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Car Talk
Posted by Stephen Green  ·  22 March 2005

GM has a problem. Hell, GM has a lot of problems. The first problem is, not even Oprah Winfrey could build any excitement for Pontiac's new G6:

As evidence of the car's meager performance, auto experts note that the world's largest automaker has dramatically ramped up rebates on the car just to get it selling at modest levels. The automaker offered more than $3,600 in incentives on it last month, and it sold less than half of what the Grand Am was averaging per month.

This, just months after Oprah gave 200 of them away in an hour-long publicity/marketing stunt watched by millions of people, and read about by millions more.

However, GM's problems aren't limited to a struggling start for a single model. Down the road, they face a bigger hurdle:

In an internal memo last week, GM product chief Robert Lutz told employees that "until further notice," the automaker has stopped plans to introduce a new line of rear-wheel drive passenger cars that were scheduled to debut in North America by 2008.

Why is a RWD product delay a big deal? In one word: Power.

American drivers want more power. Asian drivers want more power. Even European drivers want more power. There comes a point, however, where you just can't put any more power through the drive train of a front wheel drive vehicle. Get too much over 200 horses, and torque steer becomes a serious problem. For automakers looking to sell more, and more powerful, cars with big power plants and fat profit margins (like the drool-worthy RWD Chrysler 300C), they have to switch back to Rear Wheel Drive platforms.

All that power comes at a price, too. Not just in developing fancier engines, but also in keeping emissions down and fuel economy up. And, oh yeah – beefier frames to handle all the high-powered stress. In short, if an automaker wants to increase, or even maintain, its profits and market share, it has to be in the game right now.

As already mentioned, Chrysler is already playing, and playing well. Ford, except for the new Mustang (ten years late, if you ask me), seems to have given up the fight. The Ford Five Hundred is a fine car, but bland and underpowered. Chevy is trying, really trying, with a slew of sporty SS models – but not one of them compares to sportier near-lux models from their Japanese competitors. In fact, the Japanese are so far ahead, they now have their sites set on dethroning BMW's venerable 3-series.

Fact is, if you want a performance sedan, you aren't looking at Ford at all, and the pickings aren't terribly much better at GM.

I don't know what the solution is to GM's problems, but I do know that delaying new RWD models is not the answer.

Comments

Unless it's to make bigger, badder, meaner SUVs. Oops... I forgot, we're talking about GM here. it doesn't matter what they build, they've always sucked and always will.

Every few years I find myself driving a GM for one reason or another, and end up disliking the experience as much as I did the time before. Other than the Cadillac SUV or Corvette lines, I would never consider a GM.

Is it just me, or do the new Caddies look like hip-hop-pimp mobiles?

Posted by: Remy at March 22, 2005 11:00 PM

I grew up in a Chevy/Olds family, so I should have been inclined to stay with it, but GM's product offerings have been so dull that I've barely looked at any of their models sine I traded my '81 Cutlass in on a '87 Daytona Shelby. Alas, since then their offerings (in my price range) have all been as snooze worthy.

Posted by: RPD at March 22, 2005 11:37 PM


GM's problem is that they believe power and efficiency are diametrically opposed.

Meanwhile, Toyota is about to introduce the Lexus 400h luxury hybrid that has more power (and faster 0-60 times) than the all-gas version, yet still get 30 mpg.

Soon to follow is a massively powerful Toyota full-sized hybrid truck that also happens to have massively better mileage than any GM truck.

Toyota is single-handedly giving consumers power and efficiency. As well as style. How can GM compete with that?

GM's problem? Lack of creative and a "more of the same because we don't like to think different" engineering attitude. In other words, it's the we-sent-men-to-the-moon-and-back-but-making-a-full-sized-powerful-SUV-that-gets-40mpg-is-totally-impossible school of thought leading the company down the drain.

Posted by: Paul at March 23, 2005 03:09 AM

The best value for money 4 door RWD sedans IN THE WORLD are made in Australia. Ford & Holden (owned by GM) produce great family cars.

These same cars are the basis for a very strong performance car range for each marque.

Tell your bloody auto unions to pull their heads in, and allow Aussie expertise to provide some fun to your markets.

By the way, the "new" GTO was "dumbed down" to suit US tastes.

Posted by: DaveACT at March 23, 2005 04:18 AM

Yes, Americans want rear drive and lots of power, now. Uh, except for that $2.20/gallon fuel this month (and possibly $4.00 within a few years).

With lead times for new models in the auto industry, a prospective new robust rear drive high powered platform will come to market in a very different world, and may well flop.

Most of the mainstream cars from Japan and Europe are somewhat fuel efficient, although their makers are part of the recent power wars. Even the lower-powered models are generally both useful and fun to drive, while GM still has a lot of clunky, stodgy, truck-like vehicles. Just try shopping for a CAR at most GM (or Ford) dealerships, the salesmen try to move you into truck and SUVs where they are at less of a disadvantage.

Bob Lutz's GM Fastlane blog commenters all whoop and holler for a new Camaro, or SS, or whatever, looking backward to the sixties glory days. But GM and Ford have to remake themselves to compete ten years from now, when those would look like foolish choices given prevailing fuel prices, costs to own and operate, and environmental concerns.

Posted by: Seppo at March 23, 2005 06:56 AM

Pontiac has a new RWD car this year... it's the GTO. Of course they had to import it from Australia... it's the Holden Monaro.

There of course are other advantages to RWD. The car is more balanced from left to right, so your center of turn feels more natural.

The design tends to be more simplistic as well (read easier to repair... and not as likely to break) because not as much crap is stuffed in one place.

And let's not forget "lock-in"...mmmmm.

Posted by: Nick at March 23, 2005 07:28 AM

against my better judgement i bought one american car and found it to be a complete lemon. i swore off american cars. then in a weak moment i gave them another chance and bought another one and paid heavily for what proved to be utter stupidity. i got more service out of them than i would have because my father was a mechanic. gm has in large part brought their troubles on themselves due to their poor quality design and parts. our honda is running every bit as well as it did 10 years ago and i don't find nuts, bolts, or pieces of plastic on the floor or driveway every time i get in to drive it. (i also live in snow country and we like the fwd on the slick and snowy roads.) during the 04 campaign when the 'detroit constituency' was going blue because of jobs, i thought the republicans should've just told the carmakers to MAKE BETTER CARS and eliminate a big part of the problem---duh.

Posted by: molloy at March 23, 2005 10:29 AM

The G6 debacle is emblematic of the problems with American cars in general and GM in particular. Is there anything that even resembles a sports car on the market anymore that's even remotely affordable? The Corvette is now HAND-MADE. Ooooohhh. Punch me. Add another $30k to the cost for nothing in the way of benefit. The Grand Am was Pontiac's best selling car -- and they ditch it for the G6, which is bland. The GTO is a horrible replacement for the Firebird -- it looks like a Ford Escort with RWD. GM's complete refusal to market the F-Body (Firebird and Camaro) line of RWD sports cars that got decent gas mileage, were relatively affordable, and, moreover, were headturners (I still get stopped and complimented on my Trans Am WS6) destroyed the market for those cars and, for me at least, ended the run of the only decent cars from an American manufacturer.

Posted by: ProCynic at March 23, 2005 10:37 AM

Seems to be a blog of the misinformed consumers.

Faultless Toyota can't seem to get gas mileage claims right on the hybrids. Prius in real world driving gets ~40 mpg, not 50-60 as advertised. I'll bet the 400h gets less than 30 mpg (the green-minded consumer will HAVE to use the gas pedal to merge on the highway or be flattened by a semi). GM's full sized HYBRID Trucks and SUVs will arrive before and outpreform Toyotas new Tundra (and Tundra hybrid if they make one). I don't know why "massivley powerful" precedes someone's description of the Tundra, as it will, like always, be underpowered compared to Chevy's/GMCs. The chevy small block is lengendary for a reason.

What's next, Toyota builds an engine that runs off baby-skulls but will be O.K. because it's Toyota, and they are saving gas? Oh ya, and has anyone heard of the 3-5 people that have been electrocuted inside a crashed Prius when the jaws-of-life accidently cut the ground cable in the A-pillar trying to free the victim? Look for Toyota (as a brand which is already #7, i.e. not including Lexus) quality ranking to drop because of the many complaints they received about the Prius not getting advertised gas mileage. And they don't lump POS Scion in the Toyota overall (including Lexus) quality rankings, but they include their overall sales. Hmmm.

BTW, the GTO was not "dumbed down" for the US. Besides the new front fascia, LHD, and reconfiguration of the gas tank to meet US safety standards, it's essentially the same.

And I'm sorry, anyone who calls GMs new designs bland and boring (have you seen the Sky/Aura???) must have been blinded by the giant bloated jellybean shaped applicance with Camry badging driving down the road. You don't put spoilers on kitchen appliances, so why does the Camry/ES300 have one?

Posted by: Chris at March 23, 2005 10:41 AM

About the G6 debacle, it's not that the car is bad, it's that GM marketing has their heads up their rear.

Bonehead move 1: 60% of Grand Am sales were 4 cyl models. G6 has no 4-cyl for a few months, no coupe for a few months, and no convertible till next year. The line up is staggard for some dumb reason, so obviously the G6 sales won't compare to Grand Am sales and it's generating negative G6 press.

Bonehead move 2, Oprah's show didn't coincided with the G6 launch. It was a great marketing ploy and got the name out, but when people when to see one at the dealerships, there was no G6. Production had just started, and most cars were going to GM's engineering fleet. Since all features are the car are forgettable except the sunroof, most people forgot about it.

Bonehead move 3. It was overpriced. Rebates were built into the price and consumers were not fooled. When building and comparing midsized sedans online, the G6 (because of high MSRP) wasn't even considered even though overall transaction cost would have been lower than a similarly equipped Altima, Accord, etc.

Bonehead move 4: The G6 has been recalled....FOR AN OWNERS MANUAL MISPRINT. I mean come-on...more negative G6 press.

Apparently it takes a rocket scientist to see why the G6 isn't selling, and GM does not employ rocket scientists in the marketing division.

When in the automotive business you can't forget the golden rule: The customer is always right.

Posted by: Chris at March 23, 2005 10:50 AM

"Seems to be a blog of the misinformed consumers."

I think the only one misinformed is Chris' post. Let's do some fisking.

"Faultless Toyota can't seem to get gas mileage claims right on the hybrids. Prius in real world driving gets ~40 mpg, not 50-60 as advertised."

Hello! The mileage claim comes from the EPA, which unfortunately has never tested cars for real to determine the gas mileage of every vehicle. In fact, the EPA relies on a mathematical formula that's more than 20 years old.

Now this seem kinds nonsensical, but guess who is most resistant about the EPA updating their formulas to reflect modern cars? Here's a hint: it's the car companies that have dramatically increased horsepower but have done nothing to increase efficiency.

So stop trying to blame Toyota for having to use EPA mileage numbers. You want Toyota to use real-world mileage numbers? Why don't you ask GM, then, to also use real-world numbers and watch as their mileage goes even lower than the EPA numbers.

Secondly, the Prius gets better than 40 mpg real-world. Yes, it's true the prius doesn't get 60 mpg in the real world, but check the blogs of numerous Prius owners and you'll note that most get about 50 mpg real world. That's a damn lot better than anything GM can hope to achieve.

" I'll bet the 400h gets less than 30 mpg (the green-minded consumer will HAVE to use the gas pedal to merge on the highway or be flattened by a semi)."

Hello! The 400H has FASTER 0 to 60 acceleration than the all-gas 400. The reason why? Electric motors get INSTANT torque! Going from zero torque to max torque in a split second = faster acceleration times. The problem with old electrics is that the automakers relied on off-the-shelf electric motors that didn't have the kind of power output you needed in a car. Toyota solved this by developing high power, high voltage motors SPECIFICALLY designed for auto applications. The result? A hybrid SUV that performs better than an all-gas SUV. The 400h hybrid has a 0-60 time of about 6.9 seconds, btw, with 268 hp. It's disingenuous and misinformation to say that you would get "flattened" in high traffic when performance is more than adequate. But it's this kind of dismissive, wool-over-one's-eyes attitude that has stopped GM from seeing the threat from Toyota (Toyota is about to become the world's biggest car maker).

"GM's full sized HYBRID Trucks and SUVs will arrive before and outpreform Toyotas new Tundra (and Tundra hybrid if they make one)."

First of all, GM's "hybrid" trucks are "fake" hybrids. If you are nice, they are called "mild" hybrids. The electric motor mostly provides high-voltage power to plug in your power tools at a construction stop, not to power the vehicle. And the results show, as GM's "mybrids" get a measily 2 mpg better mileage than the all gas versions.

Secondly, the Tundra is a mid-size truck and not meant to compete with the heavy duty trucks. But Toyota is comitted to hybrids and they've already given glimpses via the FTX concept of what a heavy-duty hybrid will look like. And when a truck based on the FTX comes out, GM is going to be in even bigger trouble as they won't have usually reliable truck sales to fall back on.

"What's next, Toyota builds an engine that runs off baby-skulls but will be O.K. because it's Toyota, and they are saving gas?"

Oh please. "Baby skull" powered cars from Toyota? Are you trying to say there's something bad about offering more efficient cars without sacrificing power? Or are you trotting the typical GM line that efficiency is somehow a bad thing because of the conventional wisdom that it saps power?

"Oh ya, and has anyone heard of the 3-5 people that have been electrocuted inside a crashed Prius when the jaws-of-life accidently cut the ground cable in the A-pillar trying to free the victim?"

You heard? Links please.

And if you want to talk about potential electrocution, maybe you should ask how money auto deaths results specifically from rollovers by SUVs? Or how many deaths resulted from an SUV crashing into a smaller car? Or how many deaths resulted from fires or explosions as a result of crashes?

"3-5" people got electocuted? Without context, that's like saying, "Thousands haved died from airline crashes." But guess what? Traveling by plane is many times safer than taking a drive to the supermarket, statistically speaking.

"Look for Toyota (as a brand which is already #7, i.e. not including Lexus) quality ranking to drop because of the many complaints they received about the Prius not getting advertised gas mileage."

Again, Toyota goes by the EPA mileage estimates just like any other car manufuacturers. Why don't you write GM to stop trying to undermine attempts to update the mileage formulation then?

"And they don't lump POS Scion in the Toyota overall (including Lexus) quality rankings, but they include their overall sales. Hmmm."

Toyota is about to eclipse GM in total overall sales. What is your point?

"BTW, the GTO was not "dumbed down" for the US. Besides the new front fascia, LHD, and reconfiguration of the gas tank to meet US safety standards, it's essentially the same."

I personally don't care about the GTO. In fact, there's a report out today that Pontiac is one of GM's damaged brands due to lack of investment on GM's part, and there's a real chance it will go the way of Oldsmobile due to GM's decades long downward spiral of mismanagement and lack of innovative foresight.

http://biz.yahoo.com/rb/050323/autos_gm_sales_2.html

"You don't put spoilers on kitchen appliances, so why does the Camry/ES300 have one?"

And I suppose spoilers is going to save GM from itself. Right.

Sorry, I'm not buying your non-sensical defense of GM. GM is suffering for a reason, and unless they wake up and stop lying to themselves, the company will continue to lose marketshare.

Posted by: Paul at March 23, 2005 02:55 PM

Chris and Paul,
You can even forget about the inflated EPA estimates. When you take into consideration the energy required to produce the Lithium Ion batteries in the Hybrid vehicles, you drop the true equivalent gas mileage of a Prius by ANOTHER 15 to 20 mpg.
That's right, the actual gas mileage of a Prius is 25 to 30mpg.
Look at it this way, Imagine if you bought a car with a 1000 gallon "hybrid" gas tank full of gasoline.
Then, when you drove around, it would contribute 15 gallons of "Hybrid" gasoline for every 50 gallons of pump gasoline you used.
You'd find that your pump gasoline utilization was pretty good, but you would be ignoring the energy used to construct the "hybrid" system.
It is nothing short of fraud on the part of the hybrid car builders...

Posted by: j.pickens at March 23, 2005 06:37 PM

What I think your forgetting Stephen is that GM and Ford are not just GM and Ford. They are huge conglomerates. GM's high powered cars are Saabs and Cadillacs.

For Ford, its high powered cars are the Mazda RX-8, Mustang and any Jaguar, Land Rover or Aston Martin.

Ford and GM have plenty of high-powered cars, just under a different brand name. This isn't anything new nor restricted to U.S. companies. Toyota created its own brand for its luxury cars (Lexus) instead of keeping its real name Altezza. It all about marketing.

Posted by: Tom at March 23, 2005 06:47 PM

While I'm not going to nitpick your post like you did mine, much of my context was lost in your nitpicking.

I'm not returning to the Hybrid discussion, but the GM Hybrids I was referring to were the next gen trucksSUVs due at the end of this year. They are full Hybrids, not Mild Hybrids, and yes I agree, the Mild Hybrids are a sorry excuse for Hybrids. You're basically paying $3000 extra for an electrical outlet in the back.

I know the EPA sets gas mileage ESTIMATES, not the manufacturer. However, when the EPAs estimates are, say, 10% off on regular cars and 30% off on Hybrids, people who don't know about geometric averages are going to complain. If your car reported "gallonage" (gallons used per 100 miles) it would be a lot more accurate than MPG.

My point about merging was someone who is trying to get 35 mpg in the 400h will be reluctant to floor the gas pedal, as their milage will go down.

The current Tundra is a full size truck, even though dimension wise it may be more inline with the midsizes. Tacoma = midsize.

And my point about Toyota and sales is Toyota shouldn't be able to say they make all these vehicles, but only have their quality ranking based off a portion of sales. It had nothing to do with total sales, rather Toyota plays games with quality numbers.

I don't care enough to argue these points to death. I was mearly providing another, more balanced view.

And I'm sure google will turn something up about the Prius and the ground cable incident. I saw it on the news. I'm not a link conisseur.

Posted by: Chris at March 23, 2005 10:45 PM

Chris,

Thanks for explaining, I understand your perspective better now.

That being said, I still think GM has a lot more falling to do before they see the light and start turning things around. I place much of the blame on the short-sighted "leadership" of Bob Lutz, whose claim to CEO-ship is a talent for talking big about mostly nothing.

Now Ford, I believe will begin experiencing much better fortunes in a year or two. And at least Ford tries respectably hard, even though its Jaguar investment still has to pay off.

Still, Toyota deserves all the sales it's getting right now. It took some pretty big gambles when the rest of the industry was saying "no way" and now it's reaping the rewards.

Sometimes, American companies need to learn a lesson the hard way to realize that they've been delinquent.


Posted by: Paul at March 23, 2005 11:01 PM


J.

First of all, none of the hybrids use lithium-ion batteries (they use nickel metal hydride). So you got that fact wrong right there.

Secondly, where are you getting the mileage estimates that supposedly factor in the cost of production of the batteries. I hope you're not just pulling numbers out of the air.

It's definitely true that the total environmental cost of operating an all-hydrogen vehicle is greater than running an all-gas vehicle right now, but you gave some pretty specific claims about the cost of producing batteries.

Thirdly, producing batteries for hybrids is not exactly new technology. Billions of standard ead-acid batteries, which are far more dangerous to the environment than NiMH batteries are produced for regular cars, but I doubt that the cost of producing lead acids is accounted for in the mileage estimates of all-gas cars, either.

And if you want to argue "total" costs, then how about factoring in the health costs due to increase asthma and rheumatoid conditions that are generated by all the nitrous oxides and particulate matter that all-gas cars emit, compared to virtually nothing in Toyota's hybrids? There's a reason why those hybrids are classified as Ultra-Low-Emissions-Vehicles.

Again, Toyota is, for the first time in automative history, offering efficiency and power together. Yet we get the curious Dinosaurian response that high-performance efficiency is somehow "bad" for consumers and people are being "duped" into buying hybrids.

But you know, people were resistant to power steering for many years because it "separated" the driver from the car.

It's time for American companies to wake up and stop fighting change. Nothing could be better for GM than to produce a production-quality H2 that pulls more load and does 0-60 a full second faster than the current gas guzzler, but still gets 30 mpg.

But I see, GM has already decided such a Hummer would have no market demand, and thus technically impossible and instead offers up poor excuses for why they can't do it. That's the kind of engineering attitude that builds winners like the Aztek for you!

Posted by: Paul at March 24, 2005 12:42 AM



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