Writing in his Fastlane Blog, GM Car Czar Bob Lutz recently claimed that proposals to raise Corporate Average Fuel Economy (CAFE) standards by four percent per year would “effectively hand the truck and SUV market over to the imports, particularly the Japanese, who have earned years of accumulated credits from their fleets of formerly very small cars." Wrong. First, CAFE credits were never transferable between cars and light trucks. Second, as of ’07, light truck CAFE standards are gone; replaced by target mileage figures based on a vehicle’s footprint. Third, even when there WERE such things as CAFE credits for light trucks, Toyota, Honda and Nissan never used them. Fourth, Bob Lutz is an idiot.
Some time ago, we pointed out that an auto industry executive who can’t name Volkswagen’s brands wasn’t an ideal choice for Vice Chairman of Global Product Development. We’ve also chronicled the numerous occasions when Maximum Bob’s betrayed his firmly held belief that firmly held beliefs trump reality, even when they don’t. And now he’s taking on both environmentalists and the federal government without having a clue what he’s talking about.
It’s hard to believe that this uninformed loose cannon was hired to be GM’s “car guy”: the man charged with lifting GM’s products from their fug of mediocrity into a brave new world of stunning design, peerless powertrains and world class interiors. Feel free to debate Lutz’ handiwork thus far, but I reckon the majority of The General’s new products continue down the path marked not-quite, me-too, also-ran, we’re getting there, you just wait and WTF. The fact that GM’s Car Czar is still around to say stupid things on his blog (and in the media) says bad things about CEO Rick Wagoner’s management skills.
If you’re wondering why Wagoner lets Lutz get away with spouting politically incorrect nonsense, it’s because what Lutz says, others think. Face it: GM’s Board of Bystanders doesn’t pay an employee over $6m per year and give him his very own blog if his opinions fly in the face of his equally well-compensated peers. So when Bob gripes that more stringent CAFE standards would put domestic manufacturers “at odds with the desires of most of our customers, namely larger vehicles,” you can bet that the “bigger is better” mantra is alive and well at RenCen.
Yes, despite resurgent environmentalism and the effects of the Iraq war on the American motorist’s psyche (i.e. increasing their concern about fuel consumption), Maximum Bob’s mob continues to believe that U.S. consumers want the biggest damn vehicle they can afford, period. In Bob’s world, it’s all about size: “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.”
Bob believes that CAFE regulations are a government plot to thwart the will of the American people and shoehorn them into uncomfortable cars. Bob’s subsequent proposition– higher gas prices are a fairer and more compelling way to get Americans to drive “very small cars”– is not without merit. Of course, MB quickly assures his readers that he’s not advocating higher gas prices. No, bio-fuels are the “real way to save fuel”– until GM can realize the “electrification” of its vehicles (which, presumably, the government won’t encourage force anyone to buy).
According to Maximum Bob, as long as gas costs around $2 a gallon, “people will exercise their freedom to buy the vehicle they want, V8 engine and all.” In other words, Americans are selfish bastards who will buy gas-guzzling land yachts– unless they can’t afford to. Even if you agree with this sentiment and reject my depiction of MB as a clueless blowhard whose ideas date back to the days when Detroit dismissed small (yes small) imported cars as “Jap crap,” you have to admit that he’s making all the wrong noises.
The question is, who’s listening? The comments immediately following Bob’s post indicate he’s preaching to the choir. Our own ThriftyTechie spoke for many: “Couldn’t have said it better myself.” But after Bob’s message hit the mainstream media, the comments grow more… impatient. “Quit whining,” Chris R chides. “GM should be faster to market with products that people want to buy.” As GM’s PR bouncers pre-approve all published comments, one wonders how many more vitriolic reactions were swept under the e-rug. Plenty, I’d guess.
But again, the more important audience for Bob’s “Season’s rantings” lies within GM. If GM’s Car Czar can slam CAFE standards with irrational, bellicose, self-righteous and petulant impunity, in public, what effect does his anti-efficiency argument have on the thousands of designers, engineers, pencil pushers and bean counters further down the GM food chain? With Maximum Bob Lutz calling the shots for GM's product portfolio, The General doesn't have a hope in Hell of pulling itself out of its current tailspin. Blog that Bob.
[Click here for "Season's Rantings" on GM's Fastlane blog.]
128 Comments on “General Motors Death Watch 105: Bob Lutz Screws the Pooch...”
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I dont remember the exact circumstances, but in the early ’70s, there was a convention of auto manufacturers concerning the upcoming emission laws. The domestics stomped their feet, booed, said there is no way they could meet these new standards.
A representative from HONDA stood up, and said..”Yes, WE CAN”, and the Civic CVCC appeared shortly thereafter.
The more things change..well, you all know the rest.
It is very hard to have any sort of compassion for GM and their troubles when they are being run by a fool who is too old to be relevant…
“Fourth, Bob Lutz is an idiot.”
Geez, RF tell us how you really feel!
Seriously, I think it’s beneath you to resort to name calling. You can certainly say his position is idiotic.
I just don’t want this to become like Autoblog, where it seems like the inmates run the asylum. So far you and your crew have done a commendable job.
winswords:
I thought long and hard about whether or not to call Mr. Lutz an idiot. I played with "ignoramus," "delusional" and many other adjectives (including, I admit, "moron").
But an idiot is as an idiot does. A highly paid corporate executive working for a public company who feels free to lambaste federal regulations without bothering to check his basic facts is certainly acting in an idiotic manner.
Sorry, but the truth hurts.
(PS TTAC rules for posting do not prohibit commentators from flaming third parties.)
definition of idiot:
Psychology. a person of the lowest order in a former classification of mental retardation, having a mental age of less than three years old and an intelligence quotient under 25.
Doesn’t calling someone this without proof leaves you open to a lawsuit?
wonder if Bob will sue TTAC?
Bring it on.
We should probably make up our minds. Do we want GM run by an MBA who took $9B out of annual costs to get the company to breakeven and has plans in place to take out an additional $9B? Or do we want GM run by a car guy who has rationalized product development to finally start producing world class product, but who occasionally spouts off?
Personally, I don’t care what Lutz says because it is irrelevant. What matters is whether the Enclave is better than the MDX. Whether the new CTS is better than the G35, and whether next year’s Malibu is better than a Camry.
Last time I looked, GM was run by the MBA.
Given the management of the 2.5, I fully expect Ford AND GM to declare bankruptcy and DCX to be sold to the highest bidder. The “me too” Edge will not save Ford, the 300C is looking more like a fluke than a sign that DCX finally “got it”, and GM is still banking on big SUVs as their product savior, completely ignoring the overall steady rise in gas prices and consumer movement away from big SUVs.
These companies offer textbook examples of poor management.
The current General Messup crew (executives, board of bystanders all) should be pensioned off, if GM has any chance in you-know-where of surviving.
Let’s see…. if I were king for a day….
I’d look at every vehicle line made, with fresh cars right off the line, parked next to the best competitor (ok, let’s be honest, most of the other cars would probably be Honda or Toyota brands).
I’d then take the super-secret figures for warrantee work on every car, paste it to the hood along with the estimated industry average and estimated warantee work provided for the best competitor (parked next to it). I’d also make sure to note which factories built which GM vehicles and look at the overall quality of work coming from them.
Then I’d bring in the crew of new executives and we’d look at every vehicle, drive every vehicle, look at the graphs and
DISCONTINUE probably 70% of the GM vehicle line-up, and close all of the less than stellar factories IMMEDIATELY.
I’d rationalize the vehicle line-ups, probably disposing of Pontiac, GMC and Saturn (which has continuously lost money), possibly also Buick (in the US, but not China).
I’d sell Saab off for $1 to anyone dumb enough to take it.
Then when the UAW screamed due to 60% of the plants being closed, I’d have enough cajones to say “OK, here’s the deal. You can have the jobs left over, or we’ll see if the CAW and GMDaewoo want them. Your call. Give me an answer in 5 minutes, or we close down all the US plants and move the production lines elsewhere, and if that happens, we’re simply going to tell the US public the truth about who said what in this meeting – and let them decide who to punish. And by the way, the jobs bank is done as of 10 minutes ago.”
And by the way, I also have more or less given up commenting at autoblog as I got tired of being flamed for having an opinion. In fact, I scarcely ever even go back for a look-see. I enjoy TTAC much more, and don’t get flamed for my opinions here.
A healthy debate is fine, even a spirited one. I enjoy reading other people’s opinions, even if I happen to disagree to the core.
But I got tired of being trashed elsewhere, so enjoy the civility here. Kudo’s, Robert.
It’s not that difficult to develop durable cars with comfortable interiors that get good mileage. I’m a rangy 6′3″ and drive a 1999 Saturn SL. The car cost $11k, is not cramped (not exactly spacious but not cramped), and I can squeeze 42 mpg hwy / 34 mpg city out of it. It now has 8 years and over 150k miles on it and still runs beautifully.
Where the heck is this car in GM’s lineup today? Cobalt/Ion costs more and doesn’t get nearly the mileage (and Ion has about the stupidest dash I’ve ever seen).
GM wasted all their R&D making nicer SUVs and let their cars languish. The SL was highly competitive against the Corolla (and the Civic when you figure in price). In recent years, the Corolla, Civic, and even the Korean compacts have improved by leaps and bounds, and GM has no hope whatsoever of competing. They are starting to improve their midsize lineup, but when you see billboards touting the Saturn Aura’s “amazing” 28 mpg, you just scratch your head in wonder.
So now GM is faced with Asian competition that makes 42 mpg, roomy small cars, and 35 mpg roomier midsizes, and all they can do is jump up and down about how unfair CAFE is when they should have seen this coming eons ago. Very, very sad.
A lot of folks talk about improving the GM line up, replacing the clunkers, and axing this brand and that, but isn't a real issue the lack of knowing what their customers want? How can you weild the axe when you don't understand how you're going to sell the ones you do retain?
Other brands may have the luxury of a certain niche, such as Porsche for performance or Subaru for affordable AWD and still others may have grown into them, like Toyota for reliable decent transportation.
I don't think GM has this outside of perhaps their truck market. They don't build a single car across their brands that speaks to what I'm looking for, and for that matter all of my friends in my age group as well. Caddy is probably the closest, but not close enough. Just a thought.
Lutz's paycheck has to really irk the UAW.
Lutz is not an idiot, he is just perceived to be an idiot because he possesses an MBA. Apparently all ya all dont have a MBA Decoder Ring or it doesnt have the latest firmware update with the Bob Lutz v3.2.7 specific code installed. (This ring is sometimes refered to as a Perception-to-Reality Converter.)
Allow Me:
“If GM doesnt sell high-margin Trucks/SUVs, GM will go out of business. GM cannot remain (become?) solvent in the low-margin car market.”
(The Lutz specific code also appends “2008 Toyota Tundra… Oh Shit” at the end of every translation.)
File under: defending myself.
I don’t agree with everything Mr. Lutz said and if his claims regarding Toyota’s CAFE credits are inaccurate, then it is deeply troubling that he is a high ranking auto exec.
I did agree with 2 of Mr. Lutz’ main points:
1. CAFE standards don’t work to reduce fuel consumption.
2. Raising fuel prices (i.e. gas tax) would simultaneously reduce fuel consumption and affect auto purchasing habits by encouraging sales of smaller/more efficient autos.
cykickspy
Truth is an absolute defense for libel or defamation lawsuits.
Kind of appropriate given this sites name. You don’t have to prove that Lutz is your dictionary definition of an “idiot”
Given Robert’s points, I think Lutz by most people would be judged an idiot for making those comments.
GM largely ignored the car market for the past 15+ years, while investing damn near everything into trucks and SUVs. They will now reap what they’ve sown.
Well Done Mr. Farago.
The most on-target statement of all the above is: …numerous occasions when Maximum Bob’s betrayed his firmly held belief that firmly held belief trumps reality, even when it doesn’t.
That explains so much that is wrong with GM (not to mention Ford, and even certain branches of US Government)… the unwillingness to comprehend reality that is staring them in the face – or kicking them in the ass. Sort of like “staying the course” despite the fact that there never was much thought or planning put into “the course” to begin with. Gasoline prices have been up, and causing pain in the average American family’s wallet for over five years now! Certainly that was enough lead time for GM to come up with a more compelling offering than Yet Another Yukon? Were are the hyper-efficient Hybrids or Diesels?
Yes, there will always be a customer looking for a big V-8, but that is not everyone Bob.
History has proven that America does not produce the most elegant or stylishly engineered products… BUT where we have always excelled is in winning through logistical superiority. The ability to produce something good enough, on a scale that makes it affordable. The Big 2.5 have squandered that legacy and have illustrated a complete and total idiocy (Farago was correct in his use of the word) by giving the majority of the market to the imports. Face it, Toyota and Honda have become what GM and Ford once were: the vendor of choice to the average American who wants to buy a quality vehicle.
GM & Ford have become merely the suppliers of Trucks and Rental Car Fleets. Hurry up and die already.
–chuck
I am not bothered by Bob lutz, or his pay check for that matter.
If bob can design cars that people buy.then i keep my pay check.
So far Bob has done allright in the design dept.A lot of his designs might not be everybodys cup of tea.
Let give Bob a little credit since he has come aboard GM vehicles have improved dramaticly in both design and reliability
Personally I have no use for the CAFE standards, but I would expect the top car guy at GM to be aware of how that all works (or doesn’t). The Cobalt is a perfect example of how undermanaging a product produces a mediocre product. The new SS has really nice Ricaro seats. It also has the corporate mags and sits about 4 inches too high on its’ wheels. It suffers from the massive torque steer that every GM front wheel drive product has suffered from for the last 20+ years. Every 20 something car guy snorts when he walks by it.
Maybe instead of worrying about what the new CAFE standards will do to his precious truck line, he ought to go back and look at what was developed on his watch. Otherwise, just cancel the whole damn car line and only build his beautiful trucks. And maybe his retro Camaro line. Which will probably have the quality interior and handling of the last one. Er.
Funnily enough a used 2 year old GTO is a hell of a buy on Ebay. The Audi like depreciation has done wonders for it.
Robert, hang in there. Lutz IS off.
(though do give Maureen Coyne, or whoever it was a break.)
Recall that Lutz was originally asked NOT to come in from his retirement, but rather to recommend a car-guy, a Bob Lutz-equivalent, to be for GM what Lutz had (perceived to have) been at post-Lido Chrysler, a gutsy champion of out-there cars like the Viper, an opponent of bureaucratic mediocrity.
So Bob Lutz sez I’ll do it myself, I’ll be your Bob Lutz.
But why was this necessary at all ?
THE ONE BIG WRONG THING about GM, and all the domestics, is that someone who knows, likes cars, is seen as this exotic outsider.
If those running GM, et al, don’t know the difference between MagnaSteer and Magna Steyr, don’t know about cars, don’t even like cars, fine.
But why wouldn’t they have long ago hired, not one, but about FOUR OR FIVE HUNDRED PEOPLE WHO DO ?
What kind of dinner would you get at a restaurant where the owner and cooks didn’t especially care for food ?
If everyone else can design a car that meet the CAFE and sell well (Toyota, Honda, VW, Nissan, etc) and only the 2.5 can’t, well, is it fair or is it just lack of investment/skill/management?
If a student never study during the school year and got an F, and complain about the F, what do you call that?
GM and Ford are not stupid or idiots, they just place the wrong bet and are taking the consequence (serve them right). It is just business, stop bitching and start designing cars that are worth buying.
Let’s see, 4% increase in fuel conomy for an SUV rated at 18 MPG combined would be….18.72 mpg. Even after 5 years, that would be 21.9 mpg. Let’s call it 22 mpg.
It’s not like we’re talking 30 mpg here, folks. Advances in electronic controls and fuel delivery could handle this without too much trouble.
The real culprit here is that real world horsepower figures have gone up dramatically in the past 10 years. We’ve seen the manufacturers plow their money into the horsepower wars and not efficiency.
The average truck in 1995 made 210 bhp from 5.7 liters. Now it has a 5.3 liter making 295 bhp, an increase of 40%. Gas mileage was 13/18 back then, and 16/20 now, an increase of 23% in city driving, maybe 12-13% in combined mpg.
By paring back weight, moving to a 6 or 7 speed auto, improved aerodynamics, and MAYBE dropping 20-25 bhp, they could probably meet the new rules. That’s assuming no no new tech breakthroughs or widening the use of hybrid powertrains.
What MB is really saying is that GM is unwilling to put money into improved efficiency becasue it would lower their profit margins on trucks.
Maybe Maximum Bob and the countless thousands of GM bureaucrats could spend their time meeting the new standards instead of wasting time and effort trying to defeat them. That’s exactly what Honda and Toyota did, and now they’re killing Detroit.
GM may also find that their protectionist dogma doesn’t play well with the millions of consumers who have bought and become loyal to their American-built Camrys, Accords, etc.
It’s a different world now, Bob. Come join us. To quote my favorite commie rapper, “Welcome to The Terrordome”.
If a student never study during the school year and got an F, and complain about the F, what do you call that?
A Sorority Girl.
2.5 has a *HUGE* liability called Retiree Benefits. The collapse of GM will be just like the collapse of the Soviet Union where the non-producers (Brats) overwhelmed the producers (Fools). Raising CAFE is likened to Ronald Reagans military buildup and will hasten GM collapse.
This post is among the most amusing things I have read on the topic. Great job, RF, and keep 'em coming!
Luther said:
The collapse of GM will be just like the collapse of the Soviet Union where the non-producers overwhelmed the producers.
So true and well said. Does that make Lutz an Andropov, or a Gorbachev? That destiny is his to choose I guess.
–chuck
This reminds me of when Iacocca was planning his retirement from Chrysler, the program to find his successor was codenamed ‘ABL’ – Anybody But Lutz. In an ironic case of deja vu, just like Henry Ford II hated Iacocca, so, too, did Iacocca hate Lutz.
So Lutz went from Chrysler to GM and is working his magic there. Unfortunately, he doesn’t seem to be nearly as successful as Iacocca when he moved from Ford to Chrysler. Maybe the folks at Chrysler got it right (at least about Lutz), after all.
Mikey – with all due respect, “improvement” is not a competitive metric. When people go to buy cars, they don’t compare the latest model with its prior iteration. They compare it with competing models with other manufacturers.
And this is the problem with GM, Ford and DCX. Yes, this year’s model may well be better than last year’s, but how does is stack up against the latest from Toyota, Honda, etc? All you need to do is look at the state of play and current trends to see how consumers are voting with their dollars.
1. Lutz was able to encourage the GM teams to develop the Solstice and this resulted in a car that sells well. Give him SOME credit for that.
2. I have been wondering if GM is ready to eat its hat for the the “30 models over 30 MPG” campaign after the new EPA changes hit. Has anyone seen what their hwy EPA mpg will be after the change? Considering how the numbers for that last campaign came in just over 30 by the skin of their brightly-bleached teeth, I don’t see how GM can promote fuel efficiency.
3. The big 2.5 have been cut slack BIG TIME for their E85 capability (FlexFuelVehicles). I don’t competely understand it, but it appears as if they are given credit for the mileage as if the FFVs were always burning E85. In other words, CAFE is not based on “miles per gallon of fuel,” but on “miles per gallon of gasoline or whatever our formulas say for non-gasoline, even if you are only theoretically not burning gasoline.” This CAFE method is used on all FFVs, EVEN if the vehicle is sold in a location that currently does not have E85 available and has no plans to ever have it available. [Please correct my understanding if it is not correct--CAFE is not straightforward!]
From
http://en.wikipedia.org/wiki/E85
The United States government corporate average fuel economy (CAFE) regulations are relaxed for FFV. For example, an FFV GMC Yukon is rated 33 mpg for CAFE purposes, when its EPA ratings are 15 mpg city, 20 mpg highway.]
Have we heard the manufacturers that do not offer FFVs complaining about the government handing free CAFE credits to the big 2.5? I haven’t.
KEEPAUSTINWEIRD
Good point,but you gota start somewhere.The latest models stack up quite well with Honda and Toyota.Car for car the comparison its not much of a spread.
RUDIGER
Wich particular model/models that Bob Lutz was responsible for are not sucessfull.
“Wrong. First, CAFE credits were never transferable between cars and light trucks. Second, as of ’07, light truck CAFE standards are gone; replaced by target mileage figures based on a vehicle’s footprint. Third, even when there WERE such things as CAFE credits for light trucks, Toyota, Honda and Nissan never used them. Fourth, Bob Lutz is an idiot.”
What are CAFE credits?
Manufacturers can earn CAFE “credits” to offset deficiencies in their CAFE performances. Specifically, when the average fuel economy of either the passenger car or light truck fleet for a particular model year exceeds the established standard, the manufacturer earns credits. The amount of credit a manufacturer earns is determined by multiplying the tenths of a mile per gallon that the manufacturer exceeded the CAFE standard in that model year by the amount of vehicles they manufactured in that model year. These credits can be applied to any three consecutive model years immediately prior to or subsequent to the model year in which the credits are earned. The credits earned and applied to the model years prior to the model year for which the credits are earned are termed “carry back” credits, while those applied to model years subsequent to the model year in which the credits are earned are known as “carry forward” credits. Failure to exercise carry forward credits within the three years immediately following the year in which they are earned will result in the forfeiture of those credits. Credits cannot be passed between manufacturers or between fleets, e.g., from domestic passenger cars to light trucks.
Nissan North America, Inc. (Nissan) filed a petition requesting exemption from the two-fleet rule for the 2006-2010 model years. The two-fleet rule, which is contained in the corporate average fuel economy (CAFE) statute, requires that a manufacturer divide its passenger automobiles into two fleets, a domestically-manufactured fleet and a non-domestically manufactured fleet, and ensure that each fleet separately meets the CAFE standards for passenger automobiles.
Nissan filed the petition because a change under the statute in the treatment of value added to a vehicle in Mexico will cause one of that company’s passenger automobiles, which is manufactured in Mexico, to be reclassified from non-domestic to domestic. The loss of these automobiles, which are relatively fuel-efficient, will cause its non-domestic fleet to fail to comply with the CAFE standards for passenger automobiles.
http://www.nhtsa.gov/cars/rules/CAFE/Rulemaking/NissanPetition2004.htm
ASIAN IMPORTED PASSENGER CAR FLEET AVERAGE CHARACTERISTICS
In 1977 the average was 29.7 cafe mpg.CURB WEIGHT, LB 2248. In 2003 it 29.7 and 2004 it was 30.5 cafe mpg.CURB WEIGHT, LB 3025
IMPORTED PASSENGER CAR FLEET AVERAGE CHARACTERISTICS
In 1977 the average was 28.2 cafe mpg. In 2004 it was 28.8 cafe mpg.
DOMESTIC PASSENGER CAR FLEET AVERAGE CHARACTERISTICS
In 1977 the average was 17.6 CAFE, MPG. CURB WEIGHT, LB 3913. In 2004 it was 29.3 CAFE, MPG. CURB WEIGHT, LB 3277
And you are calling Lutz a Idiot?? Seems to me the domestics have done pretty well. Go to this site and do some unbiased reading.
http://www.nhtsa.dot.gov/portal/site/nhtsa/menuitem.d0b5a45b55bfbe582f57529cdba046a0/
http://www.nhtsa.dot.gov/portal/site/nhtsa/template.MAXIMIZE/menuitem.d0b5a45b55bfbe582f57529cdba046a0/?javax.portlet.tpst=4670b93a0b088a006bc1d6b760008a0c_ws_MX&javax.portlet.prp_4670b93a0b088a006bc1d6b760008a0c_viewID=detail_view&javax.portlet.begCacheTok=token&javax.portlet.endCacheTok=token&itemID=8a7bc044ae99e010VgnVCM1000002c567798RCRD&overrideViewName=Article
neilberg:
As we've written here before, the FFV calculations are a joke– that allowed GM to make their dubious mileage claims. In reality, a vehicle running on E85 gets some 15% worse mileage than a gas-powered equivalent.
Steve442:
Thanks for the detail, but nothing you've written contradicts my analysis.
Is Bob Lutz an idiot? Clearly the man is up and running, and knows more than a thing or two about cars. But that doesn’t mean he is unable to be a numbskull.
Lutz has been criminally oblivious of market directions, with his head firmly pointed towards the past, as he’s applied increasingly irrelevant solutions to customers’ needs.
His solutions, the cars he has staked the company on, have been idiotic choices. Why idiotic? Because other car companies, looking at the same data Lutz had available, reached other and far more relevant conclusions – leading them to create cars that found great favor with the market.
What does one call a person who makes the wrong conclusions, repeatedly, in spite of having access to all relevant facts?
I think Robert Farago can rest easy should Lutz ever want to sue him.
In 2003, BMW, Ford, and VW asked for and got approval for carryback plans to cover their truck fleets and Nissan submitted a carryforward plan for its imported passenger car fleet.
In ’04, Nissan and Lotus submited carryforward plans for their cars and BMW for their trucks.
Nissan’s petition for exemption from the two-fleet rule applies to their cars.
This reminds me a bit of fast food joints who refused to offer something healthy on their menu. Yes, the junk tastes amazing, but it catches up with us all and we want an alternative from time to time. Imagine if Col. Sanders still offered only old fashioned fried chicken at Kentucky Fried Chicken…not a single alternative. He’d of gone under. Instead, he offered other oil-soaked alternatives, extra crispy and spicey. But they are all still fried. As America got a bit more health conscious, they changed the name to KFC but it was the same product and America saw right through it. So, healthy alternatives began to creep in…but that’s a good thing. KFC is still around!
To me, GM is stuck in thinking they know what consumers want…we want fried, greasy chicken! Well of course we crave it…but we now know a bit better. Yes, consumers want performance, power, and a new car every 3-5 years. But most of us know better…we demand more. If you’d of asked me 10 years ago, I’d of never considered owning a car longer than 5 years…I’d rather get a new one. However, once I realized I could own a car for 7 years and it still ran great (while padding my savings account to boot!) my expectations changed. Once I got 30 miles to a gallon in a V6, my expectations changed. Once I owned a car where my only major maintenance was my timing belt at 100,000 miles…my expectation for car repairs changed.
Consumers aren’t static…we are dynamic.
a vehicle running on E85 gets some 15% worse mileage than a gas-powered equivalent.
Because E85 has less energy density and if you total up the [unsubsidized] costs to produde E85, it becomes a bigger joke.
Imagine if all vehicals were E85 and America had a drought. “We” (The maggots in DC that is) would have to choose between food and transporting no-food to market.
Csaba Csere, surprisingly, had a terrific column on the choices manufacturers made when balancing weight, power, and economy.
CAFE hasn’t improved fuel economy? Yes and no. Clearly, the standards have forced automakers to make more efficient cars and trucks. The car v. light truck distinction, however, has distorted the market, making it more desirable to both sell and buy light trucks, at the expense of overall fuel economy.
The new footprint requirements will go a long way to curing the market distortion.
Lutz only hints at the real problem: How do you best get car/truck buyers to assume the true costs of a country full of gas-guzzling trucks that everyone wants but few need? With (relatively) cheap gas, consumers don’t internalize the true costs of their vehicle choice. Fuel economy standards is one, albeit indirect, option to force consumers to face the consequence of their choices. Higher (much higher) gas taxes is another. Fees and taxes on certain vehicles is another.
But to suggest that there’s a perfect market and that the consumer is just exercising benign choice in his or her decision to buy a 6,000 lbs. Suburban to haul the tots to soccer and ballet is simply idiotic.
I think my driveway would crack if I pulled up in a 6000 lb vehicle. :(
Robert,
What does FFV have to do with a supposed “dubious mileage claim” by GM?
GM has many cars that the EPA rates at 30 MPG and over, and just because some of them are E85 flex-fuel capable and the EPA uses a higher calculation for them in the fleet average, does not mean they put that higher number on the sticker and in their ads. 30 MPG is 30 MPG.
And anyhow, my inlaws regularly average 28 to 30 mpg highway with thier 06 Impala so the EPA ratings do not seem as far from reality as some would have you believe.
Luther:
Do you have any idea how much farmland in the US is NOT being farmed because the farmer can’t get enough for the crops? And corn is just one source of ethanol in addition to grasses and wood chips which show much promise at reducung the energy input.
Technology, demand, and economy of scale will likely bring the energy cost of ethanol down in future anyhow. And what kind of drought would compare to our current state of perpetual and growing dependance on unstable countrys for non-renewable petroleum?
Does that make Lutz an Andropov, or a Gorbachev?
I dont think Lutz is an Andropov. GM will Andropov a cliff all by itself…. ArhArh.
Gorbachev actually put the final nail in Communisms coffin by trying to outlaw Vodka. Trying to outlaw alcohol in a Socialist country is like trying to take T-Bones away from rabid dogs. How else can the slaves escape the misery of their perceived reality.
Luther: " Gorbachev actually put the final nail in Communisms coffin by trying to outlaw Vodka. Trying to outlaw Vodka in a Socialist country is like trying to take T-Bones away from rabid dogs. "
Trying to (effectively) outlaw trucks, suvs, and whatever other kind of vehicle people want to buy in the US would also be like trying to take away T-bones from rabid dogs. Not a wise choice.
Time for GM to go. They have been living off the trough of the taxpayer for years and years. The whining that occurred in the 70s is now repeating itself. The difference this time is they can say they did not know it was coming. Come on, its been 30 years since the first gas crisis and now they are waking up.
Where have they have been for the last 30 years? Asleep like that guy Rummple something ;) ????
I dont feel one bit of pity for them. As always the worker bees will suffer while the execs parachute out richer than they were before. Its business as usual in corporate America. Nothing new here.
I dont think that GM even knows its a car company. Yes its a company but what exactly do they build and for whom?
“Trying to (effectively) outlaw trucks, suvs, and whatever other kind of vehicle people want to buy in the US would also be like trying to take away T-bones from rabid dogs. Not a wise choice.”
Darn right. You can’t just phase out a popular product while there’s still demand for it. People want what they want.
Not a day goes by that I don’t overhear at least a dozen people exclaim, “Lord, how I wish I owned an 8000lb., 500hp, 9 passenger, asbestos lined, r-12 refrigerated, leaded-gas burning vehicle to pull my trailer of 3-wheel ATVs and drive to my lawn dart competitions!”
Luther,
If all vehicles were E85, and we had a drought, I expect car owners would use more gasoline. Having choices is a good thing.
Stein X,
You seem to be saying that perceptive carmakers found market niches that GM missed, because GM instead focused on SUVs that they sell 500K units a year of and pickups of which they sell a million a year.
Please explain how they would have made up for it by instead selling 50K Fits or 10K R350s or 40K X-3s.
Otherwise, I’ll be left thinking Lutz is an idiot like a fox.
Neilberg offered, “Lutz was able to encourage the GM teams to develop the Solstice and this resulted in a car that sells well. Give him SOME credit for that.”
Combined sales of the Sky/Solstice are 2300 units this past month. I’d bet a quarter I could go the nearest Saturn dealer and get a Sky off the lot at less than MSRP today.
Was Lutz responsible for the SSR? It looks like that’s on closeout. They sold 111 of those in November, down from an equally unimpressive 440 or so last year.
How about the HHR? Down 20% from last November.
Those who rally to the GM banner often point out the likely upcoming Camaro. How many of those will GM sell?
I give Lutz credit for steamrollering over other, more sensible voices to bring out a couple of retro-styled vehicles of limited utility (or none, as is the case with the SSR) which flashed and died and one (or is it two?) two-seat roadster which will sell in insignificant quantities (although, give Lutz credit, the more powerful versions might eat into Corvette sales).
I’d be more impressed with Lutz if he could bring out a car that would sell 40K copies a month with good margins and increasing sales every year. That’s what GM needs.
By the way, we had a ’60’s Camaro when I was a kid. It was an attractive, nicely proportioned car. The Camaro Concept is ugly. The ass is too big and the nose is too dark and narrow.
By the way, who buys HHRs and what do they do with them once purchased? Although their sales have dropped, their sales are not insignificant, yet I’m far more likely to see a Yaris or FJ Cruiser on the road – or maybe even an Escape hybrid – than an HHR. This past month, I believe I’ve only seen one and I live right down the road from a Chevy dealer.
I thought the HHRs looked interesting. A bit too dodgy with the metal skin stretched over a skeletal frame…but interesting none-the-less. Edmunds gives it a high consumer rating…but they themselves didn’t rate it (I never know what to think by that).
I kinda figured they are good people haulers for family…but the dogs don’t mind my cars small back seat! (I don’t have any children)
chainyanker: “Not a day goes by that I don’t overhear at least a dozen people exclaim, “Lord, how I wish I owned an 8000lb., 500hp, 9 passenger, asbestos lined, r-12 refrigerated, leaded-gas burning vehicle to pull my trailer of 3-wheel ATVs and drive to my lawn dart competitions!”
All GM has to do is whip-up a clever, expensive marketing campaign with some snappy commercials and slogans and, ironically, this is exactly what happens. Trouble is, too many Americans are finally wising up to this con-game
Maybe if they’d spend a bit more on R&D than advertising, they (and the other domestics) wouldn’t be in a perpetual state of crisis.
i just read the blog in question
GM is doomed.
@SherbornSean
Lutz’ mistake was in closing off any efforts at developing alternatives to the oversized cars he favored. In fact, he initiated and managed a campaign against EVs, hybrid drive trains and smaller platforms.
He looked into the future and saw a strong need for land yachts – now his fleet is on dry land, alright.
paradigm_shift:
December 27th, 2006 at 1:14 pm
It is very hard to have any sort of compassion for GM and their troubles when they are being run by a fool who is too old to be relevant…
I am not at all happy with the ageism exhibited here. Not at all.
A lot of people harp on about what GM could do, but never do realize that they can’t, lest the people inside the RenCen want to accelerate how long it’d take them to see pink slips.
Considering that the MBAs, bean counters and stockholders are all about short term quarterly profit as opposed to any long-term strategy that would net them continued profit and viability in the long run in exchange for short-term pain, they are not gonna go for any plan that does not include some way to reap the profits that will come from that plan now.
So, if GM decided to forgo its high-profit SUV and truck lines for more R&D on their lower-profit but higher volume midsize and compact car lines, we’d rejoice. The stockholders and bean counters, on the other hand, wouldn’t. A few straight quarters of red ink would leave them a bit miffed, and just a bit anxious to lead GM further down the road to bankruptcy.
As far as consumer preference goes, any attempt by government to influence such usually results in some rather nasty unintended consequences. So for the advocates of higher fuel taxes, keep in mind that the higher costs of transportation eventually filter down to your wallet, as the cost of food, clothing and other goods rises in correspondence with rising fuel costs. Some political careers might be in jeopardy, as well.