make a lot of it we just suffocate until the plants can reprocess and store it all again. I have no problem with people suffocating because of their own ignorance.
Nate
Beaugrand,
See below:
Dihydrogen Monoxide
nate
I agree with your statement of wanting to know how oil was formed. I often wondered myself if we could produce our own oil. It would seem that if it can happen naturally, we can make it happen un-naturally, but maybe thats just one of things we were never intended to find out.
~ “It would seem that if it can happen naturally, we can make it happen un-naturally, but maybe thats just one of things we were never intended to find out.”
Brady,
We can make oil “unnaturally.” The problem is it takes a tremendous amount of energy to speed up a process that Mother Nature does for free with millions of years of heat and high pressure.
For example, there are two ways of making liquid fuel from corn:
1. Bury the corn and wait about 170 million years.
2. Use lots of energy to compress those millions of years into the few months from spring planting to fall harvest and distilling.
Riiight.
“Just a Theory.” Do a google search and you’ll find hundreds of references to how petroleum was produced naturally, it isn’t a secret. The theories are well-established, they’ve withstood the test of time and scrutiny and peer review, and they’re generally accepted as fact by anyone with a lick of sense and some small understanding of scientific method. Also they work to help discover sources of petroleum.
No one has ever discovered a drop of oil made by any speculative “ongoing” process. That’s kind of what matters- there is not the slightest evidence that petroleum is being produced, anywhere on the globe, at the present time. The only oil ever discovered was located in EXACTLY the kinds of geological formations predicted by “only a theory.”
Here’s an experiment- plant your bare foot on the wet ground and stick a finger in a “live” light socket. Electricity is “only a theory,” right? It’s just somebody’s wild guess, right? So you can’t really predict the outcome- right?
I’ve personally never seen an electron. I have no doubt they exist, because the theories predict they do, and all the experimental evidence supports the theory. But hey, maybe all those scientists and engineers have it wrong, and you have it right, so go ahead and test the “theory.”
I’m reasonably sure the engineers and geologists and scientists have this crude oil theory figured correctly, or close enough to work, so I’ll stick by a century of results, and ignore the unsupported speculations of an uninformed ‘fringe” element.
Oil is finite. We’re using it up, and there is no cheap, easy replacement.
I recently talked to the police sargent who bought my 1985 Nissan Sentra a few years ago, it’s still running like a champ and still getting 40 mpg on the highway.
Well, while I’m not sure what all goes into making oil, but if what we need is a giant hole and some soil to cover and put pressure on it, then we can make it in Kansas. In southeast Kansas there are tons of strip pits. Add in all the “ingredients” needed to make oil, go down to Northeast Oklahoma and take all the limestone and other stuff those heaping piles of dirt are made from and drop it on top. They are closing off that part of Oklahoma anyways and the government wants to do something with the soil, it makes sense. BTW this is all off the top of my head, so it may not even be plauseable. Do we know it takes millions of years to make oil, or did it just take us awhile to find it?
Or if all else fails, find a way to crush and contain the ingredients and use the deepest parts of the ocean to do the work.
“Keep in mind development time is also a function of budget and talent. The Aptera was probably brought to market in the same time and on a fraction of the budget GM uses.
“Well I’d love to hear your idea your projects that don’t take as long. ”
Prototypes already exist.
Frame made of welded steel tube, 2-piece fiberglass body; single seat design (could be “stretched” to tandem seat), 12- 20 hp, 300-500cc off-the-shelf engine, 100 mpg @ 60 mph, snowmobile CVT transmission, 850 lb curb weight. Essentially, a weatherproof motorcycle for 3-1/2 season commuting. It’s designed for solo or “2-up” commuting, not hauling; if you need a grocery hauler or seating for 3+ you need a “car” (or, my preference, a minivan), but this kind of commuter would handle 90+% of my needs, for the rest I have an old Trans Sport. I wish the top came off the Trans Sport so I could haul taller stuff…
3 months to fabricate molds for the body parts. Lots of machine shops and metal fabricating shops looking for work around here, a surplus of skilled and semi-skilled labor, hungry for jobs, I could still be shipping product before snow falls.
Beaugrand
Sounds good in theory, but what happens when things break? Wheres the warrenty? What happens when someone wrecks and dies and they say it was your design fault? There are many more things to worry about in todays market besides “just build it.”
~ “Do we know it takes millions of years to make oil, or did it just take us awhile to find it?”
Yes Brady, oil geologists are pretty sure of that. The oil we use today originated with the Carboniferous Period of the Paleozoic Era. That was about 360 to 280 million years ago.
What’s scary is that in just a bit more than one hundred years, we’ve managed to use at least half of all that oil it took Mother Nature 300 million years to make.
“Sounds good in theory, but what happens when things break? Wheres the warrenty?”
Major components- engine, transmission, frame, body, would be purchased from outside vendors (just the way the big companies do) and would be warranted by those companies.
” What happens when someone wrecks and dies and they say it was your design fault?”
The same as any other manufacturer (and a big part of the reason why the direct competition is likely to come from offshore); the “burden of proof” is on the plaintiff, but the manufacturer has to legally defend the product. It’s a risk any startup business has to plan for.
“There are many more things to worry about in todays market besides ‘just build it.’”
Yes, and congratulations for defining the reasons for the massive exodus of manufacturing jobs offshore.
For that reason I’m looking into having them built in India or China, instead of here in the US. I’d rather build them here, but too many people here fixate on the negatives, while offshore companies appreciate the opportunities.
As long as you can defend it, then there shouldn’t be a problem…just a sue happy America to deal with.
Jay Draiman says
BOYCOTT ALL CARS THAT ARE LESS THAN 100 MPG
Do you want to see a quick resolution to the energy crisis?
The public should boycott from purchasing any vehicle that is less than 100 mpg.
That is surely to grab the automobile industry attention worldwide to produce an energy efficient car that does 100 mpg or better on alternative energy – the vehicle must be pollution free.
“The ‘big three’ is not the ‘big three’ anymore,” Iacocca told National Public Radio, referring to the falling sales of General Motors, Ford, and Chrysler. “[They] didn’t adapt quickly enough to the energy problem in this country [and were] not ready with the right kind of cars.”
Any big corporation that is too bureaucratic and cumbersome to quickly react to changing market conditions is doomed to failure.
In today’s fast moving market conditions and technology – you must be innovative, utilize the cutting edge of technology and produce a quality and economical product.
The public has a short memory, all they care is what have you done for me lately.
In life we must always live in hope.
Jay Draiman
“BOYCOTT ALL CARS THAT ARE LESS THAN 100 MPG”
umm yeah, great idea…. I mean the automakers don’t need revenue to fund the R & D that goes into it. The R & D workers are glad to work for free to develop this technology. And, of course, those who work at dealerships are also glad to stop working and accumulate massive debt while everyone waits for the 100 mpg car. Matter of fact, all of those thousands (maybe millions) of people who’s jobs depend on automobile manufacturing would be happy to go un-employed…