General Motors Death Watch 46: The $2b Question

general motors death watch 46 the 2b question

For those of you who've just joined us from Wall Street, welcome. We've been waiting for you for a while– long enough to wonder if GM's stock price got lost in hyperspace. I guess you guys needed some kind of sign to find your bearings. Something like Toyota's announcement that they're gonna Avis The General in '06, ending GM's 70-year run as the world's largest automaker. Or Rabid Rick Wagoner's post horse departure barn door closing homily: "I'm not conceding anything to anybody." No matter. Now that you're here, let me tell you a story…

I was scanning the other day when I came across a "good news" piece: "Crucial GM Fullsize Truck Program Launches Early". Well, OK, it MIGHT be a good news piece, you know, if The General's SUV cavalry racks-up the sales GM needs to die another day. Obviously, it's a bit of a long shot, what with SUV's being a dead genre guzzling. But hey; it is what it was. Anyway, mid-way through Ms. Priddle's puff piece, a thought occurred to me: is it really a good idea to rush the GMT900 vehicles (Tahoe, Yukon, Escalade, Suburban, Silverado, Sierra, etc.) to market? What if they're not ready?

It's not inconceivable. The Pontiac Solstice was due to hit the forecourts in June, promised for November, still isn't widely available and already appears on bulletin boards with a laundry list of complaints. Let's face it: GM has a bit of a history manufacturing, dare I say it, crap. Oh wait; Ward's says the "new" trucks will use 60% of the old trucks' components. And according to Gary White, GM's Fullsize Truck Vehicle Line Executive, the GMT900's are "entering the world with higher quality than the ones they replace." Now THERE'S a reassuring thought.

But let's get to the point. Check the article's last paragraph: "'No one's going to ride a 1-trick pony today,' White says, noting GM could have spent an extra $2 billion for marginal additional improvement to the GMT900 lineup, but recognized the money is better spent elsewhere for a balanced product portfolio." Now ask yourself a question: what the Hell does THAT mean?

The first part of White's quote seems straightforward enough. White's saying his handiwork's got to be safe, reliable, comfortable, attractive and frugalesque. (By implication, yesterday's 'one-trick' SUV's were, um, affordable.) But what's that second bit about the extra $2b GM DIDN'T spend on "marginal additional improvement"? Is White seriously suggesting that a couple of bil only buys you a bit of soft touch plastic here, a nicer steering wheel there? I'm no bean counter, but I would have thought that 2000 million dollars can do a great deal to improve a vehicle.

I emailed Ms. Priddle to see if White had specified these missing marginalities. (GM stopped returning my calls sometime back in April.) No joy there. It then occurred to me that no matter what White's mob left out of the GMT900's, his remarks typify GM's product mentality. The company's lineup is stuffed with ¾ vehicles: cars, trucks, SUV's and minivans that are just about as good as the competition, but not quite. For example, the Pontiac G6 seems a suitable alternative to a Nissan Altima. But if you look closely (as customers do), the G6 isn't up to snuff on almost every level: interior quality, engine refinement, reliability, etc. Even the class-killing Chevrolet Corvette features some of the nastiest plastic known to mankind. In general, The General signs-off its vehicles when they're still a few furlongs from the finish line.

An Audi engineer once told me that the final millimeter of a materials gap eats up a third of the item's production budget. Even though an Audi buyer might not see or feel the resulting precision, the automaker makes the effort and pays the freight. That's just the way they do things. It's already clear from the GMT900's 60% parts carry-over (much of which is due to the SOS timetable) and pre-production shots of the vehicles themselves that White's got it exactly backwards. The huge amount of money GM spent on these vehicles delivered nothing BUT marginal improvements.

White's comments highlighted the trade-off that created the $2b compromise: "marginal improvement" vs. "a balanced product portfolio". In other words, rather than get one vehicle– I mean, a host of similar vehicles– absolutely perfect, GM prefers to build [yet] another product. It's a shotgun approach in a rifle shot world. By manufacturing a complete range of not quite products across eight brands, GM condemns itself to perpetual mediocrity, and guarantees its also-ran status relative to the tightly focused folks at Toyota. The General's generals fail to realize that people don't buy GM's balanced product portfolio. They buy a single GM product. Or, increasingly, not.

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  • SCE to AUX "a future in which V8-powered muscle cars duke it out with EVs for track superiority"That's been happening for years on drag strips, and now EVs are listed in the top Nurburgring lap times.I find EV racing very boring to watch, and the lack of sound kills the experience. I can't imagine ever watching a 500-mile EV race such as Daytona or Indy, even if the tech or the rules allow such a race to happen.As for owning an electric muscle car, they already exist... but I've never owned a muscle car, don't want one, and can't afford one anyway. For me, it's a moot question.
  • MaintenanceCosts I don't and realistically won't drive on track, but I think the performance characteristics of EV powertrains are just plain superior on the street. You get quicker response, finer control over the throttle, no possibility of being out of the powerband and needing a time-consuming shift, more capability in the speed range where you actually drive, and less brake heat. The only "problem" (and there are many situations where it's a plus, not a problem) is the lack of noise.
  • JMII After tracking two cars (a 350Z and a C7) I can't imagine tracking an EV because so much of your "feeling" of driving comes from sound. That said you might be able to detect grip levels better as tire sounds could be heard easier without the roar of the engine and exhaust. However I change gears based mostly on sound so even an automatic (like a C8) that would be a disappointment on track. Hearing an engine roar is too important to the overall experience: so tracking an EV? No thanks!I've driven an electric go-kart around a track as my only point of reference and its weird. It sort of works because a kart is so small and doesn't require shifting plus you still hear the "engine" whirring behind you. The sensation is like driving cordless drill, so there is some sense of torque being applied. You adapt pretty quickly but it just seems so wrong. With a standard ICE car, even a fast one, RPMs raise and fall with each shift so there is time to process the wonderful sounds and they give you a great sense of the mechanical engine bits working to propel you.I feel track toys will always be ICE powered, similar to how people still enjoy sailing or horseback riding as "sports" despite both forms of transportation being replaced by superior technology. I assume niche companies will continue to build and maintain ICE vehicles. In the future you'll have to take your grand-kids to the local track to explain that cars were once glorious, smoke spewing, noisy things. The smells and the sounds are unique to racing so they need to stay that way. Often a car goes by while your in the pits and you can identify it by sound alone... I would hate to lose that.
  • Kjhkjlhkjhkljh kljhjkhjklhkjh "20 combined city/highway"...sigh
  • MaintenanceCosts Not sure this is true for electrified products. The Pacifica Hybrid continues to have its share of issues and there have been some issues with the 4xe products as well.